When Bill de Blasio released his budget for New York last Thursday, he made clear his approach for the next few years: more government, more spending and more borrowing against tomorrow to pay for today.
Meanwhile in Australia, the new Tony Abbott government has taken the opposite approach. Treasurer Joe Hockey’s budget is based on the idea that governments, like families, need to live within their means. As he put it Wednesday: “The days of borrow and spend must come to an end.”
In practical terms, that means layoffs for 16,500 government workers. It means cuts in entitlements, cuts in welfare, new fees on visits to the doctor’s office, slashed subsidies to businesses and a 2 percent surcharge tax on those earning more than $168,000 a year.
It’s all necessary, the treasurer says, to make up for the spending sprees of previous governments.
The treasurer and the prime minister recognize some of these measures will mean more pain for Australians already struggling to make ends meet.
They also recognize that speaking these hard truths will probably cost them in the polls, at least in the short term. But they also recognize that if they do not act now to put Australia back on the path to a pro-market, small-government nation, they will be robbing Australia of its future.
The treasurer put it this way: “The age of entitlement is over. It has to be replaced, not with an age of austerity, but with an age of opportunity.”
Beneath the pain, however, is a larger optimism rooted in the idea that Australians don’t need their government to subsidize everything they do. “We are a nation of lifters, not leaners,” Hockey said.
Canberra is about as far from New York as you can get, but all democracies face the challenges of paying for unsustainable spending. Especially when government is growing faster than people’s paychecks.
We’re glad to see a government willing to speak so honestly to its citizens about what it can and cannot afford. Pity we have to look so far overseas to find one.