02 May 2014

The Commission of Magical Thinking

Auditors, it is cruelly said, are people who lack the wit and verve to become accountants. They tend to be so focused on what's there that they tend to resist speculation, or be incapable of it. I wondered why there was so much hoo-ha over the Commission of Audit and why it took so long to report, and for once sympathised with the intrepid sleuths of the press gallery in not pushing for its report to be released.

I was surprised when the document appeared to be a veritable festival of speculation - this government's answer to Rudd's 2020 Summit. Perhaps I shouldn't have been: for a start, the Commission contained no taupe-souled auditors, another Abbott Government disconnect between what it says on the box versus what's in it.

Secondly, for a document that would foist so many additional responsibilities upon the states, it contains nobody who had actually run a state government (and who would they pick anyway? Nick Greiner was unwell, Jeff Kennett would have tipped people off to cuts cuts cuts, Ted Baillieu or John Olsen or Rob Borbidge would've just sat there, Richard Court has disappeared comprehensively from public life - John Fahey would have been ideal, and even Gary Humphries could have used the extra work. Oh well).

Press gallery reporting on federal-state relations is stuck in the Keating frame about Premiers and a bucket of money, but in reality the disconnect between those responsible for raising money and those responsible for spending it is one of the key dysfunctions in our political system. The Commission was right to raise the issue but their suggestions are inadequate and so is this government. I live in NSW, the state with the best educational, police, and health services; I'm all right Jack, but I pity those of my compatriots who are far from being my neighbours. Queensland and WA are the fastest-growing states and neither has a AAA rating; if the government of either or both started borrowing to fund infrastructure, Hockey for all his rhetoric would have conniptions. The Commission talked about offering states a parallel income tax, a 1930s idea last heard of under the Fraser government.

Privatising Australia Post is a joke. This government doesn't have the vision to turn it into the logistics behemoth that Deutsche Post has made of DHL, so it busies itself with petty defensive bullshit like this. This government would sell it to a friendly outfit who'd invest no money in it, run it into the ground, and then hire some ex-staffer to lobby for more tax breaks and handouts because they can't make a go of it. This is not a proposal from people who understand government and business, but the opposite.

So too, the proposal to benchmark ABC and SBS against the broken TV networks: fancy having lived in Australia as long as that lot have and confusing national broadcasters with commercials.

The proposal to have university students pay for a greater proportion of their degree isn't well thought out and seems designed to align with the Kemp-Norton review of higher education rather than any sort of honest examination in its own right.

When I left school in the 1980s the smart, diligent kids studied medicine and law. There was serious money to be made for graduates with those qualifications. With the introduction of HECS at the time, paying back education costs as a return on investment seemed fair. Now, graduates in both those fields are in oversupply, and no other field of study has taken their place (with the possible exception of public sporting academies designed to generate high-earning athletes, and even there a small proportion of graduates are covered).

This deflation of education cost-to-earnings has animated debate in the US but Kemp and Norton have largely missed it with magical thinking about the market, and the Commission was wrong to even comment in an area it clearly hadn't examined (concern about duplication, perhaps? Why not just leave it alone?). Countries that invest in education reap economic growth and prosperity; countries that leave those choices to individuals do not enjoy similar benefits. It's a real pity that the commission missed that.

The same applies to the 2% of GDP pledge for Defence, an oft-repeated statistic that has all the hallmarks of being plucked out of the air - especially when couple with calls for a White Paper, which presumably would test this very proposition, and followed by the questionable overinvestment in the F-35. Auditors would have picked up on the idea that investments in diplomacy and soft power would be better investments than this or that hardware.

Means-testing family homes for pensions is very much not a winner. There is a shortage of housing stock, let alone for older people who'd be looking to buy suitable premises once they had been forced to sell their existing homes. Talk about social disruption and ... no, this government simply won't do it. Same with competition for pharmacies, I mean what sort of country do you think we're running here.

The reason why you know this government is not committed to the NDIS/DisabilityCare is because they think it's a charity rather than a economically rational rights-based system, which is why there's all this rhetoric about "trials" and pushing out timelines and "genuine concern", etc. This will go before PPL does.

