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Coalition's broken election promises: Treasurer's new opportunity

We don't know what Treasurer Scott Morrison will deliver in his first budget and, given the contradictory statement from the government, Morrison probably doesn't know himself.

But what we do know is he will break just about every economic undertaking made by the Coalition before the last election.

Treasurer Scott Morrison during question time at Parliament House in Canberra.
Treasurer Scott Morrison during question time at Parliament House in Canberra. Photo: Andrew Meares

First and foremost he will break the promises of former Prime Minister Tony Abbott.

In the Coalition's campaign launch, Abbott said on August 25, 2013, that by the end of the Coalition's first term the budget would be on track to a believable surplus. Within a decade, the budget surplus would be one per cent of GDP.

Well we're less than 12 months from the end of the first term and a believable surplus is nowhere in sight.

Abbott also said his government would be a "no surprises", "no excuses government".

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Unfortunately for him, the biggest surprise was that it wouldn't be his government for long. He would be one of those rare beings, a winner of a federal election not given the opportunity to fight the next election.

Now "the nasty surprises and lame excuses from people you have trusted" are upon him.

But in truth Abbott only had himself to blame. He claimed he could get the debt and deficit down, remove the carbon and mining taxes and maintain all major government expenditure programs. It was always a lie. (Or it was an example of someone who hasn't mastered basic arithmetic.)

Before the last election Joe Hockey was at Abbott's side making the same promises.

On May 16, 2012, he told the National Press Club, "Based on the numbers presented last Tuesday night we will achieve a surplus in our first year in office and we will achieve a surplus for every year of our first term."

He followed this up in January 2013 saying, "Based on the numbers published today, we will deliver a surplus in our first year and every year after that."

As late as March 2, 2015, now running the Treasury, he said, "We have got to have a credible plan to get the budget back to surplus so that we as a nation can start to live within our means."

On top of that, addressing Parliament a few days later, he poured scorn on former Labor Treasurer Wayne Swan for his budget estimates that predicted a surplus.

Referring to Swan's book on his time in office Hockey said, "I am just going through the index here. I can see 'Dominique Strauss-Kahn', 'superannuation', 'Erinn Swan', 'Kim Swan', 'Libbi Swan', 'Matthew Swan', 'Wayne Swan', but no 'surplus'."

Now Hockey's gone and his record shows no surplus either.

The mid-year economic outlook statement delivered in December estimates that the underlying cash deficit will be $37.4 billion (2.3 per cent of GDP) this financial year and $14.2 billion (0.7 per cent of GDP) in 2018-19.

Trade Minister Andrew Robb is gone too, along with his fanciful predictions. On the morning following the election in September 2013 he said: 1. "As of today the mining boom will be rebooted." 2. "There's $150 billion worth of projects there to be grabbed." and 3." People's jobs will grow massively."

In fact the boom has bust and the mining industry, which was never a large employer, has shed jobs.

In time we will find the huge claimed benefits from Robb's much-vaunted free trade deals will prove as illusory. But that's another story.

Prime Minister Malcolm Turnbull is in the enviable position of not having a trail of major pre-election broad economic promises we can quote.

He was in the relative back-water of communications policy. But there he did promise that he would give all Australians access to 25 megabits per second download speeds by the end of 2016. He will not deliver on that.

And he is struggling to work out what he will deliver by way of tax reform and where his government's priorities lie on the debt and deficit versus social security, health and education expenditure front.

He is hoping, of course, the electorate will treat him as a clean skin and accept Morrison's first budget as an election manifesto.

If he can get away with that, he will have created a new formula for political success in Australia. ★ After my column of February 14 on mining royalties and mine rehabilitation I had feedback from readers that the financial assurances companies provided for rehabilitation were not in the form of cash or actual funds held by the government. They were just some sort of promise.

I put this to the Queensland Department of Environment and Heritage Protection which holds $5.88 billion in such assurances.

The following is the response:

"The Queensland Government currently holds some $5.88 billion in financial assurance covering mining and associated operations across the state.

"The general, whole-of-government position is that financial assurance is lodged as bank guarantees. (Cash may be accepted in limited circumstances, subject to approval by the department.)

"EHP requires that these bank guarantees are irrevocable, unconditional and payable on demand and further that the financial institution providing this guarantee meets the requirements of Queensland's Financial and Performance Management Standard 2009.

"As 'irrevocable, unconditional and payable on demand', such financial assurances are not 'just some sort of promise'."

"Bank guarantees are an unconditional undertaking given by the bank and the bank must make good on these arrangements if called upon, whether or not the mining operation ceases operation, moves towards administration, liquidation or bankruptcy, or disclaims its mining lease or abandons the site."