Wednesday, August 22, 2007

Australian elections 2008 - the Wizard of Oz and Mr Me Too

Back in the dim and distant past - 6 July to be precise - I put up a post suggesting that this had been a very good election campaign. And indeed it was at that point. I no longer feel this, because the Wizard of Oz has entered the world of what I call supermarket politics followed by his dedicated follower, Mr Me Too.

In the few short comments that follow I am not going to source everything I say. I do not have time. But, as always, I stand ready to be corrected on errors of fact or interpretation.

When Mr Costello first floated the idea of a Future Fund I was a strong supporter. Mr Costello more than any other politician has pointed to the problem we face with demographic change. He has also pointed to the problem of inter-generational conflict and transfers. So the idea of a sinking fund to compensate for the effects of aging had a lot of merit.

Then the broader concept got linked to public service superannuation. A reduction, but still worthwhile. Now we have a multiplicity of funds with no clear rationale. The original concept has been lost.

Mr Me Too and his team began with the idea of raiding the original fund to pay for broadband. I thought that this was silly. But then they switched to a me too support approach for all of the emerging funds. This was almost going from bad to worse.

In the debate over how to use to the ever growing Commonwealth Government surplus, the Government takes credit for its good economic management, while Mr Me Too and his team emphasize that we are all economic conservatives. Both miss a few key points.

Either Blind Freddy or the Drover's Dog could generate a surplus in current economic conditions with just average economic management. But the apparent surplus is in fact misleading.

The Howard Government is, I think, a big spending Government measured by the amount of money they have extracted from taxpayers and then spent. Mr Me Too's team has pointed to this. Indeed, I think that the ugly duckling has made a special point of this.

What is not sufficiently recognised in all this is, that is that there is one area of expenditure that has been squeezed, and that is real commonwealth funding for the states.

Mr Costello says, correctly, that the states have a growth tax in GST. He also says, again correctly, that the states were meant to give up certain taxes in return.

Yet when you net all this out, real financial support going to the states has declined to the point that (I suspect) it just about matches the current surplus. And that financial support is increasingly tied, reducing state financial freedom.

Lord knows, I am not a supporter of current state structures. At least NSW and Queensland need to be broken into smaller units to provide a better geographic basis of Government. Go New England! I suspect that this is also true of WA. But the current system increasingly gives us the worst of all possible worlds.

My Howard has now made his long held position clear. The Australian people are pragmatic, aspirational nationalists, interested in outcomes, not principles. But what happens when good outcomes in a particular case measured by that case have broader adverse effects because they breach core principles? Those pragmatic Australians interested in the case will be pleased, but many other equally pragmatic Australians may be far from happy.

Mr Me Too and his team emphasise cooperative Federalism. But cooperative federalism is a working matter, not an overarching statement. Of course we want cooperation. But cooperation on what, how and why?

Mr Me Too's problem is that none of us believe that cooperative Federalism will survive the election of the first non-Labor state Government. In the absence of core principles, expediency will rule.

Switch directions and look at education.

A Bishop's role is to provide pastoral leadership to her flock. At present, this appears to consist of performance pay, adherence to a few narrowly defined national standards, a few new approaches in areas like Australian history.

I am not sure that Mr Me Too and his team are much better. When you drop below the rhetoric about an education revolution, you come back to the same narrow focus on national standards and uniformity, on specific measures and outcomes. I find it hard to see that the actual results will be any different from that likely to come from our present Bishop.

I could run this type of commentary across portfolio areas.

I have no doubt that Mr Me Too and his team will be competent managers. Things are not going to get worse under their control. I am sure that there will be some improvements at the margin. I just don't believe that there will be much beyond this unless we Australians cease to be aspirational nationalists and instead confound Mr Howard by actually engaging in a debate on principles.

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