I knew there was a good reason why I ignore you completely.
Don H wrote:
> "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. |