JOE HOCKEY IS DRUNK WITH POWER AND HIS NICKNAME "MR DOOMSDAY"
FITS HIM PERFECTLY.
HIS EVIL MIND KNOWS NO BOUND AS HE SEEMS TO ENJOY HURTING AUSTRALIANS
The most hypocritical government in Australian history? Why has the Abbott Government’s first budget crashed so
spectacularly? Can the damage be repaired? In the first part of a
two part series, Alan Austin examines the Government's wasteful spending.
Treasurer Joe Hockey’s first budget by has failed on several levels.
It has not generated enough revenue. It has allowed extraordinary waste.
It has attempted to shift the burden from the middle and the wealthy to
the poor. And it has invited global derision.
These failures are entirely the Government’s fault. Attempts to blame
Labor, Greens, PUP, independents or anyone else are spurious.
Here is a wasteful spending Top 40. It is not exhaustive:
The excessive cost, including of disposable orange life boats, is impossible to measure precisely. It is multiple tens of millions per year.
3. Offshore refugee processing
According to the government's own Commission of Audit, it costs
$400,000 a year to hold an asylum seeker offshore, $239,000 in
detention in Australia, but only around $40,000 on a bridging visa in
the community while claims are processed.
This is the fastest growing area of government expenditure with costs
over the forward estimates projected above $10 billion. About 90 per
cent is wasted.
4. High Court case on eligibility for a protection visa
The Government comprehensively lost last week. The exercise was a monumental waste of time, money and human resources.
Australia pays $40 million per year plus all extra costs. For what?
Cambodia ‘might take in between two and five people under the pilot
phase’. Resettlement in Australia would be far less expensive and more
humane.
This vindictive political witch-hunt cost an estimated $20 million,
discovered nothing new and failed completely to explore the real
questions demanding answers.
Another political vendetta squandered an estimated $61 million.
14. Direct Action Plan
This pays some businesses to reduce carbon emissions but frees others to increase theirs. The waste is about $2.55 billion over four years, plus costs incurred thereafter.
15. Religion
Money is now available to train priests and other religious workers and for school chaplains, while funding for non-religious counsellors is cut.
16. Pseudo-sciences
Federal funds are now available for homeopathy and Bach flower therapy.
17. Abbott’s new car
His $500,000 bullet-proof BMW is part of a $6.2 million outlay, vastly more than for Australian-made alternatives.
18. Travel expenses for ministers, staff and families
These have been rorted
shamelessly, with flights to a wedding claimed. Total blow-out is
unknown because the Government is withholding the information.
19. VIP jets instead of commercial flights
Ministers spent about $900,000 in just two months
in late 2013. Education Minister Christopher Pyne’s blithe assertion
that VIP jets were “probably cheaper” was shown to be blatantly false by an ABC fact check.
A department axed by the Government continued to pay the top bureaucrat $7,000 a week for months until another role was eventually found.
22. Public service hand-outs
Fat cats receive outrageous bonuses on top of already bloated salaries.
23. Lease termination
Charges of $65,000 were incurred when Abbott refused to live in the Forrest house rented for him during the 2013 election caretaker period.
24. The Lodge
Lavish renovations costing a staggering $6.38 million were approved in December. That is double the original estimate and more than the cost of demolition and rebuild.
Treasury spent $36,005 on a conference table for the November summit in Brisbane.
27. Table transport
That conference table was made in the ACT. So the Government spent another $26,298 shipping it to Brisbane. Why did the tender not stipulate assembly in Brisbane?
28. Chairs
After the table had been built and transported to Queensland, chairs were also bought in the ACT – for a staggering $68,525.
29. Koalas
$24,000 was then blown in a few minutes of G20 koala diplomacy.
Taxpayers paid almost $330,000 in September 2013 for a Canberra space
for Scott Morrison’s border protection briefings. It was fitted out,
including with an $800 door knob, but not used. Briefings were held in
Sydney until discontinued in December 2013.
31. Perks for MPs
These include $15,442 for Attorney-General George Brandis’ bookcase.
32. ‘Obscene’ long lunches
Joe Hockey spent $50,000 to fly a celebrity chef to Washington to cook one meal.
This cost a poultice but achieved only disruption to an already stressed community. The Yolngu would have benefitted far more had Abbott stayed in Canberra and not slashed $534 million from their meagre programs.
34. Asset sell-offs
$11.7 million is available to prepare privatisation
of Defence Housing Australia, the Canberra mint and other
income-generating assets. With interest rates so low, this is the time
to buy and build assets, not sell them off. A double waste.
35. Focus groups
$500,000 was spent to help sell – unsuccessfully – changes to higher education funding.
36. Media blitz
Trying to defend the widely resented university changes cost $14.6 million.
