Rarely has the pre-budget talk been so obviously about clearing the way to break election promises. That the government has been so bald-faced about this suggests they probably are surprised everyone hasn’t realised this was their plan all along.
Perhaps there are people who believed Tony Abbott when he said the day before the election that there would be “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS”, but I doubt none of them are in the Cabinet.
That the promise was always going to be broken doesn’t mean we should just wave it through, however; Mr Abbott and Mr Hockey will need to do some work to explain it all away.
In such cases there are a few standard moves, and Mr Abbott and Mr Hockey have been using them all.
The first is to claim a budget black hole. This is best done when, such as in 1983, there is actually a black hole. Peter Costello had observed how well it worked for Keating and so he was determined to play the game as well.
And so when he came into power in 1996 - huzzah! -he too found a black hole. Alas, it was all a bit of a fib. As John Quiggin noted at the time, it mostly involved changing budget parameters such as revising down expectations for growth.
It worked a trick. The ALP, cowered by the election loss, said bugger all and the media mostly went along for the ride.
This time round Mr Hockey tried the same trick – he changed the parameters, revised down growth expectations, removed assumptions about expenditure growth, and - huzzah! -he had his own little black hole. Except he kind of gave the game away when he also handed the RBA $9 billion.
So he needed to find more black holes, and so he looked beyond the budget forecast years – to a point where everything relies pretty heavily on assumptions.
This has been Hockey’s big weapon – to find his budget black hole he looked beyond the budget, and with his argument that so big is the hole that it justifies cutting back on things like health, education, the ABC and SBS and also changing the pension.
But even if these figures were perfectly fine, this does not excuse Mr Abbott’s broken promise. Mr Hockey is talking about matters to do with the ageing population, which did not just crop up in the past 6 months. Mr Abbott promising not to touch health, education and pensions was not done under veil of ignorance that our population is ageing; it was done under a veil of deception.
Oddly, this new found black hole hasn’t caused Mr Abbott or Mr Hockey to wind back any of their golden ticket promises such as the paid parental leave.
It’s always tricky to blatantly break a promise – you need a cover to go with the excuse. For John Howard it was the core promise; for Tony Abbott it’s the “fundamental commitments”. He told journalists that while he would keep all his promises “but one of the most fundamental commitments of all was to get the Budget back under control, to put the Budget back on to a path to a sustainable surplus”.
So expect the fundamental promise line to get a work out.
But even this can be tough for voters to swallow – and Tony Abbott and Joe Hockey might struggle at times to maintain the line that they are keeping their promises.
There are two ways to sneak around this problem. The first is to only make “real” cuts, not “nominal” ones. Future government expenditure is always looked at in real terms – that is, taking inflation into account. But Mr Abbott’s promise wasn’t so technical. So long as the health and education budgets are greater in nominal terms he has a line to spin that he has not cut spending.
The second way is the one most likely to be used. That is to put the cuts to education, health, ABC and changes to the pension in the last 2 years of the forward estimates – that is, 2016-17 and 2017-18. This will put the cuts beyond the next election and gives Mr Abbott and Mr Hockey the lie that they haven’t broken their promises because those promises only covered the first term.
But it’s been clear since about 1 December, 2009 that Abbott’s strategy has been to follow John Howard’s lead of 1996 in which he promised to do none of the nasty things that people expected he would do, and then after winning by a big margin took to the following election all those things.
It’s much easier to win an election when you are the incumbent and you have a fat margin to defend. Mr Hockey on Wednesday confirmed the LNP would take workplace relations and taxation “reform” to the next election.
But of course that was always their policy – even before last year’s election.
Our electoral system has become based on promising to do nothing voters don’t like in order to do them once you have gained the advantage of being elected. It’s also based on the premise that we pretend it doesn’t work that way.
Greg Jericho is an economics and politics blogger and writes for The Guardian and The Drum.
