Thursday, May 19, 2011

Too relaxed and comfortable

In 1996, John Howard stated that he wanted to see Australians "relaxed and comfortable" and now, in 2011, we're seeing the economic results of this maxim. In four terms of government, keeping specific classes of people "relaxed and comfortable", the Coalition built a dangerous entitlement culture which has led to an unsustainable structural deficit within the economy. Middle-class welfare has made Australians so relaxed and comfortable that they feel that the government is responsible for maintaining their lifestyles when they make a decision that would normally make them worse off. In the past, Australians accepted that buying a house, having a child, sending children to private schools, having private health insurance, having a new large car and purchasing large consumer items such as plasma TVs would have financial consequences - consequences that they themselves would have to manage. However, the previous Coalition government have convinced them that these decisions ought to be funded by the government.

In a recent interview on 7:30, a 'typical Australian family' noted that "the big winners from the [2011] Budget will be caravan parks, because that's where we're gonna take our holidays for the next three years."

So, it appears that we've become so 'relaxed and comfortable' about living on government handouts that we expect them to fund our holidays too.

According to the opposition, the subsidisation of the lifestyles of Australian people can be funded without raising taxes but this does raise the question of just how the Coalition can fund this ever expanding welfare spend. Cutting 12,000 public servants and cancelling the NBN will be insufficient over the long-term to pay for it, but these are the only big ticket "saving" items that the opposition has put forward.

As with the opposition's direct action plan on carbon (which I have discussed previously), middle-class welfare of this nature will continue to expand pressure on the budget, necessitating cuts to expenditure that must extend beyond public sector job cuts and the rolling back of the government's programs. So once again the questions must be asked: "how much are they going to borrow?", "what are they going to tax?" or more likely, "what are they going to cut?" to keep Australia "relaxed and comfortable".