Libs offer their single solitary “solution” again

The Liberals, with their one answer for everything (cut services to the poor!) are using the apparent problem caused by the strong dollar (“a $10 billion revenue shortfall”) to demand that the government do what they always want:

Opposition finance spokesman Andrew Robb says the Government needs to drastically rein in spending.

“They have to start showing some courage so we are living within our means,” he said. He says it is a big test for the Government. “I can’t recall one hard political decision this Government has made,” he said. “Today is the opportunity where they can take pressure off interest rates, help families and help small businesses. The cuts need to be serious and they need to be politically difficult.”

Oh yes, if you believe the Liberals, the only solution to housing affordability/interest rates is, again, cutting public services.

What other problems do the Liberals think can be solved by slashing the public services on which the poor rely, in order to enable the rich to pay low taxes? The drought? Global warming? Crime? Unemployment? The war in Afghanistan? Traffic jams? The difficulty of getting your purchases out of that stupid hard plastic anti-theft packaging without cutting yourself?

I imagine if Andrew Robb spills his tea in the morning he blames the Labor government’s spending on the poor. Damn them and their inability to make “politically difficult” decisions just because they have fundamentally different priorities to us! Now I’m going to have to change my tie!

PS If the high dollar is reducing revenue from company taxes, isn’t it also increasing our ability to pay our overseas debt?

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15 responses to “Libs offer their single solitary “solution” again

  1. The other problem is that Robb’s lying. Either he knows it, and is being cynical, or he doesn’t, and is being stupid. But he’s been discredited by every serious economist up to and including the Reserve Bank on this issue, and yet he keeps repeating it. It’s a very sad commentary on the quality of public debate advanced by the Liberals.

  2. If the high dollar is reducing revenue from company taxes, isn’t it also increasing our ability to pay our overseas debt?

    Not only that but it has a downward effect on inflation (as overseas products and components become cheaper in $Aus terms) which in turn should reduce interest rate pressure.

    But it only goes to show that politicians these days only care about the sound bite, and our pathetic media serves it up for them every time.

  3. Actually, Andrew Robb doesn’t specify where spending should be cut (in terms of services for the poor, or otherwise). As usual he is just ambiguous.

    However, on Radio National this morn, Chris Richardson agreed that reducing government spending could be a good thing. He suggested, from memory, reducing both unnecessary transfer payments to businesses and the level of middle-class welfare we dish out (he cited very high cut-in points for means testing). The other area he said they could reduce spending is in the area of tax concessions.

  4. Well, if you call tax cuts “cutting spending”, which I suspect the Liberals don’t. I don’t think they consider that money government’s in the first place.

  5. If the high dollar is reducing revenue from company taxes, isn’t it also increasing our ability to pay our overseas debt?

    1. The deficit is currently increasing. The the government is still borrowing rather than trying to repay anything.

    2. Interest payments will be lower, but presumably not all of the debt is in USD. AUD has only had a small improvement against the euro. Its the USD that is tanking.

    Andrew Robs point about the exchange rates is correct. In July, the exchange rates were swinging wildly from mid 70 cents to low 90 cents settling around the low 80 cents mark. Economists were not predicting the dollar reaching parity, but it was highly volitile at that time. I think the government basing estimates on 90 cent could be reasonably justified since you cannot expect labor to be two conservative with the numbers in a run up to the election. Cutting it to 85 cents however, was an election scam to improve their forecast and soften the impact of their mining tax stuff up. Now they as squealing they may not meet their targets because of the strengthening dollar. Well tough luck. Swan picked the most optimistic number he could get away with. Now he has to manage the books and keep his promises. No excuses.

    As for the single solitary solution, labor is pretty good at spending beyond the countries means. The deficit is still increase. They have yet to prove they can rein in spending.

    What other problems do the Liberals think can be solved by slashing the public services on which the poor rely
    Cry me a river. Most of the governments out of control spending is not assisting the poor in any way. Pink Bats, BER, green loans, NBN! Then there are renewables targets which are pushing electricity prices up. Desals pushing water prices up. Exactly how is all this government spending helping the poor? Higher repayments on borrowings means less money of social services, until you just keep borrowing and borrowing until the day of reckoning. This government is hurting the poor and your blaming the opposition.

  6. ” This government is hurting the poor and your blaming the opposition.”

    Ah the voice of compassionate conservatism, it indeed warms the cockles of my old heart.All that ranting and raving, and no mention of turning back the boats.We’ll all be rooooned I tell ya rooooned.

  7. If the high dollar is reducing revenue from company taxes, isn’t it also increasing our ability to pay our overseas debt?

    Allow me to offer a slightly less rambling and pseudo-economic answer than Chistery’s effort above:

    Yes – the high dollar value increases our ability to repay overseas debt.

  8. Here’s an alternative…
    Increase taxes for the rich.
    It’s always those least able to cope financially that have to make sacrifices.
    How about a bit of “money where your mouth is” from the other end of the spectrum?
    I know, a flat tax increase of 1% across the board…..