PPL is bollocks policy, but it is a talisman for whether or not you can trust Tony Abbott. If he junks PPL he will not be believed about anything, if he waters it down he will get no credit for it, and if it goes ahead it will be an albatross around his neck. Remember in 2007 how conventional wisdom held that Howard would be re-elected by people grateful for tax cuts?

There was a genuine conversation to be had about the age at which the pension kicks in. Rudd sprang the age increase to 67 as a surprise, reinforcing his reputation as a credibility-free stuntman. Abbott and Hockey have essentially done the same thing. They could have kicked this issue into the second term, consulting with older people and made the case for gradual increases to pensionable age (and enforced this on the parliamentary pension schemes), as though they planned on a long-term, substantial reform program. If Hockey were the better man and politician than Abbott, he would have taken that initiative, as Keating did with Hawke (who knew a thing or two about consultation). Instead, they've put the wind up people, the opposite of all that no-surprises stuff they promised.

If you're going to deregulate wages so that they go down, and cut benefits to low-income earners, it makes sense that such people would go to areas where housing and other living costs were lower. Yet, you show me a low-cost area of Australia and I'll show you an area of high unemployment. By mandating that low-income people be restricted from high-unemployment areas, Shepherd and his gang simply haven't thought things through and there is scant hope for Abbott in this respect.

These guys who govern us are not the guys to talk about 'sacrifice': not at the Budget, not on Anzac Day, not ever. Someone who claims every 'entitlement' is not the person to end entitlements. Any sharing of sacrifice will not follow through into a sharing of spoils when we come to the sunlit uplands. To share with someone, you'd want to spend time with them; and nobody wants to linger when Abbott's around.

The other place where their imagination genuinely came a-gutser was on the revenue side. It occurred to none of these giants that there was any alternative to taxing either business or incomes, and given that limitation jacking up income taxes was the only option. With miners and financiers making super profits off government guarantees, you'd think they would have been good for a bit of relief on spending cuts and direct taxation - but no, sadly.

This is a government that has outsourced its thinking about what sort of country we would want Australia to be, and how best to realise that - which is the best part of politics. It would have embarrassed itself by appointing the IPA to this Commission, but did the next best thing by lining up a range of exhausted volcanoes. The last government did something similar, but it took a grim pride in Getting Things Done which this government talks about, but doesn't really share. Whitlam and Gillard passed a flurry of legislation, while for Abbott even scrapping regulation was as half-hearted as the passing of it.

This government saw the books before the election - it only "inherited a mess" by realising how the policy vacuum they created for themselves is holding them back. They were careful to frame the Commission's terms of reference in such a way that reflected it back onto the government, and they succeeded: The Commission is a stale joke, and so is this government. Abbott and Hockey seriously believe they will get credit for not going as far as the Commission want them to, while the IPA and BCA will bag them as wimps over the smallest omission. Nobody will believe their protestations that they would never do some unpopular thing spelled out by the Commission; Abbott is nowhere so awkward as in the middle ground.

They will be flat out getting any of their big-ticket items through and it will be fascinating to see which ministers can make the best of the limited scope and time ahead of them. That double-dissolution isn't much of a threat these days, and neither is Tony Abbott.


  1. Thank you Andrew for informing the debate about the Commission of Audit’s report. It is a given that the current federal government will not adopt all of the CoA’s recommendations using the ‘spare the pain’ rule. We must allow our leaders a bit of theatre and a chance to show their humanness.

    I don’t know why you show so much concern about the PPL. Surely career women are just as entitled to breed as bogans. Some of those bogans choose a version of PPL to fit their lifestyle and they remain on that PPL version for many years.

    We could equip our defence forces with public relations kits rather than buy expensive jets. Do you think that would work?

    Andrew, one very salient question remains unanswered: Did you inform the government that you were available join the CoA team?


    1. So Kabonesa women who do not earn high salaries do not have a career and are bogans. Nurses perhaps?

      Andrew - thank you once again.

      This govt has no credibility left. Fancy huffing and puffing about the need to increase the pension age to 70 and then pull out a crayon to ring a date seven elections away! What a joke.

