FOREX NEW YORK COMPANIES

When it comes to an ungrateful electorate, the proof of the pudding is in the bleating, writes Peter Hartcher.

It was framed as a question to the Prime Minister, but really it was the first of three consecutive demands from voters, all quite similar, that Julia Gillard faced live on national television:

"Why is it that the middle class of Australia, the backbone of the economy, always suffer under a Labor government?" demanded Rebecca Broughton when she had her chance to speak directly to Gillard on Monday night's Q & A program on ABC TV.

"Why does your government penalise hard-working middle-class Australians with a new carbon tax as well as taking away or reducing private healthcare subsidies?"

Next was Pamela Tarn of Toowoomba, who said she was a single mother earning $20,000 to $30,000. Her daughter was at university in the city, where the government payment of a youth allowance "barely covered" her rent: "I am on no government benefits. How am I better off on your carbon tax rebate?"

Then a man asking: "The assistance packages that are coming through, how can you guarantee that those are actually going to go to where they are supposed to? For example, electricity, because people get bills in different intervals of time."

The carbon tax was a specific point for all three questioners. But, in essence, all sounded as though they were asking Gillard the same question: "Where's my government handout?"

These voters were accusing the Prime Minister of not giving them enough money, or of taking away an existing benefit, or perhaps imperfectly delivering a new benefit. Gillard's carbon tax "sorry" payments are feeding an ugly new flush of an established Australian distemper, a mindset of entitlement.

Even allowing for the fact that Broughton's question sounded like it had been drafted by the Liberal Party secretariat, the ganging-up on Gillard was nonetheless a stark illustration of the entitlementism that seems to grip the Australian electorate ever more tightly.

It was remarkable for the brazenness and the utter shamelessness of the demands on the national Treasury. These voters were not complaining in the angry anonymity of talkback radio or political blogs but directly to the Prime Minister on national TV.

There was no apparent unease at the thought that they were demanding something that would have to be paid for by the labour of others. How should a national leader answer the voters clamouring for their "entitlements"?

Perhaps start by explaining that it's the role of the state to create opportunities for work and wealth, to supply essential public services, and to provide a social safety net to catch the most vulnerable.

But to explain that it's not the role of the state to promise federal handouts to anyone who thinks they have a gripe, or to give out cash to create equality of handouts for all.

And to explain what happens in countries where the sense of entitlement gets out of control. That should be easy today - just point to the crisis-struck countries of southern Europe: Greece, Spain and Italy.

But, of course, Gillard said none of the things that a national leader might say. Instead, she tried to soothe the voters, to mollify them, and to assure them that they're being well taken care of.

Australian entitlementism was already becoming a problem, and it's now the tiger that Gillard is riding and dare not dismount.

"This has been going on for a long time now," says Rebecca Huntley, a director of Ipsos Mackay Research, which probes the attitudes and opinions of the electorate. "Australians always think the government should be doing more for them."

So much for rugged Australian individualism, the pioneer ethos and the spirit of Anzac that our leaders love to tell us about inbetween handouts.

"As much as we complain about pollies," says Huntley, "we still think government is central to making our lives work," and not just by providing clean drinking water, public education and safe streets: "For instance, our desire to live in urban mansions." Apparently it's the government's job to make sure we can all have one, and we're cranky if we can't.

"Very rarely do people talk about community-based solutions or personal solutions - it's almost an afterthought."

Measured as a share of Australia's economy, the public sector is still of manageable proportions in Australia and public debt is one of the smallest in the developed world.

But measured by the people's casual acquaintance with and expectations of the system of government benefits, it's another experience altogether.

Asked whether they or their partner had received any one of six government benefits in the last five years, seven out of 10 Australians said yes, according to a poll of 2001 people conducted by the Australian National University last year.

"To me, that's huge," says the ANU professor of political science who supervised the poll, Ian McAllister. "Where once government services acted as a social safety net and were targeted at relatively small minorities of citizens with particular needs, the tendency has been to provide services to a wider population base."

