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Friday 20 February 2015

'Fairness' is in the eyes of the beholder

Much has been said about the lack of 'Fairness' of the 2014 Hockey budget. But what is 'fair' to one may well be 'unfair' to another.

In the table below I have compiled a short list of questions of fairness, reflecting our society. What do you think ?

Is it “fair”?
Is it fair for Labour to now reject budget savings of some $5b that it proposed when it was in government?
Is it fair for the senate to reject withdrawing a tax cut that was introduced to compensate households for the impact of the carbon tax now that tax has been abolished?
Is it fair to run on going budget deficits funded by borrowing and thereby putting the burden on future generations?
Is it fair for politicians to make promises to the electorate that they later abandon when in office?
Is it fair that only the top 20% of earners pay more taxes than they receive in payments from the government?
Is it fair to have penalty rates which prevent employers hiring available workers?
Is it fair to have any welfare payments that are not means tested?
Is it fair to have lower paid workers through their taxes subsidise asset rich part pensioners?
Is it fair that superannuants do not pay tax on their income or earnings?

My guess is that all of us will think of some as fair and some not. But that is the point. "Fairness" is in the eyes of the beholder.

Tuesday 17 February 2015

Want money? Tell us who pays!

Cacophony of demands

Dissatisfaction abounds. Education, healthcare, security, indigenous affairs, welfare, all beckon for resources with increasingly shrill calls to action. Not a day passes without some individual or group arguing their case in the media.

The demands are often simple and specific, requesting a justifiable "investment" of public funds either to achieve greater benefits or to avert decline and social costs. The claims are substantiated by statistics and success stories, and although many of the statistics, I suggest, would not pass muster by any but the most cursory examination, and that many of the claimed benefits are not directly measurable, lets take them at face value. No doubt there are many, many projects which would provide great benefits to our common wealth. But where can the money come from? This is rarely raised as part of a demand. After all the focus is on the problem and the benefits of investment. Any discussion about funding could be a distraction. Even in those cases where there is a suggestion of how to fund the investment, it is by general statements such as ; "a new levy", "general revenue", or "the welfare budget".

Limited sources of funds

Ultimately the target for all these calls is the ''magic pudding" of public money; state or federal governments. Since these governments are not sitting around with loads of cash, quite the contrary, all governments seem to be in debt up to their necks, all funding can only be achieved by increasing taxes, borrowing or offsetting any new spending by cutting another program.

Raising taxes is an anathema to the electorate, and consequently for politicians who want to be re-elected. Hence it is generally avoided, until all other avenues have been exhausted.

The second option is taking the money from another program. Unfortunately politicians find this option difficult as it always carries a backlash from unhappy voters who lose funding for their projects.

Finally, borrowing which is often the last option standing. Borrowing is a mixed bag. It can be readily justified when the expected revenue generated by the target program is greater than the expected outlay. This will apply to projects which in one way or another add to productive capacity. However borrowing for improved welfare or social services is effectively spending money you haven't yet earned and is unsustainable. Consider it as borrowing from your grand-children. By the way much of our current deficit is due to expenditure on social services and hence borrowing to pay these deficits is effectively asking our grand-children to fund our lifestyle.

Whenever a politician announces a new initiative using public funds, which have not been budgeted, the money is being borrowed. They are spending money we don't have.

Squelching Squeaky calls

With the many conflicting demands money and resources what should a society do? How can a society rationally distribute its wealth and resources and satisfy the many conflicting demands of special interest groups?

Currently it seems it is the squeakiest door that gets oiled and this has generated a cacophony of demands.

I suggest we could lower the volume by demanding that whenever any group advocates an investment of public funds they should identify the source of the funds they require.

If they suggest there should be new taxes, tell us how much and who pays.

If it is to be by borrowing, prove that the investment will generate greater revenue over time.

If it is to be from general revenue, then tell us who you are asking to forego their funding.

Fat chance I hear you say? I guess so. After all why would any advocate want to weaken their case and perhaps generate opponents to their cause? Sure they will resist, but we the public, directly and through the media, should demand it.We should insist that the funding question be answered before any money is spent. This also applies to our politicians, who often make funding commitments without due consideration of budget constraints. It is all too easy to spend future money, especially when it belongs to someone else.

 Our media should never flinch from asking the question, "where is the money coming from?"

Copyright(C)2015 Grappy's Soap Box, all rights reserved

Wednesday 4 February 2015

Mischievous media magnifies mayhem

Following closely on the heels of Australia Day's "knightmare", the Queensland election disaster extended the criticism of our PM, now by deposed LNP MPs. Any hint of a leadership challenge, is like a drop of blood to our of media sharks, immediately generating a frenzy.

As if the world had stopped turning, not a news bulletin, newspaper, political commentator, twitter-face-blog-post goes without the questions pertaining to this one issue; "Was Abbott's speech good enough?", "Who will challenge?",  a survey is produced showing the popularity of potential contenders, Bishop has not said she would not run, or has not denied it enough, or there was a delay in denying it.

And aren't the media enjoying themselves? You can see it on their faces. The excited tone, the animation, the energy, the overt joking and 'grinning'. This game certainly looks like fun. Of course everyone gets on the bandwagon. When the frenzy is on, no journalist wants to be left out.

Who can blame them? It is much easier than the hard slog of reporting on economic or social matters which require facts, analysis, and real journalistic effort. It is much more fun. It is new, exciting, titillating.

Who can blame them, if the opposition parties are also feeding the frenzy with whatever morsels they can muster to keep the story going. After all there is an advantage to be had.

Who can blame them, if indeed the electorate is lapping it up. Those on the Left side of politics remember too well the all too recent Leadership challenges of the Labour government. They are now pleased to have the 'shoe on the other foot'. They enjoy the discomfiture of the Right, and hang on every word, and discuss it at every opportunity.

I am not blaming this on anti-Abbott, anti-Liberal media.This is not a case of media bias, although certainly some bias is apparent. It is the way independent media fight for attention. It is the media's 'raison d'etre', each vying to be the one who tells the story, the one to best analyse the situation and who can best anticipate and predict what will happen. They have many good reason to report this story, after all; "There is something happening, we need to tell our audience about all the possibilities. After all we are talking about who will govern this country of ours. This is important."

And once the fire is started, it is hard to stop. All potential contributors to the story are canvassed repeatedly, and they are quoted directly or as 'anonymous' sources. Like embers in a fire, each mention, each nuance of difference re-ignites a brush fire elsewhere and the story spreads, into actions and re-actions. Who knows when and where the current 'fire' will lead?

Our media act as amplifiers, increasing the volume and duration of whatever occurs. Small gaffes are repeated, explored, expanded and extended. Large gaffes become leadership questions, become leadership instability, become on going chaotic government.

Is it just a coincidence that in step with the evolution of the always-on news media and social media over the past decade, we have seen  greater volatility in electorate sentiment, and the rise of unstable and chaotic governments.

But how well does this serve our society? How well does this media maelstrom serve the people it represents?

I lament this unedifying picture of democracy in the 21st century.