Tuesday, 29 April 2014

The Art of Opposition

I'm always giving the Coalition a kick about various things, so it's time I got stuck into the Labor Party for a change.  Abbott, Hockey and co are for once on the right track and it's depressing to listen to their opponents' response.

Prime Minister Tony Abbott in Fairfax radio 3AW where he said a temporary deficit tax was not a broken promise.

Budget emergencies are the height of political fashion at the moment.  Our current Queensland Government has been proclaiming one for the past two years.  It is a multi-purpose piece of rhetoric, allowing them to whack their opponents over the head, justify cuts to programs they don't like and soften us up for more quixotic asset sales.  Their colleagues over the border must think it's working because we now seem to also have one a Commonwealth level and the new Tasmanian Liberal Government has just announced one down there.

The word "emergency" seems highly inappropriate to this context.  The credit ratings agencies don't seem too worried and the worst that has happened is governments going from AAA to AA+.  No government is in danger of becoming insolvent any time soon.  It's tempting - very tempting - to see the whole thing as a convenient excuse for ideologically-driven budget cuts.

Still, there does seem to be a seed of truth germinating in this pile of bovine excrement.  Sober commentators like former Treasury Secretary Ken Henry and economist Saul Eslake agree that there is a structural problem with our budgets.  In the post GFC world, government revenue is not growing like it used to, but spending still is.

I don't claim to be an expert on the mind-bogglingly complex art of government budgeting.  It involves huge sums of money and complex forecasting efforts to plan future spending and taxation.  However, I (and all my readers) know enough about budgets to know that there are two sides to any budget ledger - income and expenditure.  If your spending is higher than your income, you have three options - cut your spending, increase your income now, or borrow now in the expectation that your income will increase later so you can pay it back.

The government contends that it has already borrowed too much and would like to reduce debt, so it either needs to cut spending or increase revenue - or both.  The government's preferred option is to reduce spending.  That's easy when you say it quickly, but when you actually start to look at what you would need to cut to make a difference, it becomes a whole lot less appealing.  Just which constituents, and how many of them, do you want to alienate in the interests of reducing debt?  They have already flagged cuts to disability and aged pensions, co-payments for doctors' visits and cuts to youth employment programs.  They have announced the sale of Medibank Private.  Yet these measures, while pissing off millions of people, barely scratch the surface of the deficit.

As a result, the government is starting to look seriously at its income options.  This makes a lot of sense.  It can be argued that a big reason we are in our current situation is that governments have repeatedly cut taxes over the past two decades.  It is these cuts, just as much as spending, that makes our current budget unsustainable.

The problem is that Abbott and Hockey seemed to promise before the election that they would not increase taxes.  This was a rash promise to make, given that they had no clear overall budget strategy and fudged it by withholding their policy costing from the Budget Office until the last minute.  Yet, as Jephthah (or at least his daughter) found out,  it's better to break a stupid promise than stubbornly turn it into a disastrous action.  So Hockey and Abbott have floated the idea of a "Debt Levy", a temporary tax on higher income earners to help clear the deficit.

I'm not sure that this is exactly the thing we need - I suspect we actually need a permanent tax increase to pay for the various social programs we all value.  Still, the government should be praised for trying to find a way to avoid a wholesale slash and burn exercise which can only damage the poorest and most vulnerable members of the community.

Labor leader Bill Shorten: "A tax increase is a tax increase is a tax increase."

So how has the Labor Party, the party of the battler and the downtrodden, responded to this piece of good news?  Have they praised Abbott and Hockey for the courage to face reality, and the decency to try and minimise cuts?  Have they offered to support a reasonable proposal in the Senate, or help craft a progressive, watertight measure that would help right the listing budget ship without drowning half the passengers?  Here is what Bill Shorten has to say, as reported in today's Sydney Morning Herald.

Labor leader Bill Shorten described the idea as the "mother" of all broken promises and argued that it was indeed a "tax increase".

"No amount of weasel words by Tony Abbott and his Liberal government can change the truth," Mr Shorten told reporters in Bendigo.

"A tax increase is a tax increase is a tax increase."

When asked if his party would block the proposal in the Senate, Mr Shorten said he would have to wait to see the detail of what was proposed.

"But we will fight a tax increase on ordinary Australians," he said. "Labor will have no part of it."

So what would Bill do?  Well, apparently he would not introduce the promised paid parental leave scheme.  This may indeed be justified - it seems absurd to pay new parents a generous non means tested payment while cutting back on payments to older people and those with disabilities.  Still, the parental leave scheme is only the cream on the cake.  Forgoing this will not fix the budget problem.  You still need more revenue unless you want to make drastic cuts, which no doubt Mr Shorten would also oppose.

Sadly, everything Bill Shorten knows about being Opposition Leader he learned from Tony Abbott.  Like Abbott, he doesn't have that many ideas himself, and his party seems incapable of generating any, so he sees his role as to oppose whatever the government proposes.  The more strips you can tear off the government's flesh, the weaker it will become, and in the end it will die and you will take its place.  It worked for Abbott.  Perhaps Bill thinks it will work for him too.

He should think again.   In the archaic parlance of the Westminster System, the formal name for the opposition was always "Her (or His) Majesty's Loyal Opposition".  I'm no royalist - sure Prince George is cute but that doesn't qualify his dad to rule a country half a world away from his home - but I like the idea behind this title.  It asks the Opposition to recognise both what divides it from the Government, and what unites them to each other.  They have differences of ideology or constituency, and these mean they will advocate different approaches to many of the problems of government, and will seek to apply different priorities.  Debates may at times be fierce because they are passionate about their views.

At the same time, they share a common loyalty, whether expressed as loyalty to the crown or loyalty to the nation and its people.  All parties are there to serve the wellbeing of the nation and whether in government or opposition they are obliged to do whatever this wellbeing demands.  This means that despite not holding the reins of power, the opposition holds great responsibility.  

Government is not a sporting match, where the object is to win.  It is a decision-making forum where the object is to make good decisions.  A good opposition will contribute to this by shining the light on government policy, highlighting weaknesses and holding the government to account.  But if they are doing this responsibly their criticism will be constructive.  It will always be "instead of this, you should do this".  This way, the opposition becomes a government-in-waiting.  When the electoral wheel turns they will be more than ready to take the driver's seat, because they will have been focused on how to drive better all along. 

The Abbott opposition didn't do this.  They merely opposed.  Now they are paying the price, realising just how unprepared they were and how much catching up they have to do now.  Abbott promised "no surprises" but if you walk into a room with your eyes closed, surprise is inevitable.

Shorten and the Labor Party have no such excuse.  A few months ago they were the government.  They know exactly what is going on.  There is no justification for irresponsibility.  We elect politicians to fix problems, not blame them on each other.  That goes for both sides.  Get on with it, people!

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