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Federal

Apr 1, 2014

Fiscal fools: give us a break on the budget BS, Joe

Joe Hockey's pre-budget spinning has veered into outright falsehoods as he attempts to claim Labor has boobytrapped the budget. Bernard Keane and Glenn Dyer report.

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We’ve now entered the traditional pre-budget softening-up period in which treasurers engage in expectations management ahead of the fiscal set-piece of the year in May. But even given that, Joe Hockey is treating us as complete idiots.

The line Hockey has been pushing for some days now, and which he gave a big push to yesterday in a flurry of media appearances, is that not merely did Labor hide the level of deficits in the current budget cycle, but that it left a series of hidden spending commitments in the unpublished years beyond forward estimates. Hockey has been circulating a document to journalists portrayed in the media as a “Treasury analysis” that shows how “the Coalition inherited an unsustainable budget position” and Labor “hid [expenditure] from the public”. Hockey would like us to see him as a budgetary innocent who has found himself in the middle of a fiscal minefield planted by Labor.

Well here’s the document, and it isn’t a “Treasury analysis” — it’s prepared by Hockey’s media adviser, former Australian Financial Review journalist Gemma Daley. And if Hockey seriously expects us to believe his latest argument, he must have nothing but contempt for us. This is Hockey yesterday:

“We didn’t anticipate that everything else would be of equal or larger scale as a tsunami coming across the water. The fact is Labor’s left us with a massive forecast increase in foreign aid, a massive increase in defence – for example in one year, there’s meant to be a real increase in defence spending of 13 per cent, a 66 per cent increase in foreign aid.”

At another media conference, he said:

“If no action was taken on the budget, what the fifth-year deficit would look like, contrary to what both Labor promised was a surplus, if no action was taken, based on the approximately 6% increase in expenditure between the fourth year and the fifth year, which Labor locked in on NDIS, on Gonski, on overseas aid, on hospitals, on defence …”

Well, um, tsunamis are actually tiny when they’re on the ocean — but never mind that, let’s look at the detail. Labor in fact revealed the funding for the National Disability Insurance Scheme — or DisabilityCare as it had been renamed — in the budget last May, with new spending broken down out to 2019:

In addition to the numbers in the budget papers, there was a specific “glossy” with funding graphs for DisabilityCare and one for education funding as well, which was still being finalised in deals with the states. The increase in foreign aid was also in both the budget papers and a ministerial statement by Bob Carr — not that the government got any credit for it, because it was actually a reduction, with the government’s Millennium Development Goal commitment to lifting foreign aid to 0.5% of gross national income put back another year to 2017. The government spelt out its planned increase in foreign aid up to and including 2017-18.

In fact in question time last week, Labor invited the Prime Minister to spell out the government’s MDG policy, which he duly did: aid is to reach 0.5% of GNI when the budget returns to surplus. Which raises the question of why, in Hockey’s Mid-Year Economic and Fiscal Outlook in December, Hockey left Labor’s MDG aid funding increase intact, in defiance of the government’s own policy. The answer, of course, was that it would inflate the budget deficit for 2017 and beyond.

As for defence, the Gillard government gave the portfolio a “guidance” that it would receive around $220 billion in the six years from 2017-18, which Hockey’s document proposes to mean funding would leap 13% in 2017, when in fact the “guidance” reflects a growth rate in defence spending from 2017 lower than the average between now and 2017 of nearly 7%. And remember that Labor was repeatedly criticised for decreasing defence spending — every armchair general and arms industry lobbyist in the joint was whinging about how we weren’t spending enough taxpayer money on buying gear from the US military-industrial complex. “Military spending slumps to 1930s level,” The Australian‘s Paul Kelly shrieked. The 1930s theme — hint, appeasement!­ — was picked up by the Coalition, including Tony Abbott and Barnaby Joyce. Abbott “aspired”, he said, to lift defence spending to 3% of GDP.

So, Labor were both neo-Chamberlain surrender monkeys for not spending enough on defence when in government and now, magically, reckless spendthrifts who committed too much to defence at the same time.

Hockey’s fiscal innocent act is a little hard to believe given we were told what an exhaustive, indeed exhausting, shadow ERC process Hockey was leading within the opposition at the time to establish its fiscal credibility.

And above all, there’s this point: if Hockey seriously believes his own claims about the budget beyond forward estimates, why did he remove Labor savings measures that offset future spending? Why did he remove the 15% tax on superannuation income over $100,000 a year, costing the budget billions beyond forward estimates, for the benefit of high income earners? Why did he restore the Fringe Benefits Tax rort on novated leases — remember Joe being photographed in front of a sports car? And why have Hockey and his leader pushed for the abolition of the mining tax, which even in its crippled form, according to Hockey’s own MYEFO, is worth more than $3 billion over forward estimates? Eventually it will be the only way of recovering some of the profits offshore owners of LNG and iron ore projects will make and ship overseas (over 60% of these projects are foreign owned or controlled).

