Analysis
Posted
It sounded so reassuring at the time: "The
Coalition's plan for better management of the social welfare system". It
emerged in the maelstrom of the 2016 election campaign.
"Better
management of Australia's social services will support continued record
investment in social welfare and other assistance", it said soothingly,
going on to list a range of spending on the disabled and women's safety
and the like, and mentioning lots of huge figures for spending on social
welfare."Through the smarter use of technology, we can better manage our social welfare system to ensure that every dollar goes to those who need it most," the Coalition said.
And there, in a nutshell, was the beginning of what has become known as robodebt: the ham-fisted, computerised matching of Centrelink and Tax Office records, with little recourse to actually talking to anyone if the computer suggested you were ripping off the Government.
A policy that would hurt lots of voters, in an election campaign, dressed up to sound like something virtuous and well thought through.
Political madness gone correct.
This week, the Federal Government effectively dumped the policy as the spectre of a class action loomed, amid rumours of internal legal advice that the whole thing was rather illegal, and signs that the whole project — dreamt up by one of those genius consulting firms so loved by the Coalition — wasn't actually raising anywhere near what it was supposed to.
The distress that people have experienced as a result of getting threatening letters about "debts" that it turned out they didn't actually have has been well documented.
The suggestion is that there may be as many as 700,000 cases now open to review.
But this isn't a story about household finances as much as one about national finances; a story about budgets and number shuffling in the interests of making your books look good.
The gradual expansion of the whole data matching process meant that by the 2016 election campaign, the Coalition was claiming additional savings of around $2 billion over four years in its election costings document.
This very conveniently helped fund many of its election promises, at the very time the then-treasurer Scott Morrison and Finance Minister Mathias Cormann were making geese of themselves by over-stretching and claiming a $67 billion hole in Labor's policy costings.
(A claim that did not even survive one press conference's worth of questioning).
The election campaign came and went. The robodebt program was ramped up. But by January 2017, the howls of protest from people who had been unfairly caught up in the system were dominating a quiet news cycle.
It has lingered on ever since, a political disaster for the Government — notably in a lot of its own regional electorates — and not even a policy success. The scheme has not raised anywhere near the sorts of money it was supposed to have raised.
Obsession with surplus palpable in all Government does
When the mid-year review of the Budget is released next month, we will see what further adjustments are made to the bottom line to acknowledge this utter policy failure.For the decision to dump the scheme has been taken in the context of the Government's deliberations over the Budget review.
The sense of the all-consuming obsession with getting to budget surplus is palpable in everything it does.
Look, surpluses are great for reducing debt. No-one disputes that. Just like no-one disputes that the climate is changing and that this might have some role to play in our current catastrophic bushfires … oh wait …
Anyway, the point here is that both in the infrastructure announcements made by the Prime Minister this week, and in his rhetoric encapsulated in a speech to the Business Council, the primacy of the political value of getting to surplus, rather than its economic value, shines through.
Let's not give credence to the overall number of billions of dollars the Government says it is now "spending" on infrastructure. There are too many asterisks attached to the claims.
First of all, you have to deduct the amount that is actually coming from state budgets.
Then you have to get some idea of how much is actually just being brought forward from beyond the forward estimates (i.e. a place where numbers don't hit the budget books) and onto the Budget — but will only get spent in two or three years' time.
It's virtually impossible at this point to work out how much will be spent in the remainder of this financial year, and/or the next financial year.
The announcements are full of statements like one for $118.5 million in Queensland which says "funding to flow immediately and over the next three years after previously being allocated beyond the forward estimates".
What the paper shuffling reveals
We will only get a reasonable yearly breakdown in the mid-year review of the Budget. Probably.Yes, it is notoriously difficult sometimes to pin down the exact timing of spending on infrastructure.
But the amount of greasepaint that has been put on these numbers only makes the cracks when you get up close all the more grotesque.
If the numbers are an exercise in timing gymnastics, the political message is the contortion artist of this particular circus.
Yes, the Government is bringing some spending forward just to give everyone a little bit of a pep up. Not, mind you, because there is anything wrong with the economy as such.
We are not panicking and spending money like those terrible Labor people did in the global financial crisis, goes the argument.
Hang on. Global financial crisis? Are things that bad? No, of course not. Everything is fine. Which is why we, the Government, are making the most of trying to look like we are in control. For example, by having a surplus.
The point though, is that if you have to engage in such extraordinary amounts of paper shuffling to get to your political happy place, you are possibly not making policy decisions on any particularly sound basis.
The Reserve Bank, the business community and Labor have been calling for a bring forward of infrastructure spending for ages. It's not clear that this tepid outcome is what they had in mind.
The underlying idea, don't forget, was about the need to rebalance the load of monetary policy and budget policy.
Deja vu in Morrison's words
Instead, there is spending which might not have an impact on the economy, whatever good it does to reshaping the Government's political message.The Prime Minister was oozing reassurance this week on the economy, along with a tinge of indignation that people were somehow blaming him for the bushfires, (as opposed to what has really been the main argument — a failure to acknowledge that climate change is happening and has to be taken into account in dealing with the climate-related disasters that are increasing).
"We're taking action on climate change", he told the ABC's Sabra Lane.
In one of his more splendid bits of sophistry, he continued that "to suggest that with just that 1.3 per cent of global emissions that Australia doing something differently, more or less, would have changed the fire outcome this season, I don't think that stands up to any credible scientific evidence at all".
It was all very reassuring. Just like The Coalition's plan for better management of the social welfare system back in 2016.
Laura Tingle is 7.30's chief political correspondent.
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