Joe Hockey today gave his Budget Reply address at the National Press Club. The best you can say is it wasn’t as bad a last year, where he failed to outline the Budget cuts that Tony Abbott had said he would.
To say it was not good would be kind. To say his answers to the questions from journalists afterwards was embarrassing would be accurate.
I won’t go through them tonight (I don’t have a transcript, and also don’t have the time), suffice to say they were all on the money. They started with Samantha Maiden whose question Hockey completely non-answered and it got progressively worse until Laura Tingle asked him a question that had Hockey responding “It’s a fair question” which seemed to be code for “I have absolutely no idea and so will not answer it”.
Then Andrew Probyn, who last year tore into Hockey, got up like the Ghost from Budget Replies Past and asked him about some double counting in the Lib’s budget cuts. Probyn so perfectly skewered Hockey that Hockey could only respond by getting shouty and accusing Probyn of getting his question from the ALP. The whole session ended with Peter Martin essentially asking Probyn’s question again and asking Hockey about the “auditing” of the Lib’s election commitments.
It was hungry wolves on the meek lamb stuff. (You can listen to them here)
It won’t matter much. I don’t think bad interviews by politicians (opposition MPs at least) matter that much anymore. After all Hockey had a shocker this time last year, so too did Tony Abbott – remember him telling Kerry O’Brien this:
TONY ABBOTT: But all of us, Kerry, all of us when we're in the heat of verbal combat, so to speak, will sometimes say things that go a little bit further.
And yet here they are – well in front of the ALP, and seemingly electable.
I think the bar has been set so low and that unless they drop the F-bomb, it hardly rates a blip.
But while the answers were horrible, the speech had not been much of a prelude. It wasn’t so much a speech as a quasi economic lecture on why the Libs are so good at budget stuff, and why the ALP is not.
His lecture ranged wide and far – sometimes it even got close to reality. But there was one bit that most stood out for me. It was when Hockey came to the wonderful topic of debt (yes the evil, evil debt). He had had enough of the ALP talking about the net debt of 7.2 per cent being low compared to the UK and USA and Japan and others, he wanted to compare us with countries who were doing well:
The Treasurer is always keen to compare our net debt with other developed countries like Japan, the USA, the UK and Europe. But Australia started this journey with no net debt unlike those countries that he always compares us to.
A more realistic comparison is one where we compare ourselves with the fastest runners in the field rather than the slowest runners.
There are a number of developed and commodity exporting countries with balance sheets in the black such as Chile, Sweden, Saudi Arabia, Finland and Norway.
Against these peers Australia with net debt of 7.2% GDP looks like a very poor performer.
S0 suddenly, for no reason, we’re to compare ourselves to these five countries?
Joe even gave us a handy table to ram the message home about how bad we’re doing:
And yep, he’s right. Australia is lagging behind them on the net debt scale. It would seem to be a terrible state for Australia to be in. How awful for us. So it’s a damn good thing it doesn't matter one bit when it comes to examining how we’re doing as an economy.
Let’s compare these six countries of Joe’s on a few other measures, to see if Australia is looking so horrible:
Now call me crazy but I don’t think too many people would say give us Chile’s net debt level, but also their 7.2% unemployment, or Sweden’s 7.7%, or Finland’s 8.2%, or Saudi Arabia’s 10.8%.
What is more important Joe – Government debt or people’s employment? 7.2% net debt or 7.2% unemployment? I know which one I’m choosing...
Now sure, Norway has a nice low unemployment level, but I was surprised to see Hockey referring to it in such glowing terms – it is one of the fastest runners in the field, he said.
Usually when members of the Liberal Party refer to the economies of Norway, Sweden and Finland it is not in such glowing terms. As a rule, they deride these Scandinavian economies for one reason – taxation.
Here is how Wikipedia describes taxation in Norway:
The tax level in Norway is among the highest in the world. In 2007, the total tax revenue was 43.6 % of the gross domestic product (GDP). Of OECD-countries, only Denmark, Sweden and Belgium had higher tax levels. The tax level has fluctuated between 40 and 45 % of GDP since the 1970s.
The high tax level is a result of the large Norwegian welfare state. Most of the tax revenue is spent on public services like health services, the operation of hospitals, education and transportation.
Yep, see that phrase – “welfare state”. Sweden, Finland and Norway love taxation. Sure their public services are plentiful, but by God do they pay for them. Here’s the list of Joe’s countries according to taxation receipts as a percentage of GDP:
|Taxation as a % of GDP|
Usually you hear the Greens talking about the glories of Sweden, Finland and Norway. It’s good to finally see Joe getting on board the socialism train. Welcome comrade. Don’t be shy, come on in – plenty of room at the back on the right.
The Federal Govt level of taxation as a percentage of GDP is 23.7%. Anyone think Hockey or Abbott will be calling for an effective doubling of the Govt’s taxation revenue? Yeah, I thought not.
But look at Chile and Saudi Arabia I hear you say – sweet deal there. But ask yourself do you think public services, infrastructure in Saudi Arabia and Chile are comparable to Australia? Where would you rather get sick? Where would you rather send your kids to school?
Maybe we should compare these 6 countries by GDP per capita terms to see if Joe would still have us who swapping from Australia to lovely low-tax Saudi Arabia or Chile.
|World Rank||GDP per Capita (PPP)|
Hmmm. Doesn’t make life in the Middle East or west of the Andes so good does it. Is Joe suggesting we should compare ourselves with a country with less than half our GDP per capita? I can see the election slogan – “We’ll remove the debt and halve your income!”
It’s a winner, don’t you think?
But look, life isn’t all dollars and cents, it’s also about errr…life.
How do Joe’s favoured countries rank in terms of life expectancy?
|World Rank||Life Expectancy|
Gee. What a shock, Australia is doing well. Who said investing in public health and infrastructure doesn't pay off. Still Sweden is pretty close to us and they have a lot better debt levels, so I guess that’s score one for the 47.9 per cent tax take, eh Joe?
A few weeks back Hockey tried to float the policy idea of taxing family trusts at the company rate. That got knocked on the head within the day as the National’s quickly got on the phone. Last week he criticised the Government increasing the amount of foreign aid in the budget. That lasted about a day as Julie Bishop quickly reaffirmed the Liberal Party’s bipartisan policy with the ALP on foreign aid levels.
Somehow I don’t think his comparison of Australian with Saudi Arabia, Chile and Finland is going to last much longer than those two previous policy efforts. Though I bet the ALP will bring it up every now and then…