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Labor's election campaign breaks the golden rule

By Brendan O'Reilly - posted Monday, 13 May 2019


Whatever one's politics, there are some obvious benefits from a change in Government.

First and foremost, a clear Labor majority in the Reps, with Greens and some Independent support in the Senate (the commonly expected outcome) will allow a Labor government to get most of its legislation through, and will give rise to greater political stability.  A stint in opposition should also allow the Liberals and Nats to get their respective houses in better order.

In terms of policy there are at least some changes likely, that most people believe will be for the better.

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First of all, Bill Shorten plans to tear up a controversial $444 million contract with the Great Barrier Reef Foundation.  It was never clear what this policy was going to achieve, bar a pork-barrel benefitting researchers in a business-linked charity.  If you believe in the global warming alarmism, the reef is doomed anyway (due to rising sea temperatures) so the expenditure was going to be futile.  If you believe that the reef is resilient, the spending is unnecessary.  [The only problem is that Labor has plans to hand the money to public agencies to spend on other ways of "saving the reef", in what will likely be another waste.]

Labor also wants to put an end to the excesses of out-sourcing, indulged in (for ideological reasons) by the Coalition.  This had included umpteen incidents whereby public servants were paid generous redundancies, only to be re-employed soon after as contractors on much higher salaries.  Defence and IT have been notorious in Canberra as areas where such policies cost rather than saved money.

Then of course there is the area of defence acquisitions, whereby $50 billion is being spent on 12 new submarines, and $38 billion for nine new frigates.

Essentially the taxpayer is underwriting an indigenous naval shipbuilding industry (mostly in South Australia) that has an appalling track record in terms of cost management, late delivery and poor reliability.  (The Audit Office has warned there is an “extreme risk” of cost and schedule blowouts.)  These industries (supported in an attempt to buy votes in South Australia) have no hope of ever getting much in the way of foreign orders because their costs are about double those of overseas suppliers (who have access to higher tech, and produce to higher quality standards and on time).  Australia is too small a market to support this industry, which is destined to suffer irregular demand and persistent high costs.

This might be a reason for those outside South Australia to vote against the Coalition, except that it was one of the few areas where the Coalition received bi-partisan support from Labor.  It seems that none of the major parties has the back-bone to scrap an industry far less efficient that the recently closed motor-vehicle manufacturing industry.

Labor's big spending promises include a $4 billion childcare package, $10 billion over a decade for a taxpayer-funded 20 per cent pay increase to childcare workers, $2.4bn for expanded free dental care, $2.3 billion to fight cancer, and $660 million for still more programmes to curb violence against women(more than double the amount the Coalition allocated to the problem just two months ago).

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There are big policy changes being promised by Labor.  There will be a rewrite of workplace laws (removing sanctions on union excesses), and a hike in the minimum wage.  Labor supports the idea of a "living wage" and has promised to hire "the best lawyers in the country" in a bid to fast-track a general wage increase.  It also wants to reverse reductions in penalty rates. The overall result will be a rise in wages, and a dramatic shift in the industrial relations system, granting the unions greater power, with less accountability than ever before.

Labor plans to scrap the cashless welfare card.  There are also plans to increase the Newstart Allowance, back the Uluru Statement from the Heart (including the ‘establishment of a First Nations Voice enshrined in the Constitution), and there is a good chance that asylum seekers detained in PNG and Nauru will end up in New Zealand within months of a Labor victory. 

Labor plans to go ahead with a 45 per cent emissions reduction target by 2030.  Expensive electricity has already driven much of our heavy industry overseas.  The policy is also un-costed, though Dr Brian Fisher has estimated it would result in a GDP loss of at least $53 billion.  Labor has also pledged to make up to $1 billion in finance available to boost solar power in Australian schools, improving access to rooftop panels and battery storage.  Additionally, Labor has promised to improve the "robustness" of state governments' native vegetation clearing laws to better match Queensland's, in an effort to reduce carbon emissions.

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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