By Greg Jericho
Photo: The Coalition has promised a surplus despite more spending and less revenue. (AAP: Alan Porritt)
The treasurers debate at the National Press Club today might be a good place for Joe Hockey to reveal whether his economic pillars are built on more than just sand, writes Greg Jericho.
Two weeks ago when I examined the Liberal Party's five pillars, there wasn't much to be found. So what is the state of play now, given that we have only a week to go till the advertising blackout, and on Sunday Tony Abbott launched the Coalition's election campaign?
Well, sad to say, Abbott in his campaign launch didn't refer to the five pillars at all. This in itself doesn't mean much because while the actual pillars were not mentioned, many of the components were. This is because the campaign launch speech, like all such speeches, was a political speech, not a policy one.
But in the past two weeks, while we have moved closer to the election, we are not all that much closer to seeing many details to the five pillars.
Take the first of the five pillars - manufacturing. When Tony Abbott released the LNP's manufacturing policy last week, he announced four new measures, the first of which was appoint a Minister for Trade and Investment whose central responsibility will be to attract trade and increase inwards investment into Australia.
Changing the name from Minister for Trade to Minister for Trade and Investment I guess is what has been missing all these years. It is heartening to know however he does plan to appoint a Minister for Trade, but given we have had one every year since Federation, I'm not sure if this is a game changer.
The next announcement was to build our manufacturing export base by progressively restoring funding to Export Market Development Grants starting with an initial $50 million boost.
This scheme is largely bipartisan and provides funding to assist businesses developing plans for export. In the 2012 Mid-year Economic and Fiscal Outlook, released in October last year, we saw the scheme cut by $100m over four years to notionally "retarget" towards emerging and frontier markets, with a focus on Asian markets. The Government attempted to paint this as a response to a 2011 review of Austrade (which administers the grants), but that review explicitly stated that the grants scheme would "continue unchanged".
After the MYEFO cuts, the Opposition pledged to review the changes. This promise delivers on that commitment.
The third measure was for another $50m for a "Manufacturing Transition Fund to provide assistance to communities and industries as they transition to new areas of manufacturing growth". This is not so much a manufacturing policy as a policy to deal with the decline of manufacturing.
And finally there was a commitment to "implement industry specific Strategic Growth Action Agendas". This apparently will "bring industry and government together to develop strategic, coordinated and long term plans for growth and viability".
Which sounds like a fair bit of piffle.
While the LNP manufacturing plan quite rightly points out that manufacturing employment has been hit hard since 2007, the reality is the sector has been declining in importance for the past 30 years:
The one policy announcement on Sunday that can be seen as a broad measure designed to cover a number of the five pillars was the announcement of interest free loans of up to $20,000 over four years for apprentices. The loans will only need to be paid back once the person earns more than $51,309 a year.
The loans are capped and weighted according to the year of the apprenticeship - $8,000 during the first year, $6,000 for the second and $4,000 and $2,000 for the third and final years respectively.
This weighting is sensible as it reflects that according to the National Centre for Vocational Education Research, 31 per cent of all trades apprentices/trainees who began their apprenticeship in 2007 dropped out in the first year:
The idea is a good one, and goes nicely with the Gillard Government's introduction last year of HECS/HELP applying to TAFE colleges. But it stops being a good idea if it is used as a reason to cut funding elsewhere. Similarly it's good for apprentices to have access to interest free loans, but should it become the start of a slippery slope whereby the costs of doing an apprenticeship are placed ever increasingly on the apprentice, then that would be a poor outcome.
The cost of the policy came in at $85 million. And of course all the costings have been released, coupled with a detailed explanation of how the policy will be funded.
That last sentence was a joke for you late comers to the election campaign. Of course we don't have details.
The ALP quickly went on the offensive by suggesting the Liberal Party would cut the trades training centres. This forced Christopher Pyne, who thus far had been quite equivocal on the issue, to release a statement announcing they have "no plans to shut down any of the Trade Training Centres that are in operation or cancel any projects that have been approved under the latest funding round".
He is much less clear about whether the Liberal Party will continue the program, which has another has another five years to run.
The main takeaway from the Mr Abbott's campaign launch speech however is that the Liberal Party, now comfortably in front in the polls, has thus far decided to keep it vague when it comes to cuts to programs and services. But cuts there must be.
In his speech he also announced that within a decade, the budget surplus will be 1 per cent of GDP, defence spending will be 2 per cent of GDP, the private health insurance rebate will be fully restored, and each year, government will be a smaller percentage of our economy.
That's a surplus despite more spending and less revenue. Something does not add up.
Between now and Saturday week, there might be some more nice policy announcements, but without explaining how it all will be paid, the pillars are built on sand. Today Joe Hockey is appearing at the treasurers debate at the National Press Club. It would be a good time to start shoring up those foundations.
Greg Jericho writes weekly for The Drum. His blog can be found here. View his full profile here.
We're no closer to seeing the Coalition's sums - The Drum (Australian Broadcasting Corporation)
