Let’s be absolutely crystal clear about this. « The Australian Independent Media Network

Let’s be absolutely crystal clear about this. « The Australian Independent Media Network

Let’s be absolutely crystal clear about this.

By Kaye Lee on May 25, 2014 • ( 0 )

If you click on the official Prime Minister of Australia government page the first thing you will read is


“Over six years, Labor ran up a $667 billion debt on the nation’s credit card.”


Aside from wishing that the Prime Minister of Australia had a more
visionary or engaging opening line, it is a bald faced lie and that
isn’t a good way to convince people to trust you.


You will be subjected to a rolling slide show of Tony, Joe and
Matthias, photographed in various serious looking poses.  Is anyone else
getting sick of these photos of Tony sitting at tables with people
surrounded by lots of booklets and oversize graphs?  Is that supposed to
convince me that he knows what he is doing?  Because he has his photo
taking wearing a white lab coat trying to look into a microscope am I to
say oh well the $7 co-payment must be a good idea?


But back to the lie.


“Ran” indicates past tense – in fact Tony Abbott specifically states
that this happened “over six years”.  What he fails to mention is that
the figure of $667 billion was a projection for possible debt in ten
years’ time from Hockey’s MYEFO report produced last December, and it
included increased Coalition spending decisions like the $8.8 billion
gift to the RBA and all the interest that will cost us, and the foregone
revenue from the carbon and mining taxes, and changed assumptions about
future unemployment – in other words it was a political exercise
designed to come up with as big a number as they could so they could
then justify draconian measures as they claim to be reducing it.


Using the term “nation’s credit card” is purely designed to cause
fear.  The nation doesn’t have a credit card.  In fact we actually print
money and can do so if we have to as they have done in the US.  Credit
cards can get individuals into serious debt and the interest rate is
crippling.  Using that term makes people think of that rather than a
sensible understanding of how government finances work.


While the Coalition continues to peddle this lie I will continue to
remind people of the truth because the Australian people have a right to
know the real state of our finances.  And because nothing pisses me off
more than getting lied to about important stuff.


So what is the truth?


The independent pre-election economic and fiscal outlook’s (PEFO)
medium term projections, using long-standing methodology, show that on
Labor’s policy settings the Budget reaches a modest surplus in 2016-17,
surplus grows to 1% of GDP in 2020-21 and net debt returns to zero in
2023-24.


The latest Budget update shows net government debt for 2013-14 of
$191.5bn, or 12.1% of Australia’s GDP (not $667 billion Mr Abbott). By
contrast, net government debt in advanced economies around the world
averages 74.7%, according to the International Monetary Fund.


Gross debt in 2023‑24 is projected to be $389 billion with surpluses
projected to build to over one per cent of GDP by 2024-25.  There are no
surpluses predicted over the forward estimates, there is a higher debt,
and surplus of 1% 4 years later than predicted by PEFO using Labor
policies.


After the GFC hit, the deficit peaked at $54.5bn, or 4.2% of GDP, in
2009-10 – less than half the advanced country average.  In 2012-13, the
federal deficit was $18.8bn or 1.2% of GDP, compared to an advanced
economy average of 4.9%.


The claim that Labor left “fiscal time bombs” and secret cuts and
spending is another blatant lie.  In the 2013-14 Budget, Labor took the
unprecedented step of releasing 10 year figures for the National
Disability Insurance Scheme and Gonski school reforms, demonstrating how
they were funded over the long term.  Those figures, as well as the
efficiency dividends on the public service, were there for all to see. 
The fact is that Tony’s election promises were made knowing this but, as
we saw, working out how to pay for his promises was not on his mind.


Australia is one of only 10 economies in the world with AAA ratings
from all three agencies – in the company of other countries with strong
public finances like Germany, Canada, Sweden, Singapore and Switzerland.
This status shows our finances are considered to be stronger than those
of the vast majority of advanced economies – including the US, the UK,
Japan, France and New Zealand.


Despite headlines to the contrary, and ill-informed statements by the
Prime Minister, the agencies have confirmed our credit rating with a
stable outlook.


I hesitate to compare government finances with individual or business
finances, but I will say this.  When you go into significant debt, you
usually aren’t looking to pay it off completely the next week.  The
decision to go into debt is made by looking at your assets, your ability
to service the debt, and the value of the investment of the debt.


We do need to make some changes.  There will never be a time when
fine-tuning isn’t needed because we live in an ever-changing world with
an often volatile global economy.  Situations change requiring
adjustments to be made.


We are not in any sort of crisis.  We have the luxury to be able to
do long term planning to meet the challenges of the future whereas so
many other countries are having to make decisions for the short term as a
matter of survival.


Tony Abbott is looking for a legacy for himself rather than for our
nation.  He wants to say the debt was huge and I made it smaller and he
doesn’t care if he has to lie about figures to make this look true.  If
he really wanted to reduce debt why on earth would he stubbornly insist
on his paid parental leave scheme?  Why wouldn’t he look at negative
gearing and superannuation tax concessions and capital gains
reductions?  Why would he buy 58 fighter jets that won’t be in service
until sometime next decade?


The “Infrastructure Prime Minister” is building the Abbott Highway to
Hell to speed up the path to destruction and he is more than happy to
sacrifice anyone who can’t help him along his way.

