Coalition Costings Are A Laughable Charade


Well, aren't you glad the Coalition waited until two days before the election to release their costings?

If only.

We were promised “ample time” to peruse Coalition policies. We were promised a detailed set of assumptions and calculations to help understand the costings. Pages of fine detail, exhaustively tested, econometrically modelled, unassailably transparent, clear for all Australia to see. We didn’t get it.

What we got, after months of trepidation, was eight lousy pages. Three of the Coalition’s most expensive and controversial policies weren’t even published. I don’t know about you, but I’m of the opinion that a “final update on federal Coalition election policy commitments” should probably include border protection, Direct Action and the NBN. But no, figures for these three important policies were not released. The Coalition has returned its homework late and incomplete.

If there was any surprise in the costings themselves, it was the final bottom line attached to them. After years of Chicken Little hysteria about Labor’s debt and deficits, the net budgetary impact of the Coalition’s promises is only $6 billion over four years. As Fairfax’s Michael Pascoe noted today, “a half-decent Queensland storm can blow that away in half an hour.” Budget emergency? More like a false alarm.

The costings charade therefore brings us no closer to the truth concerning Coalition fiscal policy. Is Joe Hockey Scrooge, or is he Santa?

If the figures presented by Joe Hockey and Andrew Robb yesterday are accurate, Hockey is Santa. The costings presented imply that the Coalition has no plans for European-style austerity. The budget will be allowed to return to surplus slowly. There will not be a massive retrenchment on the scale of Spain or the United Kingdom.

If that’s true, then we can discount anything the Coalition says about Labor’s debt as a reason to cut government spending. If the Coalition keeps these fiscal settings, that argument has been revealed as utterly false. Labor’s debt is about keeping a reasonable level of fiscal stimulus in the economy, and, if the Coalition is not prepared to return to surplus faster, it too must believe, as Joe Hockey himself has said, that the economy could do with some “appropriate stimulus” in the form of deficit spending.

On the other hand, there is still the matter of the Coalition’s promised “Commission of Audit”.

This is a fiscal star chamber that Tony Abbott will set up if he takes office. Ostensibly, its aim will be to scrutinise government spending. The last such exercise was famously implemented in the early months of John Howard’s government. It “discovered” a multi-billion dollar “black hole”, supposedly left behind by the outgoing Keating government (in actual fact, the real reason was the rubbery forecasts of Labor’s final budget, which had been over-optimistic about economic growth).

Howard and Peter Costello used the commission to justify big spending cuts in their first term. Causes and programs unpopular with conservative ideology were prominent targets, including university funding and the Aboriginal and Torres Strait Islander Commission. 

A more recent Commission of Audit was held in Queensland, after the election of Campbell Newman’s LNP government. It too discovered big new structural deficits in the budget. Here too, the Newman government used the Commission as justification for huge budget cuts, including the retrenchment of more than 14,000 public servants. Here too, the eventual targets for spending cuts showed more than a whiff of ideology. The Queensland Premier’s Literary Awards and an education program for HIV awareness were amongst the first programs axed in the austerity drive.

Will history repeat itself? Certain hints thrown out during the campaign suggest it will. Abbott, for instance, has insisted that nothing is off the table when it comes to the considerations of the Audit. “"I'm very happy to have the Commission of Audit go through the whole of the administration, to tell us whether, in their opinion, they think things can be done better," he told the ABC yesterday.

Similarly, the pattern of targeting artistic, cultural and scientific government programs that conservatives don’t like seems to be reasserting itself. The Coalition will kill off all federal funding for urban rail if it is elected, re-directing the money towards roads. Yesterday Joe Hockey also announced that an incoming Abbott government would meddle in the decisions of the Australian Research Council, taking money off “futile” research projects to direct towards dementia research instead. Projects highlighted included one on sexual health in Egypt, and another dealing with the public art of climate change. 

Maybe the Coalition wants to have it both ways.

In the aggregate, it will keep government spending roughly at current levels, if only because it is worried that rapid austerity could bring on an economic downturn. In the specific, a new round of the culture wars appears in the offing, with an Abbott government imposing a more conservative agenda on the universities, culture and science.

However, perhaps this giving the Coalition altogether too much credit. So far, the Coalition has endeavoured to keep its campaign tight, clean and free of substantial gaffes. But there was a serious meltdown in Malcolm Turnbull’s Communications portfolio yesterday when the Coalition announced a policy of mandatory internet filtering, then retracted it within hours. The embarrassing episode was the closest the Coalition has come to a genuine campaign disaster in 2013, but with just hours before the polls open, it will probably have little electoral impact.

The final day of the campaign therefore sees the Coalition poised to take office on the back of widespread dissatisfaction with the current government, and rampant partisan campaigning by the popular press. Little scrutiny has been applied to the Coalition’s policies and costings, and much has been withheld from the electorate.

The Coalition has run a smart and very effective campaign, but in many important ways, a quite dishonest one. Holding back costings until two days before the poll might be counted as good tactics. But it’s not transparent. The Coalition had every opportunity to come clean with Australian voters about its policies and plans. With the creation of the Parliamentary Budget Office, it also had the resources and expertise – the first opposition party to be so blessed. Instead, it elected to hide its full plans from the Australian people. That’s not surprising, but it is disappointing.

Ben Eltham is New Matilda's National Affairs Correspondent.