It must be election time: fiscal conservatism is fashionable again. Tony Abbott and Joe Hockey go into this election with a battle cry about the Rudd government’s budget deficits and ballooning national debt. Kevin Rudd claims the budget is heading unstoppably back to sweetness and surpluses, but the opposition still has a case – by 2011, the government will owe $90 billion, 6 per cent of our GDP.
Hey, fiscal conservatism worked for Kevin07. It might work for TonyTwentyTen. But fiscal conservatism is easy when budgets are riding high and government debt is negligible. If the budget isn’t balanced, and debt needs to be reduced, then you’ll want to identify government programs to cut.
In his budget reply on Thursday, Abbott identified a couple of cuts – abandoning the national broadband network, fiddling with the building education revolution, and a freeze on hiring new public servants for a while. And reducing government advertising. Every opposition wants to reduce government advertising.
It’s a pretty tepid start, but it’s a start; Joe Hockey will apparently propose more cuts this week.
He’ll need to. If the Liberals want to walk the ”high road of expenditure restraint” and clear the national debt as soon as possible, they have to cut a lot more spending. Luckily, nobody has to look far to find things to cut.
The government is giving a not-for-profit $120,000 so they can host an interstate rickshaw ride to raise awareness of poverty. We’re giving a wallpaper company in New South Wales $36,000 to update its website, and $70,400 to another company so it can develop a ”social game platform”.
As well, $15,000 went to a team of glass percussion artists, $100,000 has gone to a Hervey Bay company to build two new cabins in their caravan park, and $8000 of federal money paid for an electric scooter-charging station in Victoria Park, Western Australia.
These are all part of multimillion-dollar programs that could be eliminated instantly.
Then there’s the $13 million we give to the Australian Wine and Brandy Corporation, and the Grape and Wine Research and Development Corporation’s $27 million. (They’re different, apparently.)
And the $150 million the government plans to spend on that idiotic ”Nothing Like Australia” tourism campaign. And the $254 million for elite sport programs.
That should be the test. You’re not serious about reducing government spending if you’re unwilling to upset the men’s Olympic volleyball team.
With so many so obviously absurd programs, you’d think eliminating waste would be easy. But every program, no matter how silly or unnecessary, has passionate supporters.
When the government spends, it makes some individuals and industries reliant on that spending. And public servants whose careers depend on that spending’s future. No matter what, someone, somewhere, gets upset when you cut a government program.
So governments are usually reluctant to get rid of anything.
Take the Department of Climate Change. Its 640 hand-picked bureaucrats were charged with implementing the government’s emissions trading scheme.
So you would have thought once the government abandoned the scheme, those bureaucrats might no longer be needed. More fool you. They’re still there: patiently waiting for their real jobs to start, filling in the long hours of the day tinkering with renewable energy regulations and trying to fix the insulation program.
On the Labor side, politicians with ties to public service unions hate the prospect of eliminating the jobs of their supporters.
And when Joe Hockey flagged the possible public service reductions earlier this year, his Liberal parliamentary colleague Gary Humphries said Hockey would have him ”to reckon with”. Humphries is the Senator for the ACT, and Canberra is a government town.
Right now, no one is more aware of how hard cutting the size of government can be than the new British Prime Minister, David Cameron. He enters No. 10 with the country labouring under more than $A1.3 trillion of national debt. If the United Kingdom doesn’t want to become the Greece of the north, Cameron will have to do something drastic.
Certainly, both Gordon Brown and Cameron went into the general election saying how much they wanted to tackle this debt. Brown proposed reducing government expenditure by 10 per cent, cunningly campaigning on an ”I broke it, I’ll fix it” platform.
But neither candidate was eager to go into too much detail about just what spending they planned to cut. Because many of those cuts will have to be public service retrenchments.
No matter how much the British people say they want the UK’s budget back in the black, it will take a lot of political courage for Cameron to get it there.
In Australia, that’s a big problem too. There’s much government waste to cut. But waste has friends and cutting waste makes enemies. Nobody wants to make enemies in an election year.