Wednesday, May 9, 2012

What is $1.5b Actually Worth?

As promised, the ALP Government has delivered a juicy morsel of Surplus, with grand proclamations about the dark years of Deficit being over. Huzzah! We're in the Money, sharing the benefits of the (Big) Boom, while barely blinking at the armada of cutbacks that go to enable this surplus of goodness.
A quick count shows about 40 headline programmes scrapped entirely, cut, or delayed. 
This is a confusing budget, in that the ALP has delivered, against all odds, the thing the voters and the Opposition most wanted, while at the same time, cutting the heart and soul from everything not nailed down. 
 From $5.4b in cuts to defence spending, to a paltry million saved by not building a new weather station at Jervis Bay, the ALP Government has been ruthless in their determination to produce the surplus they believe we all want. In this instance, we have to trust that the Government made the right choices, and only cut the least essential programmes when decided what would be cut and what would survive.
Before celebrating our glorious return to Surplusity, remember that with programmes scrapped comes jobs lost, projects spanning years of peoples' lives shelved, and the hopes of programme directors obliterated. There is an inevitable cost. It’s probably nowhere near twelve thousand jobs to go, as was reported in the Canberra Times last night, yet there will be pain. Bank on it.
But we have our blessed surplus. As Michael Pascoe wrote in today’s Farifax press, “Welcome tp the Temple of Surplus Adoration”. Of course, while the ratings agencies are delighted with the budget, and  low and middle income families are pretty happy, business is less than thrilled, well-off families are wondering where their entitlements are, and those of us without children pretend the whole thing isn’t happening, just as we do after every Budget. Mr Swan should know by now that you can’t please all of the people, and in the case of the ALP in 2012, it’s hard to please anyone.
But we have our surplus, that majestic $1.5 billion dollars. A mere trifle, you may think, but no. It’s $65.50 for every Australian man, woman and child. There’s no end to the things each of us could have done with that $65.50:

·         Download about 30 songs from iTunes
·         4 x 250g packets of my favourite chocolates
·         Movie tickets for a family of 4 (but bring your own popcorn)
·         A 50 minute massage
·         One decent (but not flash) shoe
·         A tank of petrol for a small car
·         About 10 boring minutes on a standard poker machine
·         Dinner for 2 at Sizzler
Okay, you’re right. $65.50 isn’t as exciting as I’d hoped.
It’s probably best that the government did hold onto everyone’s $65.50. They could do some real good with $1,500,000,000. Here’s what  $1.5b could’ve bought:
·         Thirty new high schools
·         6000 average family homes  
·         A medium sized hospital
·         8000+ kilometres of world class multi-lane highways
·         11.5 Joint Strike Fighter military aircraft
·         A year of employment for over  15,000 teachers, doctors, nurses, scientists, agronomists…
·         Nine or Ten Federal Elections
·         Half a Clem7 Tunnel

Given our need for schools, homes, hospitals, scientists, roads and infrastructure, why not make the cuts anyway, and spend the surplus money on doing what governments are supposed to do: provide services for the people.

The answer is less about economics, and more about politics. The electorate demanded a return to surplus, and the government provided it. If all goes according to plan, we will have $1.5b in the bank, for a rainy day. That’s good too.

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