Joe Hockey and the great entitlement deception.

 

 

 

On Thursday 24th April 2014, the ABC (AKA the AM program) hosted by Chris Uhlmann did a story called:-

Everyone has to help balance the books: Hockey
Above it was the caption “The Full Story”, except it wasn’t, it was just the introduction to the full story.
This morning I found the audio and listened to it and transcribed it.
I actually heard it yesterday and was astonished at the amount of utter rubbish the Treasurer of Australia, Joseph Hockey was talking.
The first thing he said was the following:

Uhlmann

                Can we just put this in some kind of perspective, what did the Commission of audit say about the way that Government spending has changed over the last 40 years?

Hockey

                Well the fact is that Governments have embedded programs that continue to grow over time much faster than the growth in the economy, and when you go through the items that are listed in the commission of audit, and this is new information, when Labor says this is not new, I say to them why didn’t you do something about it.

Uhlmann

                So you are describing a problem which has been known for a while.

                Well I don’t think anyone appreciated that the Medicare system was going to grow at twice the speed of the economy over the next ten years. The hospital system was going to grow at three times, more than three times the speed of the economy or that school funding in the outer years was going to grow at three times the speed of the economy. And the bottom line is if you grow it faster than the economy you need to massively increase taxes to pay for it.

I think it is incumbent on me to actually visualise what Hockey just said.
In effect the economy is the sum of all the inputs and outputs. The growth of an economy is always talked about in terms of Gross Domestic Product or GDP. The hyperlink shows the Economy as growing at 2.2% in the Dec 2013 Quarter.
The Medicare and hospital system payments were part of the Health budget. A good representation of the income and expenditure of the 2013 budget is shown here.
The expenditure for the 2013 budget is $398.303 billion. The health expenditure as part of that expenditure figure is $64.6 billion or 16.23% of total expenditure. This was an increase of 3.83% on the previous budget.
As a proportion of the Health budget, hospital services had expenditure of $2.76 billion, up 2.53% on the previous year. (2012). Of total expenditure this represents .69% of total expenditure.
So the economy grew at 2.2% and the hospital budget grew at 2.52%. NOT the three times the level Hockey claimed yesterday. For his claim to be true it would have had to have grown at 6.6%.
My second point about this is that it is not a valid comparison to compare the growth of the economy as a whole to the growth of a small part of the economy.
For example, we know from the final budget papers that there was revenue of $337 billion and we know from the above that the expenditure on hospitals was $2.76 billion.
We also know that the economy grew 2.2% so we could assume that revenue will grow 2.2% in the out years. That makes a growth in revenue dollar terms of $7.41 billion.
If we take Hockey’s claim that the Hospital Services Sector grew by 3 times the economy (6.6%), then that is growth of $182 million.
So Hockey is comparing Ants with Elephants.
The second astounding announcement by Hockey was the following.

                We are looking at every area of the budget, now, I wanna emphasise, we are framing not just a one year budget, but a ten year budget, and even decisions we are making are having very significant impact out to 2050.

Generally speaking budgets are 4 years and so he is being economical with the truth again. On Budget night he will provide figures for 4 years and anything beyond that is just too hard to forecast.

 

The next statement made by the minister was also a load of old flannel.

Uhlmann

                So are you going to be moving up the pension age to 70?

Hockey,

                “Eh well, there is an inevitability that at some point we have to increase the eh, age pension age. But it is well into the future.”

Uhlmann

                So that is a yes?

                “And, and, eh, we should celebrate the fact that we are living longer, we should celebrate the fact eh, that effectively, that one in every three children born today are going to live to 100. We should also not see someone’s life ending when they turn 65 or 70. They should work as long as they can, and I want to emphasise that we want to change attitudes in the business community as well. To encourage business to start thinking about employing people who want to restart their careers after the age of 50.”

Before I comment on this particular set of assumptions by the treasurer, I must set some ground work.

The age that males are expected to live to in Australia is 91.1 years and for females 92.2 years. You will note that I got the figures from the government web site. So where Mr Hockey got his ‘1 in three’ living to 100 years is beyond me.

If we changed the Aged Pension age to 70 right now, all we are doing is delaying the cost of the Pension for three years. In three years time the Australian Government will still be eligible to pay pensions to those who are now 67. All they are basically delaying is three years.

Given that there is an Unemployment rate of 6% and if these people cannot work, then they will be shoved onto Newstart at $35 per day, until they can claim the Aged Pension.

