Opinion- 20 October 2003
Why the Budget Surplus? – Harry Robinson Gives His Assessment
Science and Plenty
Oh what a rich, plump sound – Seven and a Half billion dollars! And, as soon as the treasurer held the surplus up for all to see, journalists, pollies, planners and do-gooders went into a rondo of plans for what to do with all that lovely money. Spend it on this, spend it on that….let’s all have a tax cut, let’s have more for schools and hospitals, lets’ give it to the poor, let’s give it to the rich. What fun they had playing with seven and a half billion dollars.
But Messrs Howard and Costello had already put the money out of common reach. They’d used it to pay down part of the national debt. Nobody could get at that plummy seven and a half billion dollars, nobody. Never mind that the national debt was already one of the world’s lowest ratios – around 5% of GDP against the US and UK about 40%, Japan way up there with 180%.
Why did we have to pay down debt? Because – and this is not pejorative – this government is a house-keeper. It believes in keeping money in the bank, running the home on a sound, decent, modest basis. No wild spending, no loose pennies, keep something aside for a rainy day. And don’t even think of investing in schemes that might pay high dividends. This housekeeper avoids risk.
Questions were asked, though. Where did that juicy seven and a half billion dollars come from? Taxes on surprisingly high company profits, we were told. Well, in a way. A big lump came from a greedy initiative by the Australian Tax Office. It had trained a new group of company auditors and they’d gone out into the corporate field, combed through company books and produced a tad over three billion dollars in surprise taxes.
Which raised the next question: Will we have another delicious seven and a half billion surplus this current financial year? Nobody can say. All sorts of expensive things could happen. Mr Carmody, the Tax Commissioner, might not be able to exact another three billion dollars out of corporate tax cheats. We might have to send an armed force to – who knows? – Heard Island or North Korea. We might need to spend big on ship and air security.
Might…might…might. Still, the chances are that next year will produce another sweet surplus. It’s obvious that the government would use some to win votes for the 2004 election. Strategic injections into health and schools. There are more votes in schools than universities, so the vice chancellors should not expect much.
Still there should be some money left over. For what? The most articulate claimant was John Anderson, leader of the Nationals. Never mind tax cuts, he said, people in rural and regional areas need roads and railways and schools and health services. Put extra money out there. Anderson saw the opportunity to bid for his constituency.
Did the science and education community see an opportunity? Did anyone see or hear a cogent case for putting money into education and research?
The question answers itself.
We could leave it there but let’s go on. That one surplus of seven and a half beautiful billions is a symptom of a radical change in nation fortunes: we are off the shoestring.
In a recent opinion piece in the Sydney Morning Herald, veteran financial journalist Greg Hywood said that in only the two last decades Australia had moved from managing scarcity to dealing with plenty. About face! As though Sisyphus had actually reached the top!
Hywood was writing of the econo/political scene but others have noted that around 1990 Australia reached critical mass, achieved new strength and stability. The first sign came in the aftermath of the 1987 stock market crash. In earlier times, one such shock would have wounded us. Prolonged drought, a commodity price downturn, a demand like the Vietnam war – any one by itself was enough to rock our boat.
No longer. In the 90s, we coped with the Asian recession and prospered. As we turned into the new century, we paid for the East Timor expedition, the security expenditure after Nine Eleven, SARS, adventures in Afghanistan and Iraq and we still prospered. This all culminated in the bonzer seven and a half billion dollar surplus.
Some credit must go to good management, some to our increasing population. But a fair whack ought to go to science and education. Because we knew more, found out more and taught more we were able to broaden our range of exports. We no longer hung on the wheat harvest or wool clip to keep us solvent. We exported IT services, education, computer games, software, high tech services in navigation and distance measuring and more and more. We used more brain and less brawn and it paid.
One consequence is that we need no longer believe any government which says it has no money to spare for such fineries as scientific research and higher education. In contrast with most of our past, we now have the resources to invest in those fineries. And Science has a rightful claim for a large slice of the cake.
who for 25 years worked in television journalism in Oz and the US and who was for several years air media critic for the Sydney Morning Herald and the Sun-Herald.