37. Damage control
The strategic communications branch of the PM’s department employs 37 spin doctors
in a forlorn attempt to polish the PM’s image. Cost to the taxpayer:
$4.3 million per year. That is on top of the 95 communications staff
engaged on border control, costing at least $8 million annually, and many other spin merchants elsewhere.
38. News media monitoring
According to Fairfax, just seven departments spent $1.2 million on "market research" in four months last year.
39. Interest on government debt
This is up from $12.2 billion in 2012-13 to $14.7 billion in 2014. With more to come.
40. Commission of Audit
And finally, as if to underscore this administration’s grinding
incompetence, the commission set up to help cut Government waste not
only utterly failed there, but blew out its own $1 million budget by 150%.
They are just some areas of waste on the spending side. Outcomes have
been just as dismal on the revenue side, perhaps even more destructive.
Those failures and whether this Government can possibly fix things will
be examined in part two, coming soon.
Alan thanks colleagues Sandi Keane and Lyn Bender for valuable input into this series. You can follow Alan on Twitter @AlanTheAmazing.
Not content spewing forth the ubiquitous puerile bovine excretum from the pages of Labor’sdebt and deficit disasterand other mandatory slogans,
Treasurer Joe Hockey last week apparently took complete leave of his
senses, going off-script and announcing to the world that Australia
would soon face a trillion dollar deficit. That’s right, $1 trillion. By
2037, based on our current debt trajectory, we will owe one thousand
billion dollars.
Give me strength.
The comment is absurd on so many levels and for so many reasons. The
idea that Australia needs to balance its budget or risk burdening future
generations with insupportable debt is utter nonsense for starters.
Australia is a monetary sovereign. WE PRINT OUR OWN MONEY. As long as we
don’t borrow in a foreign currency or go back to a fixed exchange rate,
Australia cannot run out of
money. The only way we can go broke is if inflation gets out of control,
or demand for goods and services overtakes supply.
I realise this idea may be difficult for some to come to terms with,
so let’s leave this aside for the time being and examine Hockey’s claim
at face value. $1 trillion sounds like an awful lot of money. The
announcement was no doubt intended to shock, but it shouldn’t, really.
Hockey’s argument is fallacious. Never mind the fact that the he has
doubled the deficit in a mere 16 months in office, nor that our ‘current
debt trajectory’ cannot be described in any meaningful way; The fallacy
is not in the figure itself, but in how we are meant to interpret it.
Hockey’s forecast doesn’t allow for inflation, nor is the amount
properly expressed as a percentage of GDP, which by my quick reckoning
would put it at significantly less than it is today.
Statistical analysis is bat-shit boring for most of us, so let’s just
look at some simple data points for illustration. 2037 is 22 years
away, a calculation which Mr. Hockey might find justifiably challenging
using just his fingers, but having achieved modestly in maths at public
school I was able to work this out in my head. Using the magical google
machine I was also able to dig up some relevant credible facts and
figures.
In 1993 Australia’s GDP was $312bn USD. In 2014 Australia’s GDP was
$1.52 trillion USD. That is 500% growth over a 22 year period.
In 1993 average weekly earnings were $AUD 592. In 2014 the indicator more than doubled to $AUD 1445.
I don’t expect someone of Hockey’s political stripes to be fully
caught up on modern monetary theory, but that’s not the point. Surely
it’s a reasonable expectation that someone appointed to the high office
of treasurer should not to be so challenged by simple arithmetic? If
you’re going to make projections 20 years into the future, would you not
look back at the last 20 years? Even according to the Liberal book of supply-side economics and associated lies and half truths,
a $1 trillion dollar deficit in 22 years time is unlikely to exceed
today’s 29% of GDP. For the love of god, strong liquor and loose women,
can somebody please hand the man a calculator?
I realise I have glossed over a lot here. There are plenty of numbers
that show how income inequality has increased over the last 22 years,
whether it be the obscene salaries of CEOs, or a hyper-inflated property
market pouring money into the pockets of the already wealthy. This does
not bode well for future growth. The mining boom is over. Primary
production will not carry us into the future. Coal and iron ore are a
dead end. Austerity is the path to poverty. Investing in redundant and
outmoded technologies is counterproductive. Good economic stewardship
requires investment in science, technology and innovation. People are
the most precious of all resources. Ultimately it is demand and not
supply which will create jobs. And a hundred million other gratuitously
poignant platitudes.
I was going to use this post as an opportunity to rant about zombie
economics and argue the case for bigger deficits and smarter spending,
but the more I think about this latest retarded outburst from our
dumb-as-shit treasurer, the more inclined I am to bang my head
repeatedly on the desk in front of me and lose my train of thought.
