Mark Kenny - why the Coalition's talk doesn't add up - Adelaide Now

Shadow Treasurer Joe Hockey has changed direction in recent times. Picture: Kym Smith Source: AdelaideNow

WHEN Tony Abbott went to London last year, he talked up the Australian economy against that of Britain, other European economies, and the US.

The Opposition Leader?noted?our low level of public debt as a proportion of GDP.

"On the face of this comparative performance, Australia has serious bragging rights," he said in a major speech.

"Compared with most developed countries, our economic circumstances are enviable."

It was a surprising departure from an Opposition that had taken to constantly ringing the alarm bells about unsustainable borrowings to fund government profligacy.

When chief economic spokesman Joe Hockey came out of the blocks following the Budget last year, he also had envy in mind - albeit in a different context.

Responding to Labor's plans to modestly rein in middle-class welfare through such measures as phasing out tax concessions for dependent spouses without children and extending a freeze in the threshold for family tax benefit eligibility at $150,000 a year, Mr Hockey was blunt.

"I despise this envy, this envy and this jealousy," he said.

"I despise the way Labor turns Australians on Australians and the way they're trying to turn Australians on others who may have a household income of $75,000 a year or $100,000 a year or $150,000 a year."

This week it was Mr Hockey's turn to travel to ol' Blighty for a bit of straight talking and once again there was a change in direction.

"All government-funded pensions and other such payments must be means-tested so that people who do not need them do not get them," he stated.

And he went further, suggesting that the real competitors to the Australian economy were now our Asian neighbours whose welfare costs were small - Korea at 10?per cent of GDP compared to say France at 30?per cent and Australia at 16?per cent.

"Western nations are in financial trouble and they are in financial trouble because, like a bad parent, over the years they have always said to voters you can have what you want and sooner or later it comes to an end when the burden of debt starts to cripple their economy," he said in what could hardly be a more damning critique of the Howard government's formula.

Although to give him his due, he does concede that point.

"Do you admit to being guilty yourself of this when last in government?" he was asked by Tony Jones on ABC's Lateline.

"Yes ... we did it, I mean, there are times when we did it, of course."

Mr Hockey's argument now is that we should perhaps look more to the Asian examples because "we can no longer compare ourselves with Europe and the United States, which have massive fiscal and structural problems".

So with that said, what is the Opposition's response?

It continues to support generous family payments, rejecting the term "middle class welfare" in favour of appropriate support for working families.

And if Mr Hockey now believes all welfare and pension payments should be means tested, his indignation at last year's relatively modest Budget measures seems curiously inconsistent.

Better still, how does the Opposition explain away its extremely generous paid parental leave scheme that would see bankers paid at their full salaries up to $150,000 per year for six months absence from work while a cleaner would be paid at a much lower rate?

Then, of course, there is the private health insurance rebate that the Opposition refuses to means test despite much hand-wringing over the deficit.

" ... the private health insurance means test, which isn't a reform, it's a rip-off," Mr Abbott said on February 17 and more recently, on March 6, described it as "an attack on middle Australia".

Rather than opening the debate about welfare sustainability in this country, Mr Hockey's latest piece of thinking has gifted Julia Gillard with a new angle of attack.

"Who's going to get the cuts, what is going to be cut, what can working families expect from Mr Abbott if he's ever prime minister?" she asked.

The debate over payments is a material threat to the Coalition's popularity because it goes to the question of money in people's pockets.

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