The Hockey Budget to nowhere, going nowhere
With the government facing a hostile Senate passing all of its Budget measures, John Massam reflects
on how wicked and unnecessary this Hockey Budget actually is. And the
contrived ‘budget emergency’ – popularly spouted by our Treasurer – also
appears to have been adopted by a State counterpart.
The Hockey Budget of May 13 seems to be the most wicked since the
budgets of the Great Depression of 1929-41. Those cheese-paring budgets
and large wage cuts left Australia unprepared for the attempted
invasion during the Second World War. Global austerity had ruined the
lives and psyches of millions throughout the world, and had triggered
Fascist and Communist dictatorships. However, when the Second World War
broke out, after about a year, rivers of credit then appeared out of
thin air, and after the war the cash kept flowing to re-absorb the armed
forces and the male workers in the defence industries.
There is a A$97,570,000,000 Australian “Future Fund” earning
dividends. For Prime Minister Tony Abbott, Treasurer Joe Hockey, and
the Finance Minister, the future HAS COME – pay off debts.
It is alarming to learn that the Australian national debt is $339
TRILLION (that is, $339 thousand million) and rising; the annual
interest bill is $11 trillion, according to the Debt Clock. (Each citizen’s share is A$14,450).
Soon after being elected, in October 2013 one of the new Abbott Government’s silliest actions was to give $8.8 billion (that is, $8,800,000,000) to the Reserve Bank of Australia, which had not requested any money. (See also The West Australian, page 15, Tue May 20, 2014).
That RBA $8.8 billion, plus the $97.57 billion in the Future Fund,
ought to be immediately used to pay off some of the $339 trillion debt,
thus saving trillions of dollars now and into the future.
WESTERN AUSTRALIA’S CONTRIVED CRISIS
Just like the Federal financial situation, the supposed crisis in
Western Australia’s State finances had also been carefully contrived, by
taking on unnecessary public works like digging up the Perth Esplanade,
and removing the school-children’s tiles at the Bell Tower. Mr Colin
Barnett’s Liberal-National government plans to build ovals for
million-dollar-a-year footballers. Another waste was spending millions
removing the Perth tunnel’s emergency lanes, just as a coroner in
another state was recommending that tunnel emergency lanes be introduced
there as a safety measure. The ministers sold land worth $90 million
at Burswood for $60 million.
To catch great white sharks, blamed for killing several people, the
Coalition spent millions of dollars on drum-lines, but though other
sharks suffered, no great whites were caught.
Although the Barnett-Buswell government broke election promises such
as not building rail to Ellenbrook, the W.A. debt rose from
$4,000,000,000 in 2008, to $20 billion by Dec. 2013 (ST, 22 Dec 2013, p 57).
W.A.’s credit-rating fall from AAA to AA should be given a quadruple A award for deception.
The Liberal-National W.A. Government, while building a kind of palace
for ministerial offices, even abolished the Government Astronomer. One
wonders if he and his colleagues can be “retrained” to obtain other
careers! Coffee-making baristas, lens grinders, or government “spin
doctors”, perhaps?
While the Liberals-Nationals are planning to change the laws to
introduce mandatory minimum crime sentences, there is a judge short on
the W.A. Supreme Court, prisons are over-full, and a whole police
training intake would have been cancelled, except for a public outcry.
The compulsory amalgamation of local government councils will be forced
through, no matter what the cost, defying the spirit of the W.A. Act.
FEDERAL $7 MEDICAL LEVY FOR SENIORS, SICK, AND CHILDREN
To return to the federal scene, do the Federal Liberals’ partners,
the National Party (formerly the Country Party), really intend to saddle
the old, the sick, and children with a $7 medical levy? Do they join
in the pretence that some of the money will go into medical research,
yet the Federal Government wants to take millions of dollars away from
Australian research bodies like the Commonwealth Scientific and
Industrial Research Organisation (CSIRO)?
Are our country cousins supporting the trickery of acting as if the
medical researchers in our universities and teaching hospitals are not
efficient? The W.A. burns cures discoveries alone prove their
excellence. Yet universities are to have cuts. Are our Nobel Prize
winners and their laboratories to be “privatised”? When everything has
been sold, how will governments, State and Fedeal, “balance” their
budgets then?
Have voters for the National Party already forgotten that the
Liberal-National government was willing to allow Shepparton’s cannery to
close in Victoria, thus threatening to ruin most of the small
fruit-growers in the Goulburn-Murray Valley region? Have Liberal
supporters forgotten that many small engineering enterprises will be
ruined as the three car-manufacturers wind down? These metal-fabrication
experts could be “retrained”, perhaps, to be prospectors?
