Not 'the economy, stupid' but the budget, idiots

Labor’s been beset by stupidity from many corners within its ranks, but in the end the main reason it’s made such a hash of itself is its undisciplined spending.

Bill Clinton’s 1992 election strategist, James Carville, famously hung a sign in campaign headquarters saying, among a couple of other things, “The economy, stupid”, which has since become a sort of universal political aphorism.
But it’s not always the economy, stupid. It’s certainly not true in Australian politics at the moment.
The economy is going pretty well, all things considered, yet the national government is imploding and will lose the next election handsomely unless the Opposition blows up. In fact it should be “administrative and budgetary competence, stupid”, but that doesn’t work too well as a slogan.
Yesterday’s epic stupidity of an ALP leadership challenge was brought on by the incompetence of three idiots: Stephen Conroy, Simon Crean and whoever leads the so-called “Rudd Backers”, whoever that might be, if there is a leader.
Conroy’s media reform effort was another spectacular unforced error from a minister who has become a dismal liability to the government. His statement in New York last September concerning the spectrum auction that if he told bidders to wear red underpants on their heads when they bid, then they would have to do so, was another one.
His effort in doing nothing for 12 months on media reform and then hastily drafting legislation, failing to consult with the industry being regulated and then trying to ram it through a hung parliament in a week was an amazing series of blunders, capped by the prime minister’s decision to back it.
It was that cock-up, culminating in yesterday’s humiliating withdrawal of the bills, which prompted an exasperated Simon Crean to call for a leadership spill and put himself forward as Kevin Rudd’s deputy.
Unfortunately he can’t, or didn’t, count and Rudd didn’t have the numbers so he has ended up on the backbench.
Apparently the Rudd Backers have been anonymously briefing journalists against Gillard ever since the last failed leadership challenge 13 months ago. We now know who a few of them are because they have joined Simon Crean on the backbench: Joel Fitzgibbon, Richard Marles, Ed Husic and Janelle Safin. Innumerate idiots, all.
Presumably they and the other Rudd Backers will back-off now, but the damage has been done. Australia’s pollsters will be furiously polling this weekend in the hope that they can reveal a spectacular new low for Labor’s and the PM’s standing next week, which they probably will.
But apart from all of the above stupidity, is there an underlying reason this government has made such a hash of things even without an economic recession, or anything even close to it?
I think it’s the budget, and more specifically undisciplined spending. The 2008/09 stimulus spending was worthwhile and well targeted, but since then there has been a lack of budgetary discipline that has led them to scramble around trying to plug the gap.
The revenue from both the MRRT and the carbon tax were both spent in full, and then some, so when there was shortfall from them it was a big problem. Public servant numbers have continued to grow and big social programs have been launched even as the terms of trade declined and government revenue with it. The schedule for returning to surplus had to be abandoned.
This, in my view, has been the government’s key failing. The main job of any federal cabinet is to manage the spending demands of ministers within the available cash and the person who is central to that is the treasurer.
Australia has had a bad one of those since 2007. Actually, amend that: Wayne Swan is obviously a fantastic operator in some way because he has sailed through six years of turmoil untouched, including being re-elected as deputy leader of the ALP yesterday, despite his obvious incompetence.
He has failed spectacularly to manage the budget, so that the Labor Party’s economic credibility is in shreds even though the economy is not. Like Paul Keating and Peter Costello, Swan should be the party’s hero and heir apparent, but instead he is the main author of its demise.

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