NATSEM analysis confirms: the burden of the budget will fall most heavily on the poorest families

NATSEM analysis confirms: the burden of the budget will fall most heavily on the poorest families

Date

May 22, 2014

Tom Allard

National Affairs Editor

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The poorest 20 per cent of Australian families will pay $1.1
billion more into government coffers than the richest households as a
result of the budget, highlighting the huge inequity in the government's
four-year blueprint for fiscal repair.



New analysis from the National Centre for Social and Economic
Modelling has underlined how heavily the burden of budget
consolidation has fallen on those less well-off, especially if they have
school-age children.



NATSEM divides the community into five segments or quintiles,
each with a little over 2.5 million families. It finds the poorest 20
per cent - those with $35,000 or less in disposable annual income - will
forgo $2.9 billion over four years thanks to changes to family
benefits, pensions and other payments.



By contrast, the wealthiest 20 per cent of households -
earning $88,000 or more after tax and benefits - will suffer a $1.78
billion hit, some 40 per cent less than the lowest income families.




Overall, those in the lowest quintile see incomes fall by an
average of almost 2.2 per cent while it is a decline of only 0.2 per
cent for those in the highest quintile.



The government has said it has spread the burden by imposing a
budget repair levy on people earning over $180,000. But its impact on
household finances is minimal, costing someone on a $200,000 annual
salary only about $400 per year. Moreover, the levy will last for only
three years.



According to NATSEM, in 2017-18, the year the levy will
expire, the richest quintile of households will be better off by $825
million, the only cohort to be ahead at any time thanks to the budget.



The NATSEM analysis calculates the effect of the budget
changes on household finances over four years, incorporating reforms to
welfare, pensions and taxation, including the positive impacts of
abolishing the carbon and mining taxes. It does not include the cost of
the $7 Medicare co-payment to families, roughly estimated at between
$200 and $300 per household each year.



The study also finds:

• More than one-third of the budget cuts - $6
  billion - falls on the middle quintile of households, those earning
  between $45,000 and $63,000.
• Families with school-age children are the hardest hit. Across all
  income groups, they will lose $15.9 billion over four years, more than
  90 per cent of the total.
• Low and middle-income sole parents suffer worst of all, losing
  between 10 and 15 per cent of their annual income - $4000 to $6250 - on
  family earnings of less than $60,000 by the time the changes to welfare
  takes full effect in 2017-18.
• The burden rises sharply for families with children over the four
  years of the budget. For example, a sole parent earning $60,000 with
  children aged 8 and 12 will lose $1808 in annual income in 2014-15 and
  $6278 in 2017-18.

''It's a problem when you want to fix a budget deficit by
massively cutting spending and doing relatively little on the revenue
side,'' NATSEM's Ben Phillips said. ''Government spending predominantly
goes to those on low- and middle-incomes.''



Peter Whiteford from the Australian National University's
Crawford School of Public Policy said there had not been a budget that
hit the poor so hard, at least since the Fraser government.

Read more: http://www.smh.com.au/national/natsem-analysis-confirms-the-burden-of-the-budget-will-fall-most-heavily-on-the-poorest-families-20140521-38p4i.html#ixzz32NKev2Ba

What's inside Joe Hockey's head?

What's inside Joe Hockey's head?

Date

May 21, 2014

• 48 reading now
• 
  

Ross Gittins

The Sydney Morning Herald's Economics Editor

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Gittins: Medicare’s ‘universality’ breached

Economists know the price of
everything and the value of nothing. Well, that's the attitude Joe
Hockey and Tony Abbott have taken towards Medicare in the budget. Ross
Gittins comments.

Recommended

Do you like paying tax? No, I thought not. Well, I have good
news. The harsh measures in last week’s budget were directed towards one
overwhelming objective: getting the budget back into surplus without
increasing taxes to do it. Indeed, Joe Hockey is working towards the day
when he can start cutting income tax.



If you hadn’t quite realised that, you could be forgiven.
You’ve been unable to see it because of two distractors: the deficit
levy and the resumed indexation of fuel excise.




But the levy is just a temporary pin-prick to the top 3 per
cent of taxpayers who will pay it. And the price of petrol will rise by
only about 1 cent a litre per year. The effect of the excise increase
will be dwarfed by the ups and downs in the world price of oil.

Illustration: Kerrie Leishman.

The catch is this: you may hate paying tax, but don’t be too
sure Hockey’s efforts to avoid tax increases and eventually make room
for income-tax cuts will leave you ahead on the deal.




Why not? Because to avoid increasing taxes - and avoid
cutting the big tax breaks some people enjoy - Hockey has concentrated
on cutting back all manner of government spending. And most people -
maybe all families bar the top 10 per cent or so - have more to lose
from cuts to government spending made, than they have to gain from tax
increases avoided.



That’s particularly true when Hockey’s efforts to cut
government spending take the form of tightening means tests, moving to
meaner rates of indexation and introducing or increasing user charges.



Don’t think just because you voted for the Coalition Hockey
is looking after you. It works out that low income-earners – generally
the old, the young and the unemployed - are heavily dependent on
government spending, and genuinely middle income-earners with dependent
kids are significantly reliant on government spending.