Don’t the Coalition know that many overseas governments underwrite and subsidise industry and agriculture?
WASTE, SILLINESS, SELL-OUTS
Without consultation, Abbott’s boys (only one female minister) have
ordered a larger number of warplanes than Labor did; these planes have
no limit to their final cost, just like the Liberal-National coalition
purchase of the F111s decades ago.
Another silliness is to plan to privatise the Royal Australian Mint,
although for thousands of years governments have jealously guarded the
right to mint coins, and in later centuries they forcibly took over
banknote issuing from the private banks. Will the sell-outs of public
assets be accompanied by the corruption that was recently uncovered in
New South Wales, causing a Liberal Premier to resign that day?
UNIVERSAL LAND TAX – OTHER TAXES MINIMISED
As was reported in recent months, David Airey, a leading Perth real
estate agent, suggested a no-exception land tax (I suggest about 5 per
cent for a start, rising to no more than 10 per cent in future) on the
land’s value (not the buildings, etc). A side benefit would be that
this would slow down land speculation and the withholding of land. New
home buyers might then have a chance of taking on affordable
mortgages for land and houses.
Calculations are that this could pay all the government’s expenses.
As this huge revenue came in, a priority must be to reduce and/or
abolish the enterprise-stifling taxes like payroll tax, stamp duty, and
the goods and services tax (GST). If the land-site revenue covers the
running costs, income tax and company tax could be immensely reduced,
moving towards abolition, as debt was gradually eliminated. In the
meantime, negative gearing plus company tax evasion and avoidance could
be stopped by a few simple laws.
A universal land tax idea, backed by some academics, was recommended in the Henry Report (Australia’s Future Tax System Review)
around 2010. However, widening land tax was so unpalatable to the Big
End of Town that the recommendation was dropped at once by the
politicians.
An alternative is that Federal and State governments introduce the
Tobin Tax – a small levy on every financial transaction. A 0.1 per cent
Tobin Tax would collect huge sums from parasites such as those who use
sophisticated computer programmes tied to the stock exchange to
manipulate share prices by speculative buying and selling of shares,
bonds, etc, in microseconds, thus cheating the ordinary Mum and Dad
investors. It would raise $135 trillion (about a third of the national
debt) at the start, but might decline markedly later.
If that tax is not acceptable, there are billions of dollars worth of
minerals being exported, so a reasonable royalty per tonne would bring
in millions or billions. Norway and other countries levy a very large
percentage. Don’t charge on profits, because the multinational
corporations and some big Australian investors are experts at exporting
their profits overseas to places with little or no income tax.
It would be too much to expect that the politicians and their
advisers would study how money comes into being, and so adopt credit
policies, instead of debt policies.
INTERNATIONAL BANKERS, BUREAUCRATS
This is a nasty bankers’ budget. Just read the words of Treasurer Joe Hockey, in his speech “The end of the age of entitlement”
on April 17, 2012, to the Institute of Economic Affairs, in London,
when he said that bankers “have a more active role to play in policing
public policy and ensuring that countries do not exceed their capacity
to service and repay debt.
“This is playing out most dramatically in Europe where
the European Commission and the European Central Bank are either
directly or indirectly heavily influencing public policy in Greece,
Italy, Spain and Portugal, to name a few.” (page 14).
In plain speech, he was saying that the EU bureaucrats and the ECB
bankers were calling the tune for an austerity campaign. Mr Hockey seems
to be in thrall to what he called that mysterious and amorphous group
defined as “bondholders” (page 4 of the same speech).
So, Mr Hockey in 2012 thought that it was good for Australia to
accept the wrong-headed policies adopted under duress by those
countries, even though they have led to higher unemployment plus
hardship to small business in those lands, and have driven many people
to bankruptcy, crime or suicide.
Wild riots and possible takeovers by dictatorships are quite possible
in countries which take the International Monetary Fund’s poisonous
medicines.
The brave little country of Iceland refused to take the advice of
international funds and bankers, and took firm action. Icelanders have
been saved from the artificial depression planned for them.
A most amazing fact is that when Mr Hockey took over as Treasurer
after the September 2013 election win, it was brought to his notice that
the Federal Parliament had set a debt ceiling of $300 billion, and this
had nearly been reached.
He promptly said that Australia must not have a stoppage of
government action like the United States had suffered twice in recent
years, and the debt ceiling should be doubled. The high debt level was
caused by the Labor Government, he said. Not long after he said that the
debt ceiling should be tripled.
