Paul Murray: Why the State Government’s short-sighted focus on welfarism ultimately benefits no one

Giving away other people’s money is the easiest thing in the world. Which is why Premier Roger Cook deserves no applause for his decision to commit $103 million of taxpayer funds to cash handouts for the parents of children in WA schools. There is no doubt that the people who receive the payments will appreciate the Government’s largesse. Which doesn’t make it right. When a government that is $27 billion in debt decides to give away part of its $3.3b annual cash surplus for what are blatantly political reasons, it is effectively borrowing the money. In this instance, the Government admits it doesn’t know how the $103m will be spent. That goes against every principle of responsible financial management. The cash will not materially change any family’s financial circumstances, making the handout, at best, tokenistic. There will be no lasting benefit from the WA School Assistance Payment. It is a simple sugar hit that builds nothing and will be spent in the blink of an eye. For example, with $100m the Government could have constructed another three primary schools in John Carey’s electorate to take the pressure off the one bursting at the seams in Highgate that it neglected for Labor’s first six years in office. By not using the $103m to pay down State debt, the Government increases the economic drag on its Budget and further burdens not only existing taxpayers, but their children into the future. Sorry for the bucket of cold water. But someone has to call out this welfare state bulls..t before we drown in it. Many people in this country are doing it tough. But you only have to go out on the weekend to witness that lots who grizzle about their financial position are still spending like drunken sailors. A much better case could be made for cost-of-living relief payments to impoverished pensioners. Most families with school children at least have two sustainable incomes. The welfare mindset problem is even more pervasive than just pandering to families. The schools payment comes hot on the heels of Cook’s unquantified royalty holiday for struggling nickel miners — including the hugely profitable BHP. Corporate welfare. That will probably end up costing a similar amount of money to the schools payments over the prescribed 18 months, but likely fail its objective of saving WA jobs because it doesn’t make cheap, Chinese-financed Indonesian nickel more expensive. This welfarism is not isolated to royalty-rich State governments. For example, why should Arafura Rare Earths project get $840m of Federal taxpayer debt to fund a lithium mine likely to make billions? Why should billionaire Andrew Forrest get a huge chunk of the $2b the Albanese Government has pledged to spend on as-yet unproven hydrogen technology? Venture capitalism should not be contingent on public funds. That’s just rent seeking. No modern entrepreneur harvests subsidies better than Twiggy. And very few get more tax deductibility for their “philanthropy” as well. However, it has now become a lucrative business model in the renewables age, which apparently cannot succeed without government assistance. We are yet to see whether many of these green-dream projects are economically viable without ongoing taxpayer support. But back to Roger Cook’s latest cash splash, echoing his mentor Mark McGowan’s lavish programs to pick up the tab for domestic power bills. At least McGowan’s largesse was better targeted, while delivering real household relief. The money could only be spent on an increasingly expensive essential — electricity. However, it was also a cynical round robin which saw the cash go straight back into government hands, notably its insolvent power utility, Synergy. And what a wonderful synergy that little sleight of hand provided. A nice way to prop up a failing government-run business while appearing community-minded. Cook’s follow-up misses the mark completely. How much of this money purportedly for the benefit of school age children will be pissed up against the wall by their parents? We simply don’t know. How much of it will go to families that just don’t need it? We don’t know that either. And neither does the Government from the responses to these questions put to Treasurer Rita Saffioti: Saffioti chose not to answer each question directly. Her response studiously avoided the two critical issues of means testing and how the handouts would be spent. “Our priority is to get financial assistance to those families as soon as possible and the WA Student Assistance Payment delivers on that, putting money directly into the pocket of parents,” a spokesperson said. “The two payments take into account the higher costs associated with high school students in terms of school equipment requirements. “Treasury reviewed the student assistance payment and does not anticipate the payment will have an inflationary impact based on the overall household consumption in WA.” Saffioti’s office said NSW had delivered a similar scheme using vouchers which could be spent in a wide range of stores: “This model was considered, however was not pursued as it failed to provide ongoing benefit to small and medium businesses in WA.” So is it cost-of-living-relief for families or a stimulus package for business? That’s a confused response. On the GST question, the reply was this: “WA should not be penalised for our responsible budget management and capacity to deliver cost-of-living relief.” But we will be. And on the issue of these payments adding to State debt, the government deflects with this: “State debt is not at record levels.” WA’s debt is predicted to drop $2.2b to $27.1b this year, but official Treasury estimates show it soaring to $38b by 2026-27, which would be a record. And Saffioti’s cost blowouts on Metronet threaten the push that figure even higher. When Opposition MPs raised the question of means testing on Tuesday, they were ridiculed by Education Minister Tony Buti. “It is a joke when the members of the Nationals WA, also known as the secular agrarian socialist party of WA, who have never had any fiscal responsibility in their lives and do not know how to balance the books, talk about means testing,” he said. “All they want to do is spend money and they do not care whether the books are balanced.” So, wrong for the Nationals, but OK for Labor? Opposition Leader Shane Love asked Cook this question: “Can the Premier guarantee that this cash will be spent on kids’ schooling?” Cook replied: “We know that there are costs associated with sending kids to school in any term. The Leader of the Opposition should stop being such a negative pessimist. This is a great policy; it is one that is welcomed by everyone, and he should welcome it, too.” Australians have unfortunately become accustomed to government handouts. They were made during the pandemic, earlier in the GFC and even before Peter Costello’s misbegotten 2004 baby bonus, which fuelled a well-documented national booze and gambling binge. Because the intended outcome of recent handouts was only to stimulate the economy, governments didn’t care how the money was spent. We are in very different times. The pandemic splashes left a nasty inflationary hangover that only abstinence will cure. And a slow-drip welfare state mentality eventually becomes a social cancer.