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The Stupid, the Strange and the Sensible in Search of a Surplus

The Gillard Government’s Mid-Year Economic and Fiscal Outlook, or MYEFO for the acronym loving political wonks, is now out. The record continues to struggle, a fact not lost on many, even the most casual of observers. After some time discussing personalities, yesterday the discourse turned to discussing economics and the economy, a welcome shift. Wayne Swan’s budget hopes were always, at the very least optimistic and at the most fanciful when he brought down in May what he believed was the first of four budget surpluses.

Revenue and tax receipts have continued to decimate the federal budget in the wake of the Global Financial Crisis and as a result of the continuing shocks in Europe and the US in particular.

The May budget revealed a small budget surplus of $1.5 billion and that has already, in four months fallen by the wayside with the prediction of the final budget surplus downgraded to just $1.1 billion in the MYEFO update from Monday. Falling commodity prices and ongoing poor tax receipts were the chief factors blamed for the below expectation forecast.

Tax revenue over the forward estimates also points to an ongoing challenge for the budget, with expectations for the current financial year $4 billion down and over that entire period, down $22 billion.

Of course new spending will also be a major problem for the budget bottom-line and that still, despite improving poll numbers, seems like it will become the Coalition’s problem from 2013. But of course that will be tempered by widespread cuts in a variety of areas. This appears likely to include some areas of spending with bipartisan support, with rhetoric from the Opposition around the NDIS particularly troubling.

As there always is with budget cuts and payment increases, there has been much debate over the past 24 hours about the main measures employed by Treasurer Wayne Swan in an attempt to complete his budget mission. Overall, MYEFO revealed $16 billion in spending cuts and extra charges.

The main features of so-called ‘mini-budget’ were limits to the private health insurance rebate, increased visa application fees, changes to the baby bonus, a delay in funding for trades training centres and changes to how businesses pay tax.

In terms of political stupidity, cutting the Baby Bonus for a second and subsequent children wins the prize. The changes simply will not be widely liked and will quite easily be fed into the ongoing cost of living debate.

However, it is an entirely sensible decision economically to change the size of the payment made to families choosing to have more than one child. This payment is merely meant to assist with the initial costs of raising children and in no way makes a dent, nor should it, in the long-term costs of raising a child.

The government’s decision to dramatically increase the price of visa application fees, including the Working Holiday Visa, is one of the most ridiculous decisions taken in the Mid-Year Economic and Fiscal Outlook. Tourism is a very important part of our economy and has been hit by natural disasters in the north and more broadly by the GFC and continuing trouble in Europe and the US. Add the high dollar to the equation and the Gillard Government looks quite stupid in choosing to increase prices in this area.

Another odd decision for the Gillard Government to make is to delay funding for trades training centres. Delaying funding for their baby, replacing John Howard’s iteration, will look stupid to and hurt some of their constituency, at least in the short-term. The Labor Party making these cuts to their own program also effectively blunt their own attacks on the Liberal Party over cutting funding to this program.

The ALP has also, unsurprisingly, decided to give big business a bit of a whack, though this time, it’s not just the big miners, but businesses earning over a billion dollars in general. Changes to how companies pay tax, from quarterly to monthly installments will raise $8.3 billion dollars in revenue for the government. The overall effect on individual businesses is as yet unclear but the extra impost and timing of it will certainly have some effects.

Increases to the private health insurance rebate will now be limited to inflation. It is possible that some of those on low incomes who might choose to enter the private health insurance market at the lower end could be discouraged, though the punitive measures already in place will probably cut the chances of that down.

We have a bit of a mixed bag from a government in an almost vain search for a surplus. There have been some stupid decisions and there are some sensible ones in MYEFO. The sensible ones though, especially in the case of the baby bonus payment, will quite likely be seen by many as the exact opposite, dumb ones by the broader public. The unpredictability of some of the measures is also met with the predictability of others.

The only question left is will this budget update hold up to scrutiny? There will be attacks on and questioning of it and the Labor Government from various quarters. The political pain that will seemingly be felt still seems unlikely to be quelled by a surplus.

The Sunday Sandwich (That’s a Wrap)

It’s Sunday and that means that another hectic week in Australian politics has passed with all its highs and lows, its angry words and policy announcements and legislative discussions. The week was punctuated by two main events, the passage of the Private Health Insurance Rebate means testing, a legislative win at least for Labor and the ALP leadership tensions seemingly heading toward a booming crescendo. Parliament also sat for the week and also proved far from uneventful.

The Gillard Government and its Health Minister managed to negotiate enough votes for the passage of means testing for the Private Health Insurance Rebate. This issue has seemingly split sections of the community and the two major parties no less, with Tony Abbott pledging he would reinstate the rebate for all as soon as possible upon election of a Coalition Government.