    And pigs might fly.

  9. “Most of the governments out of control spending is not assisting the poor in any way. Pink Bats, BER, green loans, NBN! Then there are renewables targets which are pushing electricity prices up. Desals pushing water prices up. Exactly how is all this government spending helping the poor?”

    Pink Bats – it was part of the stimulus package that kept us out of recession. It was hardly “out of control spending”. BER – likewise.

    Green loans – I’m not sure what this one is, but I presume (from the earlier entries in your list) that it’s part of a Liberal Party talking point. What is it, what was the point of it, has it achieved that point, and how much did it cost?

    NBN – the idea behind it, building long-term telecommunications infrastructure, is that it’ll help all of us over the next century.

    Renewables targets – sorry, that’s government spending? What?

    Desal plants – well, they’re there to make sure we don’t run out of water, which presumably helps all of us. Although they’re hardly environmentally friendly and I don’t agree they’re the best way to go.

    (And in relation to both those points, where increased prices discourage wastage, the government can compensate by providing subsidies to the poor.)

    The problem is that there’s a lot of money that should be being spent on the poor that isn’t – better funding for public education and health (eg dental care), better funding for necessary public services (eg legal aid, which I can tell you from personal experience is in crisis and it’s about to) get much worse) and welfare (much which is below subsistence level at this point). But that’s not happening while people whinge about “cutting spending”. We should be spending more.

    And funding it by taxing capital gains properly, amongst other things.

    PS one way we could save a bit of money is to stop trying to send more people to prison for lesser crimes, and apply more constructive punishments. That would also, conveniently, reduce recidivism.

  10. Jeremy,
    Renewables targets – sorry, that’s government spending? What?

    It’s government legislation that is forcing electricity suppliers into providing 20% renewables by 2020. The cost of compliance is pushing tariff rates up. Therefore the government’s renewables legislation is responsible for increased electricity prices.

    But there is a way around it. Install a solar electricity system. That will offset (or better) your increases but you’ll become part of the problem of increasing everyone else power bills. All you need is to own your own roof and have a spare $3K+, ie a middle class investment opportunity. I am doing it. I am installing a $10K system that will deliver $2.2K of electricity savings each year. That’s a guaranteed 22% return on investment and is paid of in 4-5 years. That is an unbelievably good investment but is completely artificial as the returns are subsidised by everyone else, including the poor. The reason is that the government has guaranteed that your surplus power will be purchased for 44c/kwh, double what it can be sold for. Some suppliers are offering more, but the minimum is 44c. That difference will be subsidised through increased tariff rates and the poor will be hit the hardest.

    For all the bleating I hear on left wing blogs about Howards ‘middle class welfare’, nothing Howard delivered will put more cash into my pocket at the expense of the poor than this. But as long as the idea is delivered by the ALP and has a coat of green paint on it, the social impact to the poor is irrelevant because it is serving a greater good, right?

    So I do not buy into the idea that the ALP better serves the poorer class.

  11. As I said before, the ALP should be offering an increased subsidy for low income earners.

    Did you not read anything I wrote?

  12. Christery

    “As for the single solitary solution, labor is pretty good at spending beyond the countries means. The deficit is still increase. They have yet to prove they can rein in spending.”

    Considering the last Liberal government was the biggest spending government in Australian history, your outrage at “Labors waste” is pretty funny.

    Did Howard spending our tax dollars like a drunken sailor stop you from voting for him, and did the Liberal parties excesses prove that “they can rein in spending?”

    http://www.smh.com.au/news/business/howard-the-big-spender-on-rich/2007/01/21/1169330765866.html?page=fullpage

    “..the magnitude of Howard’s spending has dwarfed that of previous governments, it is his choice of purchase in the three areas of welfare, health, and education that define him…Government spending per person, adjusted for inflation, ballooned 17.5 per cent from 1995-96 to 2004-05.”

  13. Jeremy,
    NBN – the idea behind it, building long-term telecommunications infrastructure, is that it’ll help all of us over the next century.

    long term – look how far internet has come over the past 15 years, at this rate the NBN will be cutting edge for the next 10-15 years not a century. With a 6-7 year roll out giving 4-9 good years hardly seems worth it.

    I have worked in the IT industry as a small to medium business consultant and the most common business application for higher speed broadband is to outsource it support, programing, website construction and maintenance and many other low level office functions. The NBN will probably cost jobs by allowing outsourcing. Why outsource to a regional Australian when there are people in India on stand by for $2 an hour.

  14. “Oh yes, if you believe the Liberals, the only solution to housing affordability/interest rates is, again, cutting public services.”

    Spending &ne public services.

  15. Dammit, HTML fail. Let me try again.

    Spending is not automatically “public services”. Large amounts are redistribution, which itself mostly isn’t from rich to poor. Large amounts are harmful to the public interest. And that’s before considering that public services aren’t always necessary, or the optimal solution for a given problem. It seems you’ve had a knee-jerk reaction to Liberal boilerplate.

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