Treasurer Joe Hockey’s Budget will reveal eternal struggle between political good and evil
OPINION: Like a good comic book, Federal Budgets are a struggle between good and evil with superheroes and villains. So who will Joe Hockey be?
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THIS Tuesday will mark my tenth year covering the Federal Budget.
The annual trip to Canberra for budget lock up is a ritual I’ve come to enjoy.
It’s like attending Comic-Con for economists.
Except instead of Superman, Wolverine, Spiderman and Batman impersonators, there’s genuine economic legends like Alan Kohler, Ross Gittins, Ross Greenwood and David Koch.
We go because it matters.
We get excited about it, and telling you what it all means, because the Budget is the closest our pathetic politicians come each year to spelling out exactly what they believe in about the role of government in society.
They put our money where their mouth is, so to speak.
Like any good comic book plot, budgets are fundamentally a struggle between good and evil and the desire by protagonists to do the right thing by society.
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Former Treasurer Wayne Swan once described budgets, aptly, as “moral documents revealing our priorities”. He railed, at the time, against the idea of budgets becoming “a mere exercise in accountancy’’.
Unfortunately, under Swan, budgets — or at the very least the media’s reaction to them — became just that: a numbers game. Will they or won’t they get a surplus?
Former Treasurer Peter Costello’s budgets were a number’s guessing game too. How big a windfall surplus would he pull out of his hat and who — pensioners or families — would share in the largesse through benefits or tax cuts?
It’s time to remember what budgets are all about.
Think some boring speech by the Treasurer’s got nothing to do with you?
Wrong.
Your next trip to the doctor, whether you’ll receive family payments, whether you can access the disability pension: it’s all up for grabs.
But it’s more than that. Yes, the decisions governments make about how they tax us and spend the money affect your hip pocket directly.
But they also say important things about us as a nation.
This year’s budget is more important than most.
The winding down of the mining boom has changed the economic landscape in Australia.
No more can we survive and thrive just by the rest of the world being suddenly willing to pay us a huge amount of cash for our exports.
We have to make our own way now, eking out growth and higher living standards by increasing our productivity and the efficiency and imagination with which we do business.
And we have to do it all with a leaner budget.
The starting point for Treasurer Joe Hockey’s 2014-15 budget is a budget deficit of $34 billion. That wouldn’t matter too much, if the path forward was one of return to surpluses. But it isn’t.
Australians have been living beyond our means — paying less in tax than we receive in benefits and services for years now.
On every economist’s best guess, if things don’t change soon, we’ll be in deficit for decades to come with no end in sight.
Yes, it’s a problem. Yes, we need to fix it.
There’s only two ways how: raising taxes or cutting spending.
The Coalition, because it’s a conservative and liberal government, wants to do most of the hard work by cutting government spending.
Where they cut programs that are poorly targeted or spend money inefficiently, progressives should support them. Benefits paid to families or pensioners who could otherwise support themselves are a wasteful use of taxpayer money.
Money saved on these things can be used to fund areas of genuine need, like greater and more efficient services for disabled people and disadvantaged students (which of course is what a national disability insurance scheme and the Gonski education reforms are all about).
Where you draw the line between those deserving government support and those undeserving is a deeply philosophical and ideological question.
As is whether we should be shouldering higher taxes to pay for greater services.
But restoring the budget to a believable path back to surplus has also become a moral question.
If we spend money that we don’t have today, that debt will be passed on to future generations. If how we spent that money doesn’t increase their future earnings capacity — because it built crucial infrastructure or skills — we will be leaving a terrible legacy to our children.
The Abbott government will reveal its answer to these thorny moral questions on Tuesday.
Treasurer Joe Hockey must balance the books and protect those most in need of government support.
Will he prove a Superman or a wimpy Clark Kent?
Stay tuned to find out.
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