Via Chris Joye today:
The widespread media consensus that Prime Minister Scott Morrison has “no agenda” is crap. Most critics do not see the agenda because they are projecting their own political prejudices.
ScoMo’s agenda is about empowering individual exertion, aspiration and productivity through lower taxes, smaller government, balanced budgets and investments in infrastructure, education, health and national security that create equality of opportunity while fostering individual and collective success.
…In spirit, ScoMo’s agenda is one of the first truly libertarian programs that we have seen in a long time globally where he is cutting taxes, enabling aspiration and, crucially, balancing his own books by running budget surpluses (noting the budget was, in fact, in surplus over the 12 months to March).
If Scomo is such a libertarian, what’s he doing guaranteeing first home buyers into property markets? Why is he getting elected on the basis of protecting tax distortions in the property market?
Now that APRA and the RBA have buckled, we all know what this means, as well as where tax cuts will go. More household debt wasted on house prices.
It’s a joke to call this innovative, productive or libertarian. It’s the same old property price quango protected and reborn for the LNP’s aged hoard that hasn’t had to work a competitive day in their entitled lives, plumped and fluffed from the Howard doctrine onwards.
The following chart from Gerard Minack makes all this guff about tax cuts preposterous:
In the mining boom the budget balance routinely improved by 3-4% of GDP. That allowed for an enormous loosening of fiscal policy – the red bars shows that policy measures routinely worsened the budget balance by 2-3% of GDP through that time. The largest red bar is the fiscal stimulus around the GFC.
This all went into reverse after the GFC, with the cycle changes (green bars) an enormous drag on the budget. There was almost zero change in discretionary policy to counteract this.
A lot of the measures introduced through the mining boom booby-trapped the fiscal outlook. The franking credit refund is one example. The initial cost was $500m. Now is costs over ten times as much.
History is repeating, in a minor way now: once again the cycle is working to reduce the budget deficit (the green bars are positive). Once again the red bars – discretionary policy changes – are working the other way. Put another way, the surplus we are crawling back to is all about the cycle, and nothing to do with discretionary policy changes. Morrison has been kissed on the arse by a rainbow.
Much of the political pain of the last 10 years has been both sides trying to defuse those booby traps. Labor just got blown up trying to defuse a few more with a structural reform agenda that would have forced us to earn our way. It was rejected by the Australian people who, for obviously reasons, prefer ScoMo’s government teat.
Time our Chris unfastened himself from same.