@am*3 wrote:
Icy "entire article is here" No it isn't, it is behind a paywall.
Try This Link
or here's the entire text although I know long C&P's are frowned on:
NATIONAL Commission of Audit chairman Tony Shepherd has urged the Coalition and crossbench senators to reach a compromise on the budget, warning uncertainty will drain business confidence and distract the government from other important reforms.
Amid escalating frustration in the business community about the Senate derailing the Coalition’s agenda, the former Business Council of Australia president and respected company director has likened maintaining current government spending levels to a “short-term sugar hit”.
Writing in The Weekend Australian today, Mr Shepherd says that in the “toing and froing” on the budget, people have lost sight of why government spending needs to be cut.
“Special interest groups say not us but the naysayers are not offering realistic alternatives to reducing expenditure and returning the budget to a sustainable surplus,” he writes.
If Australia continues down the fiscal path it’s on, there will be “no reserve” to deal with a future crisis.
And failing to put the budget on a sustainable path will “saddle our children and grandchildren with our profligacy”.
“But eventually we, and the rest of the world, will wake up,” he writes.
“We will then be forced to take drastic action which will be far more difficult for the community and the economy to absorb.”
The comments come after Andrew Liveris, Australian-born chief executive of US multinational Dow Chemical, warned on Thursday that the “scary” new political paradigm was an “embarrassment on the world stage” over the past six years.
Business leaders have been lining up to warn about the risks of a dysfunctional Senate as Joe Hockey has tried to negotiate deals on unpopular budget savings. Former BHP Billiton chairman Don Argus has recently decried as “nonsense” that budget measures could be blocked by the Senate and warned this could stunt the economy.
Problems with the political setting are expected to be discussed at this weekend’s closed-door ADC Forum retreat at Hayman Island, which will be attended by senior politicians, bureaucrats and chief executives.
Corporate leaders from Telstra, BHP Billiton, ANZ and GE Mining have also warned about the budget impasse and called on the business community to back the government’s agenda — a call echoed today by Mr Shepherd, who writes that the Coalition was voted in with an election platform that made fiscal reform a central pillar. “I trust the minor parties and independents will recognise what the government is seeking to achieve and recognise this is not the time for sectoral or special interests to prevail,” he says.
But he also says all sides will need to come to the table. “This will require negotiation with the minor parties and independents in the Senate and compromise on both sides,” Mr Shepherd says. “This is democracy.”
Long-term structural savings including the $7 GP co-payment, university deregulation and the fuel excise are opposed by the Palmer United Party, while other crossbenchers fear the impacts of the budget on low-income earners.
While the Treasurer has crisscrossed Australia in a bid to secure support from powerful crossbenchers for his budget, doubts within Coalition ranks have emerged over his selling of a tough budget.
The audit commission’s report warned that to “do nothing” would result in a string of deficits to 2023-24, while the situation would worsen after that.
However, it was released on May 1 — less than a fortnight before Mr Hockey delivered the budget.
Critics say it was released too close to the budget, meaning there was not enough time to explain the structural challenges to voters and argue the need for action.
Speaking to The Weekend Australian yesterday, Mr Shepherd said convincing people of unpopular reforms took time.
“The Australian public are one of the best educated in the world and if things are explained carefully to them, even though they are not happy, they will come on board,” he said. “And this does take time.”
In his article today, he notes the commission’s report is not the budget. But both assume “we are living beyond our means” and that this gets worse in later years as the cost of spending on new programs, including the National Disability Insurance Scheme, ramps up.
Mr Shepherd writes today that tax reform is “necessary”, but bringing the budget back to a “sustainable” surplus by revenue measures alone would “strangle the economy”. He singles out the top marginal tax rate of 49 per cent and the company tax rate, which was higher than that in Britain.
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