The audit jabberwok
Political editor Peter Hartcher tells Chris Hammer the Commission of Audit report is like the jabberwock - very scary, but a work of fiction nevertheless.PT8M8S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-37k9f 620 349 May 1, 2014
The Abbott government has unleashed the jabberwocky.
The cage was opened by the government-appointed Commission of Audit when it released its report on Thursday afternoon.
Out sprang a fearsome creature that wants to do dreadful things to most of the Australian public.
It wants to savage the pensions of the elderly, charge frighteningly large sums for a trip to the doctor, snatch big sums from the pockets of uni students, and put the lowest-paid workers on a long and painful wage freeze, for example.
These are among the 86 recommendations in the Commission’s report to the government.
The Treasurer, Joe Hockey, was standing by and could have put the beast to the sword. But he did not.
He made plain that it was not his jabberwocky – “it is not a report by the government but a report to the government”.
He embraced its overarching message, that government spending was out of control.
It “proves that we have inherited a mess,” said Hockey, with projected deficits running unchecked for another decade leaving Australia with net debt of some $440 billion.
But he refused to accept or reject any of its recommendations. Australia would see the government’s response in the federal budget on May 13, he said.
In other words, he wants the thing to run rampant. He wants to scare us.
Hockey wants the voting public to understand that the government faces a tough problem and tough choices.
He is conducting what the military calls “psyops”, the psychological operations to unsettle an enemy and allow easier conquest in the engagement to follow.
If the government allows these fears to run unchecked, it runs the risk of overdoing it.
Consumer confidence has already taken a hit, down by 4.4 points to 111 last week according to the ANZ-Roy Morgan index.
“This is likely to have been driven by news flow around the upcoming government budget,” said the authors, with speculation of spending cuts and rising taxes.
Now comes the jabberwocky to give consumers a real scare, with “jaws that bite, the claws that snatch”, as the flaming-eyed monster is described by Lewis Carroll in Through the Looking Glass.
But the creature was a fiction in a nonsense poem. Eventually, Hockey will put it back in its cage. He will deliver a much more modest set of cuts to government spending, hoping that he will win plaudits for his reasonableness.
And the Commission of Audit’s report does indeed hold a good deal of nonsense.
Its most dramatic idea, for instance, the recommendation that the federal government give the power to tax incomes to the states.
As proposed, this would actually increase overall government spending and the tax burden in Australia by $5 billion a year, according to the report.
How would that help governments live within their means?
The report claims that if states had the power to tax incomes, they would compete with each other to offer lower taxes.
But the states already have a number of tax powers and there is no conspicuous tax-cutting contest among them.
It would also give rise to different rates and anomalies in different states, precisely the sort of inefficiencies that John Howard and Peter Costello tried to iron out.
The net result of the Commission of Audit?
It would produce a much more unequal Australia, and a less efficient tax system.
This frightening construct won’t be the blueprint for the government, but it does have scare value. Labor and the Greens plan to make the most of it.