Wednesday, September 16, 2015

Hockey remembered: Gaffe-prone with our interests at heart


Defending his record in what may be one of his last days as Treasurer, Joe Hockey told Parliament on Tuesday that the Australian economy was $68 billion bigger than when it had been entrusted into his care.

Without Hockey that result may not have happened. Had the Coalition slashed spending in order to quickly return the budget to surplus as it implied it would, or made cutting debt its number one priority as it said it would, the economy might not have grown at all.

Hockey stood in the way of those wanting to cut spending sharply, delivering a clever first budget that provided for big spending cuts over time, rather than upfront.

Pension, disability and family payments were to climb more slowly. No one was to be hit upfront at a time when the economy and household finances couldn't take it, but slowly over time as the budget balance improved, eventually delivering the surplus.

Blowing out both the government debt and the budget deficit as Australia's export prices slid, Hockey made the deliberate decision to prioritise the economy over the surplus. He marked himself as a Keynesian, as every modern treasurer has had to in order to manage the economy well.

Far too many of his measures were unpopular, some deservedly. Cutting grants to the states by $80 billion over 10 years in the hope they would somehow make up the difference themselves was more of a pea and thimble trick than genuine economic management, and taking on pensioners without also taking on generously assisted superannuants allowed his budget to be painted as unfair.

By the standards of the Abbott government he was a good communicator, levelling with people about what he was doing and why rather than using slogans.

Often this meant he was seen to make "gaffes". Telling Australians that "the poorest people either don't have cars or actually don't drive very far in many cases" was an attempt to say that the hysterical claims about his perfectly reasonable plan to reintroduce fuel indexation were wrong. It wouldn't target battlers.

Other claims were bizarre. He said "higher income households pay half their income in tax", which isn't true at all, and claimed that his own electorate of North Sydney had "one of the highest bulk-billing rates in Australia" when it had one of the lowest in Sydney.

But the slip-ups didn't hurt him much. He was able to convey a greater truth: that he was on top of things and was prepared to take people into his confidence.

After his much better received second budget, he had grand plans to finally tackle super tax concessions and limit negative gearing. But his prime minister cut him dead, declaring they were Labor measures the Coalition would never embrace.

Shut up and increasingly deprived of freedom to act, he concentrated on less contentious topics such as international tax avoidance and the overdue report on the financial system that he commissioned after years of Labor inaction.

Cabinet was due to approve his response to the report on Monday night. He was set to announce it before the markets opened on Tuesday. He didn't get the chance. He'll be remembered as a good treasurer who kept the economy afloat in difficult times and was preparing to do more.

In The Age and Sydney Morning Herald