John Howard famously went down in 2007 spending like a drunken sailor, but that was at the end of an 11-year reign that had delivered enough budget surpluses to reduce outstanding federal bonds on issue to just $58 billion. Howard’s treasurer Peter Costello had also gone a long way to fully funding federal superannuation liabilities to public servants through the establishment of the Future Fund.
However, very little of that Howard largesse resorted to direct handouts to public companies, in stark contrast to what we’ve seen from Scott Morrison and Josh Frydenberg in recent months.
It was bad enough that $38 billion of the $88 billion in JobKeeper payments went to claimants that didn’t qualify under the rules of the scheme, but at least public companies were required to disclose precisely how much they received.
In terms of handouts in addition to JobKeeper, some public companies have been quite transparent, making a special ASX announcement on the day of the political announcement as can be seen on this list.
The large number of WA mining projects backed would suggest that this was a particularly pork-barrelling technique viewed as necessary to minimise seat losses in the state.
Most of the largesse slipped through to the keeper without much criticism, including a whopping $1.25 billion concessional federal loan to fully fund Iluka Resources as it pursues its integrated critical minerals refinery at Eneabba in WA. Iluka has a market capitalisation of $4 billion.
There was a bit of tut-tutting from the likes of Peta Credlin on Sky News when Tasmanian whisky maker Lark Distilling received a $4.5 million grant to help deliver a $20 million expansion, but Labor has spent more of its time matching Coalition spending commitments than criticising them.
Victorian political watchers with long memories will recall the saga of the Victorian Economic Development Corporation (VEDC). The VEDC was a commercial funding scheme by the Cain Labor government in the late 1980s, which ended up dropping around $100 million and being panned endlessly by the Liberals and the media for maladministration.
This is nothing on what the Morrison government will lose shovelling cash at marginal commercial projects. For instance, did the Japanese multinational Nippon Paper really need a $25 million federal grant to build a $125 million indoor barramundi farm in Gippsland near its Maryvale paper mill?
No wonder many people laughed when Frydenberg told the AFR last week he was committed to budget repair.
Having just overseen one of the biggest campaign spends in a single seat that we’ve ever seen at the federal level, the Frydenberg reputation for spending restraint is shot, particularly given the growing backlash over JobKeeper. Of all the videos posted by independent Kooyong candidate Dr Monique Ryan in recent weeks, this JobKeeper exchange from the Sky News debate was one of the few to crack 100,000 views. Meanwhile, Frydenberg’s approximately $5 million spend trying to save Kooyong smacks of panic and indulgence.
This list of grants and loans to ASX-listed companies barely touches the sides in terms of the nation-wide largesse, which is very difficult to track. The Guardian had a crack at tallying up sports grants last week and came up with $260 million of commitments from the Coalition and $290 million from Labor.
Sadly, there has barely been a dollar committed to public libraries, which just don’t have the grant-pulling power of football and netball clubs because they are staffed and run by local councils.
Let’s hope someone is independently keeping track of all promises and commitments made by the two major parties, including by way of private letters to lobby groups. Even better, the parties should voluntarily disclose their full commitments list.
There are growing calls for improved transparency and processes around federal grant-giving, which has tied into the integrity commission debate during this campaign.
Back in 2017, the Productivity Commission called for a significant overhaul of grant-giving in its “Shifting the Dial” report, but the situation has clearly got worse under the Morrison-Frydenberg regime.
After loading up with sports rorts and car park grants programs ahead of the 2019 election, Morrison doesn’t appear to have changed much about his game plan, despite being excoriated in multiple auditor-general reports.
The major difference this time is that Coalition candidates have been told they can only fund council-backed projects. However, for all the announcements that have been made, the actual delivery of many remains up in the air.
For instance, in our local seat of Menzies, Liberal candidate Keith Wolahan has announced funding for four projects, but only one of them ($1 million for new Headspace facilities) is guaranteed to go ahead regardless of the result on Saturday.
The Labor candidate in Menzies, Naomi Oakley, has matched a couple of the other announcements, but these promises appear to be contingent on Labor winning the seat, which is most unlikely given the margin of around 7%.
If Jim Chalmers is sworn in as treasurer later this month, he can expect an avalanche of requests from MPs on all sides ahead of his post-election budget later this year, which Albanese is promising will be partly focused on identifying and eliminating Coalition rorts.
And for all these public companies that have announced big federal grants from the Coalition in recent weeks, they probably should check the fine print and reassure the market that the funding won’t be clawed back by an incoming Labor government.
And then there is an election debate bunfight about giving people on the minimum wage and additional dollar per day, the equivalent of roughly two coffees a week….And the public sector has seen years of wage cuts. The coalition certainly likes to keep wage and salary earners in their box, don’t they?
“Morrison doesn’t appear to have changed much about his game plan, despite being excoriated in multiple auditor-general reports.”
Give him a bit of credit. Morrison has been paying attention to the reports, that’s why he’s inflicted drastic cuts on the auditor-general’s budget. Nobody gets to stand up to the Morrison Gang without facing retaliation.
He fails the ” Pub Test” and as a compulsive liar, nothing he says or promises can be believed .We need a new government followed by an ICAC and a new Canberra prison
The idea of funding public libraries – places where the poor can gain knowledge cheaply – is anathema to the Conservative cause. Better to fund the burning down of such places. Those of you who remember The Wire might also recall Brother Mouzane’s immortal line: ‘Who’s the most dangerous man in America today? A n****r with a library card!’
In America, billionaires, including ruthless monopolists, have a tradition of funding public libraries, galleries, and opera houses.
https://www.carnegie.org/news/articles/andrew-carnegie-legacy-support-public-libraries/
Should I mention golden shower just to get it out of the way?
It is the only noticeable trickle down effect from the tables of the rich.
It’s hard to know which to resent the most, the sheer robbery of the taxpayer or the disdain as it is done.
Krudd constructed Infrastructure Australia which was supposed to neutralise the problems associated with this process, but seems to be sidelined these days.
Krudd missed an opportunity during the GFC to establish a precedent that might have altered history.
What if, in times of economic emergency requiring mass, urgent stimulus, the payments were allocated by all parties proportionally, not just the party in power? For example, in Electorate X, if the results of the last election were
Party A – 51%
Party B – 41%
Party C – 5%
Independent A – 3%
Each of the candidates could be given a corresponding percentage of the stimulus funds to allocate.
The current system of power allocation is in reality an elected dictatorship with one party able to have absolute power with less than 50% of the voters supporting them for three years approximately. We have had a proportional system as you suggest but the major parties did not like this model .I believe it is a better system that you suggest and would produce a far more collegiate parliament that represented the views of a larger majority of the voters not the vested interests of approximately 50% of the voters or even less The constitution did not envisage a party system with very little dissent and punishment for the member of either major party if they dare think for themselves and cross the floor .
The current Morrison Government should be an example of how bad a system we have and how desperately we need an ICAC