No doubt under Hockey’s mismanagement Australia could be expected to
go broke in a very short while. But not for the reasons he argues. To go
back to my earlier point, Australia can and will run out of money if
demand for goods and services outstrips supply. That’s why we need to
invest today in infrastructure to deliver goods and services efficiently
into the future. With the bond rate parked near 2% it’s a perfect time
to ‘borrow’ money to fund, say, 10 year projects. Of course I’m thinking
of projects like a full-fibre NBN (and I could argue at length why this
should take precedence over an 8 lane intra-city expressway.) The
greater shame tho is that our governments nowadays don’t seem to stick
around long enough to see these projects through. But I digress.
2014 saw car manufacturing leave our shores forever, leaving a $20bn
hole in the economy and up to 100 000 jobs on the chopping block. Holden
had asked for $500m to continue building cars in Australia, a paltry
sum for a guarantee of direct employment for 400 engineers and 2500
factory workers, plus indirectly providing jobs for tens of thousands in
the supply chain. Before being less than politely shown the door by our
smiling used-car-salesman-in-chief last February, Holden had promised
as a condition of ongoing funding to produce two new models by 2018.
Surely I am not the only one who greeted the release of the Chevrolet
Volt at this year’s Detroit Auto Show with a raised eyebrow? With
electric vehicle charging stations already being rolled out across our
major cities, perhaps Mr Hockey would care to tell us how shutting down
Australian car manufacturing was in our long term best interest, and why
he put a free trade agreement with Korea ahead of 100 000 Australian
jobs?
Don’t talk to me about intergenerational theft, Mr Hockey. If
Australia finds itself unable to service a debt burden roughly
equivalent to today’s in 20 years time, it won’t be Labor’s fault. It
will be the fault of the short-sighted economic vandals who bled the
country dry and failed to invest in innovation and jobs right now.
For more on the subject of the deficit red herring, see this excellent article from Kay Rollinson:
Have you noticed that Joe Hockey has been doing
the rounds of radio, television and print lately, moaning and groaning
about his problems with the senate? It appears the penny has finally
dropped and he wasn’t wearing steel plated boots. Ouch!
Back in December 2013 and again in February 2014, I wrote that it was unlikely that Joe Hockey would ever deliver a surplus budget. Finally, it seems, he agrees. “If we can’t continue to reduce government expenditure we’ll
never get back to surplus, we’ll never be able to pay our bills, we’ll
never be able to live within our means,” the Treasurer told 3AW from Canberra.
The first bit was right. As for never paying our bills and never being
able to live within our means, well, that’s just childish. There will
never be a time when we, as a monopoly currency issuer, could not pay
our bills.
The deficits will continue to rise, however, and sit around $50
billion a year as revenue continues to fall. The budget savings held up
in the senate are a trickle compared with what is needed. They total an
average of $7 billion a year over the forward estimates.
“And sooner or later we will run out of other peoples’ money,”
he told Neil Mitchell in the same interview. Well, if he continues to
think that we won’t be able to pay our bills and that we will run out of
money, he should be replaced. It suggests he doesn’t know how we pay
our bills.
He also made the rather extraordinary claim that it was, “fundamentally unfair for us to have a lifestyle today that our children will never have”.
What rubbish! Just whose children is he referring to? I suspect that
when Joe Hockey’s children inherit his family fortune, they will have a
much better lifestyle than he does today.
But for the children of the rest of us, well, that depends on how much
debt they accumulate; private debt that is, not public debt. At the
moment, private debt is the big worry. It is at record levels and
threatens to undermine any chance of enhancing our way of life.
It was Peter Costello’s much lauded surpluses that drove us toward record levels of private debt.
Joe isn’t bad at making emotive styled comments in public as if
trying to tug at our heart strings. But if he is so determined to rein
in spending, he has been told time several times he should focus on tax
expenditures like superannuation concessions, private health insurance
rebates, mining subsidies and the like. This is where the big savings
can be made.
So given the facts, his concern for our children must be taken with a grain of salt.
Interestingly though, on the savings issue, the government is now
pleading with Labor to help them through this difficult time. Labor have
said they are more than willing to help if the focus is shifted toward
tax expenditures. Why doesn’t the Treasurer engage with them?
Dr Jim Chalmers, Labor opposition spokesperson for trade and investment said, “We’re
all up for a proper conversation about fiscal responsibility, but we’re
not up for a conversation that asks the most vulnerable people in
Australia to carry the heaviest load.”
Hockey has a simple choice here. Had he chosen the right one on
budget night last May, he might well have been a leadership contender
today. But he didn’t, and he isn’t. He chose to protect the big end of
town at the expense of the most vulnerable.
Just like his boss, all his problems have been of his own making.
