Snap back to reality (oh, there goes gravity)

I recently read an article arguing that the achievements of Obama as president have been vastly understated and underappreciated. It systematically laid out his tangible policy victories in various areas and contended – quite convincingly I thought – that the Obama administration, and in particular Obama as a president and personality, have been thoroughly misunderstood.

It was a unique and refreshing analysis, but it gave pause for thought: why was the thought of a journalist appealing to facts so surprising? The writer had merely demonstrated the myriad attacks on Obama’s legislative agenda were usually baseless and occasionally outright absurd, asserting failure where there in fact had been success. I couldn’t help but feel that this type of political journalism – referred to in the U.S. as ‘reality-based’ commentary, is in dangerously short supply.

So, a modest proposal: if we were to do a similar, reality-based appraisal of our government over the last five years, what might it look like? And recall, before we start, the one and only rule of the reality-based paradigm: you’re only allowed to use facts! Shock horror!

There is loud school of thought, pedaled chiefly by News Ltd. media and the shock jocks, that the Rudd/Gillard government wrote off Howard’s budget surplus, piled on mountains of debt, and imposed a series of wealth-destroying taxes on everyday Australians. Big claims, but let’s put on our reality-based shoes on and examine this, starting with the budget deficit.

In 2007 a thing called the GFC hit us and would’ve forced us into deficit regardless of whether there’d been a stimulus package or not, thanks to what economists call the budget’s ‘automatic stabilisers’. Fortunately, there was a stimulus package – two in fact – both designed by those well known Trotskyites at Federal Treasury and both credited, at least partially, for guiding us through the crisis: unemployment peaked at just 5.8 per cent here. What about the Building the Education Revolution program, you say?! The program whose complaint rate was only 3 per cent? Awkward…

Stimulus aside, the fact remains this government is the most fiscally reckless in the nation’s history! Well, no, not exactly. The government has – quite foolishly in my view – staked its political fortunes on a return to surplus in the next budget, with a more coherent, and arguably stronger, stance than the opposition. And what of us being mired in debt? Australia has the third lowest level of central government debt in the OECD, nearly six times less than the U.S. and eight times less than Britain. Believe it or not, we have less government debt than Switzerland, Norway, and Sweden.

But surely we can’t deny the pure evil of those taxes! There is now much mythology surrounding Kevin Rudd’s mining tax, the RSPT/MRRT/apocalyptic nation-destroyer. Let’s get reality-based on this bad boy, because it probably deserves the most attention of any of these bogeys. State and federal governments already received royalties on the extraction of natural resources prior to there being a mining tax. The Western Australian government took in $3.9 billion last year from mining royalties alone. States are allowed to levy as much as they like, so one of the aims of the RSPT was to streamline the inefficient royalty system and replace it with a nice, simple, broad-based tax.

Fact: the after-tax profit margin in the mining industry was 31 per cent in 2010, compared with the eight per cent average in the rest of Australian industry. Moreover, the mining sector in Australia is 83 per cent foreign owned: thus a mining tax would allow us to retain a larger portion of the profits – our profits – in Australia, while permitting an easing of the tax burden on individuals and businesses. Oh, and did I mention that the mining tax was developed by Treasury’s chief Marxist, Ken Henry? Shit, those facts are at it again!

And what of the piece de resistance of Gillard’s socialist plot for world domination, the carbon tax? The first thing to get straight is that a price on carbon is about as neoclassical, dare I say neoliberal, an economic policy as you can get. The conservative New Zealand Prime Minister just introduced one, David Cameron wants one, and John Howard supported one in 2007.

The current permutation of the dreaded carbon tax actually includes a raising of the tax-free threshold and a compensation package that leaves millions no worse off. If anything, the huge amount of compensation and limited scope of the tax – applying only to the top 500 polluters – make it far weaker than Rudd’s original emissions trading scheme, the model favoured by John Howard and supported by Malcolm Turnbull.

So, yes, the pink batts insulation scheme was botched, asylum seeker policy is an unmitigated disaster, and Labor’s factional bickering and leadership tension embarrasses us all. Criticism on these grounds is perfectly healthy and understandable; but too often, the government has been mercilessly savaged for things it’s got very right, and there’s been very little by way of pushback. The solution? Bring on more reality-based journalism!

Nick Rowbotham narrowly avoided a lawsuit for his last Honi piece. Fact.

Nick Rowbotham

Nick Rowbotham

Nick Rowbotham is an editor of Honi Soit. He writes, edits, and drops subjects frequently.
Nick Rowbotham

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