Budget cuts – Class War or Wellbeing?

2 September 2016

Dowlphin’s recollection is that in the last election, the ALP promised $6 billion of budget savings measures. The Liberal Government is now seeking to wedge the ALP by implying that the fine detail of the ALP’s $6 billion savings figure is the same as the fine detail of the $6B Liberal “Omnibus Bill”. The government accuses the ALP of hypocrisy – and they would be right if the fine detail was the same. They are different.

Dowlphin’s recollection was that reasonable superannuation reform was part of the ALP’s detail, but this is nowhere to be seen in Jessica Irvine’s 2/9/16 SMH summary of the Omnibus Bill. Nor does Dowlphin recall the ALP as wanting to cut “Green” spending – even though this is one spect of the Bill. Dowlphin didn’t read the fine detail of the ALP’s promises, but finds it hard to believe that the ALP went to the election promising the mean-spirited cuts outlined by Irvine. If they did – a curse on both parties. There are better ways to budget repair.

Dowlphin makes the following points on all this:

  1. This government strategy might be smart Machiavellian “big lie” “politics as usual” that works in the short-run, but it is slimy politics which alienates voters who want honesty from their leaders. It is Machiavellian politics gives rise to political disengagement by ordinary citizens  and to the rise of populists who thrive on highlighting problems and insecurities then go wildly astray on decency and/or policy. We deserve better than this.
  2. The details summarised by Irvine are unfair and petty. They pick on people who are voiceless and powerless. There are alternative ways of “repairing the budget” – cut fuel subsidies,  reform superannuation and negative-gearing, introduce carbon and super-profits taxes, tighten subsidies to private school that build swimming pools. These may be unpopular with particular Liberal aligned vested interests, but fairer and more efficient for the economy as a whole.
  3. Effective leadership involves “stealing” the best policies of the Opposition, antagonising  “glued-on” supporters and looking after marginal supporters. Weak leadership involves following and manipulating the middle while pushing through the ideological positions of glued-on supporters e.g. cuts in company tax rates – pretending that this will trickle-down into “jobs and growth”.
  4. The Newscorp press likes to accuse the ALP of engaging in “class warfare” whenever it comes up with what Dowlphin considers  sensible reform. This is dog-whistle McCarthyism that demeans some of the excellent journalists at the Australian.

Note 1:   Dowlphin-omics involves eliminating company taxes (together with income taxes and the GST) completely – but only in a completely overhauled tax system in which company taxes would be replaced by a progressive wealth tax on all individuals (and income taxes and the GST would be replaced by a progressive consumption tax – PCT). This will be further pursued in future blogs – Click here for PCT.

Note 2:    Dowlphin studied Public Finance public finance as an Economics graduate student and taught Public Finance at graduate level.

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