Home > Economics - General > The laws of mathematics don’t apply to the LNP

The laws of mathematics don’t apply to the LNP

November 6th, 2017

LNP promises don’t add up

It is common for political parties to promise more than they can deliver at election time. Even by the relative lax standards of Australian campaigns, the LNP Plan “Getting Queensland Back in Business” stands out for its unreality. 

The Plan only promises to create 500 000 jobs through a fiscal policy that involves

* Cutting taxes;

* Increasing expenditure; and

* Improving the budget balance

These are all desirable objectives, but it’s a matter of simple arithmetic that all three can’t be achieved at once.

Reductions in revenue

The LNP plan proposes to:

* Increase the payroll tax threshold

* Freeze registration for 6-cylinder cars

*  Write down the value of GOC assets in electricity, and increase competition to drive down prices.  This must entail a reduction in the flow of dividends to the general government sector The LNP has criticised the current governments reliance on dividends from GOCs but has made no suggestion as to how this revenue source will be replaced.

Increased capital expenditure

The LNP Plan proposes a substantial increase in  infrastructure spending.  The strategy implies that spending will be increased by up to $3 billion a year. Explicit commitments of $1.3 billion for water projects and $500 million ‘Royalties for Regions’  are included in the Plan.  The Plan commits to building a new coal fired power station at an unstated costs. It has also been suggested that the M1 will be duplicated at a cost of $2.4 billion

Current expenditure

The LNP plan announces no cuts in current expenditure, other than symbolic targets such as the Safe Schools program and executive bonuses in energy businesses, which would yield minimum savings. The LNP has promised no forced redundancies and has advertised its intention to build schools and hospitals, though without a specific budget. The Plan includes expenditure commitments including a crime action plan, a youth employment plan and assistance for tourism.

Greatly improved budget balance

Following the recommendations of the Costello Commission of Audit, the LNP proposes to target a surplus on fiscal balance rather than, as at present, net operating balance. The difference between the two is net capital investment, currently around $3 – $4 billion. Proposed increases in infrastructure spending would make this difference even greater.

500 000 jobs

As for the 500 000 jobs promise, it turns out to be a simple statistical trick.  In previous election campaigns, it’s been common to commit to employment targets for a three-year term in government.  Nicholls has shifted the goalposts by promising to create the jobs over a period of 10 years, an annual rate of 50 000 jobs a year.  That’s only marginally greater than the rate achieved during the term of the Palaszcuk government. The implied annual rate of growth is 1.9 per cent, again only marginally higher than the rate of growth under recent Labor governments. It would, however, be a significant improvement on the outcome under the Newman government, when less than 50 000 additional jobs were created in a three year term of government.

Summary

Despite Malcolm Turnbull’s recent suggestion to the contrary, the laws of arithmetic apply in Australia and, in particular to Australian governments. The promises made by the LNP can be delivered only through large, unannounced cuts in general government expenditure. This is consistent with the strategy adopted by the Newman government in 2012, and by the Abbott government in 2013. 

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  1. Tom Davies
    November 6th, 2017 at 16:56 | #1

    “the rate achieved by the Palaszcuk governmen” — wouldn’t it be better to say “ the rate that occurred during…”?

  2. Peter Chapman
    November 6th, 2017 at 17:38 | #2

    The laws of mathematics may not apply within the LNP; but if the LNP forms a government in Queensland it may discover that it is unable to repeal the laws of thermodynamics (e.g., by trying to build new coal-fired power stations). No parliament on earth has yet achieved this feat, though I suppose some act as if these and other natural laws do not apply. King Canute could not hold back the incoming tide at Bosham; Donald Trump cannot avoid the consequences of climate change; what chance then would a mathematically-challenged Tim Nicholls have?

  3. Newtownian
    November 6th, 2017 at 21:27 | #3

    Did anyone in the mainstream media ever pull Turnbull up on that howler either for it simple stupidity or the point that encryption is as critical to e-commerce as dark uses?

  4. Ikonoclast
    November 7th, 2017 at 07:15 | #4

    The Qld LNP are only following our redoubtable PM of course.

    http://www.independent.co.uk/news/malcolm-turnbull-prime-minister-laws-of-mathematics-do-not-apply-australia-encryption-l-a7842946.html

    As for the “laws of mathematics” what are they? One source tells me;

    “There are three laws of arithmetic: The associative law, the commutative law, and the distributive law. … Associative law: For addition: ( a + b ) + c = a + ( b + c ) For multiplication: ( ab ) c = a ( bc )”

    As a bit of fun:

    (1) Does maths have rules, laws or axioms or all three maybe?

