[LINK] O/t The Budget

[John Mann]

Hi,

I think people (including parliamentarians, treasurers ...) too easily
confuse
- balancing the (federal/state/city) Government's budget with
- having a balanced economy, or with
- having an enjoyable life
These aren't the same thing

What good is a AAA credit rating and a Govt budget surplus, if for example
reductions in total health spending (Govt, health fund and private) lead to
people dying earlier from treatable health problems?

Cost shifting some expense out of one budget doesn't automatically make it
appear in some other budget, or create efficiencies rather than
in-efficiencies.

Also, continued growth such as the G20's 2 percent growth target has to
come from somewhere.
Will doing so outstrip the planet's supply of water/food/resources and also
drive worse climate change?

I am reminded of a slogan from the 70's: No Jobs on a Dead Planet.

Thanks,
    John


On 1 December 2014 at 12:54, Stephen Loosley <stephenloosley at zoho.com>
wrote:

> Sure, it's difficult balancing budgets when your main customer stops
> buying, but we should certainly come up with a much better plan. We didn't,
> and hence one suspects the recent Vic election results will also be seen
> nationally.
>
>
> "Comment: Why Joe Hockey's budget flopped so badly"
>
> Sydney Morning Herald, By Ross Gittins, 4 hrs ago
>
> http://www.msn.com/en-au/news/australia/comment-why-joe-hockeys-budget-flopped-so-badly/
>
>
> Who could have predicted what a hash a Coalition government would make of
> its first budget?
>
> If Joe Hockey wants to lift his game in 2015, as we must hope he will,
> there are lessons the government - and its bureaucratic advisers - need to
> learn.
>
> The first, and biggest, reason the government is having to modify or
> abandon so many of its measures is the budget's blatant unfairness.
>
> In 40 years of budget-watching I've seen plenty of unfair budgets, but
> never one as bad as this.
>
>
> Frankly, you need a mighty lot of unfairness before most people notice.
> But this one had it all. Make young people wait six months for the dole?
> Sure. Cut the indexation of the age pension? Sure. Charge people $7 to
> visit the doctor, and more if they get tests, regardless of how poor they
> are? Sure.
>
> Charge people up to $42.70 per prescription? Sure. Lumber uni students
> with hugely increased HECS debts that grow in real terms  even when they're
> earning less than $50,000 a year? Sure.
>
> What distinguished this budget was that even people who weren't greatly
> affected by its imposts could see how unfair it was to others.
>
> Unfairly sacked Treasury secretary Dr Martin Parkinson is right to remind
> us we have to accept some hit to our pocket if the government's budget is
> to get out of structural deficit. But any politician or econocrat who
> expects to get such public acquiescence to tough measures that aren't seen
> to be reasonably fair needs to repeat Politics 101.
>
> This is particularly so when a government lacks the numbers in the Senate
> - as is almost always the case. Without a reasonable degree of support from
> the electorate, your chances are slim. Especially when you subjected your
> political opponents to unreasoning opposition when they were in office.
>
> A related lesson is that successful efforts to restore budgets to surplus
> invariably rely on a combination of spending cuts and tax increases. To cut
> spending programs while ignoring the "tax expenditures" enjoyed by business
> and high income-earners, as this government decided to do, is to guarantee
> your efforts will be blatantly unfair and recognised as such.
>
> Move in on "unsustainable" spending on age pensions while ignoring all the
> genuinely unsustainable tax breaks on superannuation? Sure. Our promise to
> the banks not to touch super trumps our promise to voters not to touch the
> pension. This makes sense?
>
> But a politically stupid degree of unfairness isn't the only reason this
> budget was such a poor one. Its other big failing was the poor quality of
> its measures. It sought to improve the budget position not by raising the
> efficiency and effectiveness of government spending, but simply by
> cost-shifting: to the sick, the unemployed, to the aged, to university
> students and, particularly, to the states.
>
> This takes brains?
>
> There are various ways to improve the cost-effectiveness of the
> pharmaceutical benefits scheme - though this would involve standing up to
> the foreign drug companies and to chemists - but why not just whack up the
> already high co-payment?
>
> There are ways to reform the medical benefits scheme - by standing up to
> specialists - but why not just introduce a new GP co-payment, even though
> we already have a much higher degree of out-of-pocket payments than most
> countries?
>
> The claim that introducing a GP co-payment constitutes micro-economic
> reform because it gets a "price signal" into Medicare lacks credibility.
> For a start, I don't believe that's the real motive. Who doubts that, once
> a co-payment is introduced, it won't be regularly increased whenever
> governments see the need for further cost-shifting?
>
> For another thing, the notion that introducing a price signal would deter
> wasteful use without any adverse "unintended consequences" is
> fundamentalist dogma, not modern health economics.
>
> Similarly, the notion that deregulating tuition fees would turn
> universities into an efficient, price-competitive market with no adverse
> consequences to speak of is first-years' oversimplification, not
> evidence-based economics worthy of PhD-qualified econocrats.
>
> I'm not convinced the range of savings options Treasury and Finance
> offered the government was of much higher quality than the options it
> picked. This budget was so bad because so little effort was put into making
> it any better.
>
> I'm starting to fear our governments and their econocrats have got
> themselves into a vicious circle: because the econocrats can't come up with
> anything better, they fall back on yet another round of that great
> Orwellian false economy, the "efficiency dividend".
>
> But the never-ending extraction of what have become inefficiency dividends
> is robbing the public service of the expertise it needs to come up with
> budget measures that would actually improve the public sector's efficiency.
>
> --
>
> Cheers,
> Stephen
>
>
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