Catallaxy Files

There is all this chat that this year’s budget estimates are pretty conservative, lest the government be embarrassed by the Pre-election Economic and Fiscal Outlook to be released by Treasury in August.

Really?  Really?

If we look at all the howlers and bloopers in Australia’s Fiscal Wonderland, the prize must surely go to the 2010 PEFO released prior to the August election.

The Treasury decided to revise down the expected budget deficit for 2011-12 from over $20 billion to $10.4 billion.  Actual outcome: $43.4 billion.

I’m not making this up.  Treasury said $10.4 billion, a figure which suited the government to a tee, and the actual outcome was over $30 billion more in deficit.

Nominal GDP was expected to grow by 9 1/4 per cent and the terms of trade by 17 per cent.  That is Tooth Fairy combined with Santa grade optimism.

And according to the 2010 PEFO, the budget surplus would be $3.5 billion in 2012-13 – again a figure that suited the government.   Actual result: close to $20 billion in deficit.

And to think that we will be expected to believe the numbers in the upcoming PEFO.  I will be treating them with a grain – nay, a tonne – of salt.

Obviously, the message has gone out.  It has been workshopped, focus group tested and the phrase to repeat, even it make no sense is:

CUT TO THE BONE

I think the Cats should keep a running tally of how often this phrase is used by Labor types in the next few types.  Whatever Tony Abbott and his team says, the response must include ‘cut to the bone’.

And, by the way, I was pretty right about the budget name:

Stronger economy, smarter nation, fairer country

or something along those lines.  Throw in supporting jobs and growth and Asian century and all the bases are pretty much covered.

Who said politics was superficial?

I really did hope that this year’s Budget Lockup would be better than last year’s.  How much can a girl take?

Sadly, I have to report that it was worse.  It is just so hard to concentrate on thousands of pages of fairytales, all the while knowing that you have to bash out some vaguely coherent commentary.

And then there is the distraction of the ministers and their teenage minders swanning through the place, trying to grab the attention of the persons deemed to be most important in the room.

Some of the senior bureaucrats also float through.  I did have a chat to one of them in order to tackle the mangled use of the word ‘save’, to include tax increases.   He did not seem to have a problem with combining cuts to expenditure with tax increases.

His reply was that “the impact on the figures is the same”.  I guess this is the Canberra view of the world – just up the tax burden and Bob’s your uncle.  Don’t worry about any second round effects.

Budget Paper No. 1 looked like a very rushed piece of work.  Some of the charts did not have labels on the axes and quite a lot of the prose did not make sense.  And there is such so much repetition.

And as for this weird exposition of setting out ten year projections of expenditure on particular programs (DisabilityCare and Gonski) and then arbitrarily attaching particular revenue lines and ‘saves’ to the various years – I really wonder who dreamt this up?  These diagrams did not show that these programs are ‘funded’ – after all, all expenditure commitments have to be covered, one way or another, given the government’s commitment to run a net budget surplus in the medium term (stop that guffawing, Cats).

The one thing that these charts do tell us is that the costs of these two large programs do not ramp up until beyond the forward estimates and just before the election after this one – around 2016-17.

One of the most amazing things about the lockup is the sheer number of people who are prepared to be jailed for 5+ hours.  My assessment is that close to a third – maybe more – are not journalists but lobbyists, NGO types, industry association workers, etc.

I’m not sure why they would do it.  I guess some of them appear on the media relatively quickly and therefore feel they need to be briefed.

I’m hoping someone might see the sense of ditching the lockup in the future.

As I was happily chomping my way through a piece of toast with vegemite  … heaven on earth … I asked myself this question:

• Do plastic bag refusniks (to use Nick Cater’s wonderful term) eat vegemite?

I’m thinking NOT. And for the following reasons:

• It is full of salt (yum);
• It is highly processed, mainly yeast;
• It is manufactured by a tax-avoiding, exploitative multinational company.

I guess their alternative is home-made marmalade, made from organically grown cumquats lovingly picked in the early morning when the dew is still on the fruit.

So Cats, what else do the PBRs of this world shun?

One of my daughters lives around the corner from a weekly “Farmers’ Market”.   She tells me that at one of the organic fruit and veg stalls, the hipsters who run it can be seen taking the avocadoes out of the boxes shipped from Mildura, removing the sticker and lovingly placing them in rustic wicker baskets.

And charging double to triple the normal price of avacadoes.

The PBRs line up for them.

I’m not sure what to make of Ken Henry’s weird remarks about politicians behaving as if they are in some sort of reality TV show.

After all, he had a part in the show, albeit a non-speaking part most of the time.  But if looks could kill … he really perfected the art of the scowl as he leant against the wall of the room in Parliament House in which pressers were being held.

The former Treasury secretary said: “It hasn’t really been a good time, obviously, for the floating of bold policy ideas.”

He said this had to change and the expectations of citizens and businesses of politicians “have to lift”.

“This may shock all of you but it shouldn’t,” Dr Henry told the Australian Institute of Company Directors annual conference in Singapore.

“The politicians think that what they are doing is more likely to be successful than any alternative form of behaviour.

“That’s what they think. That’s why they are doing it. They are not doing it to get kicked out of office. So we have to say, ‘Well hang on, that behaviour is not what we expect’ and that Australia deserves something better.”

He compared the life of a politician to being “live inside a 24/7 reality TV show”.

“They are going to behave like people we see on the TV in reality TV shows, of course they are,” he said.

Frankly, I think Ken got off pretty lightly prior to his departure to the dizzy heights of the corporate world.

He was the architect of the ridiculous RSPT, he was the person who said that the quality of spending was a ‘fourth order issue’ when it came to spraying out the cash in the name of the stimulus (contradicting what he had said previously), he was the person who was given the strange task of leading up the now forgotten Asian Century report even though he had no claim whatsoever to be an expert in Asian matters.