Only high income-earners who’ve already been means-tested out
of eligibility for most programs (e.g. me) have little to lose from
Hockey’s cuts. That’s the reason for the deficit levy. Without it, it
would have been too easily seen that high income-earners weren’t doing
any of Hockey’s "heavy lifting".



Indeed, too many people might have twigged that the whole
exercise was designed to have high income-earners as its chief
beneficiaries. The spending cuts are permanent and many of them save
more as each year passes. But the deficit tax is temporary.



Hockey wants us to believe he had no choice but to do what he
did. I accept he had to get on with bringing the two sides of his
budget back into balance, but he had a lot of choice in the measures he
took to bring that about.



He chose to focus on cutting three big classes of government
spending: health, education, and income-support programs (pensions, the
dole and family tax benefits). Not by chance, these are the programs of
least importance to high income-earners.



He carefully avoided cutting the programs of most importance
to the well-off: superannuation tax concessions, the concessional tax
treatment of capital gains and negative gearing, Tony Abbott’s Rolls
Royce paid parental leave scheme, the mining industry’s fuel excise
rebate and other "business welfare" and, of course, the high
income-earners’ favourite charity: defence spending.



And while slashing away at health, education and income
support, he was also busy abolishing the carbon tax, the mining tax paid
largely by three huge foreign mining companies, cutting the rate of
company tax by 1.5 percentage points and exempting federal grants to
private schools from his education cuts.



Hockey will tell you his net cuts to health, schools and age
pensions don’t actually take effect until 2017, after the 2016 election.
This is the basis for his claim not to have broken Abbott’s election
promises. (Remember, all the proceeds from his cuts and charges in
health care will go into the new medical research future fund.) It’s
largely true - though only for Abbott’s “core” promises.



Even so, Hockey’s most objectionable changes are the punitive
treatment of the young jobless and the attack on Medicare’s principle
of universality. The measures that will do most harm to the Liberal
heartland (including the children of high income-earners) are the
changes to HECS and deregulation of university fees.



Some people are referring to Hockey’s $7 patient co-payment
for GP visits, tests and scans as a tax. This is quite wrong. It’s
precisely because it isn’t a tax that it has been introduced. It’s a
user charge: use the service, pay the charge. By contrast, taxes are
amounts you pay the government that bear no direct relationship to what
you get back.



High income-earners want more user-charging (for
pharmaceuticals as well as GP visits) because they’re no great burden to
the highly paid, but they reduce the need for higher taxes. They reduce
the cross-subsidy from the rich to the poor.



I must warn you, however, of the one glaring exception to
high income-earners’ insistence that tax increases be avoided at all
cost (to other people). The one tax increase they lust after is a rise
in the goods and services tax.



Why? Because they believe it will be part of a deal in which
the higher GST paid by everyone is used to pay for another cut in the
rate of company tax plus a cut in the top rate of income tax.



Ross Gittins is economics editor.

Read more: http://www.smh.com.au/comment/whats-inside-joe-hockeys-head-20140520-zri5f.html#ixzz32HYOCFT1

In government, a mantra is not enough to control the narrative

20 May 2014, 2.28pm AEST

In government, a mantra is not enough to control the narrative

The annual federal budget speech is the one required speech of
the Australian political calendar. And it goes all the way back to
Federation. It’s Australia’s equivalent of the State of the Union
address…

Author

1. 
   
   
   

   Annabelle Lukin
   
   

   Senior Lecturer, Linguistics at Macquarie University
   
   
   
   
   

Disclosure Statement

Annabelle Lukin does not work for, consult to, own shares in or
receive funding from any company or organisation that would benefit
from this article, and has no relevant affiliations.

Macquarie University does not contribute to the cost of running The Conversation. Find out more.

The Conversation is funded by CSIRO, Melbourne, Monash, RMIT, UTS, UWA,
ACU, ANU, ASB, Canberra, CDU, Curtin, Deakin, Flinders, Griffith, JCU, La Trobe, Massey, Murdoch, Newcastle,
QUT, SAHMRI, Swinburne, Sydney, UNE, UniSA, USC, USQ, UTAS, UWS, VU and Wollongong.

Joe Hockey’s budget speech forgot the age-old rules of rhetoric,
which he needed to observe if he wanted to control ‘the narrative’.
Lukas Coch/AAP

The annual federal budget speech is the one required
speech of the Australian political calendar. And it goes all the way
back to Federation. It’s Australia’s equivalent of the State of the Union address.



The scope of the budget speech is no less than explaining, justifying
and selling a government’s decisions about how it will spend the taxes
we pay, forecast to be about A$360 billion in the coming financial year. It typically gives a financial outlook statement and positions the government in the context of “where we are now” and “where we are heading”.



In this process, the treasurer of the day has to make sense of the
many disparate, even contradictory, policy decisions contained in the
budget. This creates a situation that can only be retrieved by what, in
political circles, is increasingly called “the narrative”. In other
words, politicians not only have to take action, they have to interpret
what they are doing. If they don’t, someone else will do it for them.



