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economic mismangement? « Previous | |Next »
September 9, 2004

It is hard not to miss the Howard Government's profligate spending on political fixes in this election. It is buying its way back to power. It has spend pretty much all the budget surplus, with little being spent on education and infrastructure renewal. As Kenneth Davidson observes "The Coalition is spending money on its re-election campaign as if there is no tomorrow."
CartoonPryorVH1.jpg And with plenty of spare left in the budget surplus we can expect more spending directed at our pockets and purses. I guess we can expect little by way of substantive policies for the public good: eg., more money to buy back water licences to restore the flows sin the River Murray.

Davidson is not the only commentator to notice the big spending spree that will increase in interest rates after the federal election.

Gregory Hywood also notices the spending spree. He says that Howard is reshaping modern conservatism:

"The conservative model of a decade ago would have regarded such an approach with alarm. The focus would have been on seriously reducing expenditure as a proportion of the economy and delivering sustained tax reform. The Government has not even followed a more traditional conservative approach of chasing greater efficiency by investing heavily in education and infrastructure.Of course, this transformation of....Howard into big-government conservatives is quite deliberate. The small-government ethos was never a successful political approach except at the time of crisis before the 1980s reforms. John Hewson in Australia.....failed to deliver popular support behind the movement."

Hywood says that Howard is spending big to deny to the ALP the chance to capture the middle class through government hand-outs ie., middle-class welfare.

The classic example of middle class welfare is the subsidising of private health insurance further. As Davidson argues the money should be used to reduce elective surgery waiting lists in public hospitals. Davidson says:

"According to The Australian Financial Review, the Coalition has put forward a $5.1 billion heath package compared with a much more modest $3.5 billion package from the ALP. The Coalition package will largely benefit the health insurance funds and supplement doctor incomes. The ALP package is directed at increasing bulkbilling rates and boosting the number of doctors and nurses, so it is politically more effective because the spending flows through to patients rather than health providers."

Davidson does not acknowledge the attempts to ligfe bulkbilling rates by the Coalition or introduce allied health professionals into Medicare to address workforce shortages.

| Posted by Gary Sauer-Thompson at 7:36 PM | | Comments (0)