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The surplus disease

Nov 1, 2019 • 14m18s

The Morrison government is committed to a budget surplus above all else. But as Paul Keating points out, this commitment can be a kind of sickness.

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The surplus disease

113 • Nov 1, 2019

The surplus disease

[Theme music starts]

ELIZABETH:

From Schwartz Media, I’m Elizabeth Kulas, This is 7am.

The Morrison government is committed to a budget surplus above all else. But as Paul Keating points out, this commitment can be a kind of sickness. Paul Bongiorno on what happens when politics refuses to acknowledge changing circumstances.

[Theme ends]

ELIZABETH:

So, Paul, I'm wondering, do you sort of perk up when you hear that Paul Keating is doing a radio interview?

PAUL:

Well, it's certainly nostalgia for me.

Archival tape -- Paul Keating:

“The country never ever changed, it just used to move at a millimetre at a time.”

PAUL:

There is no doubt that Keating was a favourite of the press gallery when he was prime minister. He was always so colorful. It was a wild ride. And the touch of excitement went also to his vision for Australia.

Archival tape -- Paul Keating:

“I mean if there was one thing that I committed myself to it was the death of incrementalism, you know to give the county a push to give it policy shifts…”

PAUL:

But particularly, especially if you're in the broadcast media, his ability to colourfully capture a message in an image that carries the debate forward. And he didn't disappoint.

ELIZABETH:

Paul Bongiorno is a columnist for The Saturday Paper.

PAUL:

This week, the former treasurer and prime minister went on to 2GB. to say that the Australian economy is stagnant and that the Morrison government can't do anything about it because the Liberal Party has a surplus virus in its bloodstream. Keating blamed Peter Costello for this, he said Costello put the surplus virus into the Liberal Party bloodstream and now they can't get away from it.

Archival tape -- Paul Keating:

“That you know, it's naughty not to be in surplus. You know, it's it's it's immoral not to be in surplus”

PAUL:

The budget of the Commonwealth of Australia, he said, is not like the budget of a corner shop

Archival tape -- Paul Keating:

“the Commonwealth budget of the Commonwealth of Australia is not like that. It's not like the budget of a corner shop. You know, that you must, in the end, be able to close the door on Friday night and be in surplus…. “

DAVID:

He made the point that the Commonwealth can create money, it can borrow money, it can tax people for money. In other words, it's a variable financial instrument that smart governments use to the nation's advantage.

Archival tape -- Paul Keating:

“the economy as idling at the lights. That's it. You know, it's like the car idling at the lights are waiting for the lights to turn green to take off again. You know, the economy at one point four per cent, it's simply idling…. “

ELIZABETH:

And Paul, how useful is that description from Keating?

PAUL:

Keating's I'd say diagnosis, medical diagnosis of the economy, I think it's incredibly useful because this government's made it very clear it will not give up on its surplus no matter what confronts it. In fact, in the last sitting fortnight of the Parliament, the government's mantra was that it offers “stability and certainty” and wouldn't be panicking into reckless spending. And when you hear the word reckless and spending, you immediately think of the Labor Party as far as Scott Morrison's concerned. Nor would this government plunge the budget into deficit like Labor did at the time of the global financial crisis. Now, it's true we haven't arrived at the dire situation Australia and the Globe faced in 2008, 2009.

However, I think Morrison's running out of time on several fronts, like, for example, wages, job security, cost of living, even aged care and disability. And yet we know that the promise of a surplus, the promise that they made the liberals in the run up to the election actually works. We have analysis by The Guardian, essential pollster, Peter Lewis. He credits the Morrison government's May budget with its promise to get the country, quote, back in the black. And I'm quoting Peter Lewis here as the single moment that sparked the dramatic turnaround in the coalition's fortunes. Lewis says the Liberals were already perceived to be the better economic managers. That's their default position. But they then spent millions of dollars of taxpayers money ramping home this message.

ELIZABETH:

So what does that message mean, as effective as it may be with the electorate? What does that mean when the economy is tanking or, at best, softening?

PAUL:

Well, Lewis says that the coalition's economic management advantage can be eroded if voters perceive the Liberals aren't delivering for them on issues such as cost of living wages, growth and job security. The analysis is bolstered by his own latest essential poll, which found 56 per cent of voters believe the government should stimulate the economy to help prevent a downturn. And voters think, according to this poll, that it should delay the surplus. Lewis's pollsters also asked voters what they thought was the main cause for the International Monetary Fund downgrading Australia's economic outlook. The poll found only 42 per cent thought it was global factors outside the federal government's control. In other words, the government really hasn't got a ready made alibi with the world economy.

ELIZABETH:

And how is Morrison dealing with this internally?

PAUL:

Well, look, there are ructions we saw in the two sitting weeks when everybody comes to Canberra, ructions within the National Party. We even got more evidence this week that they're very unhappy not only with the handling of the drought and drought policy, but also with the handling of climate and coal. And Guardian Australia carried a story that has not been denied by the Prime Minister's office that there was a shouting match between the prime minister and the National Party resources minister from Queensland, Matt Canavan, precisely over coal. So that's, if you like, the negative pressures.

But last week, the second sitting week of the session, we got a hint that there is optimism within the government. When retiring Senator Arthur Sinodinos made his farewell government party room appearance, Sinodinos hit on one thing the prime minister may have going for him. The canny former chief of staff to John Howard said that the opinion of many is that the government is perceived as a first term government. Sinodinos told his Liberal and national colleagues, This is an opportunity for us, and I think, Elizabeth, to understand that the idea is that first term governments, if they can hold their act together, they're generally given the benefit of the doubt by voters. There's a certain discount for being the new kid on the block, learning the ropes. And we've given a chance to. But by the third term, the view hardens. The sentiment seems to be we've given you a chance and you've failed to deliver. And this helps explain the degree of difficulty in longer term survival in power. Certainly at the federal level and at the state level.