This is because humans attribute meaning to almost everything:
smiling and not smiling, talking and silence, roses versus gerberas,
stilettos or ballet flats, how you hold your knife and fork, unusual
breathing … the list is pretty much endless. The brain, to quote
linguist Ruqaiya Hasan:

…is a naturally designed interpreter: so long as it is not dozing, not drunk, not deranged, not dead, it must make a ‘reading’.

A political narrative is the reading a political party offers to
explain what it has(n’t) done, is(n’t) doing, or will(won’t) do.
Abbott’s “narrative” in opposition was really just a mantra. A mantra
is:

…a word or formula, as from the Veda, chanted or sung as an incantation or prayer.

But what is a mantra in opposition needs to become something more
coherent and substantial in government. You still need a mantra –
something you can say for the purposes of the short grab on broadcast
news – but the mantra needs to have broader and deeper roots.



It needs to be the distillation of a broader story about where you’re
taking the country, and why. If you vacate this space, even briefly,
some other narrative will colonise it.

The elements of successful oratory

The government approached budget day knowing it was handing down what
would be its most unpopular budget of its term of government. It must
have known this was going to be a hard budget to sell. But language
gives us an endless supply of rhetorical resources. And western cultures
have been studying political rhetoric for over 2000 years.



Aristotle defines rhetoric as:

…the capacity to see, in relation to a particular subject, the available means of persuasion.

Forms of persuasion, according to Aristotle, are of three kinds:
those that arise from the character of the speaker; those engendered by
creating an emotional response in the listener; and those deriving from
logical argumentation. These three forms are known as ethos, pathos and
logos.



Opposition leader Bill Shorten’s budget reply speech
had ethos, pathos and logos in spades. He related his own experience,
both in his personal and professional life, and talked up the
achievements of the previous Labor government. He showed the impact of
the budget decisions on ordinary Australians.



And Shorten detailed the general good health of the Australian
economy, and how and why the government’s cuts would hurt Australians
and the Australian economy. He explained what the opposition would
oppose, and why.

Bill Shorten’s budget reply speech as a word cloud – the biggest words are the most frequently used.
Author

Click to enlarge

Hockey’s ‘don’t think of an elephant’ speech

So what about Hockey? On “ethos”, Aristotle would have sent him back to the drawing board. Hockey’s budget speech
should have been trying to persuade us about his own credentials,
and/or those of the government. But in selling the government’s approach
to the budget, Hockey failed George Lakoff’s “don’t think of an elephant” test.



Hockey’s speechwriters should be metaphorically hung, drawn and
quartered for letting him get up and say the budget is not about an age
of austerity, but an age of opportunity. Hey guys, don’t think of
austerity! In attempting to persuade us of the strengths of the new
government’s budget, Hockey articulated not only his preferred
interpretation, but the one most likely to be recruited by his
adversaries.



Here are the other things Hockey told us his budget is not about:
weakening government, undermining a strong social safety net, cutting
government spending, self-interest.

Joe Hockey’s budget speech as a word cloud.
Author

Click to enlarge

For “pathos”, Hockey would also have got an F. The only emotion
Hockey’s speech attempted to invoke was nationalism. Hockey tried to
convince us to pay more tax by presenting it as some kind of national
duty. For this rhetorical device to work we would have to think that
“we” all, equally, hold the destiny of Australia in our hands.



And we would need to ignore the fact that the “we” who earns less is
paying more, while the “we” that earns more is paying less. We would
have to believe that “we” are freely giving as part of this national
duty – “contributing” – rather than paying more because the government
has increased taxes. And that we are “contributing” so that “we” can
continue to enjoy the quality of life that “we” all enjoy today. You, me
and Gina.



What about “logos”? Weirdly, unlike his two predecessors, Hockey’s
budget speech did not give a reading on the state of the economy and how
its key indicators look into the future.



Hockey’s speech did not recruit either the word “forecast” or
“outlook”. As treasurer, Peter Costello averaged four of these per
speech; Wayne Swan averaged three. Hockey’s only mention of GDP was to
report that the government is increasing defence spending. Hockey gave
up on the one element of the speech that would have made him sound like a
treasurer, rather than just another politician.



Rhetorically sloppy, Joe.

“The visionary lies to himself, the liar only to others.”

“The visionary lies to himself, the liar only to others.”

By Kaye Lee on May 20, 2014 • ( 19 )

The
Charter of Budget Honesty was introduced to stop incoming governments
from claiming the previous government lied about the true state of the
nation’s finances.  The heads of the Treasury and the Finance Department
are required to put out their own set of numbers, the Pre-Election
Fiscal Outlook (PEFO), during the election campaign. This gives a
neutral baseline against which we can assess the new government’s
figures. PEFO is the only set of Budget forecasts that truly belong to
the bureaucrats – all other documents (like the Budget) are issued by
ministers.


The outlook in PEFO was remarkably close to the figures in the
Economic Statement issued by Chris Bowen and Penny Wong just before the
election was called. The public servants in PEFO projected the Budget
balance out for a decade. They found that the Budget was on track,
before the election, to return to surplus in 2016-17 and keep improving
from there, eventually hitting a surplus of about 1% of GDP by 2023 with
net debt approaching zero.


Despite the Charter and the neutral numbers in PEFO, Joe Hockey still
played the Budget black hole card. The new government’s mini-Budget
(MYEFO) contained dramatically bigger deficits than the bureaucrats’
PEFO projections, with no surpluses in sight.


