This Australian budget signals a jump to the left, by Paul Kelly.
Australia is undergoing a decisive change in its political values — Malcolm Turnbull has reinvented his government as a pragmatic, populist, public investment vehicle and Bill Shorten in reply has taken Labor even further to the populist, ideological left.
The edifices of Australia’s aspirational politics and market-based reforms are being torched in an end-of-generation bonfire. Occasionally in a nation’s history you can identify a point of transformation and it is likely that this week is such a marker.
Politics is now a contest about the nature of tax increases, the scope of monumental social spending initiatives and the type of government intervention. Australia is becoming yet another Western-world laboratory for the anti-market, populist revolution fuelled by resentment towards finance and corporates, the breakdown of the social contract, big-spending social democratic reforms and a drumbeat for redistribution and equality. …
Politicians are driven by polls, of voters are informed by the PC media. The media largely choose the agenda, what the voters focus on. And the media is dominated by the leftists, government funded ABC.
The story behind this week is that Labor and the progressives have won the battle of ideas and politics since the 2013 election. …
The nation is in retreat from the pro-market post-1983 reform age that delivered such prosperity. … This is the looming political contest that defines our times. We live in a time of reaction, public denial, shallow debate, self-interest and national interest decline. ,,,
Probably no budget in the past 40 years has so ruthlessly seized the framework of its opposition — witness targeting the banks, embracing Gonski, funding the NDIS, taxing foreign workers, guaranteeing Medicare, boosting infrastructure via “good” debt accounting and tackling the deficit through higher taxes. … It is an admission of reality: that neither the public nor parliament will tolerate unpopular policies and spending cuts to deliver the surplus and intergenerational fairness we need.
The banks are now friendless:
Morrison has converted the anti-bank hostility generated by Labor into easy revenue gains for the Liberals. In the process he lectures bank chiefs about not passing on the levy to customers, saying “they don’t like you very much”. It is impossible to miss the personal factor. Instead of defending the banks against Labor, Turnbull and Morrison decided instead to pre-empt Labor, tax the banks, impose new regulations on them and make the royal commission a hollow cause.
The banks, having disastrously misread how to respond to the mounting opinion against them, never saw the hammer blow coming. The deficit levy is dangerous policy and logical politics.
The bank levy was settled as a political issue within an hour of Morrison’s budget speech. The banks were friendless and Labor signed up. Morrison ticked off his bottom-line gains. But this created a problem for Labor in its search for product differentiation.
This signals that special taxes will be the fate of any economic winners now. (Although it must be said that the basis of the bank’s ongoing easy ride is their privilege of manufacturing Australian dollars, which is not explicitly taxed or paid for. On the other hand, Australia hasn’t seen a recession in a long time, and it is recessions that replace bank profits with losses.)
hat-tip Stephen Neil