Parliament sat for the second week in a row, the first sitting period of the year and has again proved to be a full on affair with some changes affecting the complexion of Question Time. Questions must now be 3o seconds and answers no more than 3 minutes, a helpful change that should be added to as parliament progresses under the new Speaker, Peter Slipper.

Regardless of the changes, the usual bad behaviour continued, with Ministers, including the Prime Minister repeatedly cautioned to be “directly relevant” to the question asked. There was also no let-up from interjections across the chamber and a number of Coalition MPs found themselves having a coffee break during Question Time. A few ALP MPs also faced the same early afternoon tea courtesy of the new lower tolerance for interjections from the new Speaker.

Questions over the Labor leadership also permeated the week and on Saturday reached fever pitch with allegations in the press that senior Ministers were actually testing the waters for a potential Rudd spill in the coming weeks. The longer the speculation goes, the more pain it will cause the ALP and the more terminal the government will become.

The week has undoubtedly been a dramatic one with both legislation and leadership tensions dominating the week in the parliament and outside of it. The leadership tensions are becoming all the more real and almost tangible and they will surely continue to play out over the coming week, even in the absence of the key player, Kevin Rudd who heads overseas again, though this could provide opportunity for supporters to do their work. The parliament has risen after two weeks, but there will be little cooling of the political discourse which has only really just begun for the year and don’t forget, the Gonski review into education funding will also be released this week, but likely overshadowed by terminal leadership tensions.

You get the feeling that the coming week will not be like an ordinary non-parliamentary sitting week and that doesn’t bode well for the Labor Government.

Question Time Ahead of Time

The last day of Question Time for the week in the House of Representatives is upon us and promises no less than has been delivered over the last two sitting weeks in Canberra. Both sides have firmly dug themselves in to their respective attack and defense positions and have not let up except to vary their posturing within those areas. This does not look set to change at least for the day with positions so set in stone that if budged their positions may shatter into countless shards.

The Coalition has been heavy in its attack on three fronts, two of which fit into the broader narrative of economic management which both sides of politics seem intent to capture ground in this area, a traditional strength of the Liberal and National Party Coalition. Over the last two weeks the interrogation of economic matters has centered around the carbon tax, with the mining tax taking somewhat of a backseat for the moment. There is no doubt this line of questioning will continue today, being a central tenet of a future Abbott-led Coalition Government.

The Opposition has also been brutal in its pursuit of Craig Thomson and the Fair Work Australia (FWA) investigation that has been looking int0 allegations involving Thomson and the Health Services Union. In the recent sitting days questions on the matter have tended to focus on the length of the investigation rather than the MP who is a subject of the investigation. Estimates yesterday showed that the case may be drawing to an end but there is little doubt that the Coalition will want to continue its pursuit of the matter despite the angry and frustrated words of the Prime Minister in Question Time yesterday in relation to the saga.

There is also another possible line of enquiry in Question Time which the Coalition may take and that is to ask questions of the Government in relation to the passage of the Private Health Insurance Rebate means testing which passed the House of Representatives yesterday.

The Government will undoubtedly continue to try to paint themselves as the better economic managers, not for the budget position, but for the funds that they hope to raise through their new taxes to provide for Australians in different areas. As I have also repeatedly said, the Gillard Government will also focus on the economic position relative to other nations.

The Government will also surely direct some Dorothy Dixer’s toward the means testing of the Private Health Insurance Rebate which, as already noted has passed the House of Representatives.

The Speaker looks set to continue using Standing Order 94a for rowdy Opposition MPs without let-up, though we have seen Government MPs being booted from the House for one hour, particularly in recent days.

The real interest as far as the Speaker goes will be how much of a leash Mr Slipper will give the Treasurer who has tested the patience of Coalition MPs and supporters with repeated infractions this week particularly.

You know the drill, 2pm today on the TV and on the radio or in the wee hours of the morning for a replay on your TV. Enjoy the show!

Question Time Ahead of Time

It’s Wednesday and another day of Parliament and the requisite Question Time is upon us and it promises to bring much of the same drama, shouting and laughter we have come to expect, particularly during Question Time. Today’s session also promises to bring much the same line of questioning from both sides of politics, but likely not the cross-benches. This means parliament is set to continue debate on the economy, carbon tax, Minerals Resource Rent Tax (MRRT), Private Health Insurance Rebate and the Fair Work Australia (FWA) investigation into Craig Thomson. A further event past that is likely to attract attention is the Australia Day protest which overnight saw a new development with footage of a key player, Kim Sattler being brought to light.