The import of this is shown by the University of Melbourne in their Quarterly Poverty Lines document Source Melbourne Institute of Applied Economic and Social Research Sept Qtr 2013.

If a married couple were to be subjected to Hockey’s cuts they would be living in poverty with a combined income of $506.50 per week where the poverty line is deemed to be at $674.71 per week.

 

It is no wonder that Hockey has targeted pensioners because that is the largest expense item in the Government budget. Looking again at the ABC website for expenditure we see that this item was $138 billion or 34.8 percent of the total expenditure.

 

Cutting in this area a little for each pensioner, saves the budget a lot.

 

I suppose we also need to ask ourselves what this means:

 

Q. Do we want to live in a Welfare State, where we look after our older people?

Q. Should we tax the Minerals companies more for their super profits so that

pensioners can live in relative comfort in the twilight of their lives?

Q. What other measures could we take to increase revenue? What about

concessions for wealthy people who should not have welfare type entitlements?

 

Paul Keating started a Super scheme when he was PM just so that these sorts of cuts could be avoided. Superannuation in effect is a compulsory savings scheme whereby the superannuant (in their old age) would have sufficient funds to live off and not call on the Government pension.

 

However further increases to the amount of Super paid into this scheme have been blocked by the current Liberal Party. They don’t agree with such a scheme but they also don’t want pensioners to get a decent pension.

 

 

So their logic is all at sea.

 

Another interesting pronouncement was made by Hockey next in the Interview.

 

Uhlmann

                That’s fine for you and I to think about working ‘til the age of 70 but if you’re a manual labourer, your body has been hammered by your work – how could you work to 70?

Hockey

                Well, that is a very good point and that is what we have got to start to focus the debate on, about how we can have a restart of the working life after someone turns 45, 50, 55 after manual labour, now what has been happening under Labor, eh, is that those people go onto a Disability Pension and transitioned straight onto the Age Pension, and effectively for many of them, their working career, ends when they turn 50 and their body is broken from manual labour, so now we have got to change the framework of the debate to focus on how every generation can contribute to growth in the economy.

Hockey could not help himself. It was Labor’s fault. These people “go onto a Disability Pension and transition straight to the old age pension.” Where is the proof of that?

 

 

 

In the 2011 Census, I looked up jobs and also at Joe Hockey’s electorate. Of the 21,507,717 million people in Australia at that time a total of 947,608 people answered that they were labourers. In his electorate of North Sydney, there were 2,088 Labourers.

 

Of course we do not know the ages of these Labourers, but can assume they are from 18 to the age of 65. And that they are mostly men.

 

When we look at the Disability Stats for 2013 we see that the DSP population actually FELL by 0.7% from 827,460 to 821,738. Of the total there were 440,743 male and 380,995 female DSP recipients. Or 53.63% were male and the rest female.

Of the 440,743 males on the DSP, 236,680 are over the age of 50. We don’t know the breakup of their infirmities or illnesses, but you could that say that Hockey’s labourers would come in the connective tissue and musculo – skeletal injury class. Typically that represents a third of all pensioners across age ranges on the DSP. Page 21 of the stats shows there are 110,976 men in the in the class (all ages), that Joe Hockey describes. In effect what he is saying is that these people get the Pension and then sit on it until they get their Aged Pension. That they have been parked there! I can’t prove that he is wrong and he cannot prove that he is right. The detail just doesn’t exist. If it does I call on him to prove what he says.

 

Once again the arrogance of these Liberal bigots slays me. They seem to think that you can just go and get one of these pensions, or that is what they want the public to think. In reality, you have to have a serious disability to get a Disability Support Pension.

 

The seriousness of the infirm on DSP is highlighted by the people who leave the pension each year. On page 46 of the document 56,836 people left the DSP, 35,231 went on the aged pension (62%), whilst 12,262 people on the pension died (21.6%) so 83.6% of the people who left did so to the Aged Pension or died. I wonder what portion of the people who died or went on the Aged Pension were Joe Hockey’s labourers?

Whatever they were, I, unlike an uncaring and lying Liberal Government wish them well.

 

Conclusion:

 

The reason that Joe Hockey, Kevin Andrews and Tony Abbott want to attack the pension is that – that is where they feel that people do not deserve the benefits they are entitled to. Benefits which governments are supposed to plan for like they did in the Future Fund for Public Service Pensions.

All their lives, aged pension recipients have paid their Taxes and it is a precept of modern society, that a Welfare State looks after it’s ageing population.

