© 2019 by Henry Thornton. 

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Sunday Sanity Break, 15 January 2017 - the Sussan Ley affair, Donald Trump's accession.

January 15, 2017

What was she thinking? Sussan Ley, former Health Minister.  Other doubtful cases are already emerging but it seems only Ms Ley will pay the ultimate price of an untidy, delayed, resignation from Cabinet.  Nowadays, Ministers earn good salaries and have retirement benefits to die for. And it seems lots of nice travel, mixing business with pleasure the rule rather than the exception.  Trouble is, the 'rules', such as they are, are ambiguous and unclear, and surely will be fixed now.

 

This is the Canberra bubble in action, dear readers. Travel and accommodation has traditionally been described as 'entitlement' for ministers. An inquiry after Bronnie's Choppergate affair produced a large number of strong recommendations only a few of which have so far been implemented.  What was the cabinet thinking? That 'the punters' (ie voters) did not care how derelict their lack of action on this matter?

 

The simplest reform would be to increase salaries by some sensible amounts and totally remove any fringe benefits, whether or not they are called an 'entitlement' or an 'allowance'.  I include in this the excessively generous pollie pension plan. This major rort should be converted into amounts in self-managed superannuation funds so, like the rest of us, retired pollies can discover how a bad time in financial markets requires them to tighten belts and worry just a bit about their future spending power.

 

Why is the Canberra bubble so powerful, dear readers? Federal pollies work in a different space to the rest of us, in a large town dedicated to matters political. They will complain about being underpaid , even though there is no evidence that pollie quality is better now that base salaries are distinctly higher and associated 'entitlements' have become ridiculously excessive.  Does Dr Lowe at the RBA (in the Martin Place bubble) require over a million a year to come to work?  Would we have a better Prime minister if his salary was raised to match that of Dr Lowe, over a million pa with equivalently generous defined benefit pension arrangements?

 

What is ignored in this debate are the psychological benefits of high office. If the ATO was turned loose it would attribute taxable benefits to high office and add it to the relatively low cash salaries earned by people in high office - ministers, senior public officials, judges, etc, etc.  Indeed, if such people had time limits on their tenure - two terms of House of Reps, for example - our leaders would have far greater sympathy for the lot of 'ordinary' (non political) workers.

 

That is the nub of the Sussan Ley affair.  How can she be part of a government that is taxing self-funded retirement earnings, removing or reducing pensions for people with smallish asset hoards and implementing a scheme that enables a deeply flawed 'robot' to demand welfare recipients to repay alleged past overpayments?  The cabinet that signed off on these plans is attacking the weakest members of society while creating expensive reviews and new units to handle matters one imagines an existing arm of the Department of Finance might handle. The Turnbull government, far from fixing a rapidly government debt mountain, is cheerfully allowing numbers of public officials to keep on rising.

 

Clearly members of the Canberra Bubble are almost totally disconnected from the concerns of ordinary, non-Canberra folk. It is this type of disconnect that explains Brexit, the accession of President Trump and the risks of extreme governments being elected elsewhere, including in the Eurozone.

 

President Trump

 

Donald Trump becomes President of the USA on Friday 20 January. Which promises will he keep, which will be delayed or ditched? Economists are expecting new spending by government - the Great Fence, replacing some of America's aging infrastructure and perhaps increased military spending. Will foreign policy follow the Donald's pre-formal appointment suggestions? Make friends with Russia, confront China in the South China Sea (and perhaps by putting tariffs on Chinese imports) and withdrawing from NATO.  Making allies commit more to the new American military regime? 

 

Whatever happens there will be change, or at least firm questioning of many past verities. If spending by government is increased, this may turn a modest recovery into an inflationary boom, and rising US debt levels, and wouldn't that be fun?  Or not if the US Fed raised interest rates faster than now expected. 

 

Kulture

 

Fiona Prior visits the decadence of Versailles and recommends you do so too. More here.

 

Readers with a feel for history may reflect of what happened to the leaders of France who created all the wonderful beauty that is the Versailles exhibition in, you guessed it, Canberra.

 

The image of the week below is entitled Good Morning America. We are already witnessing the many interesting new currents created by the Donald during his dash for America's political heights. What happens when his powerful ministers from outside the Washington Bubble are in place and helping shape his potentially radical policy program?  

 

Image of the week - Good Morning America 

 

 

 

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