Monday, September 17, 2007

Tuesday Column: The rigged campaign

So Kevin Rudd wants three debates. He probably expects the election be fair. If so, he hasn’t been observing every previous Howard government election campaign.

Campaigning from Opposition against John Howard is a bit like playing poker against an opponent who can see the front of your cards.

Here’s how it will work in this election and how it has worked in every election since the newly installed Howard government introduced the cutely named Charter of Budget Honesty back in 1998.

The Charter encourages each side of politics (there is no provision for minor parties) to get their policies costed.

So far, so good. What could be more honest that costings, especially ones prepared independently by the Secretaries of Finance and Treasury?.

For a start there’s the process of getting the Treasury and Finance to cost the policies.

It can only be done after a writ is issued for the election. This itself can happen up to ten days after the Prime Minister visits the Governor General to request the election. So it is pretty late in the piece...

It has to be done through the Prime Minister. Yes, through the Prime Minister. That doesn’t cause much anguish for the government. It can submit its policies for costing through PM confident they won’t leak.

But the Opposition has to submit them “through” the Prime Minister as well. As the handbook says: “Secretaries are not obliged or authorised to take action in relation to any request unless the Prime Minister has referred the request to them.”

There’s no requirement for the request to be in a sealed envelope. The Prime Minister (John Howard at the moment) gets to read everything that the Opposition sends for costing, even though during the so-called caretaker period he is not able to direct Treasury and Finance in how to do the costings.

You think that’s more or less fair? Here’s the next step.

Five or so days later Finance and Treasury give the PM and the Opposition Leader eight hours notice that they are about to release their costing, but no notice of what it will be.

One hour before the public release the costing gets hand delivered to the offices of both the PM and the Opposition Leader.

Then it goes up on a joint Finance-Treasury website, and that’s it – game over. No further correspondence need be entered into.

For the Opposition it is a high-risk one-shot game over which it has no control.

If the policy it wants costed is complex (almost all of them are) Treasury and Finance are exceedingly likely to come up with a different costing to its own. Economists and accountants love disagreeing about assumptions.

The Opposition will have already announced its policy and its estimate of the cost (because to do otherwise would be to give the PM inside information) and so will be made to look stupid or worse when Treasury and Finance “correct” its “mistakes”.

But that’s not how things work for the Government. It has access to Treasury and Finance all through the year, right up until the time the writs are issued. In fact it has access to those officials right now, the same ones who will later be doing the independent costings.

It can submit its draft policies to these officials for “advice”, “consultation”. If the officials come up with a high cost, the government can alter the draft policy, then resubmit it - over and over again. By the time the PM formally asks for a costing during the campaign he knows he won’t be embarrassed, because he knows what the costing will say.

What did I say about “playing poker against an opponent who can see your cards”?

In previous years Labor has attempted to get out of the trap by submitting its policies for costing late.

It was a flawed approach because it gave legitimacy to a rigged contest. In allowed the Prime Minister to claim that by submitting its costings late Labor has treated the Australian public with “disdain and contempt".

A bolder, more honest and more effective approach would be to declare that the process has no legitimacy and to submit nothing. Labor hasn’t yet announced what approach it will take - it might yet take the bold and honest option.

Two years ago the Opposition’s Finance spokesman Lindsay Tanner introduced a modest Charter of Budget Amendment Bill designed to improve things. It would have given the Opposition 12 months ahead of the election in which to consult with Finance and Treasury about costings, and removed the requirement to use the Prime Minister as a sort of all-seeing post box.

The approach would have improved the quality of the polices put up during election campaigns (at the expense of extending the influence of Finance and Treasury) but it would have required a good deal of trust on behalf of the Opposition – trust it apparently had.

Tanner even wrote to his opposite number Nick Minchin saying he would be prepared to deal openly with Treasury and Finance on the basis that they would not leak what they knew to their political masters.

Minchin dismissed the offer replying that Labor appeared “to seek an arrangement whereby departmental resources are made available to provide confidential and ongoing costing advice on iterations of proposed Labor policies so that they can be refined and prepared for public release. I do not believe that such an approach is feasible or desirable in a Western democracy.”

Actually, other democracies go further. In the United States policies are costed by the independent publicly-funded Congressional Budget Office. In the UK they are costed by the Institute of Fiscal Studies.

Here, the decks are loaded against the Opposition in another way as well. The so-called Charter of Budget Honesty requires Finance and Treasury to release a “Pre-election Economic and Fiscal Outlook” within 10 days of the start of the campaign. It lets the parties know how much money they have to play with if they want to maintain a budget surplus.

What’s wrong with that? The Treasury’s thoughts aren’t released to the Opposition until beyond the last minute. As a result it can’t release its policies until beyond the last minute. It won’t know until ten days into the campaign how much it can afford.

Until now Labor has said it wants to make the game fairer. The Coalition had better hope that it means it. Should it lose office and be attempting to campaign from opposition for a decade it’ll need it.