Then there’s the silly decision to hand $8.8 billion of borrowed money to the Reserve Bank in one hit, when it doesn’t need the capital. And the sale of Medibank Private — a $4-5 billion contribution to the budget — will be spent on roads because Abbott wants to be an “infrastructure prime minister”, when it could cut the budget deficit or the debt. That could be $13-14 billion off the deficit and debt right there — or an interest saving of more than half-a-billion dollars a year.

Hockey is talking about sharing the budget burden around, but that’s only after the government plans to increase its own spending for political purposes and sought to hand billions of dollars in tax revenue back to foreign mining companies, large carbon emitters and the well-off in the community — revenue that would have offset exactly the spending on education, disability and foreign aid that Hockey is now claiming to have only just discovered.

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50 thoughts on “Fiscal fools: give us a break on the budget BS, Joe

  1. The Liberal party have become the experts at spinning a message without scrutiny from the public. They know how to get the average Joe to repeat their false message at the kitchen table and around the BBQ.

    Everything they are submitting to change is focused on the top down philosophy by feathering the nests of the rich so the plebs can fight over the scraps as we see in the examples in this report. One that is missed is the paid parental scheme. You will notice most of the reforms to help the underprivileged are being worn away and the Gonski report is being challenged …err sorry …reviewed at every step.

    They will push their unfair austerity measures and assist the rich until their political capital is exhausted.

  2. Indeed, why Abbott being allowed to misrepresent the budget position when he has dismantled savings measures due to be implemented by Labor and has committed to rash spending measures of his own? These include his gold plated parental leave scheme and his costly and ineffective Soviet style central planning approach to dealing with climate change. Crying poor while using taxes to pay polluters to do things like carbon sequestration a process which scientists say is already being implemented is a joke, an expensive joke.

  3. Crikey is the only place brave enough to scrutinise the Liberals’ tactics of painting the picture of an economic armageddon.

    This is the only Western nation with a AAA credit rating after the GFC, right? The only nation not to go into recession?

    Please Joe, you’re a bad actor at worst.

  4. “Where ya goin’ with the family cow, Joe?”
    “Someone told me there’s this place I can get a handful of magic beans for her!”

    [“Labor booby traps”? How much did Howard & Cosjello’s tax cuts and Iraq cost the deficit?
    Spot the booby?]

  5. The media will parrot this spin from Hockey and the tragedy is that most people will accept it as fact. Unfortunately only a small minority take time to read proper analysis pieces like that from Crikey.

  6. I find it easier to assume that any public statements by Abbott, Hockey, Pyne et al are half-truths, disinformation or outright lies unless corroborated by a reliable source (which excludes any News Corp outlet). I heard some of the interviews yesterday. It would seem that, inter alia, Joe Hockey is laying the ground for the Abbott Government’s backing out of more election commitments, including the NDIS. That plus, of course, blaming the Abbott Government’s ongoing failures on its predecessors.

  7. “mining tax…only way of recovering some of the profits offshore owners of LNG and iron ore projects will make and ship overseas”

    So state royalties are going to be abolished?

  8. Hockey’s fiscal innocent act is about as believable as his crocodile tears for those who were to be sent to Malaysia under the ALP people swap deal. Ya gotta give it to Joe, he can play the part.

  9. The Libs went to the Herman Goering school of propaganda – “if you tell the same lie often enough people will come to believe it as truth” and as the Murdoch press is Der Sturmer is this analogy it will be repeated and repeated and repeated.

  10. Amongst the LNP and their rich backers,it has not gone unnoticed, that following the GFC the very rich in countries like the UK and the US have made out like bandits.
    The fire sales that were made of government assets there, allowed the super wealthy to snap up bargains at rock bottom prices. They were then perfectly placed to provide (at a cost) the services and infrastructure that the virtually bankrupt governments couldn’t.
    To the free marketeers this is the utopia they wished for. For the poor benighted citizens of these countries, it means low wages, high costs for utilities and limited government services.
    Hockey has been champing at the bit to emulate this set of austerity policies in Australia for at least the last three years. The only problem is that the Australian economy isn’t a basket case, it’s considered to be one of the healthiest in the Western world with an enviable AAA rating.
    This is why Hockey has been deliberately down playing the Australian economy (in itself a treasonous act) and creating the false impression that government spending is out of control.
    A few more lies here and there, laying the reason for cuts and job losses on Labor are all part of the fun.

