Australia has a structural budget problem. Or, rather, several of them.
We have an ageing population that will drive a massive increase in health and welfare spending in coming decades, with a proportionately smaller workforce to fund it. We have a tax base that, courtesy of cuts to personal income tax and the flaws of the GST, is more heavily dependent on corporate profits and therefore more pro-cyclical. We spend hundreds of billions of dollars via taxation concessions, often to conflicting policy purposes.
And all of our governments are currently dealing with the impacts on revenue of a high dollar, low inflation and the structural shift in consumer spending towards services.
On current polling, Joe Hockey will be our Treasurer from September 15. For all his flaws, he appears to understand the long-term budget problems he will inherit, in a way his colleagues demonstrably do not.
That Kevin Andrews, one of the worst of Tony Abbott’s deadwood-laden frontbench, was able to convince shadow cabinet of the merits of opposing the government’s cuts to the baby bonus against Hockey does not augur well for the Coalition’s fiscal discipline once in office.
Hockey has been leading a long ERC-like process within the Coalition, with the aim of finding savings and instilling some fiscal discipline that his leader apparently is incapable of delivering. His colleagues should be supporting him. Parties that are lazy in opposition end up being lazy in government. Hockey is doing his best to ensure that doesn’t apply to a future Coalition government. All power to him.
It’s the media debate we had to have: editors Jason Whittaker and Cathy Alexander join Crikey media writer Matthew Knott for a lively discussion on Stephen Conroy’s media regulation proposals and the fierce reaction from the press. Download the latest Crikey Calling episode here.
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It is obvious that Crikey and Joe Hockey have never had a child ! Are you aware of the horrific costs even if you are with HCF or MBF… if you were you would not be advocating the removal of the Baby Bonus which in reality is not a Bonus it is a BABY NECESSITY.
Hysteria from Lady W P, who has adopted a personal presumed right to private health insurance notwithstanding, one thing is clear.
If the government is going to spend only a finite amount of money, it must look carefully at all expenditure which, over time, can lead to infinite cash outflows.
Hockey and Crikey’s editorial are correct – middle class welfare needs a far higher standard of justification than, for example, basic services in core Federal areas.
Which brings me to the thought that States are the appropriate place constitutionally to manage policing, health, education, transport and the like. Why not consider handing back both taxing powers (or increased GST) to the States, as well as real responsibility for their own businesses and closing down the huge duplicate empires which have grown in Canberra? When will we hear from either the Government or the Opposition on this subject?
Scrap the baby subsidies, they are excessive and deserve nil priority.
I fail to understand what this fear of an aging population is all about when I look around the developed world and find it is the young people without a job and with a diminishing hope of getting one. eg Spain, Ireland, Greece and US. Sure healthcare costs for older people are higher than those for the young but what about education costs and of course just the general costs of leading a decent life?
The baby bonus was a ridiculous idea to begin with and continues to be so now especially in a world that is overpopulated already and running out of resources.
Lady White Peace – and of course that’s why before the baby bonus people didn’t have children…