Cruising for a bruising

Rather inconveniently for the government, it had no sooner dismissed calls for more tax revenue from the usual lefty suspects (including me), when Moody’s came out with a warning that the much-loved AAA credit rating couldn’t be saved with expenditure cuts alone*.

Scott Morrison came back with a line that must have sounded like a good idea at the time. On the one hand “of course there will be revenue measures in the budget”. But, unlike Labor “additional revenue would be applied to reducing the tax burden in other parts of the economy”

That sounds good if you say it quickly enough. But let’s put some specifics in there. It seems clear that “revenue measures” means higher tobacco taxes. and “reducing the tax burden in other parts of the economy” means cuts in the company tax rate and the budget repair levy. So, Morrison’s budget message is

we’re going to tax smokers to fund cuts in company tax and tax relief for top income earners.

Good luck with that.

Of course, Labor is also planning higher tobacco taxes. But they will be able to say that they are using the revenue to fund better health services. And, of course, Labor has been consistent while the tobacco hike will be another backflip for the LNP (unless they get cold feet and do a double backflip, as seems entirely possible).

I’ve given up betting on elections after being unable to collect my winnings when Intrade collapsed a few years back. But for those so inclined, I’d recommend a look at Sportsbet, who are still offering 3.5 to 1 against Labor supplying the next PM (minor aside: most scenarios for so-called “hung” parliaments would lead to this outcome)

* I’m not a believer in ratings agencies, as I’ve said many times, and I don’t think a AAA rating is particularly meaningful. However, the core input to the rating is an estimate of future budget balance, so it’s not all that surprising that Moody’s, looking at the same data, have reached the same conclusion as I did.

19 thoughts on “Cruising for a bruising

  1. I think the public is getting into a frame of mind in which they immediately look at any proposed tax changes to see how they treat the rich and the poor. While the vested interests (people with lots of negatively geared property) speak loudest, there seems to be this rising hubub of noise about the Libs just looking after the rich.

    In short, the libs can only appeal if they deny their true nature, and thanks to Tone’s, “No cuts to ….” speech, people don’t believe them when they deny their true nature.

  2. Malcolm Turnbull sounds like Tony Abbott, Scott Morrison sounds like Joe Hockey, and Mathias Cormann sounds like Mathias Cormann. What could go wrong?

  3. I too had a laugh when I heard the Moody’s news. I too don’t place any stock in ratings agencies but the LNP, neocons etc. do of course. Even their ideological BFFs think the LNP are being downright dopey. Does the LNP have any credibility left anywhere on the opinion spectrum?

  4. Scott Morrison is in trouble. He is under huge pressure and has little control. I have formed these views after listening to several interviews with him lately by ABC’s Brissenden where he has become increasingly agitated, controlling and full of bluster.

    Something about all that makes him come across as rather obnoxious, along the lines of Pyne who has been dropped as a regular from 891 ABC mornings as his demeanour has become more irritated and irritating.

  5. Christopher Pyne’s demeanour has become more irritating? I suppose on general principles I have to concede that is possible, but still …

  6. Bad politics do not win elections, nor do inequitable election year budgets. I am anticipating that the double dissolution will dissolve creating the 3D triangulation of disillusionment..

  7. Australia remains unnecessarily exposed to the extended crisis in capitalism because our leaders stopped thinking. They behave as if a better system will fall out of the sky and relieve us of the responsibility of making our own future. (George Megalogenis, Quarterly Essay 61, p. 58). The temptation to place a bet aside, we are getting into “be careful what you wish for” territory if we think Shorten and Labor will do better than Turnbull, ScoMo and the LNP. The backflip warnings must be taken very seriously.

  8. Following on John Bookes’ point, Waleed Aly argues we have Abbott and the 2014 budget to thank for the way the public and media these days frame new policy proposals in terms of equity.
    Thank you Tony!

  9. The basic problem they have is this – they really, really want to cut government spending, but without it being seen to hit the “Howard’s battler” votes they need. But they have finally realised that you simply can’t do that because the overwhelming bulk of their spending in fact goes to those Daily Telegraph readers (and that which doesn’t mostly goes to their own sacred cows such as defence).

    They are the victims of the bulldust about “middle class welfare” (pretty nonexistent in Australia) that the IPA have been pushing; it has finally dawned on them there is in fact little politically vulnerable fat in health, education and welfare spending.

    Put another way they are discovering that all those people who say in polls that they want more government services even if they have to pay for them mean what they say.

  10. Truck convoy on the way to Canberra to push for lower wages, longer working hours and making the roads less safe. Wow! The stupid, it burns!

  11. I see truck owner drivers are in Canberra demonstrating that one does not need a high IQ to own and drive a truck. TurnBull laying on the BS with “you are the nation builders,…Australia needs you…..yadayadayada”.

    This whole beat up is about woolworths and like protecting their profits, on the one hand, and the LNP fighting to keep inflation and interest rates down so that their (in their mind) budget position doesn’t get worse. The tribunal is all about preventing unscrupulous manipulation of employed drivers, and this serves to protect the interests of the owner drivers as a consequence.

    I heard the opposing industry body who think this is their domain being represented but they are all about “productivity” which is code for more hours with lower pay. And all of this is happening in the land of road trains when we are on the verge of having semi automated truck platoons on long haul routes and driverless trucks at major mineral ventures.

    http://www.theverge.com/2016/4/7/11383392/self-driving-truck-platooning-europe

  12. @David Allen
    I’m not sure it’s that simple. My instinct is to support in principle the minimum rates, but I haven’t seen a persuasive argument that they won’t disadvantage the owner/operators relative to the fleets with employee drivers. The commentary from Labor and the unions (I’m a loyal member) seems light on detail and heavy on spin. I’d like to read a comprehensive and objective analysis but haven’t seen that yet. In fact the only detailed discussion I’ve heard was from Senator Heffernan on RN Breakfast.

  13. @David Allen
    Agreed, but the complaint from owner/drivers (and taken up by Turnbull et al) is that the large fleet operators are not affected by the RSRT’s order and will simply undercut the self-employed operators. As I said, I haven’t seen a convincing rebuttal of the independent truckies’ concerns, and I’d be grateful if anyone could suggest where to find it.

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