The line Hockey
has been pushing is that not only did Labor hide the level of deficits
in the current budget cycle, but that it left a series of hidden
spending commitments in the unpublished years beyond forward estimates.

“From 2017-18, payments are projected to increase
substantially (a real increase of almost 6 per cent in just one year)
because Labor back-ended expenditure in a number of key areas and hid it
from the public.”

Strange….this member of the public was able to find all those figures without the aid of any staff.  In fact PEFO
specifically says “Specific program estimates are included across the
ten years for DisabilityCare Australia, the National Plan for School
Improvement, and the Nation Building 2 and Nation Building 3 programs.”


Labor in fact revealed the funding for the National Disability Insurance Scheme in the budget last May, with new spending broken down out to 2019.

“The Australian Government will provide $19.3 billion
over seven years from 2012-13 to roll out DisabilityCare Australia
across the country. This brings the Australian Government’s total new
investment in DisabilityCare Australia to $14.3 billion over the period.


The Australian Government will provide funding of $11.7 billion to
DisabilityCare Australia in 2019‑20, the first year after full national
rollout. This represents 53 per cent of the $22.2 billion total cost of
running DisabilityCare Australia, with the States and Territories
providing the remaining funding.”

This was to be funded by the increase to the Medicare levy.


Likewise the spending for the Gonski reforms was spelled out in detail as was its funding.

“The Budget provides an additional $9.8 billion over six years from 2014‑15 for new needs-based school funding arrangements.


To ensure that the National Plan for School Improvement will be fully
funded, the Government has needed to make tough decisions — redirecting
savings from higher education, self-education tax deductions and
business taxation; and better targeting family payments.


In addition, a range of national partnerships for education will be
ceased (or not renewed) and funding will be redirected to the National
Plan for School Improvement. As well as helping pay for this historic
reform, these saving decisions will also will help improve the position
of the budget in the next few years.”

Labor copped a lot of flack for its proposed cuts to university
funding, which were really a smaller increase rather than an actual
cut.  The reason they are opposing these savings now is because they
made the cuts to fund education reforms, not to spend on roads.


Hockey also bemoaned supposed hidden funding increases to foreign aid and defence.

“The fact is Labor’s left us with a massive forecast
increase in foreign aid, a massive increase in defence – for example in
one year, there’s meant to be a real increase in defence spending of 13
per cent, a 66 per cent increase in foreign aid.”

The increase in foreign aid was also in the budget papers — it was
actually a reduction on previously proposed spending, with the
government’s Millennium Development Goal commitment to lifting foreign
aid to 0.5% of gross national income put back another year to 2017. The
government spelt out its planned increase in foreign aid up to and
including 2017-18.


As Crikey pointed out in April,

“Labor invited the Prime Minister to spell out the
government’s MDG policy, which he duly did: aid is to reach 0.5% of GNI
when the budget returns to surplus. Which raises the question of why, in
Hockey’s Mid-Year Economic and Fiscal Outlook in December, Hockey left
Labor’s MDG aid funding increase intact, in defiance of the government’s
own policy. The answer, of course, was that it would inflate the budget
deficit for 2017 and beyond.”

And on defence, the budget tells us that defence spending for the
2014-15 financial year will rise by $2.3 billion to $29.3 billion, a
real increase of 6.1%, with a commitment to building defence spending to
two percent of GDP within a decade.  So it seems that wasn’t a nasty
surprise either.


Interestingly, the Labor budget also said “Government has chosen not
to offset the hit to revenue in the near term, as it would come at
significant cost to jobs and growth.”


In a budget press release, Joe Hockey said

“While the former Government left Australians with $123
billion of deficits and no path back to surplus, our budget repair
efforts have meant that deficits in our first four years are now
projected to be $60 billion, with a surplus of well over one per cent of
GDP projected by 2024-25.”

Ummmm, according to Treasury and Finance, Labor policies would have
got us to surplus in 2016-17 with a surplus of 1% of GDP by 2023.


Hockey goes on to say

“Gross government debt is now forecast to be $389 billion
in 2023-24, compared with the $667 billion left behind by the former
Government.  This reduction in projected debt of nearly $300 billion
also assumes that we provide future tax relief to address bracket
creep.”

I am not sure why he keeps talking about gross debt, I assume because it is a bigger number, but he really should look at the government’s own website which says

“The August 2013 Pre-Election Economic and Fiscal Outlook
(PEFO) estimated that net debt would rise to 11.7% of GDP in 2013–14
and peak in 2014–15 at 13.0% of GDP. These levels of net debt are not
unprecedented in Australia. Between 1970–71 and 2011–12, net debt level
as a percentage of GDP exceeded 10.0% ten times (mainly in the
1990s)..…compared with other advanced economies, Australia’s net debt
levels are comparatively low, and have been for some time.


The PEFO projected a return to surplus of 0.1% in 2015–16.


Although Australia’s fiscal balance fell to a low in the context of
the GFC, its structural budget balance is reasonable compared to other
advanced economies.”

