The federal government is too big and has for too long been captive to the discredited Keynesian theory of economics, where governments are looked to for so-called “economic leadership” to “stimulate the economy” by “injecting money” into it. Far from solving the nation’s economic problems, they make it worse. Politicians and bureaucrats can’t pick the right winners. If they did, like former Liberal MP Bert Kelly once said, “they wouldn’t be here, they’d be sitting in the South of France with their feet in a bucket of champagne!”
My home state of South Australia is a classic example of failed Keynesian thinking. The SA government thinks it can spend its way out of an economic slump. It has gambled SA taxpayers’ money and lost it. All SA has to show for it is record debt and record deficit.
Last July, when the Prime Minister asked for alternate savings measures due to Senate rejection, I told him to end the duplication of health and education bureaucracies. To some extent, the government agreed in this budget. These bureaucracies cost and spend tens of billions, yet they do not run a single hospital or school.
The 2014-15 budget lifted spending on another state responsibility, housing, from $4.8 billion this year to $5.1 billion in 2017-18. If state governments woke up to the fact their urban planning policies were based on myth and misinformation, the Commonwealth could save all that money.
There are substantial savings to be made in what is called “labour market assistance to job seekers and industry”. Some people have become very wealthy in the job seeker assistance market, which, in the current budget papers, grows from $1.46 billion to $1.5 billion.
There is definitely a case to be made now for reviewing the scope of public broadcasting. These services were set up for the 20th century media environment, not the 21st century media environment. The private sector is ready, willing and able to provide media services but cannot compete with the deep pockets of the public broadcaster. James Paterson, in The Australian Financial Review in September rightly points out:
“… the ABC charter requires that the ABC take account of the broadcasting services provided by the commercial and community sectors of the Australian broadcasting system. And its this part of the charter the management has most openly flouted.”
Instead, Paterson points out correctly, the $1-billion-per-year ABC has established competitors to a pre-existing 24 hour news service in Sky News, fact-checking body PolitiFact and, as Paterson calls it, the “cornucopia of free online opinion” when it launched The Drum website. Now, the ABC is investing more in these areas where it competes, against its charter, with commercial enterprises. Conversely, their rural and regional services, including in my home state of South Australia, exist in an under-serviced market. These services are the true identity of the ABC, covering droughts, floods, bushfires and iconic stories that have defined the Australian national identity. Now, the ABC wants to define Australia from the confines of the Sydney CBD by cutting loose locally loved and valued services in rural and regional areas, such as Port Augusta, in my home state. Perhaps the government should create the Country Broadcasting Corporation with a charter covering country affairs only, then sell the ABC.
These are just some of many possible savings measures, which have a multiplier effect. Major spending reductions will also help address the Commonwealth public debt interest, which grows from the $13.4 billion last financial year to $17.9 billion in 2017-18 — a $4.5 billion increase. Can you imagine what we could do if we paid no interest on public debt?