And then there was the strange set-up where he as given a statutory position within PM&C, seemingly because he had not reached the age at which his superannuation payout would be maximised.

I like to run a book on what little homily will adorn the budget papers and backdrop every year.

This naming of budgets goes back quite some time.  Am I dreaming that one was called, Bringing Home the Bacon?

Anyway, my money’s on SUPPORTING JOBS AND GROWTH.

Forget the commitment to surpluses, the government is supporting jobs and growth.  Que?, I will think.  Was the government previously opposing jobs and growth?

Of course, there are other possibilities for Swanny’s swansong:

• I did it my way
• Que sera, sera
• Oh Lord, please, don’t let me misunderstood

Any other thoughts?  I still have my money on the misleading and lachrymose SUPPORTING JOBS AND GROWTH.

There is a large advertisement in the business pages of The Australian for Commission Member at the Productivity Commission.

This looks very fishy for the following reasons:

• Applications are sought by 17 May – in 13 days time;
• There are currently 11 commissioners, including the Chairman, and given the current workload, there is absolutely no need for any new appointments;
• the term of only one of the current commissioners expires this year and then at the end of the year.

In the past, it has taken nearly a year to confirm appointments to the Productivity Commission but I am betting that this will be expedited.

And given that the PC will play an important role for an incoming government -Coalition one, that is – the ALP will be keen to get another friendly appointed now.   I can think of one person in particular who needs to be placed – and quickly.

COMPLETELY DISGRACEFUL, MIND YOU.

And note that the remuneration package is $315,280 – a nice little earner, in other words.  (It has gone up a lot since my day.)

I was (stupidly) driving into the ABC in Southbank between 5.30 pm and 6.00  pm and had the unpleasant experience of listening to 774 ABC, local radio.

The compere was someone called Raphael Epstein and he was interviewing  the Editor of the Herald-Sun and the Editor of The Age (Andrew Holden).

It was appalling stuff.  Epstein was verballing the Productivity Commission – he clearly had not read the report on the NDIS –  and told everyone that the economy would be better off with the levy than without it.  Que?  In fact, the levy was not the first choice of the PC but never mind.  The PC advocated spending cuts and accommodating the NDIS within the existing budget – quite right.

The ABC might have a fact-checking unit but that is obviously to check other people’s facts, not their own.

Some chap rang in to complain about the rough treatment meted out to Julia Gillard about the carbon tax.

And here is the kicker.

Holden compared this with John Howard not taking the GST to an election and just introducing it.  Que? Que?  Que?

And what would the 1998 election have been about, I ask?

And to think this ignoramus is running The Age.

I say I was stupid because I was going into pre-record an interview for Lateline and clearly my viewpoint is not welcome, if you know what I mean.  Spend, spend, spend … deficits don’t matter.  The more debt the better.  The ratings agencies are completely cool with this.  You know the sort of thing.

Did anyone notice the ungracious hide of the Prime Minister in making this announcement yesterday?

‘On the basis of that change of mind by the Leader of the Opposition, I will bring to the Parliament the legislation to increase the Medicare levy by half a per cent.”

Honestly, she had changed her mind on Tuesday but that was quickly forgotten.  I’m not even sure that Tony Abbott did change his mind; after all, the government – aka her – had ruled out the levy.

And let us recall that is was only 6 December 2012 when the Prime Minister had this to say:

I am determined that it will be done …
I want to build a truly national scheme …
I have in the past ruled out a levy, and I will do it again now …

And this was notwithstanding the fact that the Premiers were prepared to back the imposition of a levy.

And don’t you get love I WANT TO BUILD A TRULY NATIONAL SCHEME.  Que?  She is going personally to build a  truly national scheme?  What … on her own?

It’s a pity that Brendan O’Connor, Immigration Minister, does not latch onto the perpendicular pronoun and pronounce that:

I made up the figure of 10,000.

For anyone with any experience in social research, it was completely obvious that this number was just plucked out of thin air with ZERO CREDIBILITY.

The only conclusion is that all this scaremongering is PURE POLITICS – and the worse kind at that.

And is there not some kind of irony here: if there is rorting, it is occurring under THIS GOVERNMENT, UNDER ITS RULES, UNDER ITS ADMINISTRATION.

On another point, am I the only one who thinks this government is behaving like a toddler on red cordial?  Another topic, another thought bubble every day.  Today the rushed Defence White Paper designed to justify lower spending on defence.

Here is the background to the story , courtesy Andrew Bolt.

Two weeks ago Immigration Minister Brendan O’Connor offered an exact, precise figure:

I believe that the areas where there’s been an illegitimate use of 457s numbers in the thousands… I would say it would exceed over ten thousand.

Trouble is:

However, the report provided to the minister late last year found little evidence that employers discriminated in favour of overseas workers.

O’Connor was asked on the ABC’s AM this morning where he got his 10,000 rorters figure from, when his department’s report says such rorting is “rare”. He refused to answer:

 

I’m making a forecast… We don’t have an exact, precise figure.

He did but he doesn’t.

UPDATE

All spin, no substance, say even the Government’s advisers:

THE … confidential Immigration Department advice … came largely to inform the government’s February 23 overhaul of the 457 regime and was prepared after a meeting of the Ministerial Advisory Council on Skilled Migration on December 11 last year.

But yesterday advisory council chairman Michael Easson said there were no systemic problems with the program and hit out at Immigration Minister Brendan O’Connor’s recent claim that the regime had been plagued by more than 10,000 rorts.

”I do not believe that there is any credible evidence that the management of the 457 visa program is out of control or that 10 per cent of applicants are associated with rorts,” Mr Easson said.