16/05/2014 - 15:26

Mixed messages cloud budgets

16/05/2014 - 15:26


Upgrade your subscription to use this feature.

Liberal governments in WA and Canberra are finding few friends in light of recent budget measures.

Mixed messages cloud budgets
TOUGH START: Mike Nahan managed to upset just about everyone in delivering his first, and the Barnett government’s sixth, budget.

Liberal governments in WA and Canberra are finding few friends in light of recent budget measures.

It might take several weeks for the full implications of the federal and Western Australian budgets to emerge, but what is undeniable is that both treasurers – Joe Hockey and Mike Nahan – are sending conflicting messages.

That doesn’t mean either treasurer is guilty of gilding the lily based on self-interest, although they might be accused of that. It could be more a reflection that the federal and the state economies are at different stages, requiring their own tailored responses.

Dr Nahan was first off the mark, delivering the Barnett government’s sixth, and his first, budget. He noted the state faced a challenging fiscal environment, adding that the economy had passed its investment peak, “leading to a production phase which will yield a record level of exports”.

“Over the four year budget period,” Dr Nahan added.

“Economic growth in Western Australia is expected to outpace growth nationally.”

According to Dr Nahan, the economy is shifting gear, rather than going through radical change. 

Mr Hockey’s message is different. The Hockey budget is the first of the coalition’s three-year term, and he could afford to use stronger rhetoric in his first budget after the Rudd-Gillard-Rudd Labor years. But in his pitch for belt tightening, the treasurer is also seeking to rein-in the spending largesse that emerged in the ‘good times’, including under the Howard-Costello economic leadership.

The coalition is intent on ‘rebuilding the economy’, with all sectors being required to contribute to the ‘heavy lifting’.

In framing his initial budget, Dr Nahan managed to upset just about everyone. The Chamber of Commerce and Industry of WA decried the lack of reforming zeal, and the Real Estate Institute of WA was less than happy with the changes to hit land tax, although it conceded the tightening of provisions affecting first home owners could have been worse.

With Labor leader Mark McGowan hammering away at bread-and-butter issues affecting the average family – household charges and the cost of raising and educating children – the government would have appreciated some support from traditional ally the business sector. But not much was forthcoming.

There could be a political lesson here. Dr Nahan confirmed that payroll tax concessions flagged last year would apply from July 1. The payroll tax exemption threshold will be lifted by $50,000 to $800,000 from July 1. This would help more than 16,000 employers at an estimated cost of $190 million over four years.

But because the measure had been flagged last year, the initiative passed virtually without comment.

Premier Colin Barnett is taking his time in terms of asset sales, while also pointing to a radical change of policy. After initially saying that major entities were unlikely to be put on the market, enterprises such as the Perth Market Authority and the TAB are now being eyed off for privatisation.

The TAB in particular was not on Richard Court's radar to be sold between 1993 and 2001, but the current premier has suddenly questioned why the government is running a gambling agency. This burst of ideological purity is probably linked with threats that the growth in gambling opportunities will hit the TAB's market value. Better to realise the asset sooner than later.

Both governments will inevitably take a hit in the polls over the budgets, severely testing their conviction that they are on the right track.

Senate reform

Full marks to the federal parliament’s joint standing committee on electoral matters, which has endorsed six changes to the Senate voting system following the farcical situation that forced voters in Western Australia back to the polls in April.

The proposed changes are designed to prevent candidates with a miniscule number of primary votes being elected, thanks to the manipulation of the preferences of micro parties.

Suggested provisions include optional preferential voting above and below the line, and a requirement that groups have at least 1,500 members – three times more than at present – to qualify for official party status.

The optional preferential provision would mean that voters only have to number the boxes below the line from one to six in a half-Senate election, compared with one to more than 60 in the April ballot.

Inevitably the recommendations will be criticised as the major parties ganging up against the micro parties; and there’s some truth in that.

But voters do need to know whom they are actually voting for, and how their preferences will be distributed. The existing system might have been suitable in 1984 when it was introduced and there were far fewer candidates, but with the proliferation of candidates and parties it has become unworkable.

Let’s hope that the major parties, especially Labor, now review their upper house selection process to ensure that better quality candidates are endorsed. Then both WA, and voters, will be real winners.


Subscription Options