Hockey makes sense, Abbott not so much

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In a speech today at the IPA, Joe Hockey argued:

“And we should do that by attacking spending, looking for structural saves which deliver benefits over the long term…I believe this will involve some resetting of the national mindset on the role of government. Addressing the ongoing fiscal crises will involve the winding back of universal access to payments and entitlements from the state. This will require the redefining of the concept of mutual obligation and the re-invigoration of the culture of self-reliance…The Coalition has already shown it is serious about this by its promise to end the Schoolkids bonus should it be elected…That is a $1.2 billion a year payment to families which was funded by the (mining tax) and which the nation simply cannot afford.’’

I have praised Joe Hockey before for this rhetoric. It is appropriate for the times and we’ll need more of it as national income continues to fall in the next few years. Some more detail would certainly be useful but at least he’s on the right page.

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However, our incoming Treasurer seems to be having a devil of a time persuading his leader, who is busy defending his admirable but productivity and profit devouring parental leave scheme:

Opposition leader Tony Abbott has defended his parental leave scheme, as the coalition comes under increasing scrutiny over its policy stances ahead of the May budget.

Liberal MP Alex Hawke has broken ranks to query Mr Abbott’s generous plan for a paid parental leave scheme funded by a 1.5 per cent levy on more than 3000 big companies.

Mr Hawke says the plan is “an albatross” around the party’s neck, it isn’t good economic policy and he advocates keeping the existing scheme.

He’s hinted many of his coalition colleagues also oppose Mr Abbott’s plan.

I’ve noted before the curious split that has occurred in the Liberal elite between Hockey leading with national interest rhetoric and Abbott flopping between populist positions. Perhaps Tony will give Joe the silent treatment?

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.