    2. there is a perfectly good alp parental leave policy may be you don t know, that, so you would buy a product that is yet to be built .
      seems you may be a visitor from ipa

      thank you andrew, this lot may think they can get away with scaring us and then doing less but we have long memories the meme this morning is we go to the doctor to much

      How the hell would they know . the other seems to be,let them eat cake and the other seems to be to hell with those who did not work to be rich, to hell with those that where born blind deaf or crippled.
      let them eat cake

      i just want to live long enough to see the liberal party crippled so much its never seen or hear of again

    3. Lachlan Ridge2/5/14 2:36 pm

      You're about as funny as a dead baby's doll.

      Your spiteful view of your fellow Australians betrays an insecurity that is at once bemusing and pathetic. I suspect that your involvement in public life is nil and your social engagements are narrow and limited. In short, your personality disorders render you ill equipped to face the social challenges of the twenty-first century.

      A pity for you really. Australia can be a really great country, and informed debte can help build strong social structures; but the Kabonesa's of this world are bent on making this nation a shrill, uninformed, sick and narrow place, probably to overcome some deep seated inadequacy of their own. Drag us down to their level, etc.

      Thank god there are minds like Elder's that rise above that particular putrescence.

    4. The fact that a company PPL is generally negotiated as part of the salary package for highly paid women means that they really don't need a double dip.

      Medium & low paid women generally do not have the luxury of negotiating a PPL, so it is entirely appropriate to provide one for them.

      Thank you Andrew for your usual sharp insight intothe machinations of the political world.

    5. During World War II the RAAF attempted to do battle against highly effective Japanese aircraft with planes that were expensive and unfit for the task. The F35 is demonstrably both expensive and unfit for the task. If you're going to put out a press release, put that out; and read my piece again on PPL.

      See my next blogpost on your first paragraph.

  2. Once again, thank you for sharing your insight and invective. You're the best read of the blogs.

  3. VoterBentleigh2/5/14 12:04 pm

    Abracadabra, out of the mouths of PR proselytizers a slither of truth sometimes emerges. In a UK interview, Mark Textor said that it was not so important to look at what people say, but to see their motivation. The electorate should look at the motivation behind the Audit of Commission. The whole audit is a deception with an attempt to tap into some post-ANZAC Day nationalistic fervour about all working together for the country. The motive is to return to a past world and strengthen the power of the Coalition and its financial supporters - if by degrees rather than revolution. As you say, the Coalition are more likely to discard valuable policy initiatives like the NDIS, Australia Network, etc., but keep the PM's signature boondoggle.

    This audit is yet another sign that this Government is not just arch-conservative, but reactionary in nature and policy objectives. The auditors chosen by the Coalition reiterated unachieved suggestions the Costello audit. For all the talk about changed circumstances, the current modern world has nothing to do with the audit; it is dredging up policies which were looked at decades ago and found to be wanting or useless. The Abbott auditors are recycling ratbaggery to see if they can trick the public this time around, especially since they have the Murdoch minions, the IPA, the Sydney Institute and Deloitte Access providing the magic words and helping with the hocus-pocus.

    The Abbott Coalition is double-crossing the very people who voted LNP. As just one example, before the election, Mr Abbott claimed that more taxes should not be imposed on families earning $83K-$150K, because they were not rich (Budget reply speech, 2012). Having got into office, he claims that they are richer than others and that they should accept his toxic (TA defence) debt tax. It will cost those families more than the carbon tax, which was imposed upon business, not individuals, and for which individuals were compensated. So his utterances before gaining office were used not only to counter good policy, but to entice people into his trickery. Mr Abbott ("Tricky Tony") continually reminds me of the fictional swindler, Mervyn Llyod (BBC TV series, "Hustle"), who left his supporter in the lurch declaring: "The scenery only changes for the top dog".

