Mungo MacCallum- Political Corrections

Lots of noise from a privileged few

So the budget has come, and already it has just about gone; overall it was something of an anti-climax.

In spite of the forest loads of print spent in anticipation and analysis (last Wednesday The Australian alone devoted no less than 16 broadsheet pages to the bloody thing) it could all have been summed up in the traditional headline: Moderate budget, not many hurt. However the not many made, and are still making, an awful lot of noise about it.

They are an interesting and varied lot: the private health funds, of course, were the first off the blocks to predict the end of the world as we know it. If the young who had been whipped into their ranks by the threat of heavy fines if they resisted were now to escape, their fees would have to go through the roof and the public hospital system would collapse, and that was just for starters.

The argument might have carried more weight if their fees had actually gone down and the hospital crowds diminished when the kids were conscripted in the first place, or if their annual profits had not verged on the obscene ever since. As it is they can expect and will receive little sympathy from the public and still less from the government.

More appealing were the bourbon-and-coke swilling ute drivers, who understandably objected to their tipple being treated in the same way as the alcopops consumed and regurgitated by teenage bingers. Well, just buy it by the bottle and forget the coke. And of course the farmers and the pensioners felt, as always, overlooked and let us all know, although at least the farmers kept their clothes on in the process.

But the loudest and least edifying screams came from the those best able to afford them the householders on $3000 a week and over. The deserving rich, the aspirationals who set the example of ambition, hard work and thrift for the rest of us, were once again being penalised for their success.

Not only had the politics of envy denied them a tax cut, but they were no longer to be paid for having babies and staying at home to drink gin and eat chocolates during their formative years. They could, admittedly, farm them out to child care and possibly even end up better off by doing so, but it was still all so unfair. After all, just because they were pulling in more than $150,000 a year it didnt mean they were rich. Did it? Well, did it?

Actually, yes, it did. Rich and poor are, after all comparative terms. And compared to, say, the Sultan of Brunei, the Queen of England, Rupert Murdoch and Bill Gates most of the residents of Point Piper and Toorak are scraping along in positive penury. They are, however, among the very top earners in Australia, amassing more than 90 per cent of their fellow Australians and considerably more than twice the average. In global terms, of course, they are towards the peak of the top one billionth. So despite their plaintive cries, they are unlikely to attract the attention of Oxfam and World Vision.

But you cant blame them for trying. And at least these days some are prepared to stand up and argue their case in straight debating terms. You have to give points to the letter writer in The Sydney Morning Herald who explained that yes, it was true he could be classified as rich; he had a much larger income than most people. But then, he needed it, because of his lifestyle. The rich, he summed up, have far greater expenses than the poor. We can only hope Wayne Swan takes this timeless truth into account when framing his next budget.

The opposition, of course, vigorously opposes the budget, because it is too mean, or too generous, or too expansionary, or too contractionary, or just too difficult, and it has ways of making it less of all of the above.

The first involves blocking measures such as the increased alcopops tax and the raising of the health insurance level in the senate. It can do this because the old senate, formed during the election of 2001 and 2004, is still in place. The new senators, reflecting the results of the 2007 election, do not take their seats until July 1. Thus Brendan Nelson is proposing to ignore the results of the last election and the will of the people and postpone the implementation of the governments policy, just because he can.

This could be seen as an act of supreme political cynicism, were it not surpassed by Nelsons headline grabber: a challenge to the government to knock five cents off the petrol tax, with the promise of doing so himself if he is elected to office.

There are some policy proposals which are so bad that they are unforgivable, and this is one of them. At the most superficial level it is meaningless populism: a five cent cut now would save the average family less than $5 a week and would be quickly absorbed by future price movements anyway. But at a deeper level it contradicts the entire thrust of sensible fiscal and energy policy.

Petrol in Australia is still relatively cheap compared to most of the world, especially Europe, and we still use far too much of it. Because it is a non-renewable and increasingly scarce resource, and a major contributor to climate change as well, we should be trying to wean people off it. By announcing that if punters whinge loudly enough the government can and will bring the price down, Nelson is sending all the wrong signals.

And it isnt even an original idea: John Howard did it when he was in trouble at the beginning of 2001, but wisely resisted pleas for an encore for the next seven years. Nelsons move, against all advice, is appalling policy and is now turning into bad politics as well. And by making it, he may well have added himself to the budgets short but vocal list of losers.


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