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LOSERS …
I know losers all too well: as a budget nerd, I am one
But politicians hate losers, because losers change who they vote for
That’s why lots of sensible change never happens, as it would create losers
Now layer that over today
As the Treasurer rightly says, the challenges of the moment are “a reason for more reform, not less … a reason to go further, not slower”
Yet current circumstances are making families lose – they’re petrol costs have gone up, and their food, gas and electricity costs will eventually follow
And the political challenge of change is that it creates losers – a group who are always way grumpier than any winners are happy:
· So a reform budget is an unpopular budget even if its changes don’t change the overall budget balance
· And a reform budget that also improves the budget balance is a two-time loser – it creates losers from its changes, and it creates losers from its savings
· By the way, that’s why economists argue for reform during the good times – because reforms during hard times are even harder to achieve politically
That backdrop explains the tug-of-war underway in Canberra right now
· The economic hard heads point out an enormous need for change is here at the same time as a floundering opposition means there’s an enormous political opportunity for change
· But the political hard heads are worried that reforms – especially reforms that save money in overall terms – would create lots of losers atop a new groundswell of losers due to the war in the Middle East
Politics being politics, regardless of who wins Canberra’s tug-of-war, the resulting budget on May 12 will get called a triumph of reform
I hope we do get genuine reforms. Australia has changed our policies far too little for far too long, and our budget is covered in barnacles: silly spending, terrible taxes
Let’s hope our political class rises to this moment
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