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Swan pressures opposition with greater budget transparency

Treasurer Wayne Swan will today promise to release the 2012-13 budget outcome “well before the election”, as part of measures…

Treasurer Wayne Swan will announce measures to improve costings today. AAP/Dave Hunt

Treasurer Wayne Swan will today promise to release the 2012-13 budget outcome “well before the election”, as part of measures to increase budget transparency and put pressure on the opposition over costings.

Speaking to the Australian Business Economists in Sydney, Mr Swan will commit to giving more funds to the recently established Parliamentary Budget Office.

“This will enhance the capacity for costings to be prepared in the lead up to the election, removing any excuse for policies to be released like thought balloons rather than rigorously costed policies,” he says in his speech.

The opposition has been using the PBO to cost many of its policies.

Mr Swan also says the government will introduce legislation for the PBO to prepare a post election audit of all political parties, publishing full costings of their election commitments and budget bottom line. This would come out 30 days after an election.

“This will remove the capacity of any political party to try and mislead the Australian people and punish those that do.

“It will avoid a situation we saw last election, where the Liberal party thought they could con the Australian people… Their $11 billion black hole in the budget bottom line would have been uncovered, regardless of the election outcome.”

Mr Swan will also commit to releasing the budget outcome as soon as the secretaries of the departments of Treasury and Finance inform the government they have a reliable figure.

Treasury and Finance officials have been clear that a reliable estimate could be made “well before the election and we commit to releasing them.”

“This means that the 2012-13 outcome of the underlying cash balance - the most important budget aggregate - will be there for everyone to see.”

Under the present arrangements, this figure does not have to come out until well into the formal campaign.

Mr Swan will repeat that the government needs to do more to ensure the budget is sustainable over time.

“Our focus will be on ensuring the sustainability of priority spending, and improving the integrity of the tax system.

“Inevitably, these reforms will involve very difficult decisions, but they will always be guided by our Labor values.”

New spending will be offset by savings, and real spending growth will average no more than two percent growth over the forward estimates. The government will also keep tax as a share of GDP, on average, below the 2007-08 level of 23.7 percent.

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21 Comments sorted by

  1. Gavin Moodie
    Gavin Moodie is a Friend of The Conversation.

    Adjunct professor at RMIT University

    Thanx for this report. Unlike some of Grattan's critics, I would appreciate some analysis of this news. It is interesting that this is a Labor Government seeking to trap a Coalition opposition by extending the charter of budget honesty, a policy that a Coalition Government introduced to trap a Labor opposition.

    Is this likely change the number and form of policies released by the Government and Opposition?

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    1. Michael Shand
      Michael Shand is a Friend of The Conversation.

      Software Tester

      In reply to Gavin Moodie

      "Unlike some of Grattan's critics, I would appreciate some analysis of this news" - Yes cos anyone critical of Grattan is therefor against analysis of news

      Quick question, is this true for Andrew Bolt as well? unlike his other critics do you appreciate News Analysis?

      How high brow and informed you must be to agree with the powers that be

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    2. Peter Evans

      Retired

      In reply to Gavin Moodie

      I agree it is likely to change the number and form of policies released. The Coalition keeps talking about needing to see the final Budget figures so it can settle the costings. But the Budget figures are not that relevant to the cost of individual policies. Rather the Budget figures will determine how much money there is to spend on new policies and where there might be savings. My back of the envelope calculations suggest the Coalition needs to find around $15billion in savings or new revenue to…

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    3. Peter Lang

      Retired geologist and engineer

      In reply to Peter Evans

      Peter Evans,

      >"So there will be little room for new expensive policies like direct action on climate change. "

      I thought the Coalition said they would cap their spending on direct action at $3.6 billion. Please correct me if I have that wrong.

      I understand the government has already committed $30 billion to renewable energy (one way and another) total to 2020 with expenditure increasing beyond that. It seems to me there are enormous savings to be made as well as enormous improvements that can be made to productivity and international competitiveness by removing many of the impediments that have been imposed on business.

