That’s my view of Costello in general[1]. And I think it may be true of the election budget he brought down on Tuesday night. The tight targeting of large lumps of cash was fairly transparent, and made it easy for Labor to get coverage for the converse observation, that lots of people, and crucial government services got nothing. The Courier-Mail is about as negative as I’ve ever seen in the immediate wake of a budget, running photo stories on a low-income student who gets nothing, and a mother-of-two who says the whole thing is a “vote-buying exercise”. The Oz has a series of negative stories.
Howard actually gets a better run in the Fairfax press, with both the SMH and the Fin running on a blunder made by Latham, who mistakenly said he wouldn’t benefit from the Budget (as a high-income earner he gets a tax cut). But this is the kind of story, beloved by journalists, that leaves the general public cold. The only time this kind of thing has any impact is when the person concerned is already on the ropes.
It’s now up to Latham to make a convincing response. He doesn’t need to present an alternative Budget but he does not some concrete alternatives. A good starting point would be promising to wind back the tax cuts for the top 20 per cent of income-earners, in order to fund an across-the-board reduction. I’m pleased to see that this is still on the table.
Update
Latham’s reply seems to me to have hit most of the right points.
More significantly, perhaps the Channel 9 news ran a story on Labor’s promise to fund pneumococcal vaccine, which had the government playing catch-up. This news story isn’t nearly as damaging as the version I saw on TV. but the government is faced with a nasty choice here. I can’t recall an instance where a Budget decision has been changed, during Budget week and in response to Opposition pressure, but that’s what looks like happening. The fact that Costello rolled Abbott (who lobbied for the vaccine funding) in the Budget process only makes the whole thing more piquant.
fn1. I’m sure quite a few people would have the same view of me. But if it takes one to know one, this only strengthens my assessment of Costello.
John Quiggin 
Latham’s mistake resulted in Costello reinforcing that the tax cuts went to people on higher incomes (like politicians) who don’t necessarily need it.
JQ’s last remark is obviously too clever by half in itself. Clearly that “if” is begging a question and not answering it, but what seems to me to shout as an unasked question is this, what of Latham, what is he?
They’re all as bad as each other. It doesn’t matter who you vote for, a pol;itician will always get in. If Hewson could have a crack at being parachuted into the system, how long until JQ is taken up to a great height and shown all the kingdoms of the earth?
If one is interested in increasing fertility rates in Australian families the family-oriented budget is a small step in the right direction. As our current fertility is below replacement level and the past supply of educated, business-savy migrants cannot be expected to be as strong as it has been in the past this is an important move. Of course if you believe Australia would be better-off with a lower population than at present the moves are a bad idea but this seems to me a preposterous notion in such a sparsely populated continent (and to reflect mainly people-hating, left-green prejudice).
Clive Hamilton in the Age this morning disparages Peter Costello for pandering to a selfish generation who treat the decision to have children as cost-benefit analysis. But when I listen to my younger colleagues talking about marriage and child-raising choices it seems to me that economic issues do loom large. Child-raising and particularly housing costs are an important influence on fertility. Measures that offset these costs are useful although the government could go much further than it has.
“people-hating, left-green”
I think you are mistaken Harry, that should have been “green-left people-haters”. Or is it “green-people left-haters”. OTOH, perhaps that was meant to be a “purple people eater”. There is some provenance to that in oral history, to wit, a song from half a century ago, so it must have been the wisdom of the ancients,.
And now for something completely different.
That may be what the government wants you to think Harry, but when it comes down to it there is no guarantee that The Government will continue with “family friendly” policies as your child grows, particularly this one which just seem to apply polices in a very ad hoc manner. It changed the rules on access to AusStudy leaving parents supporting university aged children way past the rules that applied when they were born.
Harry, I think the budget is more about marginal seats than fertility, but I agree that economics loom large in decisions to have children.
Prue Goward said tonight that if we want to promote fertility we need to provide a decent maternity allowance and all-day child care. The lump-sum nature of the baby bonus mitigates against it working as a maternity allowance because it can be spent on anything, ie on one big item rather than on the continuing needs of the associated with the child. (There is also no requirement for the recipients to stay out of the work force.)
The enhancements to child care included no all-day places. In our largely privatised model, all-day care for the under three’s is most staff intensive and least profitable.
It was apparent that both the Majors(or at least in Labor’s case Latham had) had come to the conclusion that the upper income tax scales had to be shifted, if ever increasing numbers of ‘ordinary’ taxpayers were not to become affected by top marginal tax rates. Now the truth is, that lifting these thresholds, will never be politically palatable for those who miss out, even though many may become affected in the next year or two. The govt seems to have ameliorated this problem, for those with children in most need. As well it has virtually bought out the maternity leave problem, rearing its head for employers. Now it is true that employers could have been soaked for this, but as an employer, I know how this prospect would make me view the hiring of prospective mothers. It would certainly encourage more casualisation of this group, to avoid maternity leave payments.
