Three word slogans

August 22nd, 2015

I have a piece up at the Drum, looking at how the three-word slogan approach of the Abbott government helps to explain their budget problems. Text is over the fold

Assuming the current Parliament runs its full term, the Abbott government has one more budget to deliver before facing the voters. In assessing its options, the natural approach for an economist would be to look at the government’s overall fiscal strategy, in the light of the major budget aggregates, and then to consider the political implications.
?Such an approach makes no sense in relation to the Abbott government. As Tony Abbott has repeatedly made clear, the government’s focus is on policy narratives that can be reduced to three-word slogans. It’s appropriate to assess the government’s strategy in this light; in fact, it would be unfair to do anything else.

Abbott’s current slogan, repeated whenever any question inconvenient to the government is raised is “jobs and growth”. However, a complete understanding of the government’s budget problems requires us to recall two earlier slogans “debt and deficits” and “lifters not leaners”.

Let’s start with ‘debt and deficits’. The Gillard government handed this issue to Abbott on a plate, with Treasurer Wayne Swan’s obsessive pursuit of an essentially meaningless return to budget surplus. The rhetoric surrounding this goal made it impossible for Labor to defend its successful use of deficits to stimulate the economy at the time of the Global Financial Crisis. The result was that a government that had outperformed the entire developed world in terms of economic management was presented, and presented itself, as a set of wasteful spendthrifts.

In opposition, the Coalition painted Australia’s fiscal position as one of imminent disaster, with the spectre of a Greek-style crisis just around the corner. The political strategy that informed the Abbott government’s first year in office was a familiar one, built around the well-used device of a Commission of Audit. This trick has been used by just about every newly elected LNP government in the past 25 years.

As planned, the Commission of Audit reported a looming financial disaster, which was then used, in the government’s first budget, to justify the wholesale abandonment of election promises. But this strategy went off the rails when the public, and the Senate, refused to accept a massive breach of promise from a government whose primary rationale for election was Labor’s failure to keep its own promises.

It has now become clear that the current government will be no more successful than Labor in returning the Budget to surplu. This is not really a problem, since Australian public debt levels are, as they were under Labor, exceptionally low by world standards. But the ‘debt and deficits’ phase of fiscal policy has still left the government with a ticking electoral timebomb.

The 2014-15 Budget included massive cuts to state school and hospital funding, conveniently deferred until the end of the forward estimates period. Those cuts are scheduled to take effect beginning in 2017-18, less than a year into the next Parliament. In its final budget, the Abbott government will have to decide whether to go to the voters with a promise of massive cuts in vital public services.

The government’s second slogan, popularized by Joe Hockey is ‘lifters not leaners’. This slogan has been helpfully decoded by the government’s handpicked Treasury Secretary, John Fraser, hired from that prominent group of lifters, UBS https://en.wikipedia.org/wiki/UBS. Fraser has argued for the urgency of cutting the top marginal rate of taxation.

Although Fraser has proclaimed himself a fan of the supply side economics of Arthur Laffer, he does not suggest such tax cuts will pay for themselves. Although the preference is obviously for cuts in expenditure, the government has already gone as far as it can in that direction. So, the only option is that of a shift in the tax mix, through an increase in the rate of GST or the removal of the exemption on food. This has been the unvarying position of advocates of ‘reform’ ever since the Asprey Commission report 40 years ago.

Once again, however, the narrative has been bungled. Since the government was unwilling to wear the opprobrium of advocating an increase in GST, it had to attempt to persuade the states to do so (the looming cuts in health and education funding were suppose to provide the stick, and the promise of more GST revenue the carrot). But the states obviously have nothing to gain from a deal where they wear the blame and Joe Hockey gets to announce big cuts in income tax. So, they have pushed alternative ideas like an increase in the Medicare levy, and have insisted that extra revenue go to provide funding for vitally needed services.

Finally, theres ‘jobs and growth’. This slogan might seem meaningless: a quick Google search reveals that just about every politician (actual and aspiring) in Australia has used it. In budgetary terms, however, a ‘jobs and growth’ strategy has to include measures that can be linked, with some degree of plausibility, to actual jobs and/or growth. That means either public expenditure, such as the $90 billion in defence expenditure recently announced to South Australian voters, or tax concessions, such as the accelerated investment write-off provisions announced in the last budget.

Either way, a budget premised on ‘jobs and growth’ is unlikely to do much to resolve the ‘debt and deficits’ problem, or to leave much room for handouts to the government’s preferred group of ‘lifters, not leaners’. It may be time to shift the attention away from economics altogether and dust off that hardy perennial ‘Stop the boats”.

  1. Ikonoclast
    August 22nd, 2015 at 10:23 | #1

    Down with slogans.

  2. Paul Norton
    August 22nd, 2015 at 10:24 | #2

    The Abbott government’s entire performance can be summed up in a three-word slogan: corruption and incompetence.

  3. Ikonoclast
    August 22nd, 2015 at 10:29 | #3

    On second thought:

    “Stop the Slogans”

  4. BilB
    August 22nd, 2015 at 12:48 | #4

    Another little Abbott gem, as reported on Thank God its Friday yesterday, was Abbott attempting to absorb some of the aura of our Champion Netball Team by declaring he was a………

    Netball Prime Minister…..???

    To which Rebeca de Unamuno explains, he stands three feet away ….waving his arm furiously ….to distract from what is really going on. That is your Netball prime minister.

