Joe Hockey’s press club address yesterday included at least 20 fudges and furphies — all of them, again, ignored by Australia’s press pack. Alan Austin covers 15 of his most egregious errors.
STRAIGHT AFTER one of the most mendacious party leader speeches in modern Western democracies – Tony Abbott’s showpiece budget reply in Parliament last Thursday – comes another.
This one – Shadow Treasurer Joe Hockey’s speech to the National Press Club on Wednesday – is even more disturbing. For three reasons.
First, we accept Abbott’s inability to tell the truth. Hence, more is expected of his colleagues. Second, it is hoped he who would be Treasurer would display some grasp of economics. And third, we might have expected Australia’s press gallery to show some diligence in scrutinising the nonsense Joe Hockey spouts if – as they seem unanimously agreed – he will soon run the economy.
Again, more than 20 misleading assertions, hypocritical claims and blatant lies. None appears to have been noticed by any of the journalists present. Here are just 15.
1. “They [Australians] distrust their government … The stability and certainty that Australians enjoyed up until 2007 has been replaced by volatility and unpredictability.”
The whole world has been in turmoil since 2008. Except one country. Australia, alone in the developed world, averted recession when the global financial crisis (GFC) hit. Unemployment rose only marginally and has remained remarkably stable. Australia’s growth, production, jobs, productivity, incomes and pensions have increased steadily.
It is wrong to suggest Australia has experienced anything like the volatility elsewhere. And maliciously false to claim it’s the Government’s fault.
2. “And we must return stable, predictable, and honest government to Australia.”
Off to an unimpressive start. The budget reply speech by the Opposition Leader was shamefully dishonest. So is this one.
3. “Stability does not come from a Labor Government that has had five small business ministers in fifteen months.”
Labor had five from 2010 to 2013. From 1997 to 2001 the Howard Government also had five. Surely Joe Hockey is not suggesting the Howard Government was unstable?
4. “Predictability does not come when policies like tax cuts are announced in one budget then reversed without shame or embarrassment in the next.”
Perhaps. But a predictable global environment is not the good fortune of any administration today. National and state governments worldwide – including Western Australia’s Liberal Government this week – are obliged to revise tax policies.
5. “Honesty does not come when a government excuses its past profligacy on the promise of a surplus ― then not only fails to deliver one, but delivers a $19bn deficit with more to come.”
Hockey ignores several vital points:
(a) This year’s deficit is less than half last year’s. The quantum is falling dramatically.
(b) A deficit of that order is regarded by most economists as appropriate for the times.
(c) At just 1.3% of gross domestic product (GDP) this is a small deficit in comparative terms. Britain, Denmark, France, Israel and the Netherlands are all above 4%. The USA, New Zealand and Japan are above 8.0%.
(d) The underlying budget deficit, according to the non-partisan Parliamentary Budget Office, is partly due to tax policy blunders during the Howard years. It instanced decisions to freeze the indexation of petrol excise and cut tobacco excise receipts as contributing to the structural imbalance.
6. “Honesty does not come when a Prime Minister and her Treasurer promise there will be no carbon tax then introduce one as soon as they are re-elected.”
7. “The objective of the Coalition, over time, is to reduce the overall tax burden on business and taxpayers, not to increase it.”
These both repeat hypocrisies in Abbott’s speech last week, analysed previously.
8. “Next year’s forecast surplus of $2.2 billion has now become a deficit of $18 billion. Again a deterioration of $20 billion.”
Forward estimates of revenue are being revised downwards across the globe. This is the result of price movements and other unpredictable conditions. It is a transparent process, with projections publicly available and revisions posted as required by non-partisan public servants.
9. “That means seven straight budget deficits from Labor. That is the longest period of successive deficits by one government in more than a generation.”
Perhaps. But before this generation, there were 32 years of consecutive deficits ― all but three of them delivered by Liberal treasurers. The economy was returned to surpluses by Labor in the 1980s. Paul Keating delivered four. Peter Costello inherited a transformed economy and delivered nine more.
10. “Under Labor the budget will never come back to surplus.”
The Parliamentary budget Office rejected that this week. It reported that the structural budget position “showed a sharp improvement” last financial year and will improve further towards surplus in 2016-17.
11. “Under Labor, gross debt ‒ that is the money we actually have to repay ‒ has been going up and up.”
Australia’s borrowings are currently 20.7% of GDP, down from 22.9% last year.
Borrowings remain low by global comparison. Many economists believe it is the correct course for borrowings to increase while interest rates are low, while Australia has top credit rating, while infrastructure investment is needed, and repayments are easily managed.
12. “The sum of all this is that the Government does not have a revenue collection problem … it has a revenue forecasting problem, all of its own creation.”
More foolish nonsense. Forward estimates are provided for the Government, the Opposition, business and the wider community by independent public servants, as Treasury Secretary Martin Parkinson explained painstakingly last week. They are not produced by Cabinet.
13. “With little credibility around the underlying forecasts on revenue and expenditure, and with a seemingly generous approach to economic parameters, the reality is that the cupboard is bare.”
Just economically illiterate drivel. Compare Australia with the next best economies in the world: Norway’s debt to GDP is 28.3%, Switzerland’s 35.3% Germany’s 82% and Canada’s 84.6%. Australia’s borrowings ‒ at a mere 20.7% ‒ allow enormous scope to borrow billions more at low interest for infrastructure or other long-term investment.
Then compare tax rates. Australia takes a puny 25.6% of GDP. Switzerland takes 28.5%, Canada 31%, Germany 37.1% and Norway a hefty 43.2%. So Australia has plenty of scope, also, for boosting income for recurrent spending.
14. “Because of Labor’s determination to keep spending other people’s money, if we are elected on September 14, obviously we will have little fiscal room to move.”
According to economists such as Professor Joseph Stiglitz it is precisely the level of stimulus spending Australia opted for when the GFC hit that saved Australia from a disastrous recession. If Hockey becomes Treasurer in September, he will inherit the world’s best- managed economy by a street.
15. “And we should never forget that Australia had its credit rating downgraded twice under a previous Labor Government when Commonwealth debt was below the levels it is at now.”
Nor should Hockey forget Australia first gained triple A ratings with all three agencies in 2011, after Wayne Swan had been Treasurer for three years. This was never achieved under the Coalition. Australia’s modest borrowings are not a problem in the real world.
So what is it with Joe Hockey? Is he unaware of the global financial crisis? Or does he understand it but seek to conceal its impact? Either way, this shows no fitness for a position of trust.
And what about media scrutiny in Australia? Why no questioning of the hypocrisy, the lies and the economic nonsense?
Are the mischievous internet memes actually true? That word has come down from news media bosses that nothing is to impede a Coalition victory ― not even accurate reporting?
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