© 2019 by Henry Thornton. 

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Why are our leaders surprised?

February 7, 2017

Screaming headlines today based on the latest News poll, which makes Tony Abbott look relatively successful.  If Mr Turnbull and his cabinet are surprised,  they might consider the following:

 

* When Mr T qualified his challenge, he said it was justified by the polls (as they were then) and lack of an economic narrative.  Polls now are equally awful and there is still no narrative.  And the LNP has endorsed the socialist example of sacking a PM elected as leader of the party that won the last election.

 

* Cutting government spending is far too hard, for this government (and Senate).  Early on it looked like part of the solution to the budget situation might be in the form of a widening of the GST and increasing the rate to, say, 15%, but Mr Tumbrill (a President Donald called him) rushed into the debate and said 'never, never'.  Threw his ministers, including his Treasurer, under the proverbial bus.

 

* Policy reform, so called, started with a surprise attack on people who have done the most to provide for themselves in retirement.  As it happens such people are (correction were) mostly rusted on LNP supporters. Most are still boiling with indignation and many of those have not or will not maintain their party membership.  Neither will donations  be offered nor help at polling booths.

 

* Next reform, so called, was to cut pensions or in some cases remove them by imposing tightened asset tests.  Another nasty surprise for elderly folk already struggling to keep heads above the rising tides of electricity, gas and water bills and council rates. The implied statement is 'Let them eat stale bread', or sell their inner city houses and move somewhere cheaper in the outer suburbs or high in shoddy apartments.

 

* Then, an even bigger mistake, getting some maniacal robot system to attack welfare recipients. No presumption of innocence until proven guilty. Bugger our long-standing rules that state the obviously fair condition that the state has to prove guilt. Disadvantaged Aussies have to prove their innocence with very little help from relevant public officials.

 

* If they had been grandfathered, surely the decent thing to do when cutting benefits for elderly and disadvantaged people, they would be acceptable. But even then, the amount saved would do little except take the edge off the ballooning interest payments on our ever-growing  government debt. (Did you notice the recent report that Australia's official debt will shortly pass half a trillion, and believe me with current budget policies will double faster that you can imagine.)

 

The graph shows an estimate of Australia's net foreign debt - already over a trillion.

 

 

 

There are only two options to stop the ballooning debt.  Cut spending by government.  This can be done carefully and as fairly as humanly possible.  Or by requiring every category of spending, including salaries of politicians and public officials cut by, say, 5 %.  The spending cuts required would be less if the GST was raised to 15 %, with no exceptions.

 

Serious spending cuts and/or GST increase would create terrible confusion in the 'world's best run economy', but with the government in a hopeless electoral position at least the LNP would go into opposition with a reputation for hard-headed realism.  To give themselves some chance of survival, a solid economic narrative is required. If I had to summarise efforts so far I'd say it like this: 'Get stuck into the elderly and those on welfare who have little choice but to cop it sweet'. 

 

The contrast to the Hawke government's narrative and broad response so that we all shared the pain at Banana Republic time is deeply embarrassing.  I'd be happy to create such a narrative for current purposes with input from Treasury and the RBA plus the few private sector economists who are fully aware of Australia's parlous economic situation. Provided the pollies in charge were serious.

 

Just to increase the political fun, today Cory Bernardi has finally announced his resignation from the Liberal Party. At the time of the last election, he explained, he still hoped a re-elected LNP government would remember its 'conservative' traditions. He would be entitled to say that the narrowest of margins result removed whatever ticker there had been in our once popular PM.  

 

Kelly O'Dwyer was sent out to say he'd broken his contract with Liberal voters.  What about the contract that was broken when Turnbull challenged the PM we'd voted for in 2013?

 

Henry lives in an expensive part of the leafy Eastern suburbs of Melbourne. With Mrs Thornton he mixes with mostly previously rusted-on Liberals. Most are still very angry and many will never forgive Messrs Turnbull and Morrison.  How our leaders can keep smiling so foolishly and apparently confidently escapes our comprehension.  Either they are complete idiots or they imagine the rest of us are.

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