So I wrote at The Conversation:
But we do now have an additional consideration. The date of the election is known, but the government is not in caretaker mode. Given the expectation that the government will lose the coming election, should it be in caretaker mode? Reasonable people can disagree on this point. After all, having the government in caretaker mode for eight months is a bit too long. Yet can the business community — and anyone else — be confident that announced policy will be implemented? I suspect not.
One of my twitter-trolls thought that was hilariously silly – and I’m sure he wasn’t alone. But that issue has arisen:
Coalition finance spokesman Andrew Robb and climate spokesman Greg Hunt wrote to the [Clean Energy Finance Corporation‘s] directors yesterday to tell them the election announcement meant they should avoid signing contracts to release the funds.
The twitterati are in an uproar. But Antony Green points us to the Cabinet Handbook and caretaker convention documentation:
Paragraph 2 then sets out when the Caretaker period is to apply for (my emphasis added):
The caretaker conventions operate from the dissolution of the House of Representatives until the election result is clear or, in the event of a change of government, until the new government is appointed. However, it is also accepted that some care should be exercised in the period between the announcement of the election and the dissolution. There is no caretaker period for separate half Senate elections.
So what happens when a Prime Minister does what Julia Gillard did last week in announcing an election more than six months before the dissolution of Parliament? What is meant by “some care should be exercised in the period between the announcement of the election and the dissolution”?
Indeed – what does it all mean?
In the first instance it means that business does not and cannot have the certainty that Gillard claimed it would have – another broken promise.
What about the Clean Energy Finance Corporation (CEFC)? This is what the Coalition say:
Mr Robb and Mr Hunt warned the CEFC directors against spending the cash now that the election had been set. “In light of the now very public timeframe for the upcoming election, we request that the Clean Energy Finance Corporation desist from entering into contracts or releasing any funds prior to September 14,” they wrote.
“The Coalition considers that any funds committed or agreements reached after 1 July will be during what will effectively be a caretaker period and as such we will neither allocate funds nor accept any agreements struck in the event that the Coalition forms the next federal government.”
That translates into ‘the Parliament will not appropriate funding’ to the CEFC. That places the CEFC in the same situation as any private organisation that is told by its financiers that funding will be cut off. It will be a very brave organisation that contracts with the CEFC after July 1. It will be an even braver CEFC director that signs any contracts after July 1. The CEFC has been effectively defunded.
Ironically the Coalition have provided some increased certainty in this one area – contract with the CEFC at your peril.
It is only Gillard’s mistake in the early election announcement that allows this Coalition tactic any legitimacy. As it is many people will be outraged but, as I said before, reasonable people can disagree on this point.
At the same time I find this Coalition tactic heartening. There is a hard edged ruthlessness to it – something I had thought the Coalition lacked.
Update: There is going to be a lot of discussion about this issue. Here are The Greens weighing in:
THE Australian Greens have vowed to oppose a coalition attempt to freeze the $10 billion in a government climate change fund ahead of the September election.
The Greens would not allow a coalition government to repeal legislation setting up the fund, Senator Milne said.
This is going to be interesting to watch. As I understand the media reports the Coalition aren’t talking about repealing the legislation. They are talking about not funding the CEFC. The procedure around appropriations and spending is explained by Anthony Albanese in this excellent speech to the Parliament.