“Government revenue has been decimated,” Wayne Swan wrote in The Australian today. The battle to save the real meaning of ” decimate” has long been lost, but Swan may have been giving a subtle hint to the pedants amongst us about the impact of the recession on tax revenue.
In the February update, Treasury’s figures showed the collapse in revenue in 2009-10 would amount to about 5-6% of all Government revenue. Tonight may well reveal it is now closer to 10%, or over $30b.
Which would more than consume the $19b surplus for 2009-10 forecast way back when in the 2008 budget. Unless there’s been some recent changes in the laws of mathematics, a budget surplus would, if there had been no stimulus packages, still be impossible without $12b worth of spending removed from the economy.
You therefore have to wonder just how delusional — seriously delusional — Peter Costello now is when he tries to maintain he wouldn’t need a deficit. His interview with Neil Mitchell on Melbourne’s 3AW yesterday demonstrated just how much a once-credible figure has slid into a twilight of self-justification and dissociation from the real world. Ignoring Costello’s laboured rhetorical tricks, Mitchell asks four times whether he’d be in deficit if he was still Treasurer, and Costello refused to answer.
Last year on the morning of the Budget, Costello held a bizarre press conference consisting mostly of jokes about journalists. It was clear the man was desperately missing being the centre of attention. And he’s come out again this year to offer his own inexpert analysis of the Government’s revenue problems. Like last year, Costello remains a backbencher, a non-contributor except where he thinks it suits his interests, which seem to revolve around making life difficult for Malcolm Turnbull, a man he loathes with a passion.
Between his complete lack of understanding of the impact of the recession, his peculiar behaviour and his insistent embrace of religious extremists, you have to wonder what mental state Costello is in — whether, having invested so much of his life in pursuing his ambition to become Prime Minister, this rather shallow man is now at an utter loss as to what to do with himself. Particularly because, by failing to bail out when it became obvious John Howard was not going to let him have a go, he missed out on a chance to get some boom-era private sector action.
Barnaby Joyce, too, is a backbencher, a man who is unwilling to contribute or take responsibility. He too feels no compunction about offering his own take on any subject that takes his fancy, whether it be emissions trading or budget deficits. Joyce’s only position is leader of the Nationals in the Senate. The only reason the Nationals even have party status is because Country Liberal Senator Nigel Scullion sits with them. Nevertheless, yesterday at the National Press Club he was declaring the Nationals would oppose any emissions trading scheme and refuse to support any increases in deficit funding. Warren Truss was nowhere to be seen.
There is actually a shadow Treasurer, easygoing Joe Hockey, who is similarly cagey about whether there should be a deficit, although he, like his leader, is more inclined to admit that external events may have had just a little effect on the budget — an effect that of course doesn’t compare to the wholly irresponsible stimulus spending by the Government. Although, when pressed, they admit the infrastructure component of the stimulus packages is acceptable — which is about two thirds of the two packages combined.
One of the Opposition’s ongoing problems is lack of a single clear message. Not merely do they have multiple mouthpieces offering commentary and outlining Coalition positions, they appear to have multiple messages as well. Stimulus spending on infrastructure is OK, particularly if it’s in their own electorates. Deficits are a great evil, and there’d be a smaller one under them — but by how much, they won’t say.
They need to get their act together quickly. The Government isn’t the only side with a complicated Budget message to sell. At least the Government has a single story and a tightly-controlled delivery mechanism. The Coalition is all over the shop. But clarity might reveal that the Coalition is, like Costello, still thinking in boom-era terms, when capitalism was an ATM that endlessly churned out money and budgeting was a problem of devising boondoggles and handouts to waste cash on.