Forty-six per cent of respondents said they'd received one benefit from the government, and 21 per cent said they'd received two.

Or put the other way, only 27 per cent said they or their partner had not received any of the benefits.

Most Australians were brought up on the story of the Magic Pudding, Norman Lindsay's tale of an inexhaustible supply of delicious pie, replenished by magic.

Just turn the pudding, and the flavour changes, steak one moment, steak and kidney the next, apple dumpling the next. The private health insurance rebate was received by 44 per cent of respondents or their partners, family tax benefit A and B by 26 per cent, the age pension by 13 per cent, the childcare benefit by 11 per cent, and the unemployment benefit and the disability pension by 7 per cent each.

Taking these benefits, and the many other public goods supplied by the state such as public hospitals, public airwaves, and public sanitation, yet still expecting more, shows a failure of political management of voter expectations. And, of course, voters make the contradictory demand that governments live within their means and keep interest rates low.

Somewhere along the way, many seem to have lost sight of the fact that the magic pudding was a fairytale. Australians seem to have taken it as a principle of fiscal management.

And now the household handouts announced in last month's budget, the $5 billion carbon tax apology. This ad hoc blurt of money is over and above the structured, four-year, $15 billion carbon tax compensation package.

"From our qualitative research, my feeling is that governments get far less political capital from this kind of chunks of cash than they think they do," says Huntley. The anger and resentment on display on Q & A seemed to illustrate just this sort of backfiring. If Gillard expected any gratitude, there was none on display.

"Because the TV ads for the household assistance payments weren't upfront about their purpose, completely disconnected from the carbon tax, they were confusing. And then people Googled them on their phones, which we know they do. And then they get the feeling you're embarrassed by your policy.

"Once you start bolting on payments to a policy, the policy itself is seen as a failure. I think the whole psychology of it fails."

A Liberal backbencher and former adviser to John Howard on industrial relations, Jamie Briggs, pounced on the latest part of the Gillard payoff plan yesterday: "Like a Nigerian hoax email, Julia Gillard has hit Twitter and letter boxes with her promise #CASHFORYOU," using the # notifier of a topic title on Twitter.

"Like her Nigerian counterparts, there's a catch with this #cashforyou, the catch is the #cashforyou is borrowed money. The #cashforyou means #debtforyourkids."

He's right, of course, that in the long run there is no such thing as "free money" from the government. One way or another - through our taxes, through reduced government investment in vital services and infrastructure, or through government debt for which we and our kids are ultimately liable - we are ultimately paying for it ourselves.

Joe Hockey said in his speech in London in April that the European debt crisis was the result of "a chronic failure of the democratic process". The crisis showed that the Era of Entitlement was over, Hockey said.

"The entitlements bestowed on tens of millions of people by successive governments, fuelled by short-term electoral cycles and the politics of outbidding your opponents is, in essence, undermining our ability to ensure democracy, fair representation and economic sustainability for future generations."

Hockey, like Briggs, is quite right. They should know. Both were part of the Howard government, which took "the politics of outbidding your opponent" to new levels of extravagance. But the key lesson from Howard's experience was that it did not work.

When the electorate is sick of a government, it will vote it out of power regardless of how much cash it hands out. Their comments suggest that Briggs and Hockey have learnt this lesson. But the Gillard government, evidently, has not. Bribing voters is neither necessary nor sufficient to winning power.

Rudd demonstrated this at the 2007 election when he made fiscal restraint, not extravagance, a virtue.

"This sort of reckless spending has to stop!" Rudd exclaimed as he deliberately underbid Howard.

Gillard failed to learn the lesson. Labor, it seems, is fated to learn it all over again. Voters will take the money, Prime Minister, but they will not respect you for it. You saw that firsthand on Monday. The electoral gratitude you court is a figment of your political imagination. The cost to the national Treasury is not.

Peter Hartcher is the political editor.