It’s the bureaucratic equivalent of an incoming Government announcing that the parlous state of the budget means it can’t keep its promises. With every new Federal government, the Department of Finance will dust off long-held savings initiatives in the hope – usually justified – that its new masters will bite.
That’s why Commonwealth departments have started the year having to respond to a range of savings proposals identified by Finance (no longer DOFA, but christened DOFD by this most acronym-unfriendly of governments).
Many of the Finance proposals would terminate major programs established under the previous government, or suggest radically cheaper ways of achieving the same outcomes. Many of them will have come from Finance comments on Cabinet submissions under the previous Government, when they would’ve been ignored for the sake of political expediency. Now, good arguments have to be made about why programs should be retained in their current form.
Finance knows that it only has a limited period in which to drive these sorts of savings. It will probably be one Budget, although the 1996 election was timed so that it had two Budgets under the new Howard Government. Thereafter, political risk aversion kicks in. Brave politicians who were happy to slash spending with a full term ahead of them will drop their knives, especially when backbenchers start complaining. But for the moment, the Prime Minister and Treasurer, who clearly need to be seen to do something about inflation and government spending, will be prepared to endure the political pain of cutbacks.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Problem is, it’s a shell game. This government was almost as profligate in its election promises as the spendthrifts it replaced. Not just tax cuts and computers in schools, but scores of middling and micro-promises for new agencies, local roads, regional programs, advisory councils and local sports ovals. Unless Lindsay Tanner and his merry band of razor-wielders seriously hack into spending, both by cutting back programs and abolishing some entirely, the net fiscal effect will simply be a transfer to a new range of programs.
If Finance could apply the same rigour to the Government’s promises as well, then a serious dent in spending could be achieved. After “core” and “non-core” promises, that’s not going to happen, and the Budget will be the worse for it. Call it John Howard’s last little gift to the Australian economy.