Australian Labor’s aged care promises add up to fiscal fantasy land

Australian Labor’s aged care promises add up to fiscal fantasy land. By Jennifer Oriel.

Last year, the government and opposition agreed the election would be fought on jobs. When the Coalition delivered employment and women’s workforce participation figures, Labor changed its mind. Its new financial plan remains something of a mystery, but we are told it is about care and left to assume there is money to fund it.

Labor lost the last election after expecting Australians to write a blank cheque for its uncosted campaign promises. Last week it reverted to type by offering the nation a budget reply without a budget. Both parties opened with motherhood statements, but the Coalition got down to business quickly with the headline figure that it had brought down unemployment to 4 per cent, the equal lowest figure in 48 years. …

Trying the blank cheque approach again:

Labor leader Anthony Albanese has delivered an alternative budget that reads like alternative truth. After hearing it, Australians are none the wiser about how Labor plans deliver on its promises or pay for them.

Next PM, according to the polls (even allowing for a 2% shy voter factor)

Consider that Labor claims the ability to increase funding and salaries, make bills cheaper, medical care better, improve aged care, make housing more affordable and manufacturing more local while funding fee-free vocational education for 465,000, creating 604,000 new jobs and turning Australia into a renewable energy superpower.

Yet its budget reply contains no detail of revenue, savings, tax rates, inflation or GDP. There is no costed plan to pay down the nation’s looming trillion-dollar debt. It is not so much a financial document as an example of anti-democratic governance that denies voters the information they need to make a reasoned choice about Labor’s capacity to govern. …

Not much difference on aged care:

Albanese’s big announcement on tackling the well-known deficits in residential care for the elderly is based on recommendations of the royal commission into aged care published last year. The Coalition has already budgeted $18.5bn to implement aged-care reforms. It will abide by the Fair Work Commission’s ruling on the Health Services Union bid to increase residential care worker salaries by 25 per cent.

Labor’s aged-care plans would add an estimated $2.5bn costing. …

Nobody can get less:

Neither party seems willing to say we will have to do more with less and tolerate a lower standard of living until the debt accrued across the world courtesy of the pandemic is paid down. No political party is running on an austerity ticket because the public is so averse to it. Governments must spend money we don’t have to appease the demands of voters and special-interest groups for whom no amount of taxpayer funding is ever enough.

Notice how that government spending changes nowadays are always to increase spending on someone. No one ever gets less.

It’s like magic. Spending more here never results in less being spent there, apparently. We just add it to the debt. And everyone now knows the debt will never be meaningfully repaid.

Government spending no longer rations a fixed quantity of spending. Just borrow more, and the banks will create the money. If the private banks won’t create it (via new lending), the central bank will.

Modern monetary theory instructs politicians to borrow money into existence until inflation starts then … oh, it doesn’t say what to do next. Last time interest rates had to increase to 20% to stop inflation (1980 in the US, late 1980s in Australia). Everyone, including all governments, will be broke well before interest rates climb that high. So they cannot climb that high. So inflation is here to stay, which means hyperinflation is inevitable. It’s just a matter of time.

Vote right to slightly delay the inevitable, vote left to bring it on sooner.

The Ancient Greeks had plenty of experience with democracy. Things usually worked well enough until the public learned to vote themselves the contents of the treasury. Debt and chaos followed, at which point a strong man took over for a while.