When Hockey said the following he suborned the reality and the truth.

Uhlmann

                What about finding money up front– are you looking at a co- payment for Medicare?

Hockey,

                Eh well, that is certainly something that is in the mix. The fact is that Medicare is growing at twice the speed of the economy. Eh, we all have to make a contribution because nothing is for free. Nothing can remain for free. And the fact is we have to ensure that the system works for those most vulnerable, the poorest in our community, but when it becomes mainstream there is a price we pay, now I want to emphasise my electorate of North Sydney has one of the highest bulk billing rates in Australia. And I have one of the wealthiest electorates in Australia. To me there is something wrong with that.

What Hockey fails to take into account is that the electors in his electorate pay a levy in their taxes for Medicare and so they are entitled to have medical help from a GP for the scheduled fee. That is the Law of the Land and there is nothing wrong with that.

It actually is an entitlement they pay for now.

And how much will it raise?

In a survey document done by doctors the amount of Medicare visits which would attract the $6 co-payment is 110 million, so the revenue raised from this measure would be approximately $660 million a year or $2.6 billion over 4 years.

Uhlmann pointed out to Hockey that:-

Uhlmann

                Couple of other quick things, what about a diesel fuel rebate to mining companies, is that in the gun?

                Eh, I am not going to get into that.

Uhlmann

                13 billion dollars over 4 years, that’s a fair whack isn’t it?

Hockey

                I just want to emphasise Chris that everyone will be making a contribution.

Uhlmann

                The paid parental leave system of course cuts against every thing you are trying to say

                Not at all, not at all.

Uhlmann

                A gold plated paid parental leave system scheme at a time when all of this…

                I do not accept that at all. We need every generation to get to work Younger Australians are either going to earn or learn for middle income Australians, middle aged Australians, we need you in work, for older Australians we want you to have the opportunity to work.

 

So the pensioners will have their benefits cut but the mining companies and farmers will get their diesel fuel rebate and the rich will get their gold plated parental leave scheme.

 

I await with anticipation how much pain Hockey is going to inflict on himself and his fellow Parliamentarians. But then I already know the answer to that. It will be a big fat zero pain.

 

These are the reasons I will never vote Liberal or for their followers the Nationals, a most unrepresentative party, if ever there was one.

Joe Hockey is a third rate actor, in a 4th rate government. The amount of lies they have told to the Australian public is breathtaking. Their arrogance even more so, but it is trumped by their egos and their lack of compassion masquerading as Christians.

What a load of old cobblers!

 

 

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14 thoughts on “Joe Hockey and the great entitlement deception.

  1. Well done Vince. Hockey is lying his head off. He says everyone will have to share the heavy lifting, but he won’t comment on fuel subsidies for mining companies.

    The Liberals now say they accept that global warming is due to human activity, but Abbott abolishes anything to do with carbon pollution or monitoring climate change. Experts say his Direct Action will be expensive and will achieve nothing.

    Another Abbott favourite is the expensive Paid Parental Leave scheme (partly paid for with a 1.5% tax on some big businesses!). This is justified because it is necessary to get highly paid women back into the workforce, but that hasn’t been a consideration until now.

    Hockey says there will have to be a dialogue with employers about employing people beyond the present retiring age and employing middle-aged to older people who have retrained for new roles. This dialogue has been going on since the late 1980s, with little noticeable change or effect.

    Personally, I don’t agree with the claims that manual labourers are worn out by the age of 65. I’m not worn out at the age of 70 and I’d be a lot fitter if I hadn’t spent most of my working life sitting on an office chair.

    The government is cutting whatever it can while maintaining benefits and advantages to its own side. Of course, it can’t admit the truth of this so it lies about it.

  2. Thanks Barry,

    There is a whole lot of terrible false information going on from the treasurer. What amazes me is the Main Stream media who do not seem to understand that their job is to hold people to account.

    Hockey also said a lot of other stuff about the $12 billion for the JSF and he said a governments first priority was to protect its citizens.

    He said that money had been put aside in other budgets for the JSF and that it was covered in the White paper they are doing now. I wasn’t aware that a White paper actually allocated Money.

    Never mind the other idea that it might be a whole lot cheaper to make and maintain friendships with our neighbours.

    The recurrent expenditure on Veterans affairs is $7 billion (and I don’t regret one cent of that). but that includes two wars. Vietnam and Iraq where arguably we should not have been. The all the way with LBJ was apparently a myth and the Weapons of mass destruction which didn’t exist were the reason we went to the other one.