The Coalition is likely to continue its attack with a three prong  mix of the carbon tax, FWA and Craig Thomson and the means testing of the Private Health Insurance Rebate. It is also now likely that the Opposition will pursue, with renewed vigour, the events of Australia Day. The questions will likely pursue the same lines of inquiry that have been displayed so far this parliamentary year.

The Government are also likely to continue on the same line of attempting to establish a narrative as good economic managers which is failing to cut through if the latest poll is any indication as far as team performance goes. Once again, Government questions, or Dixer’s will focus on the strength of the economy related to others and on the spending that is occurring under this Government.

Again the Speaker will have a tough time controlling the parliament with members likely becoming more raucous as the time flies by and the likelihood of the 94a being utilised is high. The reforms to the lengths of both questions and answers does not seem at all to have changed the tenor of the debate with much of the same nonsense, just less time to fit it in.

The rundown complete, you know have the tools to follow Question Time a little more closely, beginning at 2pm AEDT on both your radio and your television. I won’t be missing it, will you?

Question Time Ahead of Time

Day two of the second week of the parliamentary year is upon us and is not likely to disappoint with more of the same narrative from both sides likely to dominate during the parliamentary sitting day. There may well be an added ingredient slipped into Coalition questions which will cause them great fits of laughter and smiles spattered throughout Question Time.

The Coalition is likely to continue to pursue the Government over the Craig Thomson affair and the long-running Fair Work Australia investigation causing much annoyance and disbelief. The Tony Abbott led Opposition will also likely pursue the Government over the carbon tax, the Minerals Resource Rent Tax (MRRT) and the upcoming legislation to means test the Private Health Insurance Rebate.

Likely to provide added energy and vigour into the Coalition questions to the Gillard Government in Question Time is the Four Corners program last night which aired some claims which will be particularly uncomfortable for Prime Minister Julia Gillard and the ALP caucus already under pressure from many quarters. Just how these factors will be slipped into Opposition questions will be interesting to watch and certain to provide to the theatrical nature of Question Time.

The Government will certainly continue to try and plot its narrative in economic management, despite recent polling showing that this message is not cutting through to voters like the Government would have hoped. Already in progress and foreshadowed job losses will make that narrative even harder to prosecute even if the dollar is realised as a major factor.

Question Time yesterday was quite volatile compared with any of the days last week, not just because of the cross-chamber barbs and yelling and raucous laughter but because of the removal of more Coalition members under Standing Order 94a than many would have expected given last week.  The length of respective leashes will certainly be one to watch.

Given the complex and intriguing mix of events, policies and politics likely to pervade the questions during the session today, it is entirely possible for it to be the most anxious, loud, giggly and angry Question Time of calendar year 2012. You know the drill, 2pm AEDT, and if I can get into the parliamentary spirit of plagiarism, “be there or be square”.

Question Time Ahead of Time

Parliament resumes today for the second parliamentary sitting week of the year and the same areas of debate are set to continue but other policy areas will be added to the the mix. As well as the economy, Craig Thomson and Fair Work Australia (FWA), the carbon tax and Minerals Resource Rent Tax (MRRT) you can expect the Private Health Insurance Rebate means testing and the introduction of two bills on gay marriage will spark debate.

The Opposition will certainly continue to focus on the FWA investigation into Craig Thomson which has taken too much time to conclude. The Abbott led Coalition will also likely focus questions around the Private Health Insurance Rebate means testing, the carbon tax and the Minerals Resource Rent Tax, the latter two in the prism of an economy which could be in strife were Europe to collapse again this year.

The Government will again focus the deployment of the Dorothy Dixer to prosecute what they view as their strong-point, the economy. These questions will undoubtedly focus on policy measures which have provided or will provide in the near future for the electorate rather than on the budgetary situation itself, unless in comparison to the world.

Marriage equality is not likely to result in a question from the Opposition or the Government, with both sides not fully behind the idea, but we may see an Independent MP, likely Andrew Wilkie or the Greens MP Adam Bandt if they are allocated one of the questions for Independent MPs in Question Time today. This comes on the back of two different bills being put to the House today on marriage equality, one from Adam Bandt and Andrew Wilkie and the other a Private Members Bill from ALP MP Stephen Jones.

The unknown factor is, as always whether there will be any ejections during Question Time, especially since the warning has been removed by the Speaker, Peter Slipper, though if last week is an indication, there will not be a large number warming  the parliamentary cafeteria seats early.

The one thing we do know is, like always Question Time will be loud and even though there isn’t supposed to be, likely also debate. We will look to about 3pm AEDT to see if the Abbott censure motion creeps in just in time for the end of Question Time. That is also a distinct possibility.

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