Public service insulates against slash and burn
Labor should have and could have got back into surplus. Illustration: Ron Tandberg.
Are the fat cats lining themselves up a final plate of cream before the Abbott axe falls in September? A look at the most recent ABS average weekly earnings figures suggests so.
In many ways we are fortunate that a professional public service protects the public somewhat after a change of government from, on one hand, a slash-and-burn to everything but security and the military and, on the other, from wild expansion based upon the belief that government is the solution to all problems.
Public servants warn politicians against ''courageous'' actions. In doing so, of course, the professional public service has as its highest priority the protection of itself - its numbers, its pay and conditions, its power and its influence.
In the federal sphere, it knows what to expect in September: anguished cries of an empty chest left by profligate Labor spendthrifts and a need to slash and burn.
By evolutionary instinct, it knows the importance of survival and propagation - the need, like amphibians in cruel climates, to suck in fluid while it is available so they can weather the coming drought.
But it also knows, like paspalum on the lawn, that every now and then the occupant of the house will slash and burn and uproot. But try as the occupant of the house might, the paspalum will always grow back.
Come September, the flamethrowers will be aimed at the paspalum in Canberra.
Hitherto, we have seen clever tricks by the public service mandarins. When ordered to cut, they have cut immediately - on the most politically embarrassing and most publicly visible area possible - in the hope the politician will back down.
But both the political and public-service sides have been through this enough times to understand each other's games. It now seems the public service thinks it will not succeed with tricks.
Last week's average weekly earning figures from the Bureau of Statistics reveal that public servants in Canberra have been doing well, thank you very much.
In the year to last November, average weekly earnings went up 4.7 per cent to $1080.30. In the same period, average weekly earnings for the public sector in the ACT went up 7.3 per cent to $1596.30 - the highest increase and the highest absolute amount in the land, according to ABS figures released last week.
Perhaps public servants are making sure that the base upon which retirement pensions and redundancy payouts are made is as high as possible. What was the government doing to allow this?
Yes, the figure includes the ACT public service. Yes, public servants are better educated than the rest. Yes, the public sector does not have many young people or people doing menial tasks.
Even so, the growth rate is inexcusable when everyone else is tightening their belts.
It is a perennial problem of Labor governments. In the five years of this Labor government, federal spending has gone up 35 per cent to $365 billion. In the same period, population went up 8 per cent and the consumer price index went up 14 per cent.
Labor could have and should have got back into surplus. All it had to do was stop increasing spending - no cuts necessary.
There are two critical elements to public finance: how much money you spend and what you spend the money on. Labor governments do nearly all the worthwhile social reforms in Australia: the Pharmaceutical Benefits Scheme, Medicare, access to universities through HECS, universal superannuation and so on. It now wants to do another major reform which this country can afford and should do - the disability insurance scheme. The burden on carers of the disabled is unacceptably high. The struggle for the disabled to attain dignity and full participation in Australian life intolerable.
Yes, the Coalition agrees with the scheme - not because it believes in it, but because it would forfeit a lot of votes by not at least pretending to go along with it. The scheme is a vote changer for those whose lives are dominated by disability.
But if the scheme is not legislated and payments begun before the election, the Coalition will almost certainly cry poor and postpone it indefinitely - just like they stopped universal superannuation going to 12 per cent. That is the figure needed to make the scheme workable and pay average- and lower-income earners more than the mere equivalent to the aged pension when they retire.
It seems, however, that the disabled will be the victims of Labor's chronic incapacity to get public finances into order. Without fiscal rectitude, governments will not be able to make the big worthwhile reforms. The Coalition will restore some discipline on public spending, but inevitably at the cost of poor spending priorities.
Labor's big public finance failure in the past five years was not to wind back middle class welfare so it could direct the money to those with the highest need. The Howard government handed out absurd amounts of money to families with children - families with incomes high enough to look after themselves. The $4.5 billion in Family Benefit B has further hidden costs because it encourages women to stay at home. Labor should have had the courage to axe it.
Labor should have reversed Peter Costello's grey-vote-gathering abolition of superannuation taxes for the over-60s. It should have done a line-by-line root-and-branch cull of all the $3.5 billion in cash subsidies that prop up chronically unsustainable industries. In doing so, it would also reduce another $5 billion in hidden costs.
Defence spending does not bear thinking about. Defence anguished over what sort of jet striker aircraft we should have, instead of asking whether we needed one at all. So we signed up, as usual, to whatever the Americans said we should have - the $35 billion F35.
The broken promise on the surplus has done as much to erode Labor's credibility as anything else. If you can't get the finances right, the best intentions in the world remain just that - intentions.
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The astonishing thing about the toppling of Senator Gary Humphries in the ACT Senate preselection was not so much that it happened, but in how few people voted in it, even given that quite a few preselectors were disqualified. Just 198 Liberal Party members voted. Is this all the Liberals can muster in the ACT? Not so much a question of branch-stacking; more like twig-stacking.
Labor membership is similarly poor. It says quite a bit about Australia's political health.