    1. Voter Bentleigh - I appreciate what you have written and recognize where you are coming from. It I see nothing 'conservative' about this government. I think they are very radical Utopians who are bent on reshaping Australia according to their utilitarian principles. I find it unsurprising and very revealing that the people who produced this audit did not include anyone with relevant expertise. It is all about expenditure. The economy is everything. We are all servants of the economy. The economy does not serve us. Bob Menzies would be amazed. And Lachlan I agree with you about one's personality defects affecting the development of a certain world view. I think of Steerpike from Peake's Gormenghast: mean-spirited, vengeful, biding his time and that horrible creation provides a few insights on what motivates certain people. I am afraid some end up in politics.

    2. VoterBentleigh4/5/14 10:41 am

      Abbott's motivations are purely self-serving, not utilitarian, demonstrated by his readiness, without compunction, to change his position on any and every policy.

      There is no worldly idealism here. Abbott's personal ideal is a reactionary, conservative world, entrenching winners and losers.

      There is no over-riding concern for the economy or country; they are only incidental means to benefit himself and his financial backers.

    3. I would have agreed wholeheartedly once VB and you may well be right. I know think TA is an ideologue who shifts his position when strategically necessary. I remember when he was tagged as a moderate because he supposedly spoke out about the implementation of Work Choices. Now I think we misread him. I think he sensed that those 'reforms' could not be sold politically at that time. And he was correct. I think he is a very watchful creature.

    4. Btw - what I have written does not cut out your view of his self-centered ambition. I agree. That is the motor.

    5. Bentleigh...

      Let me assure you that no-one of respect and prominence listens to T.Wilson at all about his idiotic Freedom agenda and repealing his act for Bolt et al

      Many succesful Greeks/Jews /Chinese and gays have a chuckle at how silly and immature they can be to fool our Multicultural society that it's good to be a bigot

      Freedom to go and get f.....ed by many people.

      Loved watching Mr Turnball on B.B.C hard talk and great journalism that's lacking in this country..

      Thanks kindly Andrew and take a bow...

  4. A stale joke is right. Not one of the recommendations is even half way serious. Notice how negative gearing and super co-payments where never mentioned?

    You can understand how the previous Labour government was messy as it spent most of its energy fighting itself. But what's the liberals excuse?

  5. "This is a government that has outsourced its thinking about what sort of country we would want Australia to be, and how best to realise that - which is the best part of politics."

    Long been true, but worth reminding ourselves about. Good piece, thanks, Andrew.

  6. Not much needs to be said about what a joke this audit is, nor Abbott's levy vs tax bullshit. I guess this is what $11,000 breakfasts and dinners with the LNP gets the BCA. They get invited to write Government Policy.

    Just as unsurprising is News Ltds attempts (at least in Sydney through the Telegraph) to force the audit recommendations and broken promises as some sort of medicine to cure the ills of Labor's reign. Its like some weird twilight universe compared to Gillard's time and I truly wonder if they believe it as they watch their readership numbers magically evaporate. Murdoch gambled and doubled down big time on Abbott and it is perhaps the biggest mistake he will live to see. Other than perhaps hiring Lachlan after his atrocious run at Channel 10.

  7. The CoA & The Abbott Family (Credits from the IA original: Tony Abbott as Gomez, Julie Bishop as Morticia, Joe Hockey as Pugsley, Christopher Pyne as Wednesday, George Brandis as Uncle Fester and Peta Credlin as Lurch) are more rotten than stale, though the underlying philosophy is by the US Teahadists out of Thatcher Toryism.

  8. So, was there any mention in the C of A of the Institute of Sport? Introducing HECS for our sporting heroes? Closing down the Institute - what business has the Commonwealth in sport?

  9. The Commission's use of $57,460 as a benchmark because it is the average wage and how horrifyingly low that is proves this Commission did not look very hard at helping the underpaid and vulnerable. There is also very little job security for people under this figure. I am one of those people under that figure working in an industry that offers increased casualisation and often two hour shifts. This means that if one allows themselves to accept two hour shifts they can only work fourteen hours per week even if they work seven days a week. You probably think I am joking but this is reality. Where do I work? I work as a casual Disability Support Worker assisting some very vulnerable people. I will not accept less than four hours and often work seven days a week. I work for three NGOs as this is the only way to obtain enough work. A couple of weeks ago I worked out mathematically how many hours on average I have worked during this financial year, a grand total of 37 hours per week or almost full time. This month I have virtually no days off for recreation/rest. If this Commission of Audit or any Government were planning truly for Australia they would be looking at these problems including Ageism, Gender Equality and Bullying within the Workplace. They didn't and aren't and my story is quite common.

