Tag Archives: Hockey_Joe

Angry voters and the question of mandate

Nielsen and Newspoll both currently have Labor ahead 53-47 in two-party preferred (TPP) terms. This is almost the exact reverse of the 2013 election result which the LNP won 53.5-46.5.

This is how Nielsen is tracking:

Nielsen 23.6.14_cropped_600

This image from the AFR shows how the Coalition vote is trending in six polls:

AFR Je14_6e420e70-fa5f-11e3-80cb-3fa822d151bf_23p00 news poll of polls 600

Laura Tingle says voters are still angry over the budget:

Six weeks on from the budget, the rage is maintained: the majority of voters still think the budget is unfair and the task of confronting ever deepening voter hostility towards Prime Minister Tony Abbott is only growing.

It says something about the quality of the government’s budget sales job that, in the period since the budget, the number of Coalition voters who believe the budget is fair has actually fallen more sharply than the number of Labor voters who think it is fair.

The latest Nielsen poll figures suggest little the government has done has changed voters’ initial hostile reaction to the budget and, if anything, has only eroded its own base as the details of the budget’s impact on traditional constituencies like pensioners and families has become clearer.

Arguments about the budget crisis; that working people are working a month a year just to fund welfare recipients; that the government is not really cutting pensions – none of these seem to be cutting through.

John Quiggin in commenting on Hockey’s statement about “lifters” and “leaners” had this to say:

The hostile reception given to these Romneyesque arguments is unsurprising. The fact that Hockey is relying on talking points that failed even in the US is indicative of the level of delusion under which the government is operating. Having run a disciplined and entirely negative campaign, Abbott and Hockey ought to understand that they were elected by default. They owe their jobs to the fact that voters were sick of Labor’s leadership shenanigans.

The fiasco of the Senate election is a pretty clear indication of a “plague on both your houses” view. Instead, they appear to be under the impression that they were granted a mandate for radical change – and long after the budget is off the front page, the electorate will punish them for it.

Some of the hacks are finding comfort in the fact that the LNP has clawed back some support. In fact they’ve improved from a prospective landslide defeat to one that would just be demoralising. Of course much can happen suddenly in politics and the election is a long way away.

There can’t be much comfort, however, in Abbott’s approve/disapprove rating of 35-60, up from 34-62. The slide from November last year when it was 47-46 should be telling him something.

Shorten’s numbers are 42-41, down from 47-39. He was 51-30 in November, but most of the time since he has been about evens.

In the preferred prime minister stakes, Shorten leads 47-40.

The LNP support comes from the old, men, NSW and WA. Strangely Labor slipped in NSW from 58-42 to 46-54, well beyond the nominated margin for error of 4.6%. The numbers for the state break-up are small and one or both may be rogue results.

Overall, though, one might say that the voters are telling Abbott and Hockey that they do not in fact have a mandate for much of what they are attempting to do.

I’ll leave you with this Tandberg from a few months ago:


Hockey’s debt and deficit mess

In their usual sloganeering fashion Abbott, Hockey, Cormann and others constantly refer to the ‘budget debt and deficit mess’ (or disaster) they inherited from Labor. In the post Resolving the budget ‘crisis’ I attempted to show that Labor left the budget in reasonably good shape. In so far as there is a mess or a crisis now, the author is Hockey and company.

From comments I may have not made the case plain. In what I hope is my last post on the budget of 2014, I lay out the case again, with additional information.

In the 2013 budget Wayne Swan went beyond the usual four-year projections to lay out expected receipts and payments over 10 years. He did this to reflect how the numbers would work out, given that the major payments for Gonski and NDIS did not cut in until after the four-year budget cycle. Swan left the budget in good fiscal shape.

When Bowen and Rudd took over from Swan/Gillard they had to rejig the budget to accommodate the early change from a fixed carbon price to carbon trading, plus some new policies. Labor’s legacy is reflected in the Pre-Election Fiscal Outlook (PEFO) prepared independently by Treasury and Finance and published under the charter of budget honesty in August 2013 before the last election is shown:


This graph has the budget back in surplus in 2015-16, an ongoing surplus of about 1% of GDP (about $16 billion) and a restoration of budget receipts to about 25% of GDP. The forecast assumed no tax cuts to offset bracket creep. In effect the government would take back some of the eight tax cuts delivered by Costello and the one delivered by Rudd.

Six years of Labor had seen debt increase through the unaffordable tax cuts and Keynesian stimulation to counter the GFC. Nevertheless debt was modest by international standards.

