Wilkins Micawber: Scarra Blog inspiration
Thoughts from a neo-Micawberite political animal.
By Gary Scarrabelotti
The esteemed Henry Thornton asked me to write something more on the subject of the recent Budget.
Gosh. What do I know about Budgets? Finances? Fiscal policy? Taxes? Deficits? I mean, I am not an economist.
About all I know is this: when Income = Expenditure I can get by. But when Income < Expenditure I’ve got a problem.
Also, I know something about myself: I hate debt. Unless the debt is going to increase my assets or my income, in the longer term, I don’t want to touch it. And, when I have a debt, I pay it off quick smart.
Many years ago, when my late wife and I purchased our home, we borrowed $50,000 at 18%. It seemed a vast sum to us – though we quickly learned that others were borrowing three and four times that amount — and the interest rate was astonishing. We paid off the house in two years and were exceeding relieved to have done so.
By the way, I pay all my credit card bills by the due date. Recently, moreover, I cut back sharply on using credit cards because I don’t like to pay for the advantage of using them.
Micawber economics
You can see, then, that I am not a very “deep file” when it comes to budgets and stuff. Mr. Micawber of David Copperfield fame summed up my slight comprehension of these things:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.”
So, as I put it to the great Henry Thornton, I am wholly unqualified to speak. Wholly unqualified, I say: especially as I am already in deep misery over the prospect of budget deficits stretching out to 2019 and beyond.
To reinforce my lack of qualifications, I have to make a further admission: I just don’t buy a 2019 surplus. Apart from possible “bad times … just around the corner,” — a Grexit maybe; a China slowdown; a miscalculated response to China’s island building projects — I have no faith in the power of number crunching to discern the shape of things to come.
Accordingly, I cannot, I will not, put pen to paper about the Budget from the point of view of money.
Political man
What I can say, however, is something about the Budget from a political standpoint. Politics I understand. Well, I think I do. So, then, here is the gist of my thought from the perspective of homo politicus: this Budget was a necessity, no matter how much homo economicus might howl and grieve.
If the good voters of this great country Australia could not accept a stiff dose of good budget medicine, for which they were unprepared — Abbott Budget No. 1 – then Abbott Budget No. 2 had to be different. Otherwise the Abbott government, most assuredly, would have been cactus.
Aside from the need to till the soil of voter land deeply before sewing the seeds of Budget repair, there’s a big lesson to be learned from the public reaction to the first Abbott Budget. One day, years ago, during a call on Prime Minister Howard’s office, I fell into conversation with a most trusted adviser:
“The Boss always says that the punters are never grateful for tax cuts”.
Think of that. If the voters do not appreciate a tax cut, how much less will they appreciate hacking into their social welfare! PM Abbott’s mistake was to imagine that people would thank him for doing the “right thing”. The ungrateful beasts did not. Nor will they ever.
So Budget repair has been postponed to the next Abbott government. To make it happen, however, the PM needs a different kind of Treasurer. Hawke had Keating. Howard had Costello. Abbott needs …
I implied recently that Joe Hockey would help deliver family tax equity in 2016. Now I am less sure. Joe is a thoroughly decent, likeable bloke. But he is no Keating or Costello. He lacks their shameless self-confidence and hence their powers of persuasion. You might not have liked either of them, but they were believable.
The Prime Minister needs a Treasurer with unusual firmness of purpose, with an eye that really locks onto long-term objectives and who can make a case convincingly. Scott Morrison is the man. If the PM doesn’t see it now, he will see it by Christmas time.
Family calculus
Abbott not only needs a new Treasurer. He also needs to do two other things to win the next election convincingly. He needs to deliver family tax equity in 2016 and he needs to see off, in a robust manner, Bill Shorten’s same-sex marriage bill.
If the Prime Minister goes to the next elections without delivering on family tax equity, and without defeating the ALP’s revolutionary anti-marriage push, then a key element in Abbott’s electoral support could break away ‘leftward’.
In my article Family tax equity 2016 I identified a sub section of voters whom I termed the “simply Family” group.
If this group were not to get fair tax treatment in 2016, and if Abbott were to allow the Liberal Party to retreat from its long established commitment to marriage as traditionally understood, then the Coalition could kiss goodbye to “simply Family” voters.
I figure that they would make this kind of calculation:
There is no difference between Liberal and Labor on marriage: both have betrayed it.
Bill Shorten will restore Family Tax Benefit B.
Ergo, vote Labor.
If I were a Prime Minister, I’d be very careful about taking that kind of risk.