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.

Class Warfare? They Just Are!

There are days when I am amazed at my own capacity for disappointment, and at the ability of others to rise above it all. Most of the time, I’m just amazed by Tony Abbott’s incapacity to connect with reality.

That’s not to say that he doesn’t connect with voters. He connects with so many of them, he almost won the 2010 election.

I trust he enjoyed his half an hour of free national television time last night. What was supposed to be a response to the Federal Budget was a repeat of the 2010 election stump speech: no costings, no policies, no specifics beyond “We’re better than them, and they didn’t get elected anyway”.

Fast forward one year to 2012, and very little has changed. The Government is less popular than the Carbon Tax that killed it, and Tony Abbott is reading that as a sign that his parliamentary demolition squad is working. It is. The Labor Party is as fragile as any political party I can recall seeing, and yet, more than one in four voters are still prepared to vote ALP when the next election is called.

He’s still as incoherent as ever, although he’s replaced the stunning silence of his stoush with Mark Riley, with an equally stupefying response to a question about a criticism he made of the budget. His response: “They just are”. Oh, how the internet loved that one!

But back to that last frontier, “reality” – an unknown quantity in the world of Tony Abbott. As reported in The Australian Mr Abbott failed to detail any savings measures in the speech, but said he was confident he could make $50 billion in budget cuts to fund his election promises. “Yesterday was a budget reply, it's not an alternative budget,” he told the Nine Network.

Fifty billion in budget cuts, eh? And he’s going to repeal the Carbon Tax, but maintain the changes to taxation that were introduced to offset the impact of the Carbon Tax.

“If you don't have the carbon tax, you don't need compensation and this is effectively carbon tax compensation,” Mr Abbott told Sky News. “I don't begrudge the Australian public this money at this time given they are about to get clobbered and power bills, gas bills and just about everything else is going to go up and up.

Yet again, Mr Abbott provided a whole load of nothing, aside from a vague comment that our children should be bilingual. Someone should remind him that many more of our children would be bilingual, if the Coalition had supported a programme that was already in place. I guess that’s not part of Tony Abbott’s reality.

Still, the lack of anything resembling the kind of Budget Replies we’re used to has given the Coalition time to formulate a new plan of attack, and this time the battleground is class warfare. Apparently.

Just a few weeks ago, Shadow Treasurer Joe Hockey was referring to his ‘meagre’ package of $231,000 plus allowances. Tony Abbott, who also represents an electorate on Sydney’s North Shore, said that people on $83.000 salaries are not rich.

In comparison to Joe Hockey’s meagre earnings, an $83,000 package isn’t rich…but try telling that to sales clerk on $35,000, or a project administrator on $65,000.

As far as political challenges go, ‘Get off the North Shore’ is pretty average, but at least there is some reality there. Tony Abbott is the Member for Warringah, which sits adjacent to Joe Hockey’s seat of North Sydney.  According to Joe Hockey’s website,

Tony, tell me again why your receptionist, your driver, the waiter who brings your lunch should be paying tax to subsidise your children’s education. For that matter, tell me why I should be paying my tax to subsidise my boss’s boss’s kid’s education.

Relative to other parts of NSW, the electorate is also distinguished by having among the highest proportion of residents holding university qualifications and women in the workforce (almost 50% of women). Unemployment levels in North Sydney are among the lowest in Australia.

That’s not class warfare, that’s reality. That’s what you’re up against. In our reality, the majority of Mr Abbott’s Budget Reply speech wasn’t about the Government’s Budget, or about any budget that the Coalition would offer. It was a vague promise that the Coalition would do better because the ALP are a mess.

Based on Abbott’s response to the Government’s imperfect budget, the best thing the Coalition has going for them is that they’re not Labor.

Why? They just are!