Given this scenario, I would find it hard to see how a Labor Govt could have handled the budget much differently. You may of course disagree with the need to alleviate the top tax scales right now, but you do have to face the problem of adjusting them upwards, sooner or later. Also, it is most likely that this will be done in a pre-election budget, when voters are in a ‘what’s in it for me’ mode, when pressing problems need to be addressed. It is unlikely govts will voluntarily forgo this sort of bracket creep revenue in mid-term.
Apparently the pneumococcal vaccine is not as straightforward as the more conventional vaccines. There are a large number of serotypes to be protected against, which are country specific and also reinventing themselves. Cost per statistical life is also a concern, with vaccination repeats needed 5 yearly. A quick summary of the nature of the problem can be found here
Observa, the report I read said that the vaccine program had been recommended by the relevant advisory body.
The link you pointed to didn’t have any cost/life saved info, but a quick scan of the Web suggests that, while higher than for a lot of vaccines, it’s still in the acceptable range. Tthis might be different here if we need a country-specific vaccine, but I would have thought the extra costs would mostly be the fixed cost of developing the vaccine and starting manufacture, which has already happened.
One of this morning’s news shows had their resident doc explaining and extolling the virtues of pneumococcal vaccination. The problem is(as he admitted) that the vaccine is unavailable generally when you ask your GP, even if you are prepared to pay the market price. The govt is in negotiations with the drug companies on this at present, both in terms of cost and availability. It would seem that Labor is doing a bit of preemptive grandstanding on this. You can promise funding all you like, fairly cheaply it seems, for something ‘when’ it becomes available.
Assuming the vaccine is expected to become available in 2004-05, I wouldn’t have called it pre-emptive grandstanding to include funding in the Budget.
From the reports, Abbott thought the same and lobbied to have it included, only to be rolled by Costello. I imagine someone leaked this to Labor.
I don’t see why we need more kids. More generally, I don’t see why the government need have any particular population goal. We should have whatever population naturally follows from people’s free choices and from a responsible immigration policy (that being a totally different debate – so I wont say my version of ‘responsible’). If the population goes up – yay. If it goes down – yay. Whatever.
I guess this makes a green-left people hater hey Harry? I hate them so much I want to leave them alone. If that’s the definition of hate… then I wish this governmet would hate me a bit more!
It seems to me one of the negative results from the Budget for the Government will be interest groups who didn’t get any money.
When the Government spends money like drunken sailors quite a few people will feel a bit peeved they didn’tget the ‘share’.
such a reacion would be fully deserved
John Humphrey’s you totally distorted what I wrote. I said if you want higher fertility…. then…. I then said that this wouldn’t be true if you wanted lower population. As you say you don’t care which way it goes you are not a green-left people hater. Just one who doesn’t care.
I do favour not allowing our population to decline but I believe that government action and market processes will do this. I am not a fan of population targeting either and have written against this. But its not clear that free markets do deliver a fertility outcome that maximises total utility of society. (A formal analysis along these lines is provided by Yew Kwang Ng in the recent volume to Murray Kemp). Basically when a couple make their fertility decisions that maximise intra-family welfare but there is a spillover benefit to society in terms of increased gains-from-trade in having more people to connect with.
I think there are very high transaction costs in restricting people’s fertility choices but not a lot in encouraging people to do what comes naturally….
The MJA article (extract below) indicates that the new additions to the Schedule recommended, including the pnumococcal vaccine, would not be considered cost-effective by most Australians. $230,000 per life year for pneumococcal is above what most would be willing to pay.
.http://www.mja.com.au/public/issues/180_10_170504/bur10901_fm.html
These new vaccines are more costly than any previous additions to the vaccination schedule. In the private market, three doses of conjugated pneumococcal vaccine cost far more than $300, one dose of varicella vaccine more than $40 and combinations with IPV more than an extra $18 for the IPV component. At the government level, the total annual cost of adding IPV, varicella vaccine and 7vPCV to the schedule would be about $100 million, and would almost double the current cost of all other childhood vaccines. This is a large expenditure. The cost-effectiveness of these three vaccines in Australia is therefore important.8-10
Changing to IPV (at $14 per dose) is estimated to prevent one case of vaccine-associated paralytic polio every 2–3 years, a cost of $17 million per case averted.8 This must be considered in the context of the maintenance of public confidence in immunisation programs.
For varicella vaccine (at $53 per dose), universal vaccination of infants could prevent 450 hospitalisations each year, at a cost of $21 000 per hospitalisation averted, and one death per year, at a cost of $10 million per death averted, over a 30-year period.9 This does not include the out-of-pocket costs to families of a child having varicella, which make vaccination cost-effective in the United States.11
Universal use of 7vPCV (at $90 per dose) could prevent two to three deaths, 13 cases of meningitis, 110 cases of invasive pneumococcal disease, 800 cases of pneumonia and 14 600 cases of otitis media which would otherwise occur annually in each birth cohort of about 240 000 non-Indigenous Australian children by their fifth birthday.10 The cost per death averted and the cost per life-year saved by 7vPCV is estimated to be $5 million and $230 000, respectively.10 This does not take into account the impact of universal 7vPCV on adult pneumococcal disease or pneumococcal antibiotic resistance, as documented in the United States.12