Whether he realised it or not, Joe Hockey yesterday committed a Coalition Government to slashing spending by more than $40 billion.
Hockey told The Australian there was “a strong argument that government spending as a proportion of GDP should be no more than 24 per cent”.
This year it will be 28.7% of GDP.
The likely first Hockey Budget in the event of a Coalition victory would be 2011-12, when on current Budget figures, spending will 27.4% of GDP. The Australian suggests this would require cuts of $14 billion. But lopping nearly 3.4% of GDP off revenue will require a reduction from the forecast $356.4 billion to about $314 billion — or around $40 billion.
Factor in a better-than-expected recovery between now and then and maybe it could be down to a mere $30b.
Talk about your horror budget.
Hockey, displaying commendable realism, says it will take a number of years, which might mean several austere budgets in a row.
The last Government to expenditure achieve 24% expenditure: GDP was the Hawke Government at the end of the 1980s when Paul Keating was in his pomp and Peter Walsh was Finance Minister.
With all respect to Hockey, he’s no Keating, and I suspect even Helen Coonan would admit she’s no Peter Walsh, the ultimate Dr No who made fiscal pain briefly fashionionable in Australian history’s most reformist Government.
Peter Costello managed the figure on one occasion, but it was because of the switchover to accrual accounting in 2000. Costello had managed the impressive task of cutting the figure from 26.2% in 1995 to first 25.6% and then 24.3%. No Government, one suspects, could ever manage more than what Costello and Fahey managed in those first two budgets, meaning Hockey will need a long series of slashing cuts to ever get within cooee of his self-selected goal.
Yesterday wasn’t a good day for Hockey. Lindsay Tanner had a go at him for tweeting during Question Time (good for you, Joe – it helped liven up one of the most deathly boring Question Times in this Government, which is saying something, so please keep it up) and Hockey then went on Sky to bag Gordon Brown and Barack Obama, declaring “many people were starting to question” Obama’s handling of the US economy.
That should make life interesting in the event Hockey become Treasurer and has to deal with Gordon Brown and his chancellor, or develop a close relationship with Tim Geithner. Especially given Obama probably hasn’t forgotten which side of Australian politics labelled him the terrorists’ choice during his campaign.
Hockey must have been in an expansive mood — on Twitter, he had suggested everyone at the G20 Finance Ministers’ meeting from which Wayne Swan had just returned was left-wing. Angela Merkel and Nicolas Sarkozy might have been alarmed to discover the true leanings of their finance ministers.
Hockey occasionally shows some policy grunt, but why is it difficult to avoid the impression that the many people criticising Hockey as a lightweight might be right?
Expect Hockey to cop plenty in Question Time today. That 24% figure is about to burnt into his admittedly thick hide by the Government.
Another typo! Should be “last government to achieve SUB-24% expenditure:GDP.
Keating managed 23.3; Costello 23.7 in 1999. Costello got 24% in his final budget too, but never got it back below 24%. Before that you have to go back to the late Howard Budgets when he got it to about 23.8%
Come on Bernard, QT is never boring when the PM, Dep PM, Alby and Tanno are in full flight. Today brought 2 highlights when the Speaker had a couple of tongue slips and asked the Member for Sturt, C Pyne to resume ‘her’ seat. The 3 lady members sitting behind Julie Gillard were a joy to watch on hearing the Speaker.There faces said it all. Julia carried on not missing a beat, thats a true professional
Malapropic logorrhoea isn’t confined to fools like Fielding – when the Senate rejected the airline bill today on the grounds that it would stop off-duty pilots entering the cockpit in an emergency, Ludwig proclaimed “..a pilot’s decision to allow access is NOT UNFETTERED by this regulation”, which isn’t .. errr.. not OK?
Then Krudd, during PMQ, tried to have a go at Schreck’s fiskal feory ‘ bout the G20 being a commie cell by saying, “..the member for N Sydney has DEVISED the cause of the GFC..” – presumably meaning “divined” if not akshally “Devined”.
What Hockey meant was that all world leaders are members of a powerful cult known as “The Cult of the State”. These leaders worship at the altar of the UN and its offshoots and engage it in its many rituals public and private. Both sides of politics are really the one side which follows one primary directive – that the state must get bigger at all costs; which always means at our cost.
The people (as in we the people), naively fall for the clap trap from these talking heads about wanting to help us with better education (it just keeps getting worse), better health care (it just keeps getting more expensive) and better protection from our enemies (which we argue requires us to go to far away lands and kill people who aren’t attacking us).
All paid for with our money by the way. What other job lets you write cheques against other people’s bank accounts?
This “help you” story is a relatively easy concept to sell when it is explained as being for the greater good. However, the younger you learn this story the more likely you are to believe it. The story is repeated over and over again in the media, most of which is owned by six major groups globally. They push forward an endless line of shill experts funded by certain interests to convince you white is black and sour is really sweet. Now isn’t globalism great! And pretty soon our food will be owned by three or four major groups globally (cigarette companies most likely), and sold through one or two major retail groups. You can just imagine the choice can’t you. This will mean “efficiency” no doubt but I call it forcible takeover of the world’s resources by the very few. As long as your preference is for industrial food and products derived from crude oil such as the many manifestations of plastic, synthetic rubber, shampoos, detergents, cosmetics, cleaning products and on and on you shouldn’t mind at all.
Now getting elected is really about getting invited by one of the major parties to represent them in a safe seat. That is the hard part. Convincing the people to vote for you is much easier. You just lie. You tell them what they want to believe and if it is repeated often enough they will vote for you. That is where the media come in to do their bit. The people will keep coming back for more until they get sick of things never getting any better and so throw you and the other rascals in your party out while the other side has its turn. The other side will now tell the people what they want to hear while continuing to build up the power of the State. And so the process continues for another two terms after which the opposition regains the wheel. And once you are voted out there is no need to worry. You pick up some international gig somewhere from either the new government or some UN body. If not, you can always take time out in business as an advisor to some large financial group.
Any politician prepared to stop such a corrupt food troughing system would get my vote.
Once the state is big enough however, it won’t need the help of the people to govern and that situation we call totalitarianism. It has several manifestations e.g. Corporate Fascism (i.e. from crony capitalism which we have already through to the Mussolini approach); National Socialism (that is the Nazi approach) or Communism (the Stalinist option). Then there is the Chinese Party Member Model or the new Russian gang approach which are both more distributive these days. Nevertheless, all involve some form of dictatorship. Has anyone ever worked in a company that is run as a democracy? What if you called for a vote on each decision the business makes? You wouldn’t last long. You would be taken away for “in depth counselling” before having to be “let go”. You see that is why corporations feel so comfortable with the totalitarian approach to decision making. Small business and farmers on the other hand just get on with it.
Of course this isn’t happening in Australia.