Friday, January 30, 2009

You died "vomiting money to anyone registered to vote"

Bernard Keane's open letter to Malcolm Turnbull and Julie Bishop:

From Crikey

Dear guys,

I know it's hell being in Opposition generally and particularly hellish during periods of crisis when people only really care about what the bloke in charge is doing. But you're also both intelligent, reasonable people -- particularly Malcolm, who's got a brain the size of a planet. So I know you'll take my comments in good part.

As you know, the budget is in deficit. Not officially, but we all know it is, even before the stimulus package that will come out very shortly. But every time the word "deficit" is mentioned, you get a glint in your eyes, and suggest, ever so subtly -- and sometimes not so subtly -- that this is the Government's fault. Now, however unreasonable this is, no one can blame you for this, because in Opposition you live off scraps. Half-truths, deliberate misinterpretation and wilful obscurity are every bit the staples of communication that they are in government...

For a couple of months last year, around about the time Kevin Rudd and Wayne Swan were refusing to talk about deficits, you were saying we shouldn't be going into deficit. When they suddenly started talking about deficits -- not so much acknowledging the elephant in the room as recognising that it had deposited an enormous pile of dung right in the middle of it -- you changed tack and started saying deficits should be a last resort and that it was the "quality of the spending" that was important.

I’m not sure what "last resort" actually means. Does that mean the Government should boost taxes before a deficit? Slash spending before seeing red ink? Wait until unemployment is over 10%? Anyway, we won't dwell on that.

But in case you haven't noticed, just about every economist on the planet is calling for massive government spending to replace at least a small part of the huge gap in private demand left by the financial crisis. This spending will, at least for some Australians, mean the difference between having a job and not having a job. If we learned anything from the last recession it's that unemployment is a bastard of a problem to fix and pernicious in its effect on our social fabric.

Playing political games with the deficit is grotesquely irresponsible. Other conservatives are being rather more sensible. Barry O'Farrell this week proposed cutting payroll taxes and sending the NSW Budget further into deficit to help employers. And the Canadian Government -- that'd be the one led by Stephen Harper, who wants to be John Howard so much he plagiarises his speeches -- has just announced a stimulus package that will take Canada US$30b into deficit.

But you seem determined to maintain the fiscal hairy-chestedness. As part of that, you like to maintain that when you were in Government, you were the height of fiscal responsibility.

That's complete bollocks and I'm sick of hearing it. The first two Howard Budgets were excellent. They cleaned up the profligacy of the last Keating budgets and began seriously implementing a small-government agenda of the sort a lot of us had been looking for for years. But after that, you dropped the ball. Subsequent budgets got slacker and slacker, especially once the mining boom kicked in. After 2001, your budgets got downright bad as you shelled out money to buy votes. After 2004, you were shovelling money out the door so fast slow-moving people were getting buried under it.

If you'd had just a little regard for the longer term you could have used the boom years to hand out tax cuts and built the surplus up further, or make a serious start on fixing our infrastructure, or get an ETS up and running so we had it built into our economy before the crisis hit.

But no, you died vomiting money to anyone registered to vote.

You also completely abandoned the small government agenda. This was a profound betrayal, one that has left Australian with a legacy of middle class welfare and a handout mentality that will take years to undo -- if any politician has the guts to try to undo it. You could have used the boom years of full employment to wean voters and businesses off government handouts. You’re the conservatives. You're the ones who are supposed to keep government in check, to reduce the burden of government on a free society. But instead your reached hitherto undreamt-of heights of profligacy.

So don't give us this "keeper of the fiscal flame" act, because it's rubbish. Julie, you've just come back from America, and declared that the Americans had "moved on from focusing on the malaise to what they do when the economy turns -- how to get the government out of the market".

Not sure what America you actually went to, but that description of the United States couldn't be more wrong. Moreover, I simply don't believe you when you talk about reducing the role of Government anyway. You and your colleagues had 12 years to show what you were made of on that issue and you did exactly the opposite of what your party philosophy says you believe in. I will never believe the Liberals again when they talk about smaller government, not until they spell out what programs and expenditure and welfare and pork barrelling and handouts you’re going to nix when you get into government -- and then do it.

Having wasted vast amounts of money when times were good, it seems you're determined to criticise the Government for taking us into deficit when things are at about their worst since men wore hats, the world was in black and white, and FDR had a permanent lease on the White House. I'm starting to worry that if I turn on the radio, Roy Rene will be on.

Instead of pursuing this deficit-is-evil rubbish, why don't you get creative like other conservatives, and start arguing for clever ways of generating a lasting stimulus to demand rather than demanding tax cuts we'll all stick on the mortgage, retooling the economy for greater efficiency and competitiveness when growth returns to the world economy, and ensuring unemployment doesn’t become a poverty trap tearing our social fabric and damaging our economy? It'd challenge the Government, and you'd be more credible on that stuff than trying to tell us what great fiscal managers you were. Beause, quite bluntly, you weren't.