"Sir John Howard" wrote in message
news:53dc49b8-826a-43aa-8dfa-f4e5898142ea@w4g2000prd.googlegroups.com...
> http://business.smh.com.au/inflation-monster-stalking/20080513-2duf.html
>
> If it's true that political leaders fall into two broad categories -
> pleasers and doers - then Kevin Rudd's first budget reveals him to be
> veering towards the "pleaser" category.
>
> For the first budget of the first term of a new government, the time
> when a government should be at its most ambitious, it displays an
> unseasonably strong desire to be popular.
>
> A former chief of staff to Paul Keating, the economist Don Russell,
> said recently that pleasers "subscribe to the notion that if you are
> nice to the electorate, the electorate will be nice to you".
>
> Doers, on the other hand, "believe that the electorate is much more
> impatient and believe that unless you are being useful, the electorate
> will inevitably tire of you and replace you".
>
> There is some doing in the budget, but its overall character is to try
> to please.
>
> The Treasurer, Wayne Swan, talks tough. He trumpets it as a budget to
> "fight inflation first", yet it is a budget that actually squibs the
> fight.
>
> How? The Government will proceed with tax cuts. It will honour $8.3
> billion in tax cuts pledged by the Howard government, plus it will
> enact $7.1 billion in the first year's Rudd tax cuts that were
> promised before the election.
>
> Together, this will tip over $15 billion into taxpayers' incomes in
> 2008-09. Plus, this budget will increase overall federal spending,
> after adjusting for inflation, by 1.1 per cent. Whereas the last
> Howard budget spent $275 billion, this one is set to spend $288
> billion.
>
> These are both measures that will stimulate demand and add to
> inflation.
>
> Swan declared yesterday that the budget delivered a "mild tightening".
> But, in truth, the budget is stimulatory. It will add to inflation,
> not fight it. That leaves the Reserve Bank to do the tightening
> instead.
>
> It's true the Rudd Government has not spent as wantonly as the Howard
> government in its final term. A former director of budget analysis in
> the Department of Finance, Stephen Anthony, described recent Howard
> budgets as "Christmas night at the pirate's cave".
>
> The Howard government's final budget increased real spending by 5.2
> per cent, according to the budget papers, and by 2.5 per cent in its
> penultimate budget.
>
> But this is a mismatched comparison. Howard's was an aged government
> approaching an election; Rudd's is shiny and new, in the full flush of
> a decisive victory.
>
> A better comparison is with the first terms of the Hawke and Howard
> governments - these administrations cut real spending by more than 2
> per cent in their inaugural budgets, while Rudd is adding to real
> spending.
>
> And, despite the Robin Hood rhetoric of taking from the rich to give
> to Rudd's "working families", in truth, the rich emerge from this
> budget unscathed and, on some measures, better off.
>
> The budget does give generously to the "working families" previously
> known as Howard's battlers.
>
> The "typical working family" illustrated in Government budget
> pamphlets has a primary breadwinner, Patrick, earning $60,000, and
> Susie, earning $27,000, and two young kids. The family will receive
> total new benefits worth $4160.
>
> This comprises tax cuts worth $1050, an education tax refund of $375,
> plus an increase in the child-care rebate worth $1255, and benefits
> through the first home saver account of $1480.
>
> All together, that's an increase in Patrick's and Susie's disposable
> income of 4.8 per cent a year.
>
> In his 2005 book Postcode, Swan described families like this as the
> "splintering middle" of the Australian electorate. This group was
> "feeling left behind in the race for prosperity, they feel pressured.
> These are the people who increasingly determine the outcome of our
> elections."
>
> His first budget is plainly designed to stop the splintering - to stop
> families from splintering financially, and politically, to prevent
> them from splintering away from Labor, to bind them with largesse to
> the Rudd Government which is governing so ostentatiously in their
> interests.
>
> But this budget does not give to them at the expense of the winners
>
> Proud to be mean, the cut-lunch assassin
> How strange it is to see a Treasurer trying to convince us of his
> brutality. Wayne Swan, bringing down his first budget, spent the first
> 20 minutes of his press conference talking up the nasty bits of the
> thing and barely mentioning the nice bits.
>
> Sure, there are tens of billions of dollars in tax cuts and lovely new
> Medicare for thousands of people previously dragooned into taking out
> private health insurance, but all the Treasurer wanted to talk about
> was the slashing and burning. The Slaughter of the Innocents, in which
> thousands of babies lose their automatic $5000 lucky door prize!
>
> The brutal Cut Lunch Tax Assault, in which office workers can no
> longer escape fringe benefits tax on their sandwiches from the caf!
# Any government is obliged, if it is honest, to fulfil its election
promises, and, if this involves tax cuts, and spending, then so be it - even
if more/less than what the Coalition promised.
That there is a pruning of commonwealth expenditure, in other directions,
while it might be needed due to previous govt's extravagance, can also smack
of a forelock-tugging labour reaction to the boss, or of a Dr.Death doing
what comes naturally. However, better to get the nasty bits over well prior
to the next election.
No social democratic party is going to overthrow capitalism, but it will
try to humanise it.
Nor can any govt, elected by geographic democracy, do much more than try
to appeal to all of its heterogeneous constituents.
Capitalist economics tells us there is an Upper Class, a Middle Class,
and a Working Class, and, while the term Upper Class is rarely mentioned,
the other two are played off against each other, to good effect.
No aspirational family likes to think of itself as other than Middle
Class, 'cos who wants to sink into the nether regions, and live on the
Western side of Melbourne, for example - unless it becomes trendy to do so.
As Geographic Democracy has electorates which vote predominately either
Liberal or Labor (in the suburbs), it is the "marginal" electorates (those
aspirationalists) who are pandered to by both sides of politics - as they
can decide elections.
Who are the Workers? Most of us. After all, if you have no alternative
but to derive the majority of your income from "sale of your labour power",
then you are a damn worker, like it or not - and this includes "independent"
contractors.
Yeah, the whole set-up is rather farcical, and only an upgrade to
Industrial Democracy will really make much difference.
As to Inflation, that current bogeyman of economics, you control it by
controlling Prices, one way or another - and cuts to govt spending, while
assuaging the Top-Enders, are no guarantee Inflation won't still continue an
upward trend.
If Wages are controlled, then so, too, should be Prices - or at least
require justification, in both cases.
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