    Imagine if all of that money had been invested in an NBN or advanced manufacturing or Education or Skills training.

    The upshot of all of my research and Hockey’s words is that he is a particularly incompetent man as an economist and an even more incompetent liar.

  3. Hockey and his ilk in the LNP have a clear political agenda: cut public health, education and welfare (includes pensions) while at the same time cutting red and green tape (meaning workers’ well being and environmental well being) and cutting the percentage amount of tax which the upper 10% have to pay into maintaining government programs. This last one will be largely accomplished through the sleight of hand of replacing revenue from progressive taxation with revenue from regressive taxation e.g. bowser tax, GST and so on.

  4. Thanks Vince for taking the time to listen to the Hockey/Uhlmann interview, analysing it, tearing it to shreds and sharing with people like me who couldn’t watch it because they don’t want to destroy their TV from rage and frustration. I keep hoping that the LNP will prevail on TA to be sensible and give up the PPL and ditch the fuel rebate to the miners…. Silly maybe but I have always been an optimist

  5. Thanks Mike and Madame Merlot for your comments.

    I think there are a lot of people beginning to wake up to these people now. And they accused Julia Gillard of Being a Liar. To me they are the most Vile people/government in a long long time.

    Totally out of touch with the Christian principles they say they follow. Perhaps that’s why people don’t (like me) go to church anymore, because they don’t want to be associated with liars and scoundrels!

  6. I have a feeling that there will be some token changes to Politcians’ entitlements in the budget. That way they can say “See, we are contributing to the heavy lifting too, so don’t complain”.

  7. The 30% PHI rebate-even after Labor’s hard fought for means test-will cost about $6 billion this next financial year alone; Superannuation Tax Concessions are costing in the order of $10 billion per year. Negative gearing is also costing $10 billion per annum. Then throw in the cost of the baby bonus, the Childcare rebate & the first home home owners grant & the Family Tax Benefit B, & we’re probably looking at $30-$50 billion per annum there alone. Then we have the lost revenue from things like the 50% Capital Gains Tax exemption, accelerated depreciation of mining industry assets, lack of taxes on land, inheritences & family trusts, cuts to the top marginal tax rate between 2000-2007 & poor compliance with company tax payments (21% vs the official 30%) & we can easily see that, if there *is* a budget crisis, its not being created by the bottom 60% of income earners, but the top 40%…none of whom will be targetted by Hockey or Abbott….you can guarantee it.

  8. its not just the drop in pension and working to 70 its the thought that ones government and its ministers care nothing about people, any of us and do not they have parent and grandparents, like to meet hockey and ask him what his parent think of the way he is treating older people.
    well i hope those on pensions stop spending,, only spend on medical your dr prescription and good food, we can go with out till labor returns, there will be less gst , i doubt they think we spend much well we do sometimes go out for coffee me i am buying a flask, and help the children with small items, NO MORE lets go on strike and show this lot the gst drop will show them , we want be bullied its my intention to only shop in small business ,no big business has ever spoken out for us their customers

  9. Did I miss something? You claim:

    “The age that males are expected to live to in Australia is 91.1 years and for females 92.2 years. You will note that I got the figures from the government web site. So where Mr Hockey got his ‘1 in three’ living to 100 years is beyond me.”

    Yet the link to the government website states

    “In Australia, a boy born in 2010–2012 can expect to live to the age of 79.9 years and a girl would be expected to live to 84.3 years…”

  10. Yes Pierre You did miss something, if you look at the table below the information you cite, It gives the statistics, I have quoted.

    You have to look carefully at table 1 to see the actual figures which I have cited. In the years it exactly says what I referenced.

    Thank you for your input.

  11. Vince, impeccable research as ever, nice job. As ever, I’m taking an optimistic view here. I’m guessing the average age for a man in 60 years will be 95 (by which time I will be 95). Hence I’m hoping I can work until 70 before then having 25 years on the golf course. The nature of work will have changed as well. With the rapid improvement of technology, we’re likely to work much more from home, which should prolong many careers. And how we work should be much easier, i.e. if I say things the computer will type it for me etc, with Google you will probably just think something and the computer will do it. Superannuation should also help as the current young generations should have heaps of super by the time they retire. Paul Keating was indeed a visionary. In terms of the rest of the cuts and the debt tax etc, I think it won’t be as bad as what the Libs are preparing us for, so then people will be grateful for the cuts being smaller. Smart politics again by them I’m afraid to predict. See you in a few weeks!

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