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Abbott is lying about SPC: Liberal MP

In an interview with ABC rural radio, federal MP Sharman Stone accuses the Prime Minister of lying in saying that SPC's union pay deals are the reason they're in trouble.

PT2M1S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-31y66 620 349

Joe Hockey will be entitled to be the next conservative prime minister of Australia if he can win his argument about the need for the community to reduce its dependence on government.

But it's a formidable challenge. He has to convince his own party, many members of whom are tough-minded in principle about the need to reduce expectations of what government can and should do, but are apt to go to water whenever there's a local business or industry mishap.

Treasurer Joe Hockey faces a formidable challenge.

Treasurer Joe Hockey faces a formidable challenge. Photo: Glenn Hunt

There's the National Party, as dedicated as ever to redistributing money and public contributions to the private weal in its constituencies in rural and regional Australia, and, at heart, as firm believers as ever in providing markets with lots of guidance and example, mostly from the public purse. And, as ever with a problem of differentiating themselves from their Coalition partner - a task these days being accomplished as never before by continuous public disloyalty and lobbying from the de facto leader of the Nationals, Barnaby Joyce, on matters of economic management.

There are state premiers, nearly all of Hockey's own party, and, at the moment, to a far greater degree than usual, of a dry and purist approach to economic management. Yet fearfully parochial, often given to beggar-my-neighbour policies, forever wanting special favours and more than a little nervy about the impact of meaner government on their own local economies or survival.

There's the Labor Party, with no more particular call to pretend fiscal responsibility than Tony Abbott did when he was in opposition, and likely to be at least one little bit - perhaps even a bigger bit - more interventionist whenever a company fails, an industry falls over, or when there is regional drought, famine or recession. An Abbott government whose leader in opposition went about offering subsidies to chocolate factories here, hospitals there, special and unjustified concessions to classes of schools here, or large dollops of corporate tax concessions for expensive cars or middle-class maternity income has to be somewhat muted in its criticism of Labor's opportunism.

There's also the task of making sure that a distaste for personal welfare is accompanied by an understanding that corporate welfare -whether by tariff, subsidy, ''rescue'', ''exceptional circumstances grant,'' tax concession, or rule by decree and exception, suspension or favour - is equally at odds with the need for smaller government. Mere rhetoric about dole bludgers, anecdotes about well people on invalid pensions, and hints that workers with redundancy rights are rorters is not enough. The function of government is to create the circumstances in which business can flourish, not to actually prop up businesses.

Behind all this, however, is the real problem. Politicians have been working hard on influencing public attitudes about what government should and should not be doing for more than 30 years. Perhaps more than 40, if one considers (probably wrongly) the Whitlam years as some sort of watershed of expansive government, and sharp political divide about how much health, welfare, and community services we wanted, and whether and how much this ought to be targeted.

The real starting point is probably the economic reforms of the Hawke-Keating years. In retrospect, there was no vast difference between the practical management and philosophy of Malcolm Fraser (and his treasurer John Howard) and Whitlam before them. The reforming zeal of Hawke, Keating, Walsh and Dawkins was sharpened by the craze for classical economics (away from Keynesianism), a stronger public focus on ''rational'' public policy, and the creation of an appetite for tax cuts at the expense of welfare.

There's been non-stop rhetoric about smaller - and apparently implicitly, more effective and efficient - government. About paying more attention to markets and market forces, promoting competition, cutting tariffs and corporate subsidies, targeting welfare, privatisation, contracting in and contracting out, and non-stop sessions of tight expenditure review market forces, promoting competition and reducing tariffs and corporate subsidies, carefully targeting schemes kept under tight management, privatisation, contracting in and contracting out, and non-stop sessions of tight expenditure review by Cabinet.

There has also been an increasing resentment about welfare reaching people thought to be undeserving, or rorting - as well as an increasing belief that the welfare system traps people in poverty, and has created an underclass.

Paul Keating once joked about every parrot in every pet shop squawking about microeconomic reform; as importantly, Keating and Hawke in one era, and, if to a lesser extent John Howard in another, were able to win electoral support for hard-slog economic reforms against opponents offering instant balm.

Over all of that period, voters have heard much about the importance of budget surpluses, the horrors of debt, and the values of small government. And the virtues of choice and lower taxes.

One might think, thus, that there was fertile soil for Joe Hockey's practical efforts to get government off our backs, to reduce levels of government expenditure, and, of course, the crushing burden of public debt.

But there's good evidence that the public response to all of this has been fairly superficial. Over a whole generation, it seems, the grab bag of things that people expect from government, and the type of things that it expects government (or ''society'' as opposed to the ''individual'') to do for its citizens has not changed much as all.

The attachment, or expectation, is by no means to some particular method of delivery, or service point, even strictly, to specific delivery by government. Thus citizens may not care much about whether county councils are privatised, but they will blame government if there is no power. Who builds the roads or how they are funded may not matter much, but run-down roads and increasingly choked traffic is the government's fault. So is the level of service from hospitals - perhaps even doctors. So, of course, is the level of crime.

Australian understanding of the federal system is fairly sophisticated, compared with other federal systems. But that understanding embraces knowledge of the central role of the Commonwealth in gathering up and dividing out government revenue, so that state governments will often successfully blame Commonwealth parsimony even for the failure of their level of government to provide good hospitals, and school. The overlap of fields such as child care, aged care, consumer protection - and, in these days of terrorism, perhaps even law and order - mean that prime ministers, ministers and local members are being constantly invited to opine on - and apparently be accountable for - functions strictly carried out by state or local government.

Likewise, no amount of self-help rhetoric about standing up after natural disaster, catastrophe or even bad luck much reduces the demand – once it happens close to home – for  government to ''do something.''

Doing it may not involve only a grant, a program, or help. We expect government intervention to rescue or balance a tottering economy, local or national. Then the virtues of surpluses, or being debt-free seem abstract at best. Not least to politicians worrying about re-election.

Joe Hockey has the example of Peter Costello  to understand that it's not just a matter of words, but action, and of keeping the faith at the peak, rather than the nadir, of temptation.

Jack Waterford is Editor-at-Large. jack.waterford@fairfaxmedia.com.au

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