      I see the opportunity to return Australia to era of 2.2% pa real wage growth and improving standard of living we had under the previous government. I agree there is an enormous amount of really bad policy to be removed. That's going to be a really big job. It will take enormous bravery to to it. I hope Abbott and his team are up to it.

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    4. Peter Evans

      Retired

      In reply to Peter Lang

      Growth in real male total average weekly earnings was poor at the height of the GFC but in the four years to 2011/12 has averaged over 2% pa, source http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/MSB/22

      I maintain that there will be little room for new expensive policies as total Federal Budget expenditures are of the order of $380bl and a large proportion of this is not discretionary eg Defence around $20bl. Adding the $3.6bl in direct action to my estimate we already have to cut expenditures by about $19bl or around 5%. Not impossible but it gets harder and harder as you go further. When it is claimed that there are enormous savings available I would like to hear some examples that add up to tens of billions to allow for significant new spending such as the Coalitions commitment on the Pacific Highway.

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    5. Peter Lang

      Retired geologist and engineer

      In reply to Peter Evans

      Peter Evans,

      Thanks you. I agree we have committed to far to much expenditure. However, I understood the $3.6 billion for direct action is a very significant reduction compared with costs committed by this government to climate policies (e.g. total $30 billion for renewable energy to 2020). So removing the expensive and ineffective polices and replacing them with a much lower commitment is a saving not an addition. I understand Cutting the carbon tax and ETS will save $4 billion per year (that…

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    6. helen stream

      teacher

      In reply to Gavin Moodie

      Gavin Moodie...

      That's all very droll, but the difference for these two parties---no matter what form of Budget Office or Charter of Budget Honesty is in place---is that Treasury, at least for the last three decades, has been in the tank with, or at least very sympathetic to--- Labor.

      And that leaves GreenLabor with all the power, since it's the assessments of GreenLabor's Treasury friends---with their own methods and assumptions ----that are used to inflict electoral damage on the Coalition…

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  2. Michael Shand
    Michael Shand is a Friend of The Conversation.

    Software Tester

    Good Article, I do find it suspicious that Swan is pushing for budget honesty

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  3. Jack Arnold

    Director

    It is nice to find a report about the Gillard Labor government that is not a piece of "yellow journalism" and seemingly follows the editorial policy of The Conversation.

    Tony Abbott, the (mis)Leader of the Opposition Coalition without majority in his own party, will have to get the unelected political hacks of the Liberal Coalition to analyse this matter to see how the present situation of refusing to publish Liberal policies & costings may be logically retained.

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  4. Peter Lang

    Retired geologist and engineer

    The Opposition would be unwise to reveal its costing before the government has gone into caretaker mode. The government has demonstrated its ability to demand that public servants provide to the Treasurer information the Opposition has submitted for costings. With the government looking likely to lose power at the coming election, it will do all it can to get information on the Coalition's policies and costings as early as possible. Labor has demonstrated in many ways it has little integrity and cannot be trusted (its in their DNA). The public service is largely sympathetic to the Labor Party. Given all this, I can see no way the Opposition can trust that if it provides its policies early for costing the information will not be leaked to the Treasurer.

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  5. Ronald Ostrowski

    logged in via Facebook

    The Coalition have made it clear that they will not provide their detailed policy costings before the election. They may bring in a some shonky accounting firm like they did last time, and give the electorate a glance while also giving their MSM mates time to bury it in a sea on anti-Gillard and anti-Labor stories. I suspect Swann's strategy here is to ensure that the usual 'blame the previous Government for everything' approach once in power, including feigning inheriting a budgetary mess as an…

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  6. Stewart Scott-Irving

    Education Consultant

    The often sought and quoted Government attempts to achieve "budget surplus" by both the ALP and Coalitions of the past and present might have been achieved if more prudent spending and accountabilty had taken place. The almost daily availability to Treasury and the Treasurer of financial and budgetary trend data, somewhat similar to the reporting by the ASX, makes a joke of the perpetual pre-election Swann/Hockey policy costings and transparency script. Where, when and from whom are we to receive the most strident critical analysis of these two buffoons who would seek and claim to be prospective Federal Treasurer following September 2013!

