



Change is coming - you can be sure of that


Paul Sheehan

Prepare for change: The federal budget that passes into legislation will be quite different to the one handed down last week.

Prepare for change: The federal budget that passes into legislation will be quite different to the one handed down last week. Photo: Alex Ellinghausen

It’s a long game, and it has just started. I am not assuming Tony Abbott will lead the government to the next election. I am not assuming Bill Shorten will lead Labor to the next election. I am not assuming Clive Palmer will be in Parliament in 2½ years.

And I am assuming the federal budget that passes into legislation will be quite different to the one handed down last week.

In other words, it’s a long game, at a volatile time, with an accelerating carnivorousness in politics, and anyone who thinks the hysteria that has greeted the first Coalition budget will still be defining federal politics in 2016 is suffering from an excess of certainty.    

Take, for example, the potential disruptive influence of the Royal Commission Into Trade Union Governance and Corruption. The previous two royal commissions into union corruption have revealed how such inquiries can be manipulated and thwarted by liars and their lawyers.

This time is different. The commission is headed by a judicial dragon, former High Court judge Dyson Heydon, at the full height of his powers. The terms of the royal commission state that anyone named by a witness being called to the inquiry will be given advance notice of evidence to be presented and invited to provide a contrary statement and detail any evidence they wish to contest via cross examination.

This may sound simple, but it puts severe limitations on all the ways lawyers can protect their clients in court via dissembling, diversion, confusion, obfuscation and fishing expeditions.

In the next few weeks the commission should hear evidence from a former union official who claims he was told to shut up by a very senior Labor figure, and even allegedly offered a seat in Parliament for his co-operation, and, when he declined to shut up, was physically assaulted. He will name the senior figure allegedly involved. That should be interesting.

Clive Palmer will also continue to provide colour and movement. A federal court in Perth has received a claim by lawyers acting for a Chinese-owned company, Citi Pacific, that a company controlled by Palmer, Mineralogy, siphoned millions of dollars from an investment made by Citic Pacific and that some of these funds allegedly were used to fund the Palmer United Party’s 2013 federal election campaign.

These claims are being vigorously contested by Palmer.

Another instance of shifting sands is the claims of social inequity made by the National Centre for Social and Economic Modelling at the University of Canberra. The key word here is “modelling”. NATSEM’s modelling of human behaviour is that it is fundamentally inert and passive in the face of changing circumstance. Its latest modelling was described as “simplistic stupidity” by one leading economic commentator over the weekend. Another economist described the modelling as “apocalyptic” and “iffy”.

Do not treat a computer model as a fact, and treat anyone who presents NATSEM’s speculation as fact as engaging in spin.

Speaking of con jobs, at some point Labor is going to have to account for its claim that the government is strip-mining $80 billion from health and education spending when in fact federal spending on public health and government schools is not just going up, but going up significantly.

This missing $80 billion does not exist in any budget, state or federal, nor is there any clue, let alone a specific policy, as to how Labor was going to fund its promises other than by debt.

Perhaps the biggest con of all is the claim being spun by Labor and its media surrogates that the Abbott-Hockey government has embarked on a Machiavellian plot to expand the GST. This thesis is being advanced as if it were an inevitability, yet is based entirely on speculation and supposition. The Abbott government is already unpopular enough. It does not need to increase the GST. The GST was justified as a replacement for a range of inefficient taxes.  Expanding this tax would be a pure revenue-raising measure much harder to justify and much more dangerous politically.

Finally, there is the structural unpredictability of the Senate. The Greens have already said they will say no to almost everything except higher income taxes. Labor has also been the party of "No", and even voted against savings measures which it had promised when in office.

This leaves the bulk of the horse-trading to the seven minor parties and one independent, a lively process. The two incoming libertarian senators, David Leyonhjelm of the Liberal Democrats, and Bob Day of Family First, have criticised the budget for failing to curb government spending. They have separately developed policies which they believe would bring the budget into surplus more quickly and stimulate job creation.

This process could go anywhere. Assume flux. It is the only safe assumption.

Twitter: @Paul_Sheehan_



  • yep. the greens would have stopped the industrial revolution if they existed then, labour would have insisted everyone be at home getting sit down pay and taxing the rich 1500% percent, and the liberals would have liberated the poor by sending them to new zealand. :-)

    whats perverse is that when a government is elected into power, irrespective of the side elected, they are prevented from exercising their 4 years at the wheel by the people who lost the election.

    Date and time
    May 26, 2014, 5:48AM
    • It wasn't political parties that brought forward or resisted the industrial revolution. If the Greens were in power 150 years ago, maybe windmills and waterwheels would have been turned into electricity generators, and a path to the whole global warming scenario either bypassed or diminished to a point of being negligible. You come across as a narrow thinker, and maybe also a winker.

