Just Who Is Playing Politics With Treasury?

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In 1895, an obscure Viennese psychiatrist by the name of Sigmund Freud coined a term we still hear quite commonly today.

In a letter to his friend, the scandalous ear, nose and throat surgeon Wilhelm Fliess, Freud came up with the idea of “projection”: a defence mechanism by an individual who assigns his or her own shortcomings to someone else. Some paranoid patients, Freud wrote, would try “to fend off an idea that is incompatible with the ego, by projecting its substance onto the external world”.

There's been a fair bit of projection emanating from the Coalition in recent times. The main target of projection seems to be the Department of the Treasury, which the Coalition believes has trouble doing its sums.

Shadow Treasurer Joe Hockey has been complaining about the “politicisation” of the Treasury and other parts of the public service for some time now. In September last year, he accused the government of politicising the Treasury and the public service, after Wayne Swan released Treasury costings of Coalition tax policies showing they would slug business with $4.6 billion in extra taxes. In February, Hockey threatened to fire Labor public service appointments unless Wayne Swan consulted on them with him first.

For much of this year, Hockey and Opposition Leader Tony Abbott have regularly questioned the Treasury's budget figures. For instance, the reason they have given to explain why the Opposition won't release costed policies is that they're waiting for the pre-election economic and fiscal outlook statement – known by its confusing acronym as the “PEFO” – which will be released around the end of August. Whilst doing so, they have regularly suggested that the budget figures can't be trusted.

Hockey has also kept up a sustained attack on the Treasury's economic forecasts. After the Budget last week, Hockey claimed that the budget figures were not really the Treasury figures, but were fudged by Labor. “Well I don't believe they're Treasury's numbers,” he said last Wednesday. “I think they're Wayne Swan's numbers and that's a starting point because his name is on the front of the document."

This week, the attacks against the Treasury were forcefully rebutted by none other the agency's boss, Treasury Secretary Martin Parkinson. In a speech to business economists on Tuesday, Parkinson robustly defended his department's faulty predictions, arguing that “the past decade has been a tumultuous period for the Australian economy, defined by some of the largest shocks — both positive and negative — in living memory.”

Parkinson categorically denied that the budget figures had been massaged. “Had we issued PEFO on 14 May, then we would have had the same numbers in PEFO as were in the budget,” he said in response to a journalist's question.

Parkinson's forthright defence did not immediately convince the Opposition. Coalition frontbencher Mathais Cormann told ABC radio listeners that “I don't believe for one minute that the Treasury left to its own devices would have come up with some of the unbelievable assumptions that Wayne Swan and Penny Wong have based their budget figures on.” For his part, Joe Hockey was less than fullsome in his support for Parkinson, suggesting obliquely that he was lying to cover for the Government.

“I would have expected Martin Parkinson to say nothing different yesterday because he is, quite appropriately, a servant of the government,” he said yesterday at the National Press Club.

Conservative attacks on Australia's top economic public servants are nothing new. The previous Treasury Secretary, Ken Henry, was a regular target of Coalition ire, dating all the way back to his time as Peter Costello's Treasury Secretary, when he said unkind things about the Howard government's plans for the Murray-Darling basin. As Wayne Swan's Treasury Secretary, Henry was the target of consistent attacks from the Coalition for his supposedly pro-Labor tendencies.

The criticism of Parkinson is merely the latest chapter. It's in keeping with the highly effective tactics of delegitimation that the Coalition has pursued under Tony Abbott. By attacking the Government's budget figures, as well as the machinery of policymaking itself, the Coalition can strengthen its long-running argument that this is an incompetent and dishonest government.

If that means impugning the reputation of senior public servants, and indeed the institutions of government themselves, so be it. After all, public servants serve at the pleasure of the elected government. Most observers expect Martin Parkinson to walk the plank should the Coalition win on 14 September.

The Australian's conservative commentator Nikki Savva, a former staffer to Peter Costello, isn't even waiting for the election. She wants to fire the Treasury Secretary now. “If there is the slightest whiff of a fiddle or a fudge in the pre-election economic and fiscal outlook,” she writes today, “then the head of Treasury, Martin Parkinson, better start looking for another job.”

That's what makes the Coalition's claims that Labor has politicised the Treasury all the more delicious. As the short survey above quickly demonstrates, the recent attacks on Treasury's independence are a fine case of psychological projection.

While no-one doubts that Labor seeks to put the best light possible on Treasury's economic data, the truth is that it the Coalition that has been playing politics with Treasury. It is Tony Abbott, Joe Hockey and Mathias Cormann who've been playing the politics here, far more than Labor. For the last two terms, no party has been more assiduous and vituperative in attacking the public service for political gain than the Liberal Party. Call it ruthless, call it hypocritical: it has certainly been effective. Voters have rated the Coalition as the superior economic manager in most opinion polls for some time now.

The Coalition will no doubt keep up the attacks on the Treasury all the way up until early September. But sometime around about then, the Coalition will have to reveal some costed policy figures of its own. If the laughably innumerate figures released in 2010 are anything to go by, it's no wonder the Coalition is anxious.

Ben Eltham

Ben Eltham is New Matilda's National Affairs Correspondent.

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