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  7. wilma western

    logged in via email @bigpond.com

    It's a handy report and it's nice to see the Treasurer referred to as "Mr Swan"- a bit of respect for a change.

    Not exactly world-shaking tho'

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  8. John C Smith

    Auditor

    It is absurd and misleading to contest an election on future budget forecasts; it is like fighting an election over climate forecast. What we need is policy and prctice statement from each party and then let the people decide their fate at the next election. Because we cannot forecast who will lead our country. The prime minister said there will be no carbon tax in the government I "lead".
    But then the government is lead by greens ets due to lack of majority for the prime minister. In a way she said and acted truthfully as she has not "lead" the government to carbon tax.
    So any budget business is selling snake oil.

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    1. Hardy Gosch
      Hardy Gosch is a Friend of The Conversation.

      Mr.

      In reply to John C Smith

      Fact: The PM said "no carbon tax" but a "price on carbon". What we have right now is a fixed price ETS. Do not be misled by the mediocre MSM/ABC LNP propaganda.And yes isn't it great to see that the ALP, Greens and Independents can work together in the interest of the nation.
      Did you read the article by Dr Geoff Davies.in independentaustralia.net? What do you think! Frightening "tea party" prospects?

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    2. John C Smith

      Auditor

      In reply to Hardy Gosch

      Mr Swan Hon Treasurer is playing a cheap trick. There budget or policies they proclaimed before the last election is "in good shape'. No problrms for them but for us. They will be forecasted out at September election for prctice of their budget forecast and the putting that forecast in to practice. A poor single parent will have to send the kid to a child care centere9 child refuge0 and she has to go and work in a similar joint and work while thinking of the treatment her kid receives at the other child refuge.

      Tell us what they are going to do and what they have achived and people will decide..

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    3. Hardy Gosch
      Hardy Gosch is a Friend of The Conversation.

      Mr.

      In reply to John C Smith

      John. In order to get a clearer more comprehensive picture it is essential to sift through the often misleading and biased information supplied. Unfortunately there aren't that many reliable sources available these days. The following article might shed some light on it.
      http://www.independentaustralia.net/2013/business/media-2/the-future-of-investigative-reporting-in-australia/
      Also: As the name implies it is "budget forecasting". Its only a rough guide. That's why it is necessary to have midyear updates to take into account any extraneous influences.

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  9. helen stream

    teacher

    Their '$11 billion black hole in the budget bottom line' should be followed by....
    [...according to different and debatable Treasury assumptions---and even then grossly exaggerated']

    Remember that Labor had all of the resources of a very supportive Treasury , headed by Ken Henry, whose own personal Leftist political preferences were well established and publicized in the 2007 election campaign---and since.

    Remember also that Treasury had consistently under-estimated Costello's budget projected…

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  10. brent warwick

    architect

    The title of this article sums up the inherent problem with this current government. Instead of trying to fix the mining tax... instead of trying to claw back some of the huge profits that overseas internet companies make... instead of implementing a fair and equitable tax system .......they are focused on trying to make the opposition look bad ......... governing this country without all the stunts, spin and ad hoc solutions does not seem to be high on their list of priorities

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    1. Jack Arnold

      Director

      In reply to brent warwick

      Brent, I think you may have the bull by the horns. It has been the deliberate policy of Tony Abbott (mis)Leader of the Liberal Notional Coalition Opposition to 'bad mouth' every action by members of the Gillard Labor government and wherever possible to misrepresent government policies. Even so, the Gillard government has just got on with the job, passing about 300 pieces of legislation.

      This toxic approach by Abbott and his accomplices Joke Hockey and Scum Morrison particularly, has been described by others as "the longest dummy spit in Australian political history" brought about by Tony Windsor and Rob Oakeshott (both Independent) recognising that Tony Abbott lacks the necessary personal qualities to be allowed to occupy The Lodge.

      A little bit of digging shows that the foreign owned CSG industry appears to be funding much of the Coalition "borne to rule" bombast.

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