“Black Hole” Or Not, Labor Simply Can’t Manage Money

THE INTERNECINE brawl over whether the ALP has a “black hole” in its policy costings — and if so, how big it is — represents a cynical, over-used (and abused) feature of elections in this country; even so, for all but three of the past 30 years, Labor has never delivered a balanced federal budget: and its record of debt accrual at both state and federal levels is unrivalled. Even the deficit and debt increase under the Coalition is directly Labor’s fault.

I am off to Brisbane again for the day today, and whilst I have to spend a day there next month this is the last one until late July: so with some luck, that particular impact on our discussions here will lessen considerably in the next little bit.

But you know it’s election time in Australia when the Liberals and Labor are throwing around barbs about black holes and blowouts; this time-dishonoured practice is in full swing, with a tick over five weeks until polling day, and the danger of this insidious practice is that by the time voters march wearily into the polling booth they will have been so bombarded with bullshit as to disregard the matter altogether.

They shouldn’t.

It is one of those ironies that three years ago, Kevin Rudd and Wayne Swan accused the Coalition of having a $70bn “black hole” in its policy costings: it didn’t. Not unless you count the apparently predetermined Labor position of blocking every Coalition spending cut in sight to try to wreck the federal budget if it lost the election as expected, that is.

This week, of course, Treasurer Scott Morrison and Finance minister Mathias Cormann have levelled the same charge at Labor, and in eerily similar terms — $67bn — and whilst there will inevitably be some dispute over the quantum, the balance of probabilities based on Labor’s form over decades is that they are onto something.

Readers will recall the unprecedented program of tax rises totalling $102bn set out by Bill Shorten last month, which was almost immediately discredited as falling between $20bn and $30bn short; wild estimations of the money to be had from slugging smokers yet again in excise imposts were the main culprit, and the episode was reminiscent of another fatuous justification for hitting smokers by another fatuous ALP leader.

At the time of the last election, the idiotic Kevin Rudd ran around proclaiming that smokers cost the health system $31.9bn per year to treat smoking-related illness as a justification for slapping on an extra $5 per packet in tax; in something of a breath of fresh air, it was one of Rudd’s own health bureaucrats who publicly contradicted the then-PM, stating that not only had Rudd exaggerated the figure tenfold (the actual cost was $3.19bn) but that the regime of excise collection, as it stood at the time to reap $6bn per year, more than paid the cost of smokers’ healthcare.

Demonising smokers might be fun, but at least do it honestly.

The record of the Rudd-Gillard-Swan government — whilst withdrawing some Howard-era measures — was to lift expenditure on social experiments and welfare addiction measures targeted at the most vulnerable under the cover of the Global Financial Crisis; contrary to the ranting of Rudd and Swan in particular, revenue never fell during or after the GFC, and increased on average during the six years of Labor governance by 7% per annum.

But this didn’t worry Labor then — as it borrowed heavily overseas to fund its mad obsession with locking selected constituencies onto the Labor teat — and it won’t worry Labor now; its Treasury spokesman is the same Labor Treasurer who was a party to Rudd’s mad pronouncements on the state of the budget in 2013, and there is no reason to believe he has changed his spots.

And to some extent, serial embarrassment David Feeney — already a source of negative headlines for Labor over his failure to remember he has negatively geared property, contradicting Labor’s plans to abolish negative gearing — has let the cat out of the bag with his “inability” to say whether the ALP will continue the $1.6bn annual Schoolkids’ Bonus introduced by Julia Gillard and Wayne Swan, abolished by Tony Abbott, and set to expire after this year.

Feeney, of course, ought — by the usual debased standards of an election campaign — to be disendorsed; many better people than him have been booted off the cart by both sides over the years for a lot less.

But he is a union and factional thug with clout, which means Labor is obliged to carry his festering carcass all the way into the next Parliament: if he doesn’t lose his seat to the Greens, that is.

My point this morning is that where there is smoke, there is usually fire, and this commodity is not in short supply where Labor’s election effort to date has been concerned.

Already, Shorten is promising tens of billions of extra dollars in health and education spending with at best a dubious story as to how it will be paid for: never mind, of course, that more and more money won’t fix a health system carrying too many bureaucrats, consultants, advisers and other hangers-on, nor an education system currently consuming record levels of money in real terms, and in which deficient teacher training and not education funding is the true culprit in generating unsatisfactory outcomes.

According to Shorten, GP consultations will fall by up to $24 under a Labor government, which is the biggest pile of manure seen outside a proctologist’s office in some time: for bulk billed patients, how much less than “free” can you get? And for those who are not bulk billed,  the volume of money required to deliver this unbelievably crass pledge is horrific.

But let’s not forget that this is the same party which insisted government borrowings were low “by international standards” — as it merrily racked up $300bn in debt in less than six years — and which has shown such cavalier disregard for the national good as to have spent three years playing fast and loose with Australia’s future, blocking every Coalition bill aimed at reining in the tens of billions of dollars in annual recurrent expenditure it legislated before leaving office in what we now know was an attempt to blame the whole lot on the Coalition.

Labor has governed this country for 16 of the last 30 years; of those it has delivered surplus budgets just three times, and even then more than quarter of a century ago when Paul Keating was Treasurer.

By contrast, 11 of the 15 Coalition budgets in that time have delivered surpluses.

The past three (and especially the unmoving trend in the bottom line) arguably have far more to do with Labor’s misuse of the Senate as an instrument to prevent the delivery of election promises by its conservative opponents than with any real charge of mismanagement on the Coalition’s part.

(Political stupidity a la the 2014 budget and fiscal incompetence are not the same thing).

In other words — with debt now at the half trillion dollar mark — Labor has effectively spent somewhere in the order of $200bn on the public purse from opposition, in the form of borrowings that might not have been required, and that is the price Australia has paid for a Shorten government before such a contemptible entity has even come into existence.

God willing, it never will.

And when it is remembered that every Labor state government that has been kicked out over the past 30 years left a huge pile of debt behind that wasn’t there to begin with — and in at least two of those bequests, in Victoria in 1992 and South Australia in 1993, those states were left all but insolvent — the charge I regularly make about Labor being rotten to the core becomes difficult to convincingly refute.

Is there a “black hole” in Labor’s election costings? Who in hell knows, if we’re being honest. But based on past form and on balance of probabilities, betting your house on the suggestion Labor’s sums don’t add up is probably a guaranteed way to hit paydirt.

Even if, by some miracle, Shorten and Bowen have added mathematical prowess to the thin list of problems the ALP has resolved since being flicked by voters three years ago, their party doesn’t deserve the benefit of the doubt.

My great fear is that voters have grown so accustomed to a federal government haemorrhaging red ink and mortgaging future generations’ living standards for the dubious benefit of Labor’s election prospects that such considerations register with fewer and fewer people who take such matters seriously.

Certainly, most of the many people I talk to every week have no comprehension of how the debt disgrace afflicting this country can be Labor’s fault after three years of government by someone else.

But once I explain it — and clarify anything that might unduly bias the point — there’s no problem understanding it at all: and in this sense, Bill Shorten can probably feel grateful that when it comes to the TV soundbites from which most swinging voters get their political insights from, their usual attention span is less than that of a gnat.

Is there a black hole in Labor’s numbers? It would be a miracle if there wasn’t, but the greatest shame of all is that you only have the word of a politician for that: and as the politician in question is on the record as a self-confessed liar, his word isn’t worth all that much at all.

Is it, Mr Billy Bullshit?


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