Wednesday, May 22, 2013

CAAANBRA: Missed the Target

Shadow Treasurer Joe Hockey addressed the National Press Club today in what was effectively the woofteenth attempt by the opposition to deliver a Budget Reply Speech. Just an hour or two earlier Independent Rob Oakeshott announced via Twitter than next week he will be mounting a Confidence Motion to reaffirm Parliament’s faith in the departments of Treasury and Finance.

The proposed Confidence Motion is in response to the projectile vomit-like stream of doubt that Joe Hockey and his colleague Matthias Cormann have aimed at the Department of Treasury over the budget figures.

The one thing that irked me most about Mr Hockey’s and Senator Cormann’s suggestions that the figures quoted in the budget are untrustworthy is that they are trying to launch another political attack at the government. It's an election year; if the Opposition wasn't trying to undermine the Government, you'd need to check for a pulse. In any case, they missed their huge, floodlit Government-shaped target by about t--h--i--s much, and hit the public service instead.

Treasurer Wayne Swan has stepped in this morning and labelled their attacks as ‘profound insults’ to the public service. Understatement, much?

What evidence does the Opposition have that there is anything suspicious in the Budget figures? I had hoped that Mr Hockey’s speech at the NPC today would answer that question. Instead, Mr Hockey offered five reasons why we can’t believe the budget that Mr Swan handed down last week. (Five is the Coalition’s favourite number at the moment; their campaign features a five pillar plan to save us all from more ALP thingamyjiggery. It's Newman's CanDo Plan for Queensland all over again.)

Here’s Mr Hockey’s Big Five:

1. The Government broke their promise to deliver a surplus (which he suggested later had lead to the “fiscal emergency” we’re now facing, here in Oz where we have the healthiest economy in the world.)

2. An ALP Government would have to borrow more money, which would undermine the budget forecast

3. If they borrow more money, they’d need to increase the debt ceiling

4. (And this is the clanger) the Budget assumptions are "courageous"

5. The ALP Government spends too much money

It makes you wonder if Mr Hockey has ever had to construct a budget for anything in his life. Cattle stations notwithstanding, he seems to lack even a basic understanding of forecasting, so here's the simplest possible explanation: forecasting is taking the facts that you have right now, and using experience and expertise and wisdom (including everything from Grandma Queenie’s common sense to sophisticated economic modelling and even some wishful guestimation) to try to predict what is going to happen in the future. As for economic forecasting, it’s hardly a science. In fact, getting two economists to agree on what to have for lunch is impossible. But that’s about future, and the Liberal’s beef is with the present. Or not. Confusing.
Let's revisit Mr Hockey’s number 4. The Shadow Treasurer and the Shadow Assistant Treasurer (whose portfolio also includes Financial Services and Superannuation) are both publicly questioning the accuracy of assumptions provided to the Government by the Departments of Treasury and Finance.

It’s important to note that neither of these shadow ministers have any formal education in economics; both have qualifications in Law, as do Wayne Swan and Penny Wong. That has always struck me as a little odd…but like all of us, Ministers and their Shadows rely on subject matter experts – usually public servants - for advice and information.

In the case of the budgetary dollars and sense, the current Secretary of the Department of the Treasury is Dr Martin Parkinson, an economist with a long history in and around politics, and as a senior public servant. He’s copped the brunt of the attacks from the Opposition. In today’s Australian, Senator Cormann continued the tirade:
Senator Cormann said Dr Parkinson provided the government with forecasts behind closed doors and he would "of course" defend them publicly. But he said the budget was the government's document, not the Treasury's.

“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,” he told ABC radio.
Yes, the Opposition is suggesting that the Government has somehow coerced public servants within the Departments of Treasury and Finance to fudge figures that would make the Budget look better than it really is? That is one helluva serious allegation, one helluvan insult and quite probably, grounds for investigation. It’s also close to unbelievable.

Senator Cormann wasn’t finished:

“His job as secretary of Treasury until the election period is to serve the government of the day.”
That much, at least, is true, although I suspect his words were thick with unspoken agenda.
Section 1.2 of the Australian Public Service Values and Code of Conduct document is a pretty dry read, but there is no ambiguity around the relationship between public service and the Government. This document lists the Australian Public Service (APS) Values as follows:

•The APS is apolitical, performing its functions in an impartial and professional manner.

•The APS is openly accountable for its actions, within the framework of ministerial responsibility to the government, the Parliament and the Australian public.

•The APS is responsive to the government in providing frank, honest, comprehensive, accurate and timely advice and in implementing the government's policies and programs.

The document continues:

The role of the APS is to serve the Government of the day: to provide the same high standard of policy advice, implementation and professional support, irrespective of which political party is in power. This is at the core of the professionalism of the APS.
If Mr Hockey or Mr Cormann have legitimate concerns around the veracity of figures included within the budget, and if they believe that the wobbly figures were provided by a member of the APS, have the suspected breaches been reported to the appropriate authorities for investigation? (Note to Mr Hockey: Sky News and The Australian are not appropriate authorities.)
If they don’t have anything more concrete than wishful thinking and a desire to hurt the Government’s chances of reelection, they should sit down and shut up now…and in an astonishing turn, even Tony Abbott agrees. He’s visibly placing his trust in the Treasury, and restricting his budget related hostility to attacks on Wayne Swan and Penny Wong.

Where does that leave Joe Hockey and Matthias Cormann?

With no tangible proof of wrongdoing by the Government or the Public Service, no support on this issue from their Leader, and Mr Oakeshott’s decision to lead a Confidence motion in the Departments of Treasury and Finance, their campaign to discredit the numbers is looking pretty fragile.

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