When Hockey says that Labor left us with a debt of $667 billion, he
is quoting a figure from his own MYEFO document which included his
decisions to cut revenue from the mining tax, the carbon tax, the 15%
tax on superannuation income over $100,000 a year, and the Fringe
Benefits Tax rort on novated leases.


It also included his inexplicable decision to hand $8.8 billion of
borrowed money to the Reserve Bank. The sale of Medibank Private — a
$4-5 billion contribution to the budget — will be spent on roads because
Abbott wants to be an “infrastructure prime minister”, when it could
cut the budget deficit or the debt. That could be $13-14 billion off the
deficit and debt right there — or an interest saving of more than
half-a-billion dollars a year.  Scrap the company tax decrease, scrap
the Paid Parental Leave scheme, close a few corporate tax loopholes and
tax concessions for the wealthy and we would be well on the way to
addressing the challenges of the future.


So what it boils down to is that Hockey confected a large future debt
to justify ripping the heart out of our most vulnerable so he can say
he is being “responsible” by getting the young, the sick, the
unemployed, the elderly, the disabled, the single parents, and anyone
else who doesn’t have a voice, to pay for his claim that he might
improve his own fictional bottom line in ten years’ time.


In the mean time we will give up the Gonski reforms, the real NBN,
all action on climate change, environmental safeguards, research,
renewable energy, hospital funding, universal healthcare, the ABC…all
while sending a large percentage of the population into poverty.


The carbon tax doesn’t sound so bad now, does it?


“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.”


― Friedrich Nietzsche

Joe Hockey admits co-payment is a new tax - or a rabbit

Joe Hockey admits co-payment is a new tax - or a rabbit

Date

May 20, 2014 - 2:08AM

Heath Aston

Political reporter

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"We didn't say we wouldn't raise any taxes": Joe Hockey addresses a live forum at Penrith Panthers Leagues Club for the ABC's Q&A with host Tony Jones, right. Photo: Wolter Peeters

Treasurer Joe Hockey has conceded the $7 Medicare co-payment
introduced in the budget amounts to a new tax - but denied the Abbott
government had lied to Australians that it would not introduce any new
taxes.



Appearing on ABC's Q&A program, Mr Hockey was jeered
early on by the audience in Penrith in Sydney's western suburbs until
host Tony Jones asked for respect for the Treasurer.

No, I don't think you have to lie to get elected 

"We didn't say we wouldn't raise any taxes. That's absurd
because we went to the last election promising to introduce a levy for
the paid parental leave scheme," Mr Hockey said.

Holding to account: Particpants at the forum prepare to ask the Treasurer questions. Photo: Wolter Peeters

"We said emphatically that the taxes would be lower under us
than they are under Labor and if you have a look at the Budget Papers
it actually shows that the taxes are lower under us than if Labor were
re-elected."




But the Treasurer accepted under questioning that the co-payment was a new tax.



"It's a payment. You can call it a tax," he said. "It comes
out of a pocket. It comes out of someone's pocket. A taxpayer's pocket.
You want to call it a tax, you can call it anything you want, you can
call it a rabbit."



He also conceded that the rise in the petrol excise was a tax increase.



The Abbott government has plunged in the polls and is under
fire for imposing those new taxes and cuts to family tax benefits,
tougher welfare eligibility, lower pensions and deregulated university
fees.



The government is also under fire from state premiers and
chief ministers of the territories for cutting $80 billion from health
and education funding over the next decade.



Mr Hockey dismissed claims by NSW and Victoria that the impact would be immediate, saying funding would increase.



"We are giving the states an extra $9 billion in net terms
over the next 4 years. They just got a $4 billion windfall from the
GST, an increase in $4 billion in the GST," he said.



Mr Hockey said the Coalition had not attempted to sneak into
government by keeping its plans secret before the September election.
"No, I don't think you have to lie to get elected," he said.

Read more: http://www.smh.com.au/federal-politics/political-news/joe-hockey-admits-copayment-is-a-new-tax--or-a-rabbit-20140519-38kh5.html#ixzz32Bf1udus

'Missing' figures show poor are hit

'Missing' figures show poor are hit

Date

May 19, 2014

Peter Martin

Economics Editor, The Age

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Information withheld from Tuesday night's budget shows that
high-income couples will suffer scarcely at all while low-income
families on benefits lose as much as 10 per cent of their incomes.



Inserted into the 2005 budget by then treasurer Peter
Costello and included in every budget since, the table is usually titled
''Detailed family outcomes''. It sets out the way in which the budget
measures make different types of families better or worse off.




Joe Hockey's budget is the first since 2005 without it.



ANU public policy experts Peter Whiteford and Daniel Nethery
have crunched the numbers on all the personal tax and benefit changes in
the budget to replicate the missing table.




Their findings, published by Fairfax Media on Monday, show
Australians on benefits suffer far more from the budget than those on
high incomes.



The worst off is an unemployed 23-year-old whose income will
slide 18.3 per cent as a result of the budget. A single parent on the
parenting payment with a child aged six will be 10.2 per cent worse off.



In contrast, an Australian earning three times the average
wage will lose just 0.9 per cent of their take-home income. A
high-income childless couple earning $360,000 a year will lose nothing
whatsoever.



