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Aug 14, 2011

Australian opposition talking slashes rather than cuts.

From the believing if we see it department.

The US has just dealt with its S&P downgrade; we have one of our own. Treasurer Swan has downgraded the budget surplus planned for 2012/13. It has gone from a dead set truly rooley rock solid promise to an objective.

Meanwhile the Liberal’s plans for budget cuts have been leaked to Labor, (nice one Malcolm.) While Joe Hockey has refused to confirm the leaked documents suggesting the Coalition would axe the carbon and mining taxes and offer personal income tax cuts, it appears they are on the table. The Coalition would need to find $70 billion to do this and still balance the budget.

They seem to be serious in this endeavor:

THE Coalition could shut down entire government departments as its searches for $70 billion in budget savings to fund promises for the next election, including up to $8bn in cuts to personal tax.

Treasury spokesman Joe Hockey has told The Australian he is leading an opposition razor gang blitz on "big government", guaranteeing to deliver the budget to surplus in 2012-13 while also slashing tax collections and government spending.

As Wayne Swan warned of threats to basic services such as health and education, the Seven Network reported that leaked opposition documents showed the Coalition planned to slice $70bn from Labor programs.

The documents said the cuts were needed to fund $37bn in existing promises and up to $8bn in tax cuts. They would make up for revenue it would forgo by dumping the planned carbon tax and mineral resources rent tax.

Mr. Hockey, who said last week a Coalition government would likely scrap the Department of Climate Change, said other departments could also be dismantled.
It is to be hoped that they are serious about this. Hockey is known to be one of the few people in the Liberal Party with any inclination towards, or background in classical liberalism, and as such is the sort of guy who would favor such policies. Most of the rest of the party are ‘wet’ or ‘small L’ Liberals, and that is likely to present a problem for him.

The government are starting the expected scare campaign but it appears to be the usual Labor boiler plate stuff which is unlikely to make much headway. What will be critical in any effort to cut the budget will be to gag Abbott, who has a habit of making rather ridiculous promises based on spending large sums of money. It would also help if they were to drop the insistence that carbon emissions need to be cut.

It is accepted by both sides that the unilateral cutting of emissions by Australia is not going to cool the planet. It seems nonsensical therefore, to continue with policies designed to do that. Those of us in the LDP would not object if they were to pinch our policy: that governments lack the competence to address climate change and prefers market responses instead.

The present time offers the coalition an excellent opportunity to come up with radically different reforms to the way the nations finances are managed. Labor has a severe credibility problem with the electorate and is as popular as a dose of clap. If the opposition wish to bite the bullet and seriously reform the system and get back to some form of reality, they are in the box seat to do so.

They currently have the inside running and are well ahead. Policies that would normally be worryingly likely to tip the balance in a closer situation can be actively perused. Sir Humphrey Appleby might not approve, but this is a time for courageous decisions.


  1. "Hockey is known to be one of the few people in the Liberal Party with any inclination towards, or background in classical liberalism"

  2. Certainly is to be hoped they're serious, but even if they are I'm not optimistic. First there's the public service inertia to overcome, and while I don't have anything like as clear a picture of the Aussie public service as I do it's British counterpart I expect it to be pretty similar apart from the lack of cut-glass plummy accents and people called Bernard (or Sir Humphrey). Secondly there's the problem that scrapping an entire government ministry requires a particular type of politician to be given the job of minister - in fact no less than the political equivalent of a kamikaze pilot is what's needed. Again, my knowledge of Aussie politics and past politicians is lacking but of course Britain faces precisely the same need, and the number of British pollies I can think of offhand who fall into that category is zero. And that was after a recount.

    To be honest I'm not sure how to genuinely cut the size of states without simply waiting for them to go tits up and starting again from scratch.

  3. Hi Tim, I was alluding to his Grattan Institute speech, in which he indicated that he was influenced by his reading of Locke, and Mill.

    I admit that he is rather soft on this where the rubber hits the road, but he is about the only Coalition member who gives any indication of a knowledge of the basic tenets of liberty, or at least admits to it. The rest are little better than conservative creatures of the state.

    Angry, the suicide squad aspect could be handled by giving someone a useful portfolio as well as one or more that are to be abolished. I am somewhat pessimistic on whether this idea will last beyond the start of the next election campaign, during which it will probably be repudiated.

    This is probably the best, if not the only chance they will get at this.