Through the pain barrier with Liberal budget

HARD, or not hard enough?

This Budget provides the Abbott government with its best, perhaps its only chance, to rein in the runaway costs of six years of Labor’s recklessness. The worry is that it may not be sufficient. Forget the predictable cries of anguish from the ABC’s trained troupe of rent-seekers, there is not that as much suffering as they might have you believe. And there could not be because of the straitjacket of promises Prime Minister Tony Abbott wrought for the Coalition before last September’s election. The plethora of numbers released by Treasurer Joe Hockey last night, most of them leaked in advance, will just not cause as much pain as the financial position might have justified. This Budget certainly does not adopt that many of the recommendations put forward by Tony Shepherd’s Audit Commission but it has the right flavour. With debt rising to $667 billion, the measures adopted have the potential to change that trajectory and as Hockey said in his address: “Doing nothing is not an option”. This is in the conservative tradition, not the Labor tradition. Labor has always sought to take from the economy, to borrow more, indeed, Labor’s illustrious “light-on-the-hill” legend Ben Chifley even sought to nationalise the banks and chunks of industry in his effort centralise control of the economy. Abbott and Hockey are making incremental, not radical, changes. The safety nets for health, education, pensioners and families, remain but the free rides for those who can afford to pay are being whittled away. As they had to be. The audit commission found that the Department of Human Services sends out payments of more than $400 million every day. This is unsustainable. The Budget will pare back payments to those who have the capacity to stand on their own feet. Universities will be able to set their own fees from 2016, though those already studying will be covered by their existing arrangements until 2020. The competition for students will improve the quality of courses offered. If the ABC’s recent ill-mannered Q&A guests are any example, the students can only benefit. The higher education sector is in favour of the move. It is overdue. Despite the socialist students’ whining, more than 60 per cent of Australians don’t have university degrees and they have been paying the fees of more than 60 per cent of the students. Eighteen per cent of students never repay their higher education loans, which average $16,500. They wanted a fairer system, they have received one. Under this arrangement they will not be required to repay loans until they are earning over $50,000 a year. The ABC will lose its ill-gotten Australia Network, a long overdue move given the utterly shameful manner in which the public broadcaster acquired the broadcast rights to this redundant channel. Both the ABC and SBS will have their funding reduced a fraction as the government claws back a minuscule efficiency dividend. The fuel excise will be indexed, as expected, but every dollar raised by the increase will go to road building. The additional cent or to which will be payable has given rise to possibly the most contentious claim about the Budget, that it breaks a promise not to introduce new taxes. This not a new tax but there is no doubt that fuel prices are major concern to Australians. Refusing to lift fuel rationing after WWII was as much a factor in the aforementioned Chifley’s loss of the 1949 election to Robert Menzies, as his plan to seize control of people’s savings. The plum the government hopes the public will talk about is the new Medical Research Fund bankrolled by the $7 Medicare co-payment, changes to the Pharmaceutical Benefits Scheme and other tinkering in the health budget, until it reaches a base sum of $20 billion, making it the largest research endowment fund in the world. There is one inescapable truth underlying the presentation of the Abbott government’s first Budget — realistically, given the inexorable political cycle it represents the only chance to get the settings right. Labor may rollout its key figures — Opposition Leader Bill Shorten, Chris Bowen and Penny Wong — but, seriously, they lack all credibility. Abbott and Hockey will face the biggest challenge the Coalition has yet met. It will be tough. But that’s what politicians are paid for. To make the tough decisions that are necessary to take this nation through dire economic times. Sir Winston Churchill fought perhaps the greatest battle any democratic leader has confronted in the last 100 years. After he was eventually rejected by his own party, having led Britain to victory and inspired the free world, one of loyal supporters, Harold Nicolson, wrote in his diary: “Once the open sea is reached, we forget how we clung to the pilot in the storm.” Australia is in those stormy seas now and we must stay the course.