SHOW ME THE MONEY

Another way of beginning this column would have been to reprise Tom Cruise's movie role; the one where he's obsessed with getting people to say. "show me the money".

Because that's what government is all about. Money.

As this column attempts to explain . . .

WHAT HAPPENS NEXT . . .

Back in 1987, while working for Bon Hawke’s second re-election campaign, the ad-man John Singleton created what was, quite possibly, one of the most obnoxious characters ever to appear on Australian television. That’s a big claim but anyone who lived through Wendy’s repetitive, whining demands knows exactly what I mean. The knowledge you’ve created a memorable character is, of course, music to advertiser’s ear: it shows the message got through. And, when the voters (or, as Singo prefers to call them, the “punters”) walked into the ballot booths that year enough of them remembered the critical message they’d been bombarded with any time they turned on a television set over the past few weeks to ensure Labor was returned triumphantly.

The ALP’s Bob McMullan wrote the advertisement, but although he’s a cultured, educated man the nearest it got to a classical allusion was when the central figure,  ‘Whinging Wendy’, quoted Laurie Oakes “on TV”. She enthusiastically ripped into then Opposition Leader John Howard, accusing him of lying. Wendy’s technique was simple. She outlined the promises Howard had made to cut tax and protect services before delivering the killer punch. “Where’s all the money coming from, Mr Howard?”

He couldn’t find an answer. Wendy’s question resonated deeply. The Liberals had previously been perceived as better economic managers. Nevertheless, the electorate remembered that when Howard was Malcolm Fraser’s Treasurer, the budget had blown out badly, and the accusation of fiscal sloppiness stung. Labor won more seats at that election than it had ever held previously. Sixteen years later, Singo was still going on about it. “We never did work out where the money was coming from, did we?” he’d ask, rhetorically.  

The reason he knew the ad worked was because it zeroed in on a simple, critical, truth – Howard’s sums didn’t add up. The Secretary’s of Finance and Treasury weren’t (and aren’t) jolly rotund men wearing Santa Claus’ suits with never-ending streams of money that can be dispersed, at will, forever. Eventually, the accounting will come. This message took a while to sink in, but ever since that election voters have been expecting governments to act the same way a family would: by balancing the books and reducing the mortgage.  

National finances are, of course, a bit different. Nevertheless, the concept that we need to balance the budget makes intuitive sense. That’s why Labor’s being punished now for it’s “profligacy” and spend-thrift ways under Kevin Rudd. The conservative attack is two-fold; it’s not just that the surplus was spent, there’s also the accusation it was squandered. That’s the rub for the government. It doesn’t gain credit for facilitating our escape from the global financial crisis because it was spending money saved by Peter Costello, rather than Wayne Swan. Yet nor has it been given any credit for useful stimulus measures. Instead it’s derided for pink batts and sending cheques to cemeteries.

Try as he might, the Treasurer’s been unable to acquire any of the gravitas of his two great predecessors in the role (Costello or Paul Keating). Although he’s been on top of his job technically, it’s his particular manner that fails to inspire confidence. Whenever Swan’s around ordinary people feel the need to pat their wallet to check someone hasn’t gone through it lifting all their twenty-dollar bills. We know he loves to hit the waves back on the Sunshine Coast and there are pictures of him holding his board as he walks up the beach. That image may be the right one for a local MP – but when was the last time you trusted your money to a surfie?

The simple reality is that Labor’s lost the economic debate. In other circumstances the party might attempt to draw the electorate’s attention elsewhere, to areas like education or health, where it still supposedly has the advantage. But that’s not possible any more. This government is facing such a shellacking it has no alternative other than to fight on Tony Abbott’s chosen ground. That means the economy, and it means going in hard. Putting Treasury at Abbott’s disposal and demanding real detail on the costings that the coalition’s refusing to provide.

These are big questions. And, quite understandably, the opposition has absolutely no intention of providing any answers. Doing so would be akin to circling a warship in front of your own torpedo. It doesn’t require a degree in maths or economics to understand why.

Instead of spelling out exactly where the knife would fall, the opposition likes to imply it’s identified plenty of ‘fat’ in the public service. We’re asked to believe that somehow an Abbott government would be able to identify exactly where that’s built up. The myth is thus that cuts wouldn’t actually reduce services. Unfortunately (and including the Defence Force) the government only employs 258,563 people. That’s 3,074 less than the year before, which is fewer again than the year before that. There just aren’t great savings to be made.

Although (anecdotally) there appears to be some slight evidence the economy is picking up (slightly), tax receipts remain down. The overall picture, despite the mining boom, is one of constrained revenue forecasts. So there’ll be no great big pot of money for a coalition government to share out. The current year’s tax revenue comes in at $353 billion dollars. But the projected surplus is a wafer thin $1.5 bn; a rounding error. The minerals tax was originally scheduled to bring in $7.2 bn this year, instead it will deliver just $ 3 bn. To put that in perspective, spending on social security’s forecast at $131.6 bn and health is $61 bn.

Secondly, an Abbott government has already announced it will forego huge dollops of money, including, most particularly, the mining and carbon taxes. Shadow Treasurer Joe Hockey’s pretending that clawing back the recent tax cut won’t hurt anyone because it’s just compensation for the increased carbon pricing mechanism. And I bet the electricity companies can’t wait to slash their prices. Ho ho, it’s Christmas again.

The final problem is that the current government’s been building expectations that it knows it will never be in office to meet. The review of higher education; a new disability support scheme; a return to spending money on defence; etc, etc.

Whinging Wendy will soon be back with her one simple, rhetorical question. “Where’s the money coming from, Mr Abbott?”