You must have heard of the “the rich”, the people who pay nearly all income taxes flowing into government coffers and yet are pilloried for doing so. Never mind Labor and the Greens, the safe politics of shaking down the rich is thriving in Coalition ranks.
Budgets are getting terribly tedious. I think this because the scope for action is narrowing, as every initiative is loudly bagged these days by somebody or other. Joe Hockey took a walk on the wild side and that served him badly – which he deserved, to be fair — because he was monumentally inept.
“We all know what to do, but we don’t know how to get re-elected once we have done it.” So the Prime Minister of Luxemburg, Jean-Claude Juncker, recently said. But do politicians at large really know what to do? I don’t think they do.
Hockey was a poster child for political incompetence. Why do we think a bunch of self-promoters who are good at getting people to vote for them will be competent at running government? Sir Humphrey had it right: politicians can’t be trusted to run governments. What then is the answer? There isn’t one.
Imagine yourself as Treasurer and it is your first budget. You try to cut the deficit by screwing pensioners, denying young people unemployment pay, and charging poor people for doctors’ visits in order to underwrite gee-wiz medical research. You couldn’t write home about such ineptness. This is not an example of a politician knowing what to do and bearing the electoral pain. It is an example of a typically blundering politician who has not the least idea of what to do.
Budget deficits can only be reduced sustainably by cutting the growth in future expenditure below aspirational levels. Of course, even this can’t be done without incurring the wrath of special interests. But it possibly can be done without losing too many votes. Actually cutting expenditure is largely impossible; except for relatively minor amounts in insensitive areas.
Raising taxes doesn’t work because governments can’t resist spending the revenue. To them, an extra dollar of tax revenue is an extra dollar to splurge. That is why they are fond of trumpeting — incurable spendthrifts and debtors that they are — that additional spending has been fully funded; perish the thought that the funds might have been used to pay down debt.