Revenge of the Nanny state

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Two stories this afternoon at the AFR shows how happily populist our politics is, not to mention how well Nanny State politics goes down with the battlers. Both are stories about Coalition intervention into government payments. The first is about a plan, or at least an intention, by the Coalition to police carbon tax rebates so they don’t end up in the pokies:

Coalition Families Minister Kevin Andrews says ensuring welfare benefits are targeted at specific purposes would be a priority for a coalition government, in light of data showing compensation to low-income earners for the carbon pricing scheme causing a spike in poker machine spending.

Mr Andrews said the poker machine data showed that if you didn’t target the money, some people would misuse it.

“Our first point is you shouldn’t have the carbon tax at all but it would be better if you had a scheme that dealt in a practical way with higher prices,” Mr Andrews said.

Poker machine revenues in Queensland jumped more than 7 per cent in May – when the first Clean Energy payments were made – and rose almost 12 per cent in the year to June, according to the Queensland office of Liquor and Gaming Regulation figures, The Australian Financial Review revealed exclusively on Wednesday.

Mr Andrews said it was “human nature” that dictated some would use the money to feed a poker machine addiction or spend it unwisely in other ways.

The independents jumped on the bank wagon too.

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Can someone tell me why this is an issue? If people want gamble the money, let ’em. It’s none of the government’s business. Carbon tax rebates are just that.

The second is about how the Coalition will police subsidies for car makers:

A Coalition government would review federal agreements that provide assistance to struggling car manufacturers and insist on more rigorous benchmarks on how the funds are spent.

A day after Ford Australia announced plans to cut 440 jobs, opposition industry spokeswoman Sophie Mirabella said the government’s assistance to car companies had been ad hoc and lacked transparency in areas including job guarantees.

“We would obviously be very cautious in not breaking contractual arrangements from the Commonwealth but we will be looking at those contracts very closely if we win the election,” she toldThe Australian Financial Review on Wednesday.

The federal government is providing $5.4 billion in subsidies to the industry up to 2020 to protect jobs and skills, including $34 million towards the development of a 2014 Ford Falcon, but it has ruled out a further bailout for the car maker.

I support car industry subsidies because I think being able to build engines is an pretty obvious strategic capacity. But I don’t support ensuring that they remain as inefficient as possible via job guarantees.

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Neither of these would be populism would they?

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.