TE-BO’s Guru: Budget 2014-15 – ‘TRUST ME’ … Part 1: ‘The Medical Research Fund’.

TE-BO’s Guru: Budget 2014-15 – ‘TRUST ME’ … Part 1: ‘The Medical Research Fund’.
| Author: TE-BO’s Guru – | Date: May 15th, 2014 |

the-eyeball-opinion6The 2014-15 Budget hard sell begins across all media forums.  The early verdict is a collective talk-fest with guests and presenters offering their opinions based on their own political and budgetary agendas.   It is a maze of opinions and depending of where you get your news – the clear verdict is the budget is worse that expected when the fine print is read and connected.

This ‘madhatters convection’ of messages from this Government, the States, and all the media outlets and their guest economists is an affront to the glaring reality in how this budget will impact on the lifestyles of people on welfare, and low to medium fixed incomes.   What we are about to see now is a 2 week or so period of Budget responses of support/outrage, and/or protestation to be followed by a calming of the waters, and then everybody will move on until a Senate vote on the passing of the legislation.   It has been muted already by the PM that there is a high likelihood of some ‘horse-trading’ to help with the passage.

In summary terms – Hockey and his Cabinet decided to wind back as much as they could of the previous Governments assistance handed out to low income earners and the welfare sector, and Howard’s generosity to the middle class sector in the last years of his Government.   Nobody talks simple talk on these matters anymore – it comes forth as political rhetoric to suit a pre-scripted agenda.

The ‘A$20 billion new Medical Research Fund’

Costello had his ‘Future Fund’ chestnut as a policy legacy that would allow him ‘to live in infamy’ in the afterglow of his political career.  It was a policy designed as an ego boost for someone who failed at the single ambition to become PM but never had the ‘guts’ to have a go.

It would seem that all Treasurer’s aim for a positive legacy – history shows few do and most don’t.

The debate on the ‘Future Fund’ since its establishment is a misnomer sideshow of smoke and mirrors about whether it is just another ‘Political Slush Fund’, and dressed as a Financial Mammoth to give the illusion that it is a safety blanket for the Australian economy.

Costello was not the only Treasurer to pinpoint the Government’s mismanagement of its future superannuation liabilities to the Commonwealth Public Service, yet he was the one who decided to do something about it.

Did this ‘liability shortfall’ need fixing – all the previous Governments felt not.  All previous Treasurers felt no urgency nor need to fix the ‘future liability’ of the Government’s workforce.   Yet – during Costello’s term as Treasurer, [1996-2007], Costello by 2005-6 realised he had so much tax money/revenue built up it was an embarrassment of riches.  In his budget forecasts – Costello as did Swan, had no idea how far wrong their Budget forecasts would be.

Historical Table of Budget Actual verses Forecast outcomes. [click either image to enlarge in a new window.]

As can be seen neither Government had much knowledge about future earnings and expenditure …

Nevertheless – the ‘Future Fund’ is now valued at some $97 billion, with an additional $10 odd billion reserved in the ‘Education’, ‘Medical’, and ‘Building’ Funds established in 2008 under PM Rudd.

In the ‘Future Fund’ formation, Costello gifted some $60 billion of ‘Telstra’ equity owned by all Australians at the time to set up the Fund.  That in itself was a fraud upon the Australian people – the masses so to speak who all owned a share of Telstra by public entitlement, and yet Costello believed it was more deserving to ‘gift’ that $60 billion of Telstra equity to a more deserving cause – the creation of the ‘Future Fund’ whose charted states:

In history political mistakes and lies are revealed. For example the charter for the ‘Future Fund’ states: [linked here]

Future Fund

The Future Fund was established by the Future Fund Act 2006. The object of the fund is to strengthen the Australian Government’s long term financial position by making provision for unfunded Commonwealth superannuation liabilities. These liabilities will become payable at a time when an ageing … – [yes -spellchecker picked up the error – but this text is pasted directly from the website] – … population is likely to place significant pressure on the Australian Government’s finances. The Future Fund has received contributions from a combination of budget surpluses, proceeds from the sale of the government’s holding of Telstra and the transfer of remaining Telstra shares. The Future Fund Board of Guardians is responsible for deciding how to invest the assets of the Fund.

Legislation stipulates that money may not be withdrawn from the Future Fund until 2020 except for the purpose of meeting operating costs or unless the Future Fund’s balance exceeds the target asset level as defined by the Future Fund Act.

Was gifting this $60 billion to be used to fund the lifestyles of retired Commonwealth public servants and their families more deserving than investing in the Nations future prosperity?

In any context – this charter as described above is misleading.  It is a contradiction in outcome when matched with purpose.  To say the ‘Future Fund’ is established to – ‘make provision for unfunded Commonwealth superannuation liabilities‘, and match that with – ‘These liabilities will become payable at a time when an aging population is likely to place significant pressure on the Australian Government’s finances’ – makes no sense unless you are a former Commonwealth Public servant.  And particularly so if you are a former politician and can access superannuation entitlements once voted out or resigned of Parliament having served a minimum term requirement.  It’s a very generous scheme no private taxpayer has entitlement to.  Why should it be so generous – e.g. Gillard has another 15 odd years to go before so would reach pensionable age but as a former PM she gets her entitlements for the rest of her life regardless of what additional income she earns in the private sector during that 15 odd years.

