Budget 2014: Fixing Labor’s mess

Labor's economic policy

Labor’s economic policy

Giving any Left-of-Centre party the reins of government is like giving Dracula the keys to the blood bank.

Firstly, they spend like there is no tomorrow, and when they run out of money, they just put up taxes and/or borrow more, which eventually cripples the economy and bankrupts the government. It never gets to that stage of course, because the electorate, who generally appear to have very short memories, vote them out at the last minute and leave the fiscal conservatives to clean up the mess.

This has been going on for decades. In the UK in the 1970s, then Chancellor Denis Healey famously said he wanted to tax the rich “until the pips squeak” (although he denied it later). At one point, the highest rate of income tax was 98%. Just think about that for a minute – over a certain (admittedly high) threshold, for every pound you earned, you would get two pence. The rest went straight to the government’s coffers.

Little wonder that Margaret Thatcher, who followed the Labour government of which Healey was a part, said that the trouble with socialism is that you eventually run out of other people’s money.

Nothing changes.

Here in Australia, during the six chaotic years of the Rudd – Gillard – Rudd again government, fiscal prudence was kicked into touch. Whilst acknowledging the existence of the GFC, and the need to respond to it, Labor pissed money up the wall on a scale never before seen. $46 billion on the NBN? Worked out on the back of an envelope. Pink batts? Ditto. Who cares? It’s only other people’s money after all.

When the majority of the electorate saw the writing on the wall, and that the Australian economy was heading into a black hole, they voted in a Coalition government to clean up the mess. Cheers. Thanks for that. No wonder Labor never learn, they never have to do the dirty work themselves.

The Coalition were foolish to claim before the election that there would be no tax increases, given the massive size of the deficit, and now they are having to employ some rhetorical gymnastics to avoid claims that the debt levy is a broken promise. But it has to be done. It always amazes me that Labor and the Greens cannot work out the simple rule that you can only spend what you receive. Wayne Swan (World’s Best Treasurer™) would get into debt every time he passed a Two-Dollar shop.

My advice to the Coalition is to remind everyone why we need a debt levy, is to call it what it is, a Labor Levy.


  1. Reblogged this on Tamar Conversations and commented:
    Well said, Simon. Every single recommendation from the Commission of Audit was excellent. Why didn’t Joe follow through?

  2. Sadly, Labor (and their supporters) are repeating the “compare Australia’s debt/GDP ratio with the rest of the world” mantra, and vigorously waving people away from a comparison of our debt now as opposed to when Labor was voted in, and more importantly: our ability to repay said debt.

    Doubly sadly: people don’t realise when a government is spending like it’s going out of fashion; they sure as hell know when it’s time to pay up.

    Disclaimer: I don’t support either of the major parties; I just sympathise with the Libs having to clean up Labor’s mess.

  3. The ALP are such scum, they caused this mess by their prolific spending and now they are not accepting any blame, all they are doing is trying to score points. N

  4. Andrew McRae says:

    If I’ve understood Steve Keen correctly, he reckons the sting in the tail is that private debt (for investment) would have to rise to astronomical levels to keep GDP growth at level required to achieve surplus and repay the debt.
    Those with an eye for economics might be interested:

    Well there was always going to be a sting in the tail, one way or another, when Labor’s national credit card had to be repaid.

  5. manicbeancounter says:

    The best admission of the left being profligate with other people’s money was in the UK. The last Labour Chief Secretary to the Treasury, Liam Byrne left a joke note to his successor in May 2010. It said
    “Dear Chief Secretary, I’m afraid to tell you there’s no money left”

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