Twitter is a tricky place when it comes to extended conversations, but 3AW's Tom Elliot posted his 5 point plan for bringing the budget back into surplus.
I replied to him and he replied back. It was a tricky chat, 140 characters makes it hard to make your point.
So here is my extended response.
Firstly, here is a link to Tom's plan.
Keep in mind, Tom is/was in the Finance business and is the son of John Elliot, a successful businessman and entrepreneur. So he knows a lot more about money etc than I do, but I still have a few issues.
Tom's 5 point plan
Let's go through it one bit at a time.
1 - No new welfare programs should be launched for at least five years – and policies like the Gonski education reforms, National Disability Insurance Scheme (NDIS) and Paid Parental Leave should be put on hold for at least three years;
This is exactly what I always say about Liberal supporters/Liberal Governments.
It's money first, people second.
Sure, welfare is where a lot of money goes, but I think you'll find it's not there just for a giggle.
The money going towards these reforms are NOT just being piddled away. They are for worthwhile causes - health, specifically people with disabilities, and improvements in education for our children.
Gonski isn't just a bag of cash. It is about better distribution of funding based on the needs of the schools.
It is supposed to better target those who need more assistance.
The Paid Parental Scheme? Well, I didn't agree with that anyway as it is exactly as shown in the above cartoon. Just because someone on a low income receives a benefit doesn't mean someone on a high income should be entitled to the same benefit. To his credit, Tom also didn't support the PPL Scheme, so he hasn't changed his spots.
Set aside all this and look at the first bit - no new welfare programs? What about all these people losing their jobs from the auto-industry? Perhaps they can slot into existing welfare programs to help them be retrained, or just receive the dole while looking for a job.
2 - Corporate handouts should end now. This means no more money for Holden, Toyota or Avalon airport. Such handouts just create a corporate welfare mentality that we can ill afford;
While I can see the point, I did sort of cover it in my last post.
Baby you can drive my car!
But grants and subsidies keep businesses going. They keep people employed, specifically in sectors where if the business disappears, the workers are required to retrain. But not all of them can do that, they may, for example, be too old.
I'm not suggesting that the Government should be fully funding businesses. Heaven forbid.
But I wonder if the concern is more about being a socialist or communist that anything else.
3 - All politicians’ salaries and benefits should be frozen at current levels for at least five years. If we’re all going to put up with a bit of pain, there’s no reason our political masters shouldn’t do the same;
I have no problem here.
But Tom says that if we're all going to experience pain - I think having your income frozen at $120,000 is probably not quite as painful as having your job removed thanks to a retraction of subsidies.
4 - The federal and state budgets should be immediately balanced for recurrent expenditure. Any household knows that funding your daily living expenses on the credit card is never a good idea, and the same goes for governments. By all means borrow to fund infrastructure, or other assets whose value will grow over time – but keep expenses and tax receipts balanced;
Well again, sounds fair.
I thought our state budget was balanced.
5 - Remove all exemptions from the GST (eg fresh food, women’s hygiene products, internet purchases under $1000 from overseas, etc.) and increase the rate to at least 12.5 per cent (and preferably 15 per cent). The GST is one of the most efficient and hard-to-avoid taxes we have, and at just 10 per cent the Australian rate is lower than most other countries. Time for its revenue raising abilities to be enhanced.
Not accepting this one for one simple reason.
It's the same reason as always
The increase in GST and application of it to currently exempt items affects people on low incomes more than it does people on higher incomes.
Yes I know, everything does, that' kind of the way it goes.
But that is my point!
If someone earns $30,000 a year, having GST added to their food eats (yes, I went there) more out of their pool of money than it does for someone earning $100,000.
We all eat about the same.
We all (well) use "lady" products.
Saying our rate is lower than everywhere else is a bit like when I was a postgrad and the Professor in my University Department said that he was cutting our payment for marking undergrad's work.
Prof - "People overseas don't get paid for marking, it's part of their duties as postgrad students."
Me - "I don't live overseas, I live in Melbourne, and if you stop paying us, I'm no longer marking."
Prof - "But it will be part of your duties."
Me - "Best of luck with that. You're about to lose all your markers and this will only add to your own workload."
Me - "I note that you won't be getting paid any more for marking this work either - but then fancy doing something for nothing."
Prof - "That's why the postgrads do it......uhhh"
Me - "Exactly."
I don't think he thought his position through.
And that is the other point. It was a rushed idea that he thought was an easy way to save money.
Go after the bottom rung of the University Ladder - students.
Look, Tom has some good ideas, but like most right-leaning folks, his ideas are about putting money ahead of people.
To say cutting subsidies is good for people as it effectively weans them off the dependency is a little insulting.
"This'll hurt me more than it'll hurt you son!"
Yeah...that wasn't actually correct.
But you'll note I haven't offered up my own suggestions for savings to the budget....
I'm not a financial expert - I had $16 in my account last week ;) - but I do know that when I make my plan, I'll put people first and money second.
Next post will be some ideas on how to save some cash.
PS: If you do read this Tom, I actually do like your work :oP