''These calculations are conservative,'' Professor Whiteford
writes. ''They do not take into account the proposed abolition of the
schoolkids bonus as this is not a new budget initiative. They do not
deduct rent or childcare.''



Partly offsetting the personal tax and benefit changes will
be the abolition of the carbon tax. Professor Whiteford says the gains
from this change are tilted towards low-income earners but will ''offset
less than one-fifth of the losses for the unemployed''.



The biggest loser among parents is a single parent on Newstart with a child aged eight, whose income will slide 12.2 per cent.



All the figures prepared by Professor Whiteford and Mr
Nethery are presented as changes to 2016-17 disposable incomes because
that's when most of the budget measures will have come into effect.



What's striking is that the number of dollars lost a week
varies little with income. The loss to a single 23-year old on Newstart
is $47 a week, close to $67 is lost by a two-income couple with three
children taking home between them 133 per cent of the average wage.



Asked why the Treasurer excluded the table from the 2014
budget, a spokeswoman for Mr Hockey said the government had been
transparent about the changes in the documents that accompanied the
budget papers.

Read more: http://www.smh.com.au/federal-politics/political-news/missing-figures-show-poor-are-hit-20140518-38i05.html#ixzz326LdsToM

The Budget for the true deceivers

The Budget for the true deceivers

Mark Chapman 15 May 2014, 12:00pm 206

EconomicsPolitics

We’ve moved into an age of post-factual politics, where our leaders make up their own reality and expect us to buy it, writes Mark Chapman from Taxpayers Australia.



SO, THERE WE ARE.



After all the weeks of speculation and leaks, all the angst and all the heat, the Treasurer has finally spoken.



Frankly, it was an anti-climax — not least because what we got was
almost exactly what we expected to get.  Despite promising surprises,
the speech actually ran exactly as predicted and was exactly as feared.



Once again, the tired old clichés were dusted off and given another outing:

“end of the age of entitlement”

and

 “doing nothing is not an option” 

as well as

“a nation of lifters not leaners." 

To be honest, I was slightly surprised to hear so many of these again.

In Full: Joe Hockey hands down budget

Quite simply, hardly anyone believes this nonsense. 



Everything Abbott and Hockey have said has made it clear that they
are only ending the age of entitlement for those groups they don’t like
and those groups who won’t vote for them. For the favoured few – the miners, the wealthy, the foreign owned media corporations – the age of entitlement rolls on
and the government even throws a few sweeteners onto the pile
(abolition of the Australia Network, cuts to the ABC and SBS, extra fuel
subsidies to the miners, paid parental leave and now the promise of generous largesse to multinational drug companies through the new medical Futures Fund).



And all the polls, the public commentary, the seething anger in the
community indicates that, as a nation, we can see this.  We can see that
we are being screwed over and we don’t like it, not one bit. 



Now, I’d assume Messrs Abbott, Hockey and Cormann
are reasonably intelligent men and that they would see that their
message isn’t cutting through. Naively, given that Smokin’ Joe kept
assuring us (nudge nudge, wink wink) that we didn’t know everything that
was in the Budget and that he had a few surprises up his sleeve, I
assumed that there would be something in there to soften the pain — to
demonstrate a real and genuine commitment to sharing that pain.



But no. What we got was exactly what the leaks told us we would get.



Unlike their election promises, there were no surprises. Just a
torrent of cuts, all aimed at the jugular of the poor and
vulnerable. This country is no longer a place to be young, no longer a
place to be old, or sick, or unemployed.

Joe Hockey 7.30 Interview - 2014 Budget

But if you’re wealthy or you run a large corporation, come on in, we’re open for business.



Yesterday, the day after the Budget, Cormann and Hockey were out
patrolling the airwaves loudly proclaiming the fairness of the Budget
and dismissing any suggestions of broken promises. Because now all we
have is the ‘fundamental promise’ to fix the nations finances. 



All those other ‘non-fundamental’ promises (no new taxes, no
increased taxes, no changes to the pension, no cuts to health or
education or the ABC or SBS) no longer count.



And we’re expected to buy this.



We’re expected to accept this insult to our intelligence and even
thank the government for their largesse in helping to dismantle
everything that makes this country a desirable place to live.



We’re expected to buy this Orwellian nonsense that a Budget loaded
with assaults on the most vulnerable will help to build a better nation.



We’re even expected to accept that the politicians are helping with
the heavy lifting as Mr Abbott − who enjoys a higher salary than the
British Prime Minister or even the President of the United States −
struggles by without a pay rise for a year, which will no doubt to be
recompensed with a double sized rise next year to make up for any slight
inconvenience.

Joe Hockey: Working for the corporate sector

And then, hidden in the Budget papers, is the final kicker.



A few weeks after we learn that $24 billion is to be spent on fighter jets, we learn that the Defence budget is to increase by 2%. Whilst every other department and authority of state takes a hit − including, tellingly, swingeing cuts
to the massively underfunded corporate regulator ASIC − whilst the
budget (if you believe the hype) spirals out of control, we can somehow
afford a real terms increase in the Defence budget.



It’s now reached the stage where this crew have abandoned fact based
reality altogether and appear supremely confident that they can sell us
their analysis of a broken budget based purely on the proposition that if we say it’s true, then it’s true.



