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Prime Minister Gillard and the First Week

February 10, 2012

Prime Minister Gillard and Treasurer Wayne Swan won the first week.

Look at the indicators. Slipper is performing in the chair. Wilkie is voting for removal of the private health insurance rebate for well-off Australians. So are the Greens. With all the constraints of a hung parliament, the government is continuing to get its program up.

It is also continuing to stay on message: focusing on the economy and jobs. The troubles of a two-speed economy are actually helping Labor. The troubles of the car industry, for example, cast the Labor government as the defender of manufacturing jobs through “co-investment” and “job support”. By contrast, Tony Abbott has to enter his party room and order his team to stop speaking out and broadcasting their differences on industry policy.

Moreover, the Opposition’s three spokespeople were caught with different lines on how quickly they could bring the budget into surplus. I’m waiting for the Opposition to address this question: will they reinstate the middle-class welfare removed in Labor budgets, such as dependent spouse rebate and vehicle fringe benefits?

The Coalition will abolish the carbon tax. The Coalition will abolish the mining tax. The Coalition will find room for income tax cuts…and close a $70 billion black hole.

How? Not the old staples of cutting advertising and consultancies. And not simply declaring that government will be smaller.

Gillard was relaxed and authoritative on the 7.30 Report last night, delivering one of her most persuasive interviews. At the end of the week, she can breathe easy. The Australia Day embarrassment is now behind her, as is the issue of Wilkie and poker machines. The biggest step towards securing a surplus – abolition of the private health insurance rebate – is going to pass Parliament.

9 Comments
  1. February 10, 2012 4:31 pm

    The farce of the Australia Day embarrassment put in play by the Office of the Prime Minister remains like a smelly mess on her one remaining shoe Bob. People are making a joke about the misspelling MP Craig Thomson name, telling readers leaving out the P only leaves the wind. You know Labor is not willing to get rid of the dead wood politicians. So it falls to the voting public to do what the Labor Party team refuses to do, by directing their own votes numbering Labor last below the line. Edward James

    • Bill permalink
      February 11, 2012 12:07 am

      It’s funny how little comment there is about the fact that a media adviser to the W.A. Premier was forced to resign.

  2. February 10, 2012 4:35 pm

    Perceptions are strange things and I guess in the eye of the beholder. Gillard did win the first week but the private health rebate cut will come back to bite her once people realise that there could be hundreds of thousands of Australian disadvantaged who aren’t wealthy and may downgrade their health insurance or may opt out altogether putting pressure on those waiting lists and those who can ill afford to have health insurance. As for the 7.30 Report I thought Chris Uhlmann completely showed the Prime Minister’s shortcomings and forcefully revealed the problems the public seem to have with Julia Gillard for which she had evasive answers. I didn’t find her persuasive at all and certainly not as persuasive as she was when I had regular dealings with her when I was a CEO in the health sector. I just don’t think she is up to the job not that Abbott is either.

  3. Lynda Newnam permalink
    February 10, 2012 4:48 pm

    Origin Energy managing director Grant King, referring to the opposition’s plans, said: ”There’s been uncertainty for probably 10 years and right now you’d say there’d probably be another five years of uncertainty … It will result in different [energy] choices than might otherwise have been made.” see SMH http://www.smh.com.au/national/coalition-lashes-carbon-critics-20111020-1madf.html 21/10/11. Lateline interview 11/7/11 with King also worth watching.

    During this year the Coalition will need to announce a compromise carbon pricing mechanism if they expect to be taken seriously by big business.

  4. February 10, 2012 5:17 pm

    How will they fund the existing deficit and the yawning black hole of debt created by unfunded income tax cuts, abolishing the Carbon Tax, the Mining Tax, and the restoration of all the other middle class welfare benefits?
    Easy! The Libs will return to their tried and tested formula for cutting out waste – don’t spend any money building infra-structure – No hospitals, universities, research institutes, roads, communications systems, rail links, air and sea port facilities or renewable energy systems, Build nothing for the future, like they did during the last mining boom, and balance the budget.
    Bit short sighted, but that’s never troubled any Liberal Government so far.
    A curious link between conservative political views and intelligence has been identified:

    http://pss.sagepub.com/content/23/2/187.full.pdf+html

  5. February 10, 2012 5:18 pm

    The level of debate regarding health care reform is pathetic. We should be opening up the sector to more private sector involvement and more personal responsibility. However the best we can manage is an insurance subsidy from the Liberals and the removal of the subsidy by the ALP.

    If the Medicare levy was meant to raise the revenue needed to pay for Medicare it would need to be about 9%. So if we increased in from 1.5% (there abouts) to 9% and cut income taxes by 7.5% we would still pay the same in taxes (the levy is a tax) but we would have a lot more transparency informing the debate.

    Each quarter we ought to get a statement from the Medicare office outlining how much expenditure we incurred. Again this would not change the benefit we receive but it would improve transparency and better inform the debate.

    If the Medicare statement suggested above required that the expenditure be repaid by the user this would allow us to cut taxes by about 9% (inclusive of the current 1.5% Medicare levy or else just the 9% levy suggested above). Given the dead weight cost of taxation this would be real bost to the economy.

    However there is a social policy concern that cost may deter people from getting treatment. Fair enough. We can fix this concern by allowing people to roll the debt from their Medicare statement onto their HECS debt. In short Medicare would become an income contingent loan from the government. Social concern fixed.

    Okay some people don’t want to burden their future self with such a debt. That is up to them. They can take out private insurance instead or pay as they go using cash. People will vary in their preference but nobody will miss out on medical service due to an incapacity to pay.

    Having reformed the demand side of the equation we should seek to reform the supply side by privatising hospitals. We already have private GPs, private specialists, private medical centres and private pathology services. In fact most routine encounters with the medical sector is already through a private provider. We even have numerous private hospitals. It isn’t a sector that benefits from either government ownership or government operation so we should extricate the government from it and allow hospitals to focus on treating patients and allow governments to instead focus on making good laws.

    Instead of serious and meaningful reform we instead get debates over petty rebates.

  6. February 10, 2012 8:58 pm

    Regarding the “$70 billion black hole” – over what period of time does that apply to? One year? Three years? Five years?

  7. Les permalink
    February 11, 2012 10:28 am

    Wow, a review of the week and not a single mention of the biggest issue in Federal Poliitics at the moment… who is going to be our Prime Minister into the next election, failure #1 or failure #2?

    Unfortunately I cannot see anyone (labor or liberal) that is worth the walk to the polling statiion! The entire federal arena is so berift of talent at the moment that it’s depressing!

    • Bill Molyneux permalink
      February 14, 2012 3:05 pm

      One of the image problems with incumbent politicians is the way they are’push-pulled’ by various media, they need to be exposed to them( but not to so many and not so often). Because they are constantly under ‘attack’ for their latest policy innovations, their messages vary in the way in which the public hears them, therefore they may appear to be incosistent or wavering in their policies. Under pressure last week to gain some points Wayne Swan attacked the banks on rate rises before it was due to be announced. When the rise didn’t occur he looked a bit foolish, which left him with no ammunition to have a second go at them this week when rate rises and saclings occured.
      There is a major problem with some major initiatives such as global warning / carbon tax in that people in general cannot grasp the concept of the scale of hundreds of millions of years involved– to most, the ‘three score and ten’ range is what occupies most minds. What they do understand though is the cost of the impost ( to them) which goes with preparing the world for these eventualities. The puplic won’t die from too much education, but they could from the large environmental issues which face us.

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