John McCain is starting to make up some ground in the race to win the Republican Party presidential nomination and one of his themes that is resonating is the attacks on George W Bush’s pork barrelling. The Financial Times produced this illuminating story last week, which included the following:
Mr McCain’s other drumbeat is runaway spending. “The Republican party has three bases – value conservatives, defence conservatives and economic conservatives,” he says in an interview on his bus between “town hall” meetings. “Of these, economic conservatives are the angriest.”
Mr McCain lambasts Washington for its culture of pork barrel spending. In spite of having spent 24 years on Capitol Hill, Mr McCain presents himself as an outsider. Like his rivals, Mr McCain reaches for Ronald Reagan rather than Mr Bush. He pulls out a pen he says was given to him by the former president. “I carry this with me everywhere I go,” he says. “When I become president I will use it to veto every piece of pork barrel spending that comes across my desk.”
Which brings us to the latest outrageous and irresponsible piece of pork-barreling by the Howard Government – yesterday’s $4 billion splurge on the elderly, pensioners and carers.
John Howard is spending like the proverbial drunken sailor, setting the joint on fire before he leaves and ensuring the incoming Labor Government will be locked into long-term spending commitments. He’s determined not to do a Jeff Kennett and leave the Labor Party with bags of cash.
While the PM claims we can afford this social dividend, the tables at the back of the latest edition of The Economist lay out the statistics to prove the point about his government’s fiscal recklessness during this unprecedented commodity boom.
There is Australia, the only commodities dependent country in the world with a huge trade and current account deficit, $US12 billion and $US47 billion respectively.
And whilst The Economist listed our budget surplus at 1.4% of GDP, this pales into insignificance when compared with Denmark (3.8%), Norway (18.9%), Russia (4%), Chile (8%) and Saudi Arabia (18.7%).
The Republicans have surrendered the responsible economic management mantra to the Democrats in the US and John Howard is doing likewise in Australia.
Labor was in charge at the peaks of the last two commodity booms in 1988-90 and 1973-74 and ran surpluses of 1.7-1.8% of GDP. We know that even they weren’t enough to forestall recession-inducing hikes in interest rates.
The Australian welfare state is already incredibly generous and arguably unsustainable, yet yesterday we had a supposedly responsible economic manager making permanent increases in various base payments.
John McCain would be furious, just as Australia’s economic dries are. When it comes to economic reform, John Howard’s record won’t be much better than Malcolm Fraser’s.