Political Corrections

with Mungo MacCallum

The rich get richer, the poor get...

There is no longer any doubt that our embattled Treasurer has lost all contact with political reality.

Last week Peter Costello contemptuously dismissed opposition leader Kim Beazley's plan for an alternative budget as "populist". And he was right; but by golly it takes one to know one.

The document Costello presented to a slavering electorate last week was the softest and most irresponsible budget since... well, since his last one.

But at least that was in an election year. This is the first year of the political cycle - the time the hard decisions get made. What we got last Tuesday was an indiscriminate mish-mash of handouts, liberally flavoured with economic snake oil. John Howard would have been, and indeed was, proud of it.

Howard of course claimed much of the credit, especially for the huge tax cuts for the rich; perhaps he was miffed by a recent analysis that showed that, in spite of the massive tax reductions of the past, the gap between rich and poor had not in fact increased all that much because he had also been generous on the welfare front.

The present budget should fix that; not only do the rich get their regular hamper of dosh, but the bludging paraplegics at the bottom of the scale are to be driven back to the assembly lines, assuming that there are any left after a decade of so-called reforms.

And of course there is no thought to any real investment in the country's decrepit infrastructure, or the ailing health and education systems, or even any real reform of the tax system. Even Alan Jones, the government's best-known media cheerleader, found it all a bit short sighted. And when you get more concerned with tomorrow's ratings than Alan Jones is, then brother, you're well and truly into terminal myopia.

Costello bases what remains of his reputation for having a long-term policy on the creation of what he calls a Fund for the Future. Basically this consists of giving a so-far anonymous collection of unelected business mates a really gigantic amount of public money and sending them off to play the stock market with it. Honestly.

The justification for this extraordinary concept is that the retirement benefits for Commonwealth public servants are technically unfunded; as the shiny bums finally flex off for good, they are paid out of general revenue. This has worked perfectly well in the past and there is no reason to believe it would not continue to do so - unless, of course, they all leave in the same week. The only way Costello's plan makes sense is if he plans to sack the entire bureaucracy in the first week of 2010. Perhaps he has a secret plan to privatise the government.

It must be said that Beazley's response, while slightly fairer on the tax side, is no more far-sighted across the board; he pays lip service to the need for more infrastructure spending, but is totally vague about how, when and where.

This, of course, is where the Fund for the Future money should really be going. It would then be a genuine investment in the future, something with a visible and measurable return in the form of water, transport, research and innovation. It would not only be good economics; it would be good politics, dare one say popular - which makes it all the more puzzling that the government did not follow the course.

Costello claims that there will be legislation to make the Fund untouchable; future governments will not be able to use it as a pork barrel for future elections. But what governments can legislate, they can also unlegislate.

Anyone want to bet that the nest egg remains intact next time the polls start to swing against those in the hot seat? Unless, of course, Costello's mates have already blown it all in a punt on Blue Sky Mining NL.

While most Australians will feel concern and sympathy at the plight of the hostage Douglas Wood, there is something a little unseemly at the way so many government and non-government bodies are jostling for the headlines in their attempts to negotiate his release.

No doubt they are all quite sincere in their efforts, but it is hard to avoid the feeling that there are a lot of people who would like a share of the credit if they are successful. If even a fraction of the energy, government and non-government, had gone into protecting the rights of those other Australian citizens illegally held by foreign enforcers, David Hicks and Mamdouh Habib, the current exercise would be a great deal more credible.

Similarly, the supporters of Schapelle Corby are clearly well meaning, but it is almost certain that their attempts to pressure the Indonesian authorities for her release are futile and quite likely that they are counter-productive; this applies particularly to the government's belated letter to her lawyers about airport baggage handlers.

Whether she is guilty or not (and interestingly, a host of Australian expatriates living in Bali are far less convinced of her innocence than Australians living at home) the judges will be highly sensitive about being seen to bow to outside influence from what is still seen in Indonesia as an arrogant and bumptious neo-colonial power.

There is a real danger that her conviction has now become a matter of face. She won't face a firing squad, but personally I'll be surprised if she gets less than 20 years.

And on this depressing note I am once again leaving these doleful shores, this time for a relaxing few weeks in the Middle East. Back in July, unless of course I'm kidnapped - and have to rely on Alexander Downer to save me. Ha.