Photo: In theory the Commission of Audit could tinker with the system, but in practice it is pretty limited in its options.
The Commission of Audit is there to provide a cover the government can use to justify its own rhetoric. If it comes undone, the Commission will provide a convenient scapegoat, argues Mungo MacCallum.
There is an old political adage that says never set up an inquiry unless you already know the result; and Tony Abbott and Joe Hockey have certainly done their best to comply with it in selecting the terms of reference and personnel for their much-trumpeted government Commission of Audit.
Abbott promised a government of no surprises, and while he may not be able to deliver across the board, he will certainly do so when his hand-picked body reports in March, leaving plenty of time to process its findings before Hockey hands down his first budget.
In theory, the first national audit since 1996 should cover the whole of government and indeed all the nine governments in Australia, federal, state, and territory – though not, of course, local, still unrecognised in the constitution and destined to remain so for a long time if the Coalition has its way. And the audit should also examine every aspect of the budgeting process including those now shrouded in secrecy such as the spending patterns of our security services.
But Abbott and Hockey, while declaring virtuously that nothing is off the table, have made it clear that vast areas are in fact sacrosanct. For starters, half of the entire process – the revenue side – is effectively forbidden territory. Not only is Abbott planning a completely separate tax review, but he made the traditional opposition pre-election commitment not to increase taxes.
In theory the Commission could tinker with the system, but in practice it is pretty limited in its options. The carbon and mining taxes are to be abolished and the current system of payments to the states and territories will remain until the full tax review – and even then there is a pledge not to increase the GST.
But Abbott's promises went much further: there are to be no reductions in three of the four biggest portfolios: health, education and defence. Again, this leaves room for a bit of micro-management; the Commission can juggle the available funds to accord with its own priorities, provided, once again, they accord with Abbott's own: for instance, he has already committed to removing Labor's means test on the private health insurance rebate, no matter what.
So, with more than half the budget already declared a no-go area, the Commission is left with welfare – though not, it should be added immediately, one very big ticket item: Abbott's pet parental leave scheme.
Seniors have also been promised that their benefits will be enlarged. And the National Disability Insurance Scheme, enthusiastically embraced by Abbott during the campaign, may also be off limits.
John Howard's welter of middle class welfare measures may be vulnerable, but given that many of them are given as tax benefits rather than direct grants they may be considered more properly part of the tax review than what is left of the Commission of Audit.
In fact the Commission's main task may be to clean up the plethora of small promises made during the campaign, deliberately targeted handouts whose removal would cause voter anger out of all proportion to any economic benefit that might be gained.
We are told that the Commission may consider privatisation of both commonwealth and state-owned enterprises, which presumably means that the government wants it to do so. But there are not too many of those left and if the states were to part with theirs they would want a massive quid pro quo – one which would only be available through changes to the grants system, which will have to wait on the tax review.
All of which leaves the Commission with three fifths of five eighths of not very much, which may explain the short time given to its members to do their analysis and prepare their report. And they should have little trouble doing so, given that the chairman, Tony Shepherd is a former president of the Business Council of Australia and the head of the Commission's secretariat, Peter Crone, is the Council's chief economist.
The BCA is one of the more conservative of Australia's business lobby groups, with a long standing policy of resisting wage increases, demanding tax breaks for its members and defending every aspect of corporate welfare while condemning much public welfare as wasteful and extravagant.
And there will be no serious opposition to this becoming the Commission's dominant view. The other members consist of the former Howard minister Amanda Vanstone and three public servants: Peter Boxall, an ardent free marketeer who worked as Peter Costello's chief of staff, Tony Cole, a former treasury secretary, and Robert Fisher, a ex-bureaucratic heavy from Western Australia. Not too many closet socialists or bleeding hearts among that lot.
There has been some protest at the one-sided make up of the Commission; surely it would have been reasonable to include at least one voice from the other side, someone to speak on behalf of those who receive and depend on government benefits and who could make the case for their retention – or perhaps even a critic of big business, someone willing to point out the cosseted nature of so many industries and the extent of the protection, subsidies and favours Tony Shepherd's members receive from the taxpayers.
But this was never in the script: Abbott promised the Commission of Audit in the context of ranting about unsustainable debt and deficit, a budget emergency, the overwhelming urgency of the need to do something about the hideous morass into which Labor had delivered the nation.
Of course, the emergency is suddenly over: Joe Hockey has insouciantly raised the debt ceiling by two thirds, borrowed an extra $9 billion for the Reserve Bank and allowed the promise of returning to surplus to recede yet further into the never never. And he, like Malcolm Turnbull and Greg Hunt, finds himself bound by Abbott-inspired policies which he must surely know are at best silly and at worst downright dangerous – policies which sounded terrific as three word slogans in opposition but which are manifestly unsuited to the actual process of government.
The Commission of Audit is there simply to provide cover: to produce a report the government can use to justify its own rhetoric. And of course if it all comes undone, the Commission will make a very convenient scapegoat.
Mungo MacCallum is a political journalist and commentator. View his full profile here.
What will a Commission of Audit achieve? Not much. - The Drum (Australian Broadcasting Corporation)