Another version in a report of December 5, 2013, said the Liberals
wanted a $500 billion limit, but later did a deal with the Greens in the
Senate to set it at $400 billion.
Before the 2013 election the Liberals had said they would reduce debt. Voters, another promise broken!
WORK TO 70, PREVENT YOUNGSTERS WORKING
The minor parties have a duty to stop the Government from expecting
the old to work until 70, thus preventing the younger generation from
starting careers, while ordering the under-25s who can’t get jobs to
starve for six months. At present about 25 per cent of the young are
unemployed, and this budget seems certain to increase the number of
jobless.
To dismiss 16,000 public servants would turn them out onto the
streets, and double the workload of those not dismissed. Perhaps they
could “retrain” to be politicians?
These cruel Canberra federal policies would increase the crime rate
and the demand for more prisons – and that would cost money (a State
responsibility, no doubt!), and lead to more deaths, nervous breakdowns,
and suicides. Will overworked police be less inclined than at present
to investigate and prevent petty offences?
FOR 39 YEARS STATE LIBERALS WERE NOT RESPONSIBLE MANAGERS
While in Opposition in 1975 Liberal leader Malcolm Fraser (later that
year elected as Prime Minister) said that “those levels of government
responsible for spending money should also be responsible for raising
the taxes.” (Malcolm Fraser; The Political Memoirs, 2010, M.Fraser and M.Simons, Melbourne University Publishing, Carlton, Victoria, page 278).
So, if this was principled “federalism policy” 39 years ago, why
didn’t the Liberal-National Parties, which were at times running the
States and the Northern Territory, keep out of debt by levying universal
land tax, and/or revert to collecting income/company tax? Or is it
easier to blame the Federal Government when States are reducing the
police forces, cutting the number of judges, and under-staffing
hospitals and schools?
The Liberal Party has a cheek asking the disadvantaged to stand on
their own two feet; this was exposed as hypocrisy in the news-item “Pay your way, backer tells Libs,” The West Australian,
page 3, Feb 7, 2014. The party’s WA branch has been operating
rent-free in Menzies House, Level 4, 640 Murray St, West Perth, for
decades. The landlord is now giving them their own medicine.
In the minds of some Australians, perhaps the only Abbott policy that
is working is Operation Sovereign Borders, which at present has stopped
the ‘illegal’ undocumented clients of the people-smugglers coming in as
asylum-seekers. But even those effective government instrumentalities
are to be chopped up and the command structure amalgamated, presumably
at great cost. Who knows if the new management will be asked to sack
people after another demand for an “efficiency dividend”?
A real cost-saver would be to cut out “457 visa”, “student visa”, and
“working visa” visitors who in a few year become Australian electors,
at least until unemployment goes down to 1 or 2 per cent, not long-term 5
per cent.
Anyone who doubts my statements about the way the Money Lords over-awe nations’ governments ought to read Confessions of an Economic Hit Man, 2005, by John Perkins, Plume Publishing.
For an Australian perspective on deceit by the Big End of Town and the banksters, read Bankers and Bastards, 1992, by Paul McLean and James Renton, Hudson Publishing, Victoria, Australia.
Another eye-opener is The Secret Life of Real Estate and Banking, 2009, by Phillip J. Anderson.
My final word is that the Coalition is breaking nearly all of its
pre-election promises, including “There will be no surprises,” just like
the Labor Rudd/Gillard/Rudd government did. The latter tried to stave
off the unnecessary Global Financial Crisis with its spending on Roads
to Recovery (good) and Ceiling Batts (no OHS there! Dr Troy Delbridge
was dismissed). Fortunately, the Senate and the States, if they stand
firm, might be able to curb the Abbott-Hockey irrational and
irresponsible plans that are likely to lead to a trade depression, and a
down-spiral of budget deficits.
Related Posts
If there was any stand-out from Joe Hockey's performance on Q&A it
would have been his ability to permeate the studio with an overwhelming
odor of wealthy complacency, with weasel words thrown in for good
measure. It was with considerable smugness that Hockey admitted that the
GP co-payment, ". . .is a new tax…Like
climbing mountains, maths is a marvellous thing. It is objective
rather than a matter of opinion. It can’t be argued with. A fact is a
fact. But like many other powerful tools, maths can be used for evil in
the hands of the unscrupulous. Take our present government – please. On a
Liberal Party…“TONY
Abbott and Joe Hockey are convinced the government will be punished
electorally if it does not produce a tough budget, and they believe
there is a “public appetite” for decisive action to get the economy back
on track.” Sounds good? Well let’s get real here. Nothing pisses me off
more than getting lied to…
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