ELIZABETH:

And how correct do you think Sinodenos is? I mean, does the public really see Scott Morrison and his government as a first term government?

PAUL:

Look, I think the jury's out on that. There is no doubt that Morrison was pretty successful in the election campaign, drawing a line on what happened in the run up to August 2018. It was as if it didn't exist. It was all in some ephemeral Canberra bubble. However, he runs the argument the other way when it suits him, when he talks about our government doing X or Y, and he's meaning the government of Tony Abbott and Malcolm Turnbull. So he runs that argument both ways. But Labor's very wary of this. It keeps reminding people, and Anthony Albanese did it again on Tuesday in his major speech, that this, in fact, is a third term government and that the government is showing that even though it's now into its seventh year, it's still struggling, for example, to come up with a long term strategic drought plan. Now, if Labor keeps hammering this counter message and the electorate perceives that there is more than a ring of truth in it, then I think Morrison may not get away with being a first term government when in fact he's a third term government,

ELIZABETH:

We'll be right back.

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ELIZABETH:

Paul, as Scott Morrison continues to commit to surplus and face down economic headwinds, he’s also confronted this week with the interim findings of the aged care Royal Commission. Tell me about that.

PAUL:

Well, the Aged Care Royal Commission handed down its interim report on Thursday. It's become something of a ticking clock for Morrison. At the time it was announced it was widely seen as a time buying exercise in the face of mounting media revelations of abuse, neglect and gross mismanagement in the sector. The fact is that the government had already, by August 2018, received two high powered reports into the abuse that had already been reported, and there was a wide perception that hadn't really done or wasn't really doing much about it.

Archival tape -- Unidentified Male Reporter:

“And to what extent has the Commonwealth failed Australia's elderly?”

Archival tape -- Unidentified Male Reporter:

“Well, I think it's pretty obvious from the what will come through with the royal commission and the last 18 inquiries into aged care, that there's been a clear lack of leadership at government. And that doesn't matter which political persuasion it is. There's a lack of leadership”

PAUL:

So it's no surprise that already this commission, after nine months of harrowing evidence and almost 7000 submissions, has already found aspects of the aged care system cruel and unkind. Last month, the prime minister told parliament that he wanted to ensure that the results of this royal commission are fully implemented. But the only way you can do that, Morrison told Parliament, is by ensuring you maintain a strong budget.

Archival tape -- Scott Morrison:

That is why the government increases funding for aged care every single year. It is why, Mr Speaker, the government wants to ensure that the results of this royal commission are fully implemented. Mr speaker as we work through the issues that are raised and we are sure to get to the bottom of the care issues that are so central…”

PAUL:

And as we know, when he says strong budget, he's got that virus. He means budget surplus. But consider this. Minister Richard Colbeck says the government has increased funding for home care packages by two point two billion dollars since the budget. That boosted the number of packages by 25,000. But that still leaves a waiting list of 100,000 for these packages. And according to figures cited by Labor in Parliament, 16,000 elderly Australians died while waiting for their approved home care packages last year. The remedy to this situation won't come cheap, and it certainly needs a new culture in terms of responsibility and not being able to push it under the carpet for much longer.

ELIZABETH:

And is there any way for that new culture and the necessary spending to coexist alongside this surplus virus?

PAUL:

That is the rub, isn't it? That really is the rub. If you want a surplus, you have to make cuts. There's no doubt about it. There are so many demands on the federal government's budget. And what we're seeing, some of those cuts can literally be life and death.

ELIZABETH:

Paul, thank you so much.

PAUL:

Thank you, Elizabeth. Always good to chat. Bye.

[MUSIC ENDS]

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ELIZABETH:

Elsewhere in the news:

The Liberal senator James McGrath and the former Liberal candidate Jacinta Price have appeared in an advertisement from the Institute of Public Affairs opposing an Indigenous voice to parliament. In the ad, McGrath says that the Voice to Parliament will quote “damage equality” and “divide Australia on the basis of race.” This comes days after the Minister for Indigenous Affairs, Ken Wyatt, announced the formation of a senior advisory group, to be co-chaired by Tom Calma and Marcia Langton, which will oversee options for an Indigenous “voice to government”.

And Australia’s aviation engineering union has called on Qantas to ground the airline’s Boeing 737 fleet after a crack was found on a second aircraft. The federal secretary of the relevant union, Steve Purvinas, said both cracks were found on the part of the plane that holds up the wings and that Qantas shouldn’t be flying them. While Qantas has announced that it will be undertaking immediate inspections of its Boeing 737 fleet, the airline has said the cracks do not compromise safety and that calls to ground the fleet are unreasonable.

7am is produced by Emile Klein, Ruby Schwartz, Atticus Bastow and Elle Marsh with Michelle Macklem.

Erik Jensen is our editor.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

This is 7am, I'm Elizabeth Kulas, see you next week.

The Morrison government is committed to a budget surplus above all else. But as Paul Keating points out, this commitment can be a kind of sickness. Paul Bongiorno on what happens when politics refuses to acknowledge circumstances.

Guest: Columnist for The Saturday Paper Paul Bongiorno.

Background reading:

The Coalition's surplus focus in The Saturday Paper
The Saturday Paper
The Monthly

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7am is hosted by Elizabeth Kulas. The show is produced by Emile Klein, Ruby Schwartz, Atticus Bastow and Elle Marsh. Our editor is Erik Jensen. Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

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113: The surplus disease