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Byron Shire
March 7, 2021

How to hallucinate a budget crisis

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Mungo celebrates a successful operation at one of his favourite haunts with partner Jenny Garrett (far right) and friends Diana and Gail.
Mungo celebrates a successful operation at one of his favourite haunts with partner Jenny Garrett (far right) and daughters Diana and Gail.

Mungo MacCallum

Even after 15 hours of surgery my recovery was not entirely beset by hallucinations.

But given the amount of kites, balloons, smoke and mirrors emanating from the government about what will and won’t, might and mightn’t, be in the budget, it may as well have been. Or to put it in Bazza McKenzie terms: from the safety of a hospital bed, it has all been one massive Technicolor® yawn.

The initial emetic was the revival of the claim of budget emergency, necessitating urgent and drastic action to smash the deficit within five years. Since this unlikely proposal was not only rejected by an army of economists but also contradicted most of treasurer Joe Hockey’s actions since his election, this always appeared dubious at best. But for the sake of argument let’s assume that he is fair dinkum, and examine a few of the ideas floated to make us all suffer for his ambition.

First there was the Medicare co-payment, predictable enough; in spite of their regular pre-election protestations the Liberals have always been unhappy with the idea of a universal public health care system and, having failed in their zealous attempts to strangle it at birth forty years ago, have invariably spent their time in government seeking to undermine it.

A co-payment would be a useful wedge, aimed at driving more people towards the well-cosseted private health insurance industry.

It is obviously inequitable and also silly; if we are serious about containing health costs the only fair and sensible course is simply to increase the existing Medicare levy on progressive income tax.

Double it if you like: with a proper explanation, voters would accept and even embrace the need for a little evenly-spread pain to preserve the much-loved institution. But while it may be good economics, that solution is, for this government, bad politics.

And the same applies to Hockey’s eminently sensible proposition that the age for pension eligibility will have to be raised, and sooner rather than later. Of course if his conservative colleagues had allowed the Hawke-Keating superannuation scheme to develop seriously, instead of turning it into yet another tax lurk for the well-off, the problem would be far less acute. But as it is something will have to be done. However, let’s get some sort of order into it. Before pushing up the age limit, it would be smart to make sure that the non-pensioners have something to do with their time other than hanging around Centrelink.

So far, the controlled leaks were at least consistent, if not exactly best practice. But then came the Deficit Levy, now morphed into a temporary increase in the top two marginal tax rates. The justification is that this is the only way Abbott, Hockey and the rest of the gang can think of to make sure that the very rich make at least a token contribution to the common weal, a moderately worthy aim which begs the question: why didn’t they do it sooner and make it permanent? Answer: because not only would it break the habit of a lifetime, but because it is, as the panicked party room has discerned, a really great big broken promise.

It wasn’t the first and it won’t be the last, but because of its fundamental nature, and also because of the inanity of the justifications offered (it’s only a levy, not a tax, and anyway I’ll only put it in a little way and if it hurts I’ll take it out again) it has assumed totemic status. This one is not just bad politics; the economic benefits are both small and short term. It may well prove as ephemeral as the business lobby’s dystopian Commission of Audit.

This, as Ross Gittins among others has pointed out, was never meant to be taken seriously; it was only ever set up to produce a recipe for the kind of scorched earth feudalism which would make Abbott and Hockey look like moderates in comparison. It is no more than a cloud of thought bubbles, a neo-conservative wet dream. If it was so easy to abolish Medicare, restrict education to the wealthy, reduce the impoverished to serfdom and introduce not just one but six new taxes (one for each state) John Howard would have done it years ago. Abbott can’t and won’t.

But it adds to the plethora of confusing and essentially contradictory signals emanating from the prime ministerial bunker. We’ll keep our promises, no surprises, but suddenly we have discovered a crisis invisible to the world’s economists and plan to make you miserable for a while so you’ll thank us when we remove the thumbscrews.

Of course there are easier ways. If the mining boom is really winding down, like, say, the car industry, is it not time, indeed past time, to remove the massive taxpayer-funded subsidies given to them? If we are really facing an ageing population, should not the superannuation tax breaks at least be means tested so that the money can be redirected where it is needed? And surely it would be a good opportunity to reinstate fuel excise indexation, precipitately abandoned by Howard in the polling panic of 2001?

But these are apparently among the dwindling list of still sacred bovines confined to the luxurious corral guarded by the people who really run the Liberal Party. And of course, if Abbott and Hockey were serious about finding easy and painless ways to collect money, they would abandon the costly and ineffective policy of Direct Action on climate change and set up the emissions trading scheme Kevin Rudd planned to bring in on July 1.

And while they’re at it that they could rejig the Mining Resource Rent Tax to make it a genuine revenue raiser …

But now I’m sure I’m hallucinating.

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  1. Good to have you back, Mungo. You ought to spell out those “massive taxpayer-funded subsidies”, which you did a while ago, to remind us why the Mining Resource Rent Tax was a reasonable and justifiable idea. Why this was never explained to the public when the original Mining Super Profits Tax was first flagged is beyond me.

  2. Hallucinations or not, great to have you recovered enough to be writing again Mungo. Keep it up, the country needs you!

  3. Yippee … you’re leading us once again to understand the big picture! Thank you Mungo. At such a time when we are exporting Abbott’s perverted Christian conscience concerning the plight of asylum seekers. Could it be that we are presenting ourselves as a very uncivil, inhumane and cruel nation..domestically and internationally? What happened to the basic Christian doctrine “Love Thy Neighbour”. What Confessional Box would you suggest Abbott seek to find repentance and absolution?

  4. Welcome and thank goodness. I was beginning to think that we were being guided by North Korea. The religious right seems to be so far out there that I was wondering where balanced sanity is situated.

  5. Hi Mungo .. WELCOME and Congrats on your Healing road to recovery.

    Now – to fill you in “WHILE YOU WERE SLEEPING” (to coin a movie title) you’ve no doubt missed a lot of ABBOTSPEAK, gobbledegook changing the meaning of our language as we know it. Had you been at your usual up, alert and terrific self, you might well have been flung back to hallucinate about Good Times We Think We Once Knew !!! All the current crop of misguided ministers have been well schooled in speaking as one single voice, using identical Abbotspeak, but mostly stumbling over their tongues trying to “get it right” i.e. not one misbegotten word uttered that their Lord-and-Master had not already spluttered out. BORING beyond belief ! No personality, no individuality, and no direct answer from any of them .. all the same cardboard cut-outs creating increased amazement that they’re actually imagining they can run a Country !

    Enjoy your being waited on hand and foot; enjoy a slow and complete recovery, because if you don’t
    you won’t have the strength and VOICE to speak on our behalves to reduce the numbers of ego-based Abbott Highways and Budgie Boulevards be built all over the Country in the name of the self-appointed Minister of Madness .. oh not .. that was Minister of Infrastructure. Funny, I thought we had one in Sydney, once.- and he “came a cropper” as I recall. May his legacy continue !

    Sweet drams, Mungo .. while you can.


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