      Date and time
      May 26, 2014, 6:51AM
    • Stripping back the hysteria, the Budget does a very good job in targeting middle class welfare. This is consistent with the LNP's mantra of ending the Age of Entitlement and these particular budget measures should be commended and passed. However, clearly the budget also attacks low income groups and goes way too far in doing so. It also fails to target the big end of town. Should the budget be revised through the Senate negotiations to remove the hit to the poor, then the Government can definitely ride out the current tide of public anger. Anyone who suggests otherwise is turning a blind eye on history. Look no further than people suggesting Labor is the answer, given its shambolic time in Government. Abbott was wise enough to ensure his budget austerity measures were staggered over a number of years so as not to damage the economy's recovery. If next year's budget includes some focus on the big end of town, the economy is healthy and we are tracking towards surplus, then I think the LNP will win the next election. All of the above is more than possible.

      Date and time
      May 26, 2014, 7:07AM
    • Goodness only knows where we will be in 2016 - a lot will happen before then.
      The fate of this budget is in the hands of the cross benchers - and their assessment of their political odds.
      Whether to gamble on the chances of their re-election with a DD - if they refuse to pass the budget measures and Abbott threatens a DD.
      Abbott may blink - and they won't have to consider that 'existential crisis'.
      Self interest will be a big player in determining their approach - and who could expect anything to be different.
      Ah, interesting times lie ahead.

      Howe Synnott
      Date and time
      May 26, 2014, 7:12AM
    • NO davem, it is not the fact that we have a LNP bunch of spivs and rorters now in power.
      It is the fact of how they lied to and mislead the Australian voters to get there..

      THAT is what the public are annoyed about.

      nambucca heads
      Date and time
      May 26, 2014, 7:46AM
    • I would refer everyone who keeps spouting this "slashing $80 billion" semi-truth to page 7 of the Budget overview. Actually read the thing.

      Firstly, it's an estimated saving spread over 10 years across all of the states. Secondly, it's an adjustment to the amount that Commonwealth funding increases over those 10 years. The amount actually going to the states is still DOUBLING from current levels over that period.

      Date and time
      May 26, 2014, 8:01AM
    • He's being facetious but his second point is quite correct. They won the election: let them bloody govern.

      All this outrage about 'Tony's lies'....I recall his two main promises being to Stop the Boats and Bring the Deficit back to Surplus. Seems to have actually succeeded on the first, in case anyone wasn't paying attention. This budget is trying to achieve the second.

      We all heard Abbott say he was going to bring the government back to surplus. Why is everyone so surprised when this involves increasing revenue (translation: more taxation) and/or decreasing expenditure (translation: cutting down government services)?

      Date and time
      May 26, 2014, 8:09AM
    • @ Martin

      "maybe windmills and waterwheels would have been turned into electricity generators,"

      They were! And, just like today, they couldn't supply nearly enough power, power when it was needed, or any power at all if the wind stopped or water levels dropped. The Snowy Hydo works because we built a score of big dams at the highest places so as to get the biggest possible drop to the turbines i.e. velocity, and a constant and controllable water volume. The Greens stopped a similar scheme in Tasmania i.e the proposal to dam the Franklin/Gordon river system that would have made Tasmania attractive to industry. What they've now got is pristine rivers, generational unemployment, and a bankrupt state where 85% of people either collect welfare or are government employees at one level or another.

      The Greens have never had a sensible idea about anything. All they want to do is tax the rich so that it becomes pointless to invest in anything; close down smoke-stack industries; close down factory farming and agri-business; close down mining and gas extraction; close down coal fired electricity generation; reduce petrol and diesel vehicle numbers to zero; ban politically incorrect words and thoughts; drive up the price of everything while creating a nation of unemployed collecting welfare paid for with worthless plastic money.

      The Greens vision for the future is some sort of mid 18th Century bucolic idyll - a society that never existed and can never exist.

      The way the Senate is elected and the way the seats are distributed is absurd. Tasmania and South Australia should be de-stated and amalgamated with Victoria. When Tasmania gets 17 federal politicians for fewer people than live in Greater Newcastle, something is very wrong. It's a rotten borough. So is SA.

      Jack Richards
      Snowy Mountains
      Date and time
      May 26, 2014, 8:14AM
    • Oh now,

      Jack Richards rails against the Senate because it blocks the anti-intellectual measures of his heroes and gives oxygen to his foes - the dreaded Greens.

      Well Jack, what you say about windmills and industrial sabots is colouful, but in practice the Greens support an efficiency price on carbon and an increase in renewable energy, even by using market forces to promote them

      Your luddite heroes are too pre-enlightenment to understand, let alone back, such measures.

      The Greens may be your only hope.

      Date and time
      May 26, 2014, 8:30AM
    • 1 - 3 correct answers, if your lucky, is not a bad start to your article Sheehan
      Davem ... thank god have some level of restriction ... these Liberals would be even more dangerous than they already are if that were not the case.
      They are already proving how dangerous & deadly their conservative ideology is. The sooner we get rid of them the better.
      I agree ... if capitalism & consumerism didn't dominate the global expansion & industrial growth, we would all be living a much nicer, more pleasant & sustainable existence.
      We all know how bad the conservative, greed driven agenda is, yet we keep trying to support it, as if it will have a different effect this time ....
      And what is the definition of insanity ....?

      Yuppy Ville
      Date and time
      May 26, 2014, 8:59AM

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