  10. Thank you Andrew.
    I don't think any notion of wanting us to be a particular sort of country enters their mind - other than 'country-with-surplus'. Surplus = profit, but a country isn't a business and profit shouldn't be its prime aim. It gives no attention at all to the idea the country is made up of people, not tokens to move around like a Monopoly board - nor, I realise was it intended to. I don't think it would be possible in any case for someone earning $25,000 for two weeks to understand how it is for someone supporting a family for six months on that amount.

    Just some examples to add to yours.
    Most unemployed young people live at home, with financial and emotional support. How can it make human or practical sense to force them to move to a 'high employment' (and therefore more expensive) area without that support?

    Why should a pensioner who built a house in a very cheap area 50 years ago have to move because it's since become worth much more? Local councils see the desirability of making it easy for them to stay by waiving rates - why not this much more highly paid group?

    I know through work that any sort of medical co-payment is going to cause very expensive problems - I could give specific examples such as untreated broken bones, undiagnosed asthma. As an asthmatic myself, I can afford the two per day preventative drugs, but still wonder how others manage the cost and would manage an increase. If I lapse into not taking medicine, I need more expensive treatment. That should be stating the obvious!

    Most of what this government stands for comes as no surprise to someone who follows politics but my main hope now is that it serves as ammunition for opposing parties because we have it in writing. Tony Abbott has openly broken 'promises' and just as obviously weaselled out of them so with the correct framing there's a very strong message for a future election. He is even letting down some in the upper brackets who believed his PPL promise.

    However, I don't suppose any party would want to point out that with all the suggested cuts, nobody suggested looking at politicians' pensions and perks! How can such a review be taken seriously though?

    There’s already more criticism in the media and my main wish is that they really address this fundamental faking of the 'budget crisis' which still has some people accepting the rhetoric. I don't know why nobody is asking where's the sense of removing the revenue-raising carbon price ostensibly because it's a burden and then adding all the additional 'burdens' promised.

    It won't change some rusted on voters, but I’m positive many now regret their vote and ‘we told them so’. However, as you say, there’s little hope of a double dissolution at this stage.

    J Andrews

    1. Your statement about employment and support networks is spot on, especially for young people. Unlike most politicians and any of the Commission of Audit, I know people who are struggling financially and know how hard it is for their kids to find work. The main point is kids from low socioeconomic backgrounds are often less equipped with the financial and emotional tools to successfully move away to find work. I lost a cousin who committed suicide after the shame of being unemployed for a year, ironically the day before a job offer arrived. I know another young man who is trying to find work and is becoming severely depressed, the only thing keeping him together is his family.

      The Commission of Audit are sociopathic types who are incapable of feeling empathy, they simply don't care about social costs, after all, they're borne by the great unwashed, not 'people of calibre'.

  11. If those who have written comments here and AE himself had run the audit commission we would have had a very different result.

    Why should that Dickensian looking Tony Shepherd and his team be deciding the new shape of Australia? Who are these people?

    What is wrong with the government that they cannot do what they are paid to do? In my innocence I thought a PM and Treasurer led a team which developed policy with the able assistance of bureaucrats. Instead this work has been farmed out to people who have presented a five volume neo liberal wish list which some say has been inspired in part or entirely by the policies of the IPA.

    I think people are waking up to them. There is just nothing of substance at all coming out of Canberra.

  12. Anon...

    I have the privilege and time to be a keen media and news observer as an outsider..

    Appointing young guys in their twenties to conduct propaganda and do the dirty work of discredited and shady corporate donors to influence our policies is healthy...?

    Some of these people think they're Gods sadly as appearing on the idiot box gives them credence and respectability in their own minds

    Narcissistic bastards and losers in my opinion that use politics and their status to fill a "void"

    Nasty people to avoid at all costs with the exception of a few individuals.