When a bishop trumps an abbott

by ericknight

Rumour has it that there was a rather nasty stoush between a bishop and an abbott last week. Julie Bishop was cagey about what it was over. It is clear what it should have been over. Abbott’s decision to reallocate foreign aid funding to pay for the floods is an error of judgment.

In Battle Lines, Abbott acknowledged that the Liberal party has traditionally struggled with an image problem. The problem is that swing voters see the Liberals as cold-hearted. I say it’s an image problem because this doesn’t need to be the case. No party can claim a monopoly on a good heart. Political parties, you may be surprised to know, rarely disagree with purposes: better health care, better education, helping the down-and-out. What they disagree on is how to achieve these purposes.

Both sides want to help Queensland. But Abbott made himself the news story by axing foreign aid to pay for the floods. Instead he should have tried to cut bottom line spending deployed in unproductive projects under the $42 billion stimulus package. The message here is fiscal responsibility.

I have commented elsewhere why Gillard’s levies are fiscally imprudent. The flood bill should be paid for out of the national budget. It is a very serious problem if the Treasurer is running the economy on such a fine margin that it cannot pay for natural disasters. It’s like the Seinfeld episode where Kramer tries to see how far he can drive his car in the red zone of the fuel tank. Missing this point and being close to a policy suggested by Qld One Nation is a mistake.

{ 2 comments… read them below or add one }

Tom Spencer February 14, 2011 at 2:13 am

Eric,

You make a good point, in that both parties agree that they want to help Queensland, what they disagree about is where the money for this initiative should come from.

It is worth noting that the cost of rebuilding Queensland will not be small. The Herald Sun has suggested that the cost may exceed $16 billion (see article here).

In the context of a “$42 billion stimulus package” this may sound easily affordable. However, the enormity of the cost can be appreciated by the fact that it is more than the total cost of the Snowy Hydro scheme ($12.5 billion in 2011 dollars, source).

As you suggest, the best approach is run a national budget that is managed responsibly and can accomodate the unexpected natural disaster or two.

In the alternative, somebody will be asked to pay for the rebuild. If we raise taxes, Australians pay. If we cut aid, foreigners pay.

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ericknight February 23, 2011 at 9:15 am

It’s amazing talking politics with people in America and Britain. Trying to explain that in Australia we argue over how to spend a few billion dollars rather than how to save it is a luxury problem!

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