Here’s Labor’s debt in context:


Hockey has done three main things.

First, he has added $68 billion in debt over the four-year budget cycle.

Second, he has delayed major cuts until the fourth year, as Ross Gittins has pointed out. (Ironically he has done this to stimulate the economy in transition from reliance on the resources boom. In fact consumer confidence tanked from the pre-budget talk of austerity and remains at levels of the 1991 recession.) Hence the budget does not reach surplus until 2016-17, one year later than Labor.

Third, Hockey has restrained receipts to 23.9% of GDP, according to Gittins, one election promise he has kept. Hockey has put the budget into a straight jacket entirely of his own making. This decision is based on his austerity/small government ideology.

The transition from Swan to Bowen to Hockey is reflected in this graph a form of which was published in the AFR at the time of the Mid-Year Forecast and Economic Outlook (MYEFO) last December.


Swan’s embarrassment and a fair bit of the negative view of Labor’s reputation as an economic manager is reflected in the difference between MYEFO for 2012 and the 2013 budget. Swan/Gillard had bravely forecast a budget surplus for 2012-13, but had to give up and defer for two years because of failing revenue. Treasury and Finance seemed to be completely blindsided by what was going on but the repeated failure of revenue to meet forecasts made the government look incompetent.

I understand revenue picked up a bit in the weeks before PEFO 2013, mainly due to better receipts from the mining and carbon taxes. I believe it was stable between PEFO 2013, Labor’s legacy, and MYEFO 2013, Hockey’s mess.

You will recall that the from ABC Factcheck confirmed Bowen’s contention that Hockey added $68 billion of debt to the forward estimates:


In the overall narrative the focus should be on what Hockey has done in increasing the deficit and in establishing a 23.9% of GDP limit on receipts. Instead we have sloganeering and a welter of numbers in an attempt to sheet home the entire blame to Labor. The LNP keeps saying that they gave us the budget the country needed and that there was no choice. There was choice in the overall budget framework as well as the allocations within it, which privileges the rich and the corporates and punished everyone else. Infrastructure and defence have also received increases, beyond normal inflation, though the former is limited to roads, neglecting public transport.


One sloganeering tactic is to state (true) that we are paying $1 billion in interest every month, and then rattle off what could be achieved with $12 billion extra in the budget. This entirely overlooks the need for debt to counter the GFC and the state we would have been in had we followed LNP policies.

Another is to say that if nothing were done then in 10 years the debt would be $667 billion pa. No economic commentator has had a good look at this claim, but it’s based on the Hockey mess, not Labor’s as such.

Based on that $667 number, they now have dazzled everyone with a ‘blizzard’, to borrow Bernard Keane’s description, of numbers derived from it. The interest bill becomes $2.8 billion per month, or $25,000 for each man, woman and child in the country, $100,000 for a family of four. Each Australian’s share of the interest would be $9,400 over the next 10 years, and so on and on.

Keane says it’s a Howard trick, although Howard had the gumption to stick to one number. Does anyone remember the ‘Beazley black hole’, the gigantic deficit left to the Howard government in 1996? This graph shows the budget balance history going back to when Howard was treasurer:

Budget balances_cropped_600

The graph is interactive. I’ve taken a screen shot with the blue marker bar over the socalled “Beazley black hole” It wasn’t a black hole and it wasn’t even Beazley’s as he was finance minister; Ralph Willis was treasurer. The deficit in that year was a benign 1.1% of GDP.

[This graph has replaced the less good one I had in the original post.]

The Tories have form, they specialise in lies. I’m inclined to think this present lot are liars, clunkheads or both, Laura Tingle’s assessment in 2010, and unfit for government.

Update: ABC FactCheck have done a thorough analysis of Hockey’s claim that

“At the moment we’re paying a billion dollars a month – one billion dollars every month in interest, in interest on the debt that Labor has left.”

Labor only incurred 75% of the current debt and there is a difference between gross debt and net debt. The verdict:

Using either gross debt or net debt, Mr Hockey’s claim that at the moment Australia is paying a billion dollars every month in interest on the debt that Labor left is exaggerated.

A nice way of saying he’s lying.

Previous posts on Budget 2014:

On a mission to upset everyone

Budget explainer

A crisis in trust

Shredding the fig leaf

Poll anger or a shift in the tectonic plates?

To GST or not to GST

Cap super, says Richard Denniss

Resolving the budget ‘crisis’

See also especially Hockey’s morality play.