Rudd is conning us says Dr. Nelson..
".. instead of being upfront and saying that they are cutting research
and development and welfare budgets to fund their own spending frolics
they have created this blame game that the reason is that there is an
inflation crisis that was caused by John Howard and Peter Costello."
Dragon slayer off the mark
Article from: Herald Sun
Brendan Nelson
May 12, 2008
THE benchmarks for tomorrow's federal Budget are very simple. Last year
the Australian public listened to what Kevin Rudd had to say.
They heard him say that he was going to be a good economic manager and
end the blame game.
They heard him say that he was going to bring grocery prices down.
They heard him say that he would bring petrol prices down.
They heard him say that he would make housing more affordable.
They heard him say that he would not increase taxation as a share of GDP.
They heard him say that he would help, not hurt, working families.
These are the benchmarks that the Prime Minister set for himself and the
ones against which we will hold him accountable.
These are the tests for the Budget.
He has already failed on one: that is, ending the blame game.
But let us try to come to grips with the wa****ng machine of spin that is
emanating out of the Ministerial Wing of Parliament House.
The Rudd Government has told the media that an inflation crisis
justifies major expenditure cuts in this Budget.
But though the inflation dragon is a problem that needs to be managed,
it is not out of control and is hardly a crisis that justifies big cuts
in public spending at a time of rising interest rates and sluggish US
and global growth.
The fact is that the Howard government left a budget that was on track
to deliver a surplus of over 1.5 per cent of GDP.
To give you an order of magnitude, that 1.5 per cent of GDP is about $17
billion.
But most serious commentators believe that a no-policy-change surplus
could be as high as $22 billion or about 2 per cent of GDP.
This impressive surplus, remember, is without Kevin Rudd or Wayne Swan
lifting a finger.
So let's unpack all this.
First, it is known that on a no-policy-change basis we were likely to
get a Budget surplus as high as $22 billion.
Second, last Friday a Government spokesman was re****ted in a Sydney
newspaper as saying that the surplus would be between $20 billion and
$21.5 billion.
Apparently this was not a leak but a direct answer to a journalist.
And yet, third, we are aware from Kevin Rudd and Wayne Swan that there
are to be large expenditure cuts.
How does that add up?
There are two explanations:
One is that the reason we have been given for the expenditure cuts - the
inflation crisis - is a complete charade.
The real reason for the expenditure cuts has nothing to do with
macro-economic policy.
Instead, it is about finding expenditure cuts to fund the $10 billion in
increased expenditure that Kevin Rudd and Labor promised before the last
election.
You might have thought Mr Rudd declared before the election that he was
against profligate spending and ceased making spending promises.
Well, the answer is he didn't stop and he intends to implement at least
$10 billion in additional spending.
Before the election, Mr Rudd consistently told the press that the ALP
had detailed $10 billion in expenditure cuts to fund this new expenditure.
But this is simply factually untrue.
The $10 billion expenditure cut list was never released to Treasury and
Finance for costings.
Therefore, you didn't hear any stories before the election about cuts to
social welfare such as lump sum carers payments, cuts to Centrelink,
cuts to research and development at CSIRO because they never were
accounted for.
So what may be happening is that the ALP is going to make swingeing cuts
to vital programs to fund $10 billion in ALP promises, many of which
like a $2 million payment to preserve a dead tree in Barcaldine are
highly questionable.
And instead of being upfront and saying that they are cutting research
and development and welfare budgets to fund their own spending frolics
they have created this blame game that the reason is that there is an
inflation crisis that was caused by John Howard and Peter Costello.
That explanation is almost certainly at the heart of what we will be
seeing on Budget night.
If instead this is not the only reason and in addition to funding their
election promises they are also tightening fiscal policy, I will state
again the Opposition does not agree.
Labor will be increasing unemployment for no sensible economic reason.
The Rudd Government should simply hold the line on fiscal policy.
No savage fiscal tightening is required.
- Dr Brendan Nelson is federal Opposition Leader
--
rgds,
Pete
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'I'm not young enough to know everything' -Oscar Wilde
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