Joe Hockeys politically dangerous contribution to the welfare debate is a gift to the struggling Gillard government
POLITICIANS are alert to journalists seeking gotcha moments. Well, usually they are, but apparently not Joe Hockey this week, despite being shadow treasurer, a former cabinet minister and an experienced media performer.
When Hockey on Wednesdays Lateline gave a bald yes to the proposition that he was warning the Coalition would be looking closely at the whole range of entitlements that is, welfare benefits and the like you had to wonder where his head was at. Certainly not connected to the nerve which registers political danger. Maybe that nerve gets a bit numbed when its owner is abroad.
At a time when Tony Abbott is trying to carefully manage the oppositions messages, Hockey has handed a gift to the struggling Gillard government. It wasnt a case of making a passing slip: Hockey delivered a provocative speech in London and then mismanaged the interview afterwards.
Before we go to the speech, a word about Hockey. Hes a small l liberal but hes an economic dry. He also likes to make, from time to time, big addresses that go to broader questions than just the day-to-day grist.
So his ambitious topic at the Institute of Economic Affairs was The End of the Age of Entitlement. His thesis was that Western democracies have been spending more than they could afford on entitlements. Government spending on a range of social programs including education, health, housing, subsidised transport, social safety nets and retirement benefits has reached extraordinary levels as a percentage of GDP, he stated. Economic circumstances meant that the age of unlimited and unfunded entitlement to government services and income support is over.
So far, so good. Hockey was referring mostly to Europe, Britain and the US. The debt crisis has shown the danger of unsustainable spending.
He put Australia in context. Australia has not completely avoided the problems of other Western democracies because it still has a lot of spending by government which many voters see as their entitlement. However, over the years there have been a number of key decisions to reduce spending to manageable levels.
But when he talked up the superiority of the situation in parts of Asia, Hockey was in highly controversial territory. Praising Hong Kong in particular, but also the wider region, he said: The concept of filial piety, from the Confucian classic Xiao Jing, is thriving today right across Asia. It is also the very best and most enduring guide for community and social infrastructure . . . The sense of government entitlement in these countries is low. You get what you work for. Your tax payments are not excessive . . . By Western standards this highly constrained public safety net may, at times, seem brutal. But it works and it is financially sustainable.
On Lateline, Hockey said, We need to compare ourselves with our Asian neighbours where entitlements programs of the state are far less than they are in Australia.
Well, good luck with the filial piety system, Joe. (One of my colleagues quipped that if Hockey could get a bit of filial piety into his family, hed vote for him.) The Confucian way isnt so strong here. Put more seriously, while family is a favourite word on our politicians lips (and we have many family-oriented benefits and programs), individualism is strongly ingrained in Western societies and many people do not have strong family networks to look after them in difficult times.
Its one thing to say entitlements should not get out of hand, or argue they have gone too far, its something else to be lauding a model that may, at times, seem brutal. Remember that Australias wage level is higher than every Asian country except Japan. That imposes a cost on us, but we prefer it to the alternative.
Also, while the low-tax-look-after-yourself-and-your-own approach might be OK for the Asian middle class, those who are in deep poverty (part of poor families) would not find it so good.
Questioned on television, Hockey got into a conceptual jungle over the health insurance rebate. Surely the opposition should have supported the means testing of that entitlement? No, Hockey said, because some entitlements work to reduce other entitlements. Means testing the rebate, he argued, led more people to seek the more expensive entitlement of the public hospital system.
The welfare area is always difficult: the issues are objectively sensitive for those affected, and politically tricky. It is of course important to have debates about whether entitlements should be recalibrated and eligibility restricted. But when a senior spokesman launches into such a debate, care and precision are needed.
One irony is that the opposition has already flagged reviews of entitlements, without stirring the hornets nest in quite the way that Hockey has. The Coalitions razor gang has been looking at all government spending. And Abbott has announced that a Coalition government would have an audit commission undertake a comprehensive program review. Abbott who with his Catholic social values background is not such a hardliner as Hockey has also advocated welfare changes to get more people into work.
Yesterday Abbott was trying to contain the Hockey problem by saying, Joe was making the very obvious point that governments have got to live within their means. Australias spending level was not yet unsustainable, Abbott said, but there was a danger we could go down that path its the job of the Coalition to ensure that we never do.
Hockeys comments come only days after shadow finance minister Andrew Robb defended the ANZs rate rise. Abbott the one whose discipline some Liberals used to be so concerned about must feel booby-trapped by his economic spokesmen.