That is an unjust outcome for all Australian taxpayers, and an example why some of the over funding in that $97 billion converted from Telstra equity should be used in fund some of the expenditure and savings sought in Hockey’s Budget.  Is this $97 odd billion not meant to provide a safety net for all Australian’s – or just those who worked for the Commonwealth?

The truth is simple in that it provides for the economic prosperity of Commonwealth Public Servants – who mind you, are all employed on the taxpayers dime for all their working life.  The highest paying jobs outside of executive level status are now with the Public service industry.  Some 30-40 years ago there was a 10-20% under payment in public sector jobs – you tell me of ‘entitlement’ and those in jobs who can protect their own incomes beyond the masses.

Why not address the Government fraud involved here in not providing superannuation entitlements on a monthly or quarterly basis every Australian Non-Government employer has to comply with.  Where is the 15% tax collect on these liability shortfalls accounted for in the past budgets?

Why not take responsibility for the fraud/negligence and force the liability on the superannuates as any failed non-Government business have to do?  Let those responsible for the non-compliance face criminal charges as private sector business owners have to do when they have failed to comply.

Tapping into taxpayer assets – i.e. Telstra, and the general tax revenue base to fund the past frauds of successive Government’s is as criminal as the AWU scandal.

And now – Mr Hockey with all his limited and collective non-financial wisdom has chosen to set up another ‘Fund’ for Medical Research to be funded by a medial levy again from those who frequent a medical provider because they have the misfortune to be unhealthy.  Something at odds with Medicare’s charter to help provide  health care affordability to all Australians.

To use Hockey’s own words – ‘it will be the biggest, and the best facility in the world’ – why is that necessary against the weight of ‘the worst budget crisis in history’.

All I can say Mr Hockey – given the budget crisis preface you used to make the spending cuts and savings outlined in your budget – was this six year $20 billion tax collect really needed in preference to the new budget measures impacting on the welfare recipients,  and low-middle fixed income earners impacted by the measures you proposed to introduce?

Let us be upfront and honest – Australia’s fiscal budget predicament is far better than most of the major Western world powers, i.e. the G7 and out to the G20 memberships.   But the reality of that statement does not mitigate the damage six years of Swan madness has placed us in.

The Nation will be dragged to where the rest of the Western World has already arrived soon enough if measures are not taken.  Abbott/Hockey had to wind back some of the outrageous ALP policy initiatives and future spending forecasts.  Nobody is in denial of that fact.

What is at question is the urgency Abbott and Hockey deem necessary in making the choices they have in this budget.

The policy divide and urgency in the policy’s proposed is unexplainable.   On this score alone – this Budget cannot be considered anything other that a fail.

That $20 billion collect for the Medical Research Fund is a mis-direct.  The $7 fee is a warning to patients of GP’s to consider whether it is necessary to visit the Doctor or other medical facility.   If it reduces the GP’s income as expected,  do you not think that all GP’s who bulk-bill will not increase their gap fee as well.  That then means the $7 co-payment will only be a part of the increase in the cost of a visit to the Doctor.

Hockey – this policy has created a minefield for those with ongoing medical conditions – anybody on long term medication now face additional costs to get a script.  The policy fails for it does not provide a road map to help contain the collateral damage.  And all for what – an ego agenda that is your dream of a Medical Research facility[s] that might or might not find medical breakthroughs.

It is a high risk gamble – and supported by your own admission that we don’t have a University ranked against the top echelon in the world.  How could you expect to provide a possible ‘cure for cancer’, as you mentioned in your budget speech,  with such a low respect for our educators because they don’t have a ranking amongst the top echelon of global Universities, unless to intend to import the brains-trust with the monies you plan to collect..

Mr Hockey – your rhetoric in justifying this ‘Fund’, and delivered at the ‘National Press Club’ on the 14th May, is nothing but a gabfest of political double speak delivered to a forum of wankers who all walk in single file behind you, along with a naive pack of Journalists along for the free food and drink. During that speech you mentioned and labored on the point of the Australian people ‘taking responsibility’. You do Australian’s a great dis-service Mr Hockey – it is not the Australian people who should take responsibility for the financial and political frauds committed by successive Governments over many past decades – it is the likes you you and your kind who let your own ego’s and ambitions get ahead of your abilities.

Mr Hockey believes as do all politicians, fixed income earners, and the welfare sector are the easy and more manageable targets to any fiscal restraint when Governments see budgetary troubled waters. Mr Hockey’s budget forecast is a pitiful example of naive foresightedness.

There is so much more to come on this Budget Forecast.


This entry was posted by TE-BO - [The EYE-BALL Opinion].

One thought on “TE-BO’s Guru: Budget 2014-15 – ‘TRUST ME’ … Part 1: ‘The Medical Research Fund’.

  1. The spelling of ageing is correct in British English – aging is the spelling in American (USA) English which is why the spell checker on Software developed by a US Company will pick the spelling of ageing up as being incorrect……….Just depends whether us Aussies use British English or American (USA) English.


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