Hockey fumbles the ball – again – on Coalition economic policy

May 20, 2013

Sometimes, I rather feel sorry for Shadow Treasurer Joe Hockey – and then I remember that this is the man who might well end up being responsible for the nation’s finances, come September.

After Abbott’s Budget reply speech last week – a speech for which he received a good deal of criticism, and (for once) a heck of a grilling from the media – someone was going to have to attempt some damage control. And that someone pretty much had to be Hockey. After all, if you don’t send out your nominee for controller of public revenue from time to time, it’s going to be hard to sell your plan. As a bonus, Hockey doesn’t look or sound like the stereotypical Liberal. No private school vocabulary, no plummy accent. There’s a bit of the bogan in ol’ Joe, and the party uses that to its advantage whenever it’s trying to ‘connect’ with the people.

Accordingly, Hockey fronted up for an interview on ABC1’s Insiders program yesterday. Generally, the Coalition get a fairly easy ride in most interviews (the notable exception being – sometimes – ABC 730). Hockey, arriving early on Sunday morning, apparently expected the same comfortable treatment.

Instead, he was metaphorically nailed to the wall by Barrie Cassidy.

Asked to justify why the Coalition insisted on using the phrase ‘budget emergency’, Hockey at first flatly denied ever doing so (even though Opposition Leader Tony Abbott is still using it as of this morning), then fell back on familiar talking points. The budget isn’t in surplus, it will never be in surplus under Labor, we’re vulnerable because we’ve borrowed money from overseas, etc. He claimed that the major reason Australia holds a AAA credit rating from all agencies was due to the Howard government – oh, and that it was ‘cute’ that we’d achieved the rating from Fitch. It doesn’t mean much, anyway, he argued, because everywhere else is so bad. Naturally we’d look good in comparison.

In one stroke Hockey dismissed the across-the-board AAA credit rating, and the agencies. He would have us believe that it’s ultimately meaningless, that it has nothing to do with our actual economic status, and the fact that countries in Europe are undergoing incredible economic stress is the only reason we have this rating. (And, in the case of Fitch, that it’s just ‘cute’.) Hang on a moment, though. Didn’t the Opposition pooh-pooh the idea that our high dollar (among other economic factors) was directly related to European circumstances? Oops, never mind. Little details like consistency aren’t important, right?

It’s all about stability, said Hockey. That’s what the Coalition was going to provide. That statement surely had Cassidy mentally rubbing his hands with glee as he invited Hockey to give some examples, and Hockey was happy to oblige. Delay the superannuation contribution increase (from 9% to 12%) for two years. Scrap Schoolkids’ Bonus. Scrap Lower Income Superannuation Contribution Scheme. Scrap 12,000 public service jobs via ‘natural attrition’ (which is a fancy way of saying, ‘we’ll merge various departments and restructure people out of existence without actually having to call it redundancy’).

I leave it as an exercise for the reader to determine exactly how these cuts provide any stability whatsoever.

The delay in implementing the 12% superannuation contribution was where Hockey really got lost. Cassidy was relentless, pushing for figures, and Hockey either couldn’t or wouldn’t provide them. ‘I don’t have the actuarial tables in front of me,’ he repeated. ‘It hasn’t kicked in …’ He ended up utterly tangled in his own argument, unwilling to admit that there would be any effect on people’s retirement savings. In fact, he said that the delay was effectively a good measure, since people would have ‘more money in their pockets rather than in superannuation for just a short period of time’.

This is flatly wrong, and a very disturbing error for the putative Treasurer of Australia to make. Compulsory superannuation contributions do not come out of your take-home pay. They are paid by the employer on top of your salary or wage. Delaying the increase to 12% will have no effect whatsoever on the ‘money in the pocket’. Hockey should know this. It’s simple. Even giving him the benefit of the doubt – that perhaps it was a simple slip of the tongue – it speaks volumes about his ability to think on his feet about financial matters.

The rest of Hockey’s interview only added to the impression that here was a man who just didn’t know why he was there, or what he should be saying. He fell back on talking points at every opportunity. Whenever Cassidy pressed him, he would interpret it as a ‘sanctimonious’ lecture from the government, and throw in an assertion that the Coalition was ‘honest’. Even then, he seemed unable to stop himself.

On the NDIS, he said that there was no possibility of delay – but in the next breath, hinted that it might not be implemented because he didn’t trust the government’s figures. That undermined Abbott’s Budget Reply, in which he not only supported the NDIS, but actually claimed it was as much the Coalition’s ‘achievement’ as the government’s.

On the Gonski reforms, he tried to say that the budget actually cut education spending, while being funded from the mining tax (it’s actually funded from general revenue). At the same time, he admitted, ‘I don’t know what Gonski looks like, what the whole education plan looks like’.

On the Coalition’s proposed tax review, he ruled out any change to the GST – then suggested they might, possibly, perhaps look at it. In a year or two. By the next election, certainly. Assuming ‘key stakeholders’ (read: big business) went along with it.

Overall, Hockey gave the impression that he really didn’t know what he was doing, or why he was even in front of the cameras. It might be poor preparation, but this isn’t the first time Hockey has given such a dreadful performance. He’s been caught out on the Reserve Bank cash rate, sources of funding for various programs, the difference between zero growth and low growth, unable to explain the Coalition’s own figures, and – famously – redefining the word ‘tax’ in order to criticise the government. These might explain why Hockey so rarely fronts the media without Abbott right there to step in, since Shadow Finance Spokesperson Andrew Robb is nearly as inarticulate as Hockey himself.

It’s really not a good look in an alternative Treasurer. But there’s this to consider. Polls have (inexplicably) shown that, after the Budget was handed down last Tuesday, Hockey is preferred Treasurer. As the election nears, Hockey will have to front the media more often. If he acts as he has until now – unable to provide figures, contradicting his own party’s stated aims and policies, and making glaring errors on the simplest of economic questions – the Coalition’s claim to be better at managing the economy will be seriously tested.

It needs to be. The Coalition rests on the laurels of Peter Costello’s work as Treasurer in the Howard government (glossing over the fact that it was a much higher taxing government than Labor under either Rudd or Gillard), tends to be long on rhetoric and short on policy detail, and has a history of not releasing its costings until so close to an election that Treasury and the Australian people cannot sufficiently scrutinise them. That’s if they give their costings to Treasury at all – remember back in 2010, when they got out of submitting their costings to Treasury byaccusing them of colluding with the government to ‘steal an election’? In fact, the Coalition’s had a ‘pass’ on the kind of scrutiny that is absolutely necessary, while feeding talking points on ‘Labor mismanagement’ to the media that, too often, are merely repeated.

Hopefully, Cassidy’s interview with Hockey is just the first hint that the tide may be turning, and we can look forward to seeing both major parties (not to mention the Greens, and newcomers like Katter’s Australia Party and Clive Palmer’s United Australia Party) subjected to real investigation and interrogation from the media – whether mainstream or independent.

The Budget Reply, 2013 (via Storify)

May 16, 2013

Opposition Leader Tony Abbott’s Budget Reply speech, with annotations from yours truly.

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