Various subjects

As expected, more problems are emerging in NSW following O’Farrell’s resignation. Most important, perhaps, is that new Premier Baird had approved when Treasurer (with the then Finance minister) the appointment of Di Girolamo to a three-year $100,000 directorship of State Water Corporation. In a TV interview (not mentioned in the SMH article below) Baird claimed this was approved by the “full” Cabinet. Even so, it doesn’t look a good decision.

Further, as pointed out in The Australian’s article in Inquirer below, the use by the ICAC inquiry of a much wider definition of “corruption” (to include breach of public trust) has significance for the Liberal as well as the Labor Party. The fact that last October Abbott banned lobbyists from holding office in political parties suggests he was aware of problems within (at least) the NSW Liberal Party. It also indicates a failure by O’Farrell to (fully) address the problem then.

In commenting initially on the resignation I suggested  there might be more revelations of corruption (in the ICAC definition). That still applies. Some respondents to my initial commentary have suggested I was too “kind” to O’Farrell and his government.

Meantime, speculation continues on the federal budget without substantive economic analysis to support the large spending reductions needed to prevent, as Shanahan suggests below, a damp squib.

Let me be clear here: while there is no doubt that Labor left irresponsibly large spending commitments stretching into the future, commitments for next year (2014-15) are “only” 2 percentage points of GDP above what they were in the final year of the Howard government in 2007-08. It should be politically practicable – and not damaging to the economy unless Keynesianism is allowed  – to return to 2007-08 GDP rates or close to them in 2014-15. Such action would also come close to eliminating the deficit.

But Shanahan has felt it necessary, so close to the budget date, to raise the possibility of a damp squib and to leave the impression that the Coalition has not settled on the main aggregate outcomes. Given the lengthy period since it assumed office, that is a disheartening perspective.  ( I should mention here that an opportunity exists to quiz Hockey at a function in Sydney on Wednesday 23 April –book at www.spectator.co.uk/hockey )

Finally, it is of considerable interest that visiting UK foreign minister Hague has expressed serious concern at the problems faced by the UK in handling extremist Muslims returning from Syria (see report below). Hague says policy action is being taken. Particularly given that an Australian was recently reported as a possible leader of al Quaeda overseas, it is about time Australia issued a policy statement.