  11. This budget is going to be a howler – there is no sign whatsoever of Big Joe having the nuts or brains to fix the structural deficit, created mostly by Howard….just more crack-pot ideology that will increase the mess for someone else to clean up after this incompetent lot have been sent packing.
    But let’s hear some hard arguments from Labor about how to fix the budget properly, and maintain or improve the services we all deserve – fair-minded Australians will listen to good arguments for why we should contribute to that.

  12. Part 1

    Amongst the LNP and their rich backers,it has not gone unnoticed, that following the GFC the very rich in countries like the UK and the US have made out like bandits.
    The fire sales that were made of government assets there, allowed the super wealthy to snap up bargains at rock bottom prices. They were then perfectly placed to provide (at a cost) the services and infrastructure that the virtually bankrupt governments couldn’t.
    To the free marketeers this is the utopia they wished for. For the poor benighted citizens of these countries, it means low wages, high costs for utilities and limited government services.

  13. Part 2

    Hockey has been champing at the bit to emulate this set of austerity policies in Australia for at least the last three years. The only problem is that the Australian economy isn’t a basket case, it’s considered to be one of the healthiest in the Western world with an enviable AAA rating.
    This is why Hockey has been deliberately down playing the Australian economy (in itself a treasonous act) and creating the false impression that government spending is out of control.
    A few more lies here and there, laying the reason for cuts and job losses on Labor are all part of the fun.

  14. Part 2:1

    Hockey has been champing at the bit to emulate this set of austerity policies in Australia for at least the last three years. The only problem is that the Australian economy isn’t a basket case, it’s considered to be one of the healthiest in the Western world with an enviable AAA rating.

  15. Part 2:2

    This is why Hockey has been deliberately down playing the Australian economy (in itself a treasonous act) and creating the false impression that government spending is out of control.

  16. This moderation software is insane. As long as I only post a short paragraph it doesn’t care but woe betide you if you make a long reasoned argument.

  17. Part 2:3

    A few more li*s here and there, laying the reason for cuts and job losses on Labor are all part of the fun.

    Evidently the moderation software doesn’t like the word L I E S. Give me strength

  18. Crikey, you are moderating the word L I E S in an article discussing the Abbott government, this is surely an impediment to free and honest speech as you can’t describe their output as anything else.

  19. Onya for hanging in there Diddy. Can anyone provide me with a reasonable explanation as to why the abbott gov. wants to dismantle entities that add to the govs bottom line e.g. CEFC.

  20. We all know how this story ends … people struggling at the bottom of the heap will have to make do with less while those sitting atop of the heap will have their corporate welfare entitlements extended. The age of entitlement is over (small print follows) if you are poor.

  21. Hi GK, the reason why the current government wishes to dismantle the CEFC is purely ideological. According to the IPA/LNP view point, only the ‘free market’ can decide what industries or technologies are worthy of investment. The promise of massive short term profits are the only criteria that should be taken into account when assessing the worth of any investment.
    Old business models like burning coal for electricity are also seen as tried and trusted performers even if they are actually highly inefficient and very reliant on government largesse (although this is hidden by tax breaks and sweet heart deals giving them virtual monopoly in certain areas).
    The CEFC is a threat to the status quo and could mean a loss of earnings for critical LNP backers.
    The idea that government can pick favourable outcomes (i.e. Cleaner energy production at competitive rates) is a complete anathema to the Abbott’s bunch.
    They cannot critically think about anything that deals with forecasting what challe may face in the future as they are totally wedded to a mythical utopian past

  22. Australian politics seems to become more grotesque every day. The current government has tumbled to the fact that they can lie with impunity and there is no-one in mainstream media (is Crikey mainstream yet? I’m not sure – that’s another discussion) to take them to task. I must admit I’m starting to despair … the whole fabric of political communication in this country (politicians, the media and the electorate/audience) is too threadbare to be able to deal with the complexities of a modern democracy. We are seeing the ascendancy of the malleable and stupid as never before: they offer the easiest route to power for any politician lacking scruples and modern communications technology has made them more accessible than ever.

    In any electorate, half the voters are below the average intelligence of that electorate. It’s much easier to win over the less intelligent than the more intelligent (three-word slogans; appeals to xenophobia) but once you have them all you need is a few of the greedy and self-serving from the other half and presto! You have your majority and your seat in parliament. Ever since Howard, the Liberals have made an art-form of this tactic and Joe’s showing every sign of continuing it.

