So, what the hell is going on with the Coalition’s internal costings process?
Last week there was the embarrassment of Tony Abbott claiming $4 billion in savings from repealing the carbon pricing package, when the savings will have nearly all disappeared by June 30 this year.
This week, courtesy of Fairfax journalist Kirsty Needham, Scott Morrison has been caught out on his bizarre, cheap-as-chips costing of re-establishing offshore processing facilities on Nauru. Morrison has resisted providing a costing for two years, and now we know why. That the parent company of the outfit that provided the costing was involved in a major UN bribery scandal is the sort of thing that again demonstrates one of our many political double standards: if a Labor opposition had made a similar blunder, it would dominate the media cycle for days.
Now there’s the confusion over when the Coalition plans to return the budget to surplus. Andrew Robb initially declined to say when; Joe Hockey’s effort to clarify the issue yesterday didn’t help; David Speers gave him a going-over on the issue on Sky and elicited that a Coalition government would have a surplus next year, and it would be larger than the government’s surplus courtesy of the Coalition’s decision to cut 12,000 public servants.
This morning Abbott further confused things by seeming to say that Robb was right and there wouldn’t necessarily be a Coalition surplus, only that they’d return to surplus “as quickly as possible”.
And that $70 billion savings figure is off again, having been on and off and on again depending on who is talking; yesterday Hockey indicated the Coalition’s savings target was lower than $70 billion, but he wouldn’t say what it was.
And we still don’t know when the Coalition’s tax cuts, heralded by Abbott last week, are scheduled.
It’s true that events in Europe make forecasting trickier than normal. The remarkable track record of Europe’s leaders in making the wrong decision at the wrong time over the past 18 months could yet ensure another financial disaster. But that equally applies to government and opposition. That’s not the Coalition’s problem.
The core of its problem is that, despite all the fiscal hairychestedness coming from Abbott, like all politicians he’s much keener on spending and handouts than savings. Abbott wants to give tax cuts similar to those on offer from Labor, but without a carbon price, depriving himself of revenue. He wants to keep the lift in compulsory superannuation without the mining tax (which Labor itself over-committed anyway). He wants to keep middle-class welfare because it’s “aspirational”. He boasts about how his paid parental leave scheme would be better than Labor’s “glorified Baby Bonus”. He wants to dump a “socialist” carbon pricing mechanism in favour of huge government grants programs controlled by Canberra.
The resulting maths is the painful end of populism: trying to accommodate big hits to revenue while maintaining spending. That’s why it’s not just dental schemes that are now “aspirational”, but the Coalition’s entire fiscal policy, brimful of good intentions and best endeavours but devoid of hard numbers that might prove inconvenient.
Abbott can get away with it because there’s an embedded psychology in voters and journalists, that the Coalition are the fiscally disciplined ones. Forgotten is the profligacy of the Howard years, that saw taxes and spending surge, driving interest rates and inflation up. “Whitlamite” is still the by-word for big-taxing, big-spending governments, when the appropriate adjective should be rather more contemporary.
There are some in the Coalition who are conscious of the party’s record on middle-class welfare. Most won’t speak publicly. Jamie Briggs, who bravely defied the South Australian consensus and took aim at car manufacturing recently, wrote yesterday in The Australian Financial Review about “transfer payment dependency”. Absent, for obvious reasons, was any reflection on the origins of the problem under Howard. But Briggs, whom Abbott has foolishly left on the backbench along with several other talents, outlined a strong case for why his frontbench colleagues should be bolder in explaining how their small government rhetoric will translate into reality.
Apart from anything else, it would also serve to dispel the fog of fiscal confusion about what exactly the Coalition would do once in office.