Getting on with the Job

The recent floods and cyclone have had a devastating impact on Queensland and Victoria, with major infrastructure now needing to be rebuilt. In order to fund this rebuilding effort, Labor has proposed a $5.6 billion package. Two dollars out of three of this package will be funded by savings measures from the budget, while the remainder will be funded by a one-off levy in 2011-12. The levy will be progressive, so that flood victims and taxpayers earning less than $50,000 will pay nothing. For most of those who do pay the levy, the cost will be less than a cup of coffee per week.

Yet although he was part of a government that used special levies to fund extraordinary costs such as the Gun Buyback or the East Timor reconstruction effort, Tony Abbott has opted to oppose the flood levy. Dragging out his tired old ‘big new tax’ line, the Liberal-National Coalition has argued that the circumstances are inappropriate to impose a levy. This is despite the fact that during the election campaign Abbott proposed a company tax levy. Not only would that levy have been effectively imposed on all taxpayers (for the most part, company taxes end up being paid by consumers and workers), but it would have been permanent, not temporary.

What has Abbott proposed instead of a levy? His favoured solution seems to be savings cuts. The trouble is, he can’t identify reasonable programs that could be cut. He keeps talking about scrapping infrastructure funding, but does the Coalition really want half-built school libraries? And in a sign that Coalition maths are just as fuzzy as they were last year, Abbott has tried to go back to several ‘savings’ measures that were identified by Treasury as dodgy in the last election, when they found an $11 billion hole in Coalition election costings. (It’s not clear why he thinks that a spending cut that was shown to be fake last August will fool anyone today.)

Being the man who just says no might be good short-term politics for Abbott, but surely he also recognises the risk that it poses to his credibility over the long-run. The more often Abbott reaches for the glib one-liner instead of a sound policy choice, the less likely the Australian people are to believe that he has the skills and temperament to govern the country.

(cross-posted at the ALP website)

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