  23. Good article Bernard.

    The details may not be perfect (@mark duffett) but it’s a damn sight more perceptive and analytical than most of the muck written in the mainstream media.m

  24. @ Graeski – I agree.
    Speaking of those with below average intelligence – did you happen to watch Q & A on ABC TV Monday night? If not, I recommend everyone does so, purely for the ‘tweets’ which are screened throughout the program. Much of the discussion centered on human rights, which necessarily involved the international scene. The sheer ignorance, xenophobia and down-right rudeness was breath-taking, particularly as all the program participants were excellent.
    The rAbbott and his government got the thumbs down from a number of the international panelists, who seemed to be suggesting that Australia had lost the plot on a number of issues since this government was elected. It appears we can dish out criticism, but we can’t take it!
    As for Joe Hockey – I bet he can’t even spell economics, let alone understand it. Either he is a complete idiot, or he thinks we all are!!

  25. On the lies & obfuscation front, nothing beats my favourite loony toon – the constant mantra that “the mining tax is crippling WA and costing consumers heaps so we’re abolishing it because it was so badly designed that it collects nothing”.
    Que?

  26. @ CML, Graeski
    Also agreed. The galling aspect of the Australian electors I find is when they say they aren’t interested in politics or all the politicians are the same, so they gormlessly vote for the slogan rather than the policy.
    Can’t wait till the budget and all the bleatings from the proletariat when they are well and truly screwed. I am looking forward for a few “I told you so’s”.

  27. The Labor Party sometimes has difficulty balancing budgets due to the fact that they try to help too many people, where as on the other hand, the Coalition doesn’t care how many people they hurt, as long as they’re Old, Sick, or Poor!

  28. We keep talking about the politicians. We should be talking about the frightening degree to which the power and political bias of the dominant mainstream – Murdoch – media is not only deciding the agenda, but moulding our attitude to politics and politicians.

    Julia Gillard was that rare type of politician – a Prime Minister for the 21st Century. For those who aren’t, pick any European, American or Third World head of government.

    Abbott, like Reagan, is a nonentity whom its suits the vested interests of the media’s patrons to present as the semi-silent Man of Steel. Mainstream media (including many journalists from Fairfax and Their ABC as well as Murdoch’s ideological battering-ram The Australian) is once again performing dreadfully. Its utterly uncritical acceptance of every evil Noalition act is in striking contrast to its relentless campaign of vilification against Gillard Labor, including the then eager, utterly uncritical, promotion of any Noalition position.

    Propagating Noalition positions, however distant from truth and reality, are Standard Operating Procedure – whether regarding debt, the deficit, climate change, education changes, broadband, or of course refugee-hate issues. Critical issues are virtually ignored – the tensions “we” are creating within our region, exponentially increasing cost of stubborn refusal to adapt to climate change, or even the equally stubborn refusal to fund the exponentially increasing costs of the Big Australia so eagerly promoted by politicians.

    That mainstream media journalists could be so completely indifferent to such disasters demonstrates mainstream media’s shameful and sycophantic commitment to ensuring the manufacture of consent to such destructive behaviour – as well as its general tendency to regard reality purely as a form of potentially award-winning entertainment.

    Thus transnational capitalism, the politicians they own, and their mainstream media collude to ensure that our anger at their viciously anti-worker and anti-social policies is either defused or redirected to other (politically powerless) groups such as asylum-seekers. While we obsess with the official demon, we neglect the evils being committed against us.

  29. It’s not, sorry, The_roth.

    “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

    Joseph Goebbels.

    As ever though, Joe took his inspiration from his idol, Hitler, who wrote in Mein Kampf:

    “…in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.”

  30. Apologies, The_roth. I checked out your link and did a bit of a surf and it appears you’re on to it in saying there’s no real evidence either way. What got me started was the debate as to whether it was Goebbels or Goering and, convinced it was the former, I made the schoolboy error of Googling “the big lie goebbels” and – lo and behold! – found what I was looking for: a site attributing it to Goebbels. Bloody web!
    I love my history – still trying to figure out the humans! – and have read quite a bit on the Nazis and WW2 and that quote sounded so much like something Goebbels would say, given its similarity to his idol’s stated ideas and that his job as head of propaganda was to run and control the lying. Ah well, live and learn.
    The Mein Kampf quote is accurate however, and a great example of Hitler’s brand of hate-filled, twisted insight into human psychology. Hasn’t lost its relevance either, more’s the pity. Cheers.

  31. Dear Mr Hockey. How are you today Sir? feeling better than when you told a big fat fib to the nation? When you made Aussie history by becoming our greater prevaricator ever?
    Mr Hockey, to trust anything that comes from you would be like believing that Gina Rhineheart has decided to be loving to her own kids.

  32. @ Tyger Tyger I’m a bit of a history nut myself and it did sound like somethimng the Nazi hierachy would say. Still misquote or not it hasn’t stopped conservatives world wide trying to put its essence into practice sad to say.