A Hole Comments
Easy as Pie
Australian governments of both persuasions consistently fall short of world best practice when it comes to budgeting.
Budgets should be a clear annual statement of the nation’s economic standing and the policies designed to promote economic growth during the following year.
Instead they’ve become perennial punch-ups between politicians about which black-hole should get the biggest and fairest award.
Following a period of intense research and consultation at the Wayne Swan Institute I am at last in a position to reveal the essential truth about budgeting.
First it’s important to look upon the national economy as a pie.
The budget reveals the size of the pie, how it will be divided up and the plans to make it bigger in future years.
If it is a Coalition pie the main emphasis is on growth while Labor’s main pie perspective is about how it should be divided up.
The trouble is that both these approaches while no doubt well-intentioned have serious inherent weaknesses.
By placing too much emphasis on growing the pie rather than dividing it up Coalition governments tend to create high profits for shareholders but slim pickings for everyone else. By placing too much emphasis on dividing up the pie rather than growing it Labor governments are prone to create an economically unsustainable bludger’s paradise.
The Coalition fails to share out the wealth that its policies have created while Labor’s policy is to share it out before it’s been created.
The Coalition’s policies lead to pie consumption favouring the economically successful while Labor is keen for everyone to get a slice whether there’s enough in the kitty to pay for it or not.
Coalition economic policies tend to promote sufficient discontent in the community to bring Labor back into government while Labor’s economic policies tend to promote so much alarm and dismay that the Coalition can always be assured that a return to government is never far away.
We can only hope that sometime in the future we shall be blessed with a government that strikes the right balance between making the pie big enough and ensuring everyone gets a fair slice.
The way things are looking however that’s nothing more than pie in the sky.