We’ve moved into an age of post-factual politics, where our leaders make up their own reality and expect us to buy it.



The evidence so far is that we’re not falling for it but I have to say, I’m nervous.



We have two more years of this and given that this Budget seems to
have been only Stage One in their assault, I fear for where we’ll be by
the time of the next election.



Mark Chapman is head of tax at Taxpayers Australia Inc — a non-profit non-partisan organisation providing advice to taxpayers. You can follow Mark on Twitter @mchapman_mark.







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More Joe Hockey stupidity: Diamonds on the soles of his shoes

More Joe Hockey stupidity: Diamonds on the soles of his shoes

Bob Ellis 14 May 2014, 11:30am 93

EconomicsPolitics

(Image by John Graham / johngraham.alphalink.com.au)

Fat man with a cigar says 'tighten your belts, the age of entitlement is over'. What is wrong with this picture, asks Bob Ellis.



Fat man with cigar says:

‘Tighten your belts.’

What is wrong with this picture?



Fat man with cigar whispers:

‘Lunch with me, baby? Twenty thousand bucks.’

What is wrong with this message?



There is an old Labor saying: If you’ve never had holes in your shoes, you don’t know what it’s like.



I last had holes in my shoes in 2003 and a girl in the office, Viv Skinner, bought me new ones.



I wear sandals now; a conscious decision — they’re cheaper.



I had holes in my shoes because I had student-age kids and a
half-million mortgage left over from misspending money on real estate in
the eighties and losing it all. You get holes in your shoes that way.
And you see things differently, with holes in your shoes.



Joe somehow thinks the occasional skint supporting mother with four
sick children and a part-time job who has to pay, now, twenty-eight
dollars a week to go to the doctor and twenty dollars more for medicine
doesn’t matter.





He imagines she’s uncommon, statistically irrelevant, uninfluential when she whinges about it.



He imagines she doesn’t have a mother, an uncle, a schoolfriend, a
neighbour, a fellow church member who’ll talk about her to others and
write to their local member.



He imagines this kind of information, in the Facebook age, can be
suppressed — as it was last century by editorial policy and a fearful
ABC newsroom.



He imagines he can act as secretly as Howard and Costello did and get away with it.



He imagines no-one’s watching or listening.



He imagines no-one cares.



He also imagines Howard and Costello got away with it, when their
1996 ‘tough budget’ lost them seventeen seats. Seventeen seats would put
his mob out of government — and more people are watching, and
listening, and reading now than ever before.



One of the things they saw was a fat man with a cigar telling others to tighten their belts.

Hockey stumbles over question of dancing in office

One of the things they heard was of him, Joe, charging twenty thousand dollars for lunch with him, at the ‘North Sydney Forum’.
What they heard was how Liberals have been buying influence in this
fashion since Askin’s day, and the Liberal Party is, basically, a
racket. Almost sixty per cent of New South Walespeople believe this now —
and he’s telling them to tighten their belts, and share the pain, the
burden.



They’ve seen Rake. They know how big a fib this is. Cleaver Green says I’m on your side, trust me.



The bottom line − to use a tedious phrase − is eighty per cent of us
have less money to spend now. And this is supposed to be good for the
economy. And it’s really, really bad for the economy. Less money spent
means less revenue, less profits, less jobs, less money spent, less
revenue, and so on down to oblivion. It’s why all austerity programs
fail.



A dimwit can work that out. Joe Hockey can’t.



Joe could have paid the interest on the deficit, $1.6 billion, by delaying for a year the money to be spent on the fool fighter-bomber
that still can’t fly, and keeping all of Labor’s measures — broadband,
Gonski, the NDIS, the schoolkids’ money, the ABC’s golden age — going.



He could have paid $3.2 billion next year by halving the pregnant
millionairesses’ baby bonus, and waited for the economy to improve.
Instead, he decided to wind up the Australian project — the fair go; the
neighbourly society; the ladder of opportunity; the good village we all
aspire to, altogether.



And he thereby lost his career, his reputation, his good name, his posterity. That’s how dumb he is. He will be despised now as Lehman Brothers. That’s how dumb he is.

Joe Hockey 7.30 Interview - 2014 Budget

He imagines he’s got years, not months, before ICAC snares him and he
has to resign his seat. That’s how dumb he is. That’s how truly dumb.



Treasury revealed on Monday
that the deficit for the first nine months of the fiscal year was $24
billion. Which meant for the whole year it was about $30 billion, not
$47 billion. This brought down the problem by a third, and meant
Swanny’s date of surplus, 2017, was correct. Joe will get his surplus
too by that year — and in the meantime destroy Australia.



But it’s likely he won’t get that far.



The reason is the disabled and their relatives. This is three million
people. On top of them are a million immediate friends and what we call
the doctors’ wives. These add up to 22 per cent of the electorate. Joe
is telling the disabled to get off their crippled butts and on their
bike and find a job — in an era when half the young people’s jobs are
done by machines. If he loses that 22 per cent, he loses fifty seats and
sweeps the Liberal Party out of Australian history.



That’s how good he is at adding.



Fat man with cigar says get on your bike, you cripples, the age of
entitlement is over. The healthy ones, come pay me $22,000 and we’ll
talk.



That’s how dumb he is.



Oh boy.







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