Last week’s “unintended” Treasury leak about the unsustainable state of the budget fooled nobody who’s been around the block. It is an old trick: float a policy balloon, wait for the howls, then retreat or advance, depending on which way the wind is blowing.
Fiscal discipline? We all cheer for it as long as it doesn’t hit our own slice of the pie.
The Treasurer’s challenge is less about balancing numbers, and more about navigating the swamp of human psychology. We feel the pain of losing a perk much more strongly than the pleasure of gaining it.
Daniel Kahneman called it “Loss Aversion”.
Hand out a benefit to appease a small group, and you’ve just set a trap for your future self. Try clawing it back, and the noise will make a toddler’s tantrum look civil. Ever tried taking a birthday present from a six-year-old? Good luck.
That’s how government spending grows. Drip by drip, group by group. Give out enough trinkets and nobody notices until it’s time to start collecting them back. Suddenly, the losers organise, mobilise, and scream bloody murder, while the rest of us just mutter, shake our heads at the stupidity of it all, and pay the bill.
Take the latest fuss over super accounts above $3 million. Only a handful are affected, but the outrage is theatrical. Why? Because the few that are in line to benefit do not want that benefit stripped away. Meanwhile the vast majority of us will not be affected, but do tend to be caught up in the emotion of being rorted by the government, again, without understanding the facts.
Nobody wants their treat taken away, but most are perfectly happy to see cuts, as long as it’s not their treat on the chopping block.
Maybe we’re just a nation of optimists who secretly believe we’ll all be in the $3 million club one day. Dream on.
The real leak here? Not Treasury’s numbers, but the enduring political tactic: float a “mistake,” watch the reaction, then call it consultation. Mr. Chalmers is no stranger to policy trial balloons.
Header courtesy of DALL-E
