Friday, 16 May 2014

A Disappointing Budget, A Disappointing Government

A Disappointing Budget, A Disappointing Government

I do not normally mention current political issues as mostly they are not that important and I wish to look at underlying principles. But two nights ago the Australian Federal Government released it's budget and I'm so disgusted and disappointed with both the budget and the current Liberal Government that I need to say something. For Foreign readers the Liberal Party in Australia is on the right and the Labor Party is on the left and since September 2013 we have had a Liberal Government. What most political commentators call "Conservative", but which I do not.

Under the last Government, a Labor Government, Australia went from having a surplus to being hundreds of billions in debt and all within 5 years. They also left a number of budgetary time bombs, promise big spending now, but only hand over the money in future years. All of this means that our Federal Government debt will head into roughly 80% of GDP, it's about half that now, if left unchecked. The current Government promised a horror budget and they delivered on it. Some of it is tough but needed, some is tough and in time we may see they were right, but the rest is just bloody mindedness and incredibly stupid. It is so bad that it seems designed to improve the political fortunes of the Labor Party!

Let me start with some of the good things:
Foreign aid was cut, Labor increased this greatly. Foreign aid should have a clear national goal, it should not be a prop for foreign Governments unable to collect revenue or manage their own finances.

Middle Class welfare was cut, this will hurt alot of families but I think it has gotten out of hand and needs to be scaled back.

Reducing the Public Service, I am not someone who is opposed to the Public Service, they do good and vital work. Sadly Labor has a habit of hiring more than needed for political gain. I just hope that the Liberals handle it well, sadly this budget doesn't bode well.

Here are some of the tough but might still be right:
Before the election the Liberal Party promised to balance the budget and to change nothing, it was never possible but people wanted Labor gone. Now those broken promises have come back to bite the Liberals and they are denying that they have broken any promises. I'm sorry but even blind Freddy can see that they have. You cannot say no tax increases, increase tax and then say it's not a tax but a levy. There is no difference and everyone knows it. Having said that I do believe they may be right.

A 2% Debt levy on all incomes earners over $180,000 a year.

Fuel Excise increase, basically more tax on fuel.

A $7 co-payment to go to the doctors. Australia has whats called Medicare and all wage earners pay into it and it provides free medical care for all Australians. Unfortunately medical costs keep going up and some people abuse the system. A small payment may help solve this problem. I know of a Government scheme that provided free mental health care, but because it was free people didn't treat it with respect. A $5 fee was introduced and it changed people's behavour. Incredible but true. The co-payment is not unlimited but cuts out after so many visits. Sadly again the Liberals have done this badly, they have told Doctors that they do not need to charge a co-payment if they object but they will lose 25% of their income because Medicare won't pay them the full amount if they don't.

The stupid things:
Youth Allowance extended until age 25. You are not a youth when you are 24 years of age, it is a step in the wrong direction.

Unemployed people under 30 must wait for 6 months until they receive any financial support and then must do "work for the dole". How does someone live for 6 months with no income? The Treasurer Mr. Hockey in interviews is quite clear that he doesn't care. The aim of this policy is to force young people into jobs but it will not work. Instead it will encourage people to "work" the system. Want to see if a new job works out but don't want to lose your benefits for 6 months if it doesn't? Lie. This is a recipe for social disaster.

Continuing the failure of the "earn or learn" policy. This policy means you either need to be earning a wage or learning at University or in a trade. In theory it's fine, but the reality is it encourages mindless education and degree getting for no purpose. If I have 3 degrees but you have 5 I guess you must be a better clerk than me. It pays no attention to job creation and ignores the reality that people live with in the economy.

Increasing University fees. Again this would be fine if jobs exist for graduates to go into and by jobs I mean jobs that need a university degree. This is a very expensive way to hide the real unemployment figures.

Cutting wages increases for Public servants and Politicians for a year, but Pensioners and the Unemployed for 4 years. The Liberals talked about spreading the pain of the budget around but it seems some must feel the pain more than others, very unfair.

Continuing to fund future time bombs such as the NDIS, Gonski and the Parental Leave Scheme. The National Disability Insurance Scheme, the Gonski School funding and the Parental Leave Scheme are all expensive turkeys. The NDIS and Gonski have not started and should be scrapped before they start. The Parental Leave Scheme is a new form of Middle Class welfare designed by the Liberals and also not currently in operation, it should also be scrapped.

And after all this we will still owe $300 billion in a decade's time!

This Government has proven to be a massive disappointment and Mr. Hockey's statements in interviews have been some of the worst things I have ever heard a Minister of the Crown say. I am finding it very uncomfortable having to agree with the left and having to admit that when they accused the Liberals of being heartless and only caring for Business, they were right. This budget is in no way a Conservative budget, in any sense of the word. It is an economically Liberal budget with a view of society that does not say we are all in this together but instead says society is divided into winners and losers. That is quite disgraceful!

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  1. Andrew Simmonds20 May 2014 at 00:22

    It has been an extremely disappointing budget from the "conservative" government so far.

    The budget is to be paid for mostly by new taxes while the cuts are to be suffered mostly by those at the lower rungs of society.

    Joe Hockey has had the worst of publicity during this time, most of due to his own silliness. The man is shockingly out of touch with the average Australian and doesn't even realise.

    At first glance, it seems like the Coalition is out to punish all those who abandoned them for Rudd and Gillard.

    20% of Australians live below the poverty line - that will increase.

    Australian youth are not invested the great Australian dream. Young people cannot get any traction, cannot afford housing, jobs are part-time, etc. Entrepreneurship has too many regulations, far too much risk. They now are being informed that they will need to work until they are 70 years old.

    1. "Australian youth are not invested the great Australian dream. Young people cannot get any traction, cannot afford housing, jobs are part-time, etc."

      Yes, I'm surprised this doesn't cause more concern. I know some young people who are very hard workers but they face issues of student debt for professions they can't break into, alongside the issue of housing affordability. Sad to say, they are worse off than my generation was at their age and we faced our own problems (e.g. disruption to family formation).

  2. Dear Mr.Simmons

    Sadly I agree with everything you have written, boy I wish I didn't!

    Mark Moncrieff