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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

philosophy behind Costello budget « Previous | |Next »
May 16, 2003

I argued in a previous post that the 2003 Costello budget has its roots in the 1980s neo-liberal Fightback manifesto of John Hewson. It goes back to the old roots of self-sufficiency, individual responsibility and lower taxation. Its a 1980's tune many citizens love to sing along with.

We are looking at small (but strong) government through an explicit rejection of a collectivist social liberalism that developed the welfare state in the name of social justice. You can hear Rupert Murdoch rubbing his hands with glee upon hearing the news. Reduce the power of the state, reduce the power of the state he says to himself. He mutters 'the state is a monopoly with coercive powers.' Thats bad. Small government is the key to reviving the good market order The Australian thunders.

This article by Louise Dodson makes a similar argument.

"The philosophy is small "c" conservatism writ large. Based on economic rationalism, it involves dismantling the welfare state and introducing two-tiered health and education systems. The catchword is "choice" - giving taxpayers the choice of pocketing extra money as tax cuts and spending it rather than the Government spending it for them. Consumers also have the choice of using private health and education rather than publicly funded services."

There is a bit more going here than the market talk of choice and diversity. Low taxes mean low public spending. Low public spending means the welfare state is reduced to a minimum safety net designed to prevent acts of desperation by the needing.

Louise Dodson goes to make another point about these neo-liberal reforms.

"The middle classes are most affected. With a safety net for the poor, those on middle incomes will pay more for medical consultations and private health insurance. They will pay more for their children's tertiary education, although the budget makes it more likely that their children will get to university, because the number of places has been increased.They are compensated by benefiting more from the tax cuts."

Compensated? One should add the middle class are only only partly compensated. Remember the bracket creep. The tax cuts are a smokescreen to hide the shift in spending from government to consumer. As Geoff Kitney says:

"The policy changes announced in the budget represent the most profound change in the way Australia has thought about these issues in 30 years. They dramatically accelerate the demolition of the Whitlam transformation of health and education policy in the early 1970s when responsibility was shifted from individuals to the community."

The undergraduate degree is a big cost---we are looking at $60-100,000 for a degree. Its a debt. Those with deep pockets will be able to afford a good education; the others will be able to buy a second rate one for second rate jobs. Its old-fashioned elitism achieved through one's market capacity and an explicit rejection of the ethos of equality.

Gareth Parker asks: what is wrong with a two-tiered system? Its a good question. It may not address small matters such as market failure, the need for public goods and Australians being citizens who live in a democracy. Not everything in public life is about the market. We do not live in the market alone.

| Posted by Gary Sauer-Thompson at 12:23 PM | | Comments (0)