I think that one of the most significant errors that Labor has made in the election campaign is the failure to recognise that the Coalition is its identical fiscal twin.
All this cut, cut, cut accusation. Really? When the figures are finally released at the end of next week, there will be $1 or 2 billion difference over four years – out of total of nearly $1700 billion – between the Coalition and Labor. No cut, cut, cut – only some minor reallocation.
The Coalition will not be cutting health, education or welfare – more’s the pity. There really is so much fat in all those areas. And the Coalition’s proclivity to pork barrel at the local level is as strong, if not stronger, than Labor’s (having the Nats in tow does not help).
Expect a continuation of all this National Regional Development Fund rubbish and lots of stupid projects funded by the feds.
To be sure, there is some reallocation of the spending on the part of the Coalition associated with the abolition of the carbon tax (which is now cited as a virtue of voting for Labor on some of its pamphlets – the mind boggles) and the MRRT. (See John Freebairn’s piece in The Conversation on how these decisions by the Coalition are likely to be fiscally helpful over the forward estimates).
But if Labor had more smarts, it wouldn’t have been banging on about the numbers – do people really relate to billions? – or the imaginary cuts, which are unlikely to occur, save to the public service in Canberra, but drawing attention to some of the programs that the Coalition will ditch as part of the reallocation of spending on various programs.
Not that I am a fan of many of these programs, although the loss carry back provisions probably make some sense and instant asset write-off has been useful to small businesses as they were pummeled by other Labor policies.
And I guess if you receive the School Kids Bonus or the Low Income Superannuation Contribution (this latter is just crazy by the way), Labor could make a case that a Coalition government will involve the withdrawal of these benefits.
And then there was the information revealed last week that the Coalition’s PPL somehow pays for itself – Bowen and Wong’s figures from Thursday confirmed this. Of course, this is just a silly accounting sleight of hand and requires the damaging 1.5 per cent levy on large companies (deadweight loss around 40 per cent). But this information undermined Labor’s attacks because of the emphasis it has been giving to costings and fiscal black holes.
The PPL is a dud and Labor should have been able to prosecute this case better, although the weakness of its scheme and the generous treatment of public servants does undermine its case somewhat.
(It is an interesting thought to think down the track – would Labor oppose an implemented Tony Abbott style PPL scheme in an election campaign? GST Rollback all over again?)