    (It might alternativly have been Grettel Killeen’s line, which ever it was totally on the mark)

  5. BilB
    August 22nd, 2015 at 12:50 | #5

    Also, Paul Norton is on the mark

  6. Ikonoclast
    August 22nd, 2015 at 13:46 | #6

    @BilB

    I think Tony Abbott was trying to tell us he is our:

    “Nutball Prime Minister.”

    This is certainly a three word slogan I could support in relation to him.

  7. BilB
    August 22nd, 2015 at 13:52 | #7

    My nusinesx partner was just telling me that there is so little legislation going through the parliament that committee meetings are being cancelled.

    Abbott launched his Netball Prime Minister gem along with some others including that there should be more “body contact” in the game.

    Yes. Nutjob.

  8. BilB
    August 22nd, 2015 at 14:01 | #8

    ….business….

    90 billion in defence expenditure? and 40 billion for a national broad band for everone was an economic disaster???

    We have got the lowest grade prime minister that this country can produce. Even Latham would have been better.

  9. Donald Oats
    August 22nd, 2015 at 16:40 | #9

    I think that this particular government is a living example of one that sought power by any means necessary (act now, apologise later, being one of PM Tony Abbott’s many expressions defining his approach), and once there, they had absolutely no clue as to what to do with that power, except to go on a bashing spree, searching the darkened alleys for perceived ideological opponents—finishing them off; again, by the any means necessary view of “morality”. Once they ran thin on opponents to stomp on, they beached their bloated whale of a government. Now we are stuck with chucking buckets of water onto it to keep the sad beast alive, but for what purpose?

    Even if they replace the leader, they are still beached with no clue what to do next. It is quite possible that if they replace the leader, they will pick someone with even less talent to show for being a Rhodes Scholar or other important academic achievement; there are so many from which to choose. Looking forward to the election, whenever it is.

  10. James Wimberley
    August 22nd, 2015 at 19:04 | #10

    I question whether “and” counts for slogan numerology. These are two-word slogans.

  11. rog
    August 22nd, 2015 at 19:30 | #11

    This govt seems to driven by one policy; Labor Were Worse.

  12. Donald Oats
    August 23rd, 2015 at 17:35 | #12

    “Coal cures poverty.”

    Except it doesn’t. Not since its discovery has it cured poverty worldwide, nor will it.

  13. Julie Thomas
    August 23rd, 2015 at 19:46 | #13

    No Sandpit or Message Board.

    This is an interesting article about leadership, service creativity and why they are not good things or rather how they have been subverted into bad things by neoliberalism.

    http://harpers.org/archive/2015/09/the-neoliberal-arts/?single=1

    I think the full article is available for one view without subscribing

    “So what’s so bad about leadership, service, and creativity? What’s bad about them is that, as they’re understood on campus and beyond, they are all encased in neoliberal assumptions. Neoliberalism, which dovetails perfectly with meritocracy, has generated a caste system: “winners and losers,” “makers and takers,” “the best and the brightest,” the whole gospel of Ayn Rand and her Übermenschen. That’s what “leadership” is finally about. There are leaders, and then there is everyone else: the led, presumably — the followers, the little people. Leaders get things done; leaders take command. When colleges promise to make their students leaders, they’re telling them they’re going to be in charge.

    “Service” is what the winners engage in when they find themselves in a benevolent mood. Call it Clintonism, by analogy with Reaganism. Bill Clinton not only ratified the neoliberal consensus as president, he has extended its logic as a former president. Reaganism means the affluent have all the money, as well as all the power. Clintonism means they use their money and power, or a bit of it, to help the less fortunate — because the less fortunate (i.e., the losers) can’t help themselves. Hence the Clinton Foundation, hence every philanthropic or altruistic endeavor on the part of highly privileged, highly credentialed, highly resourced elites, including all those nonprofits or socially conscious for-profits that college students start or dream of starting.

    “Creativity,” meanwhile, is basically a business concept, aligned with the other clichés that have come to us from the management schools by way of Silicon Valley: “disruption,” “innovation,” “transformation.” “Creativity” is not about becoming an artist. No one wants you to become an artist. It’s about devising “innovative” products, services, and techniques — “solutions,” which imply that you already know the problem.”

  14. Megan
    August 23rd, 2015 at 20:08 | #14

    That’s interesting. I hadn’t heard of “makers and takers” before.

    The concept was packaged for the Australian market as “lifters and leaners”, and for the UK it was “strivers and skivers”.

    What a coincidence! (not)

  15. Julie Thomas
    August 24th, 2015 at 08:46 | #15

    Here is a three word from Moorice Newman who is sure that relearning the language of

    “smaller government, self-reliance and wealth creation”

    are the three magic words that will bring back the glory days.

    I saw this quote on a screen shot provided by Dorothy Parker who calls out the loons at the Oz with such perspicacity and enlightened commentary.

  16. Ikonoclast
    August 24th, 2015 at 09:16 | #16

    The issue of “makers and takers” is very clear. Workers are the makers and capitalists are the takers.

  17. Jim
    August 24th, 2015 at 09:43 | #17

    I think all of the LNP slogans to date could be summarised by another uber-slogan……. “Magic Pudding Economics”…..

  18. Bernard J.
    August 24th, 2015 at 23:47 | #18

    So Hockey’s on the bandwagon to cure bracket creep by reducing income tax. Can someone explain why one would not simply raise the bracket thresholds rather than reduce taxes?

    Especially as the Hockey strategy ultimately benefits the most those earning above the highest threshold…

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