    (2) Do we need to refine our terms? The Laws of Physics, The Laws of Maths and the Laws of the Queensland Criminal Code are all termed “laws” in common parlance. Yet these “laws” are very different. How should we refine and define terms to talk about these differences logically?

    As for the topic, I guess the powers that be, including the ALP/LNP duopoly, want an illiterate, innumerate populace. It suits their purposes. It probably helps the LNP that their own leaders are functionally innumerate. It is perhaps easier to tell whoppers when your reality checking of formal systems and real systems detects far less inconsistencies than would be necessary to display even basic competence.

  5. John Quiggin
    November 7th, 2017 at 08:49 | #5

    @Tom Davies “wouldn’t it be better to say “ the rate that occurred during…”?”

    Yes, I saw that problem and thought I had fixed it, but maybe the edit didn’t save. I’ll change it.

  6. Svante
    November 7th, 2017 at 08:50 | #6

    @Peter Chapman

    Poor old Canute cops it again. Canute the Great already knew he could not hold back the tide. His purpose was to impress on others the all overriding power of natural law, and his own piety. A Christian king, he believed natural law to be god given and eternal. He never wore his crown again. As wiki says “Canute kept the Church sweet with many gifts.”

  7. derrida derider
    November 7th, 2017 at 09:02 | #7

    Svante is right – the usual telling is that Canute’s feat was a response to flattering courtiers who assured him he was all-powerful. He rebuked them by demonstrating that he was not.

    A pity that AGW, and hence sea level rises, is too slow for that strategy to work on denialists ….

  8. Svante
    November 7th, 2017 at 09:06 | #8

    Turnbull this morning speaking to Fran Kelly just before 9am on ABC RN said he’s always paid his fair share of tax. Without drawing breath he immediately modified that to say that he pays the tax he is obliged to pay. He demonstrated the LNP understanding of basic maths law in that the value of any given number at any time and anywhere is relative and optional.

  9. Svante
    November 7th, 2017 at 09:09 | #9

    …and subjective.

  10. I am and will always be Not Trampis
    November 7th, 2017 at 16:46 | #10

    I cannot see any State Government building a coal fired station. It costs too much and takes too long to build and when it is up and running it simply embeds high costs.

    Surely they would listen to their public service advice. at the very worst they must understand opportunity cost.

  11. David Allen
    November 7th, 2017 at 17:40 | #11

    I am and will always be Not Trampis :
    Surely they would listen to their public service advice. .

    That would assume that they actually care about good governance rather than power and personal gain.

  12. I am and will always be Not Trampis
    November 8th, 2017 at 07:52 | #12

    The second sentence David. It would come back to bite them on the bum!

  13. Peter Chapman
    November 8th, 2017 at 10:43 | #13

    @Svante
    Svante, thank you, I am well aware that Canute was acting with what we might term ‘irony’… but such subtleties are beyond most contemporary politicians. As some in the UK are asking of people like Priti Patel and Boris Johnson, “Are these the best we have to offer?”

  14. Peter Chapman
    November 8th, 2017 at 10:48 | #14

    @I am and will always be Not Trampis
    “Surely they would listen to their public service advice…” Regrettably this is not at all certain. Nicholls was complicit in Campbell Newman’s demonisation and diminishing of the Queensland public service and there isn’t much evidence he, or his party, have changed. They are more likely to come up with a public-private partnership proposal of some kind to build their new power station (cue: yawns and cries of “Here we go again”).

  15. may
    November 8th, 2017 at 12:26 | #15

    public servants mean public services so why would a governing group that is committed to reducing public services to as close as possible to zero pay any attention to them at all?

    from here it looks like every election there is a purge of the “not-one-of-us’s” .

    the ABC comes to mind, with all the squalling about being over-run by lefty/commo (overpaid)types and how unfair to the for-profit crew a publically funded broadcaster that broadcasts what they won’t is.
    as well as every now and then producing some excellent stuff and acting as an industry training ground and gasp, horror, putting on uncommercial news.

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