Comment: Taking a hockey stick to the facts

Treasurer Joe Hockey and Prime Minister Tony Abbott have proven themselves to not be across the policy detail of their budget cuts, writes Greg Jericho. (AAP)

A tough budget is always a hard sell - but it helps to be across the policy details, too. If you don't understand it, how do you expect to sell it to the Australian public?

When answering questions on new policy there are a lot of traps for politicians. Most famously in 1993, then opposition leader, Dr John Hewson got tripped up trying to explain to Mike Willesse how his proposed GST would affect the cost of a birthday cake.

It was one of those questions that was both very good and also very stupid. Expecting Hewson to know exactly how the GST would affect a random individual item – an item let’s be honest no one was worrying all that much about the price of – did verge on the "gotcha" variety. If Hewson didn’t know the answer it didn’t actually mean the GST was bad policy.

But the question was very good in the sense that it perfectly captured how incomprehensible the tax could be. It captured how confusing it would be for those small business owners who would have to deal with charging and paying the GST.

And it was very, very good at exposing whether or not Dr Hewson was able to explain how it worked in a practical (if perhaps trivial) example. For the man who had come up with the GST policy, and who had pushed it as a more logical and simpler way of taxing consumption, failing to be able to explain it would be a fatal blow.

Dr Hewson decided to show just how across the details of the policy he was by replying to Willesee’s question like this:

"Well, it will depend whether cakes today in that shop are subject to sales tax, or they’re not – firstly. And they may have a sales tax on them. Let’s assume that they don't have a sales tax on them, then that birthday cake is going to be sales tax free.

"Then of course you wouldn’t pay – it would be exempt, would, sorry – there would be no GST on it under our system. If it was one with a sales tax today it would attract the GST, and then the difference would be the difference between the two taxes whatever the sales tax rate is on birthday cakes, how it’s decorated, because there will be sales tax perhaps on some of the decorations as well, and then of course the price – the price will reflect that accordingly.

"But the key point is that there, the average Australian will have more money in their pocket."

I’m guessing you skipped after the first line. The point however is that Dr Hewson was right. He was actually across the detail, the problem is the detail was complex. That complexity was part of the problem of the GST.

But instead his answer was actually regarded as proof that Dr Hewson didn’t know his own policy.

Now let us shift to this week. Joe Hockey was on the ABC’s Q & A and was asked a question about the GP co-payment by a man, Korey Gunnis, who has a number of medical conditions, including rheumatoid arthritis, cerebral palsy, osteoporosis, osteoarthritis, chronic asthma, hearing loss, an anxiety disorder and clinical depression.

Mr Gunnis asked Mr Hockey, "How do you expect me to live on a disability support pension and treat my conditions when I cannot find suitable work with the proposed heartless Medicare co-payments and other increased cost-of-living measures?"

It was a pretty brutal question, and tough to answer. Fortunately, Mr Hockey did not tie himself up like Dr Hewson did trying to explain the ins and outs of health funding and how the budget would affect cost of living. Instead he replied:

"Well, from what you said, you wouldn’t be hit by the so-called Medicare co-payment. You wouldn’t be affected."

Mr Gunnis suggested that he initially would be affected, but the Treasurer again replied:

"No, you wouldn’t, because you’d be on a care plan with your doctor. Obviously you’ve got a number of chronic diseases. In that situation you are not affected by the co-payment."

Quick, clear, straight to the point. The perfect answer. It also showed the Treasurer to be across the details – more across the details than the questioner.

So job well done, Joe Hockey, completely different to Dr Hewson.

Except  one of the different things to Mr Hockey’s answer was that unlike Dr Hewson the Treasurer’s answer was wrong.

In fact, he is not across the details of his policy.

News.corp’s national health writer, Sue Dunlevy reported that Mr Gunnis would actually have to pay the co-payment. While his once a year visit to the GP for chronic disease management would be exempt, none of his other GP visits or medical tests would be.

The GP spokesperson from the AMA, Dr Brian Morton said of Mr Hockey’s comments that “He either doesn’t understand or is misusing the statistic or is lying.”

Not the best three choices for Mr Hockey to choose from.

Tony Abbott this week also failed to demonstrate his grasp of the budget policy. In the one radio interview on Melbourne’s ABC, he got the details wrong on the GP co-payment – suggesting the co-payment was limited to 10 visits for everyone, and he also was wrong on the impact of the budget on university students.

His answers helped him get past the tough questions from call-in listeners, but as with Mr Hockey on Q & A, the details were all wrong.

Rather wonderfully Sue Dunlevy asked for a comment from the Treasurer’s office to clarify Mr Hockey’s statements. She was told regarding the treatment of chronic diseases that "the legislation was still being drafted … I can’t give any detail."

And fair enough, too: details would only get in the way.

Greg Jericho is an economics and politics blogger and writes for The Guardian and The Drum.