Coalition loses all credibility
Chris Bowen posted Thursday, 16 February 2012
As published in The Australian
On June 10, 1987, opposition leader John Howard launched the Liberals' tax policy for the upcoming election. Paul Keating identified a $540 million error in the Liberal costings. Howard admitted his error. The result of the election was sealed that day. After the election, shadow treasurer Jim Carlton was removed.
Modern-day Liberals are not as willing to be honest about their mistakes as Howard was. When Howard's error was pointed out he admitted it and took responsibility, despite the obvious political costs.
Tony Abbott's fiscal mistakes have been bigger than Howard's were, and yet he covers his ears and pretends it's not happening.
Take the debacle over the costing of the proposed detention centre on Nauru, for example. Reopening the Nauru detention centre has been Liberal policy for years. Yet they went to the last election with no costings, let alone a funding plan. Abbott claimed it was as simple as organising a bit of gardening at the pre-existing centre.
Fast-forward to 2012. The government offered to reopen Nauru as part of our negotiations with the Liberals on offshore processing. The Department of Immigration was asked to send a team of experts to Nauru to assess how much work would be needed to get it up and running again and what it would cost the budget. They reported the old centre needed to be completely rebuilt and major infrastructure upgrades would be required. The department said capital costs would be more than $300m and the total cost would be almost $2 billion over four years.
What was the response of the opposition? To criticise the professionalism of the independent bureaucrats. Scott Morrison said there "would be hell to pay" if bureaucrats handed him a costing like that. Really? A minister telling public servants what their independent costing should be? Someone should send Morrison a copy of the Charter of Budget Honesty.
Then the Liberals released their own costings. They told us they'd been completed by a major company that had been involved in constructing and operating the original Nauru centre. Interestingly, they told us it would only cost $80m to rebuild the centre, despite it costing $121m to build a centre of similar size in Western Australia.
We now know the costing was done by a catering company. Morrison's claim that the company had been involved in building the Nauru facility is a blatant untruth. Costings aren't a smorgasbord. You can't go to a catering company just because you don't like the costings a government department serves up.
This is symptomatic of a pattern of behaviour from this opposition. After the most recent election it was revealed that Treasury had identified an $11bn error in the Liberals' election costings. This is a huge error. Howard's $540m mistake would be the equivalent to $1.2bn today. Abbott's error is a lot bigger than Howard's. And yet, far from admitting it and taking responsibility Howard-style, this leader has done no such thing.
Abbott and Joe Hockey claimed their costings had been audited by a large and respected accounting firm. Oh, that's OK then, what would the federal Treasury know? Since then, their so-called auditors were fined by a disciplinary tribunal for professional misconduct relating to those costings. The Liberal response? Hands on ears, pretend it's not happening.
Whether it is an accounting company or a catering firm, the Coalition's private sector alibi for costing disasters has been found wanting every time.
Since then, of course, things have gotten worse when it comes to fiscal credibility for the alternative government. Abbott wanted us to believe he could deliver personal income tax cuts at the same time as abolishing the Minerals Resource Rent Tax and repealing the carbon price. Last week, the opposition took every position imaginable on whether this was a promise or an aspiration.
They also walked away from delivering a surplus, in the words of shadow finance minister Andrew Robb: "Well it just depends." (ABC 24, February 6).
The shadow treasurer himself has admitted a $70bn shortfall on live television before saying this was a mistake and he shouldn't have said it.
Let's put this in context: $70bn is more than the federal government will spend on the age pension this year and next. And yet we are expected to believe the Coalition will be able to come up with real and verified savings of this magnitude by the time of the next election.
There used to be a time when an opposition's fiscal credibility counted for something. Commentators would once agree that an alternative government with major costing errors simply wasn't ready for office.
This is not just a matter of fiscal credibility but also integrity. Every costing error and every time Abbott refuses to acknowledge an error, it's a reminder that the opposition's economic team is even weaker than the team that cost Howard the 1987 election.
As Keating, the man who prosecuted the case against Howard's 1987 error, has pointed out, "You wouldn't trust Tony Abbott with a jam jar of 5c pieces".
Tags: Budget,
Economy,
Immigration,
Surplus