Easy maths to balance book of promises

November 16, 2007


LIES, damned lies and statistics. Never has the term been more apt than when used to describe the spending promises, and attempts to tally them, made during this election campaign.

Not known for their honesty at the best of times, politicians face a particular dilemma during elections.

On the one hand, they are desperate to impress voters with what goodies they have to offer if elected.

On the other, the importance of "good economic management" dictates they must try to hide the embarrassingly large sums that all this pork-barrelling adds up to.

Like an addict who meticulously sets about hiding their habit from friends and lovers, politicians have developed a series of smoke and mirror ways of hiding their spending promises.

It explains how the Coalition can claim it has spent only $11.7 billion in this election campaign, while the Herald's porkometer has sniffed out more than $65 billion in pledges.

So here is the Herald's guide for aspiring politicians, and confused onlookers, to Political Accounting 1001.

IGNORE TAX CUTSTax cuts are a decision to forgo revenue that otherwise would have been raised, rather than a decision to spend. Party poopers will point out this still has the same effect of stimulating the economy by putting more money into people's hands. Ignore them.

IGNORE PRE-CAMPAIGN PROMISES Politicians have been making promises engineered to win this election for almost a year. Good political accountants should rule off the books from day one of the official campaign.

REPACKAGE Allocate money from previously budgeted, but unallocated pools of money such as the Auslink roads package or the Australian Water Fund. It won't hurt your bottom line, and allows you to dish out a seemingly never-ending list of new programs.

DELAY Announce programs that don't start for at least four years, so the Treasury won't be able to include it in the "forward estimates" - the four-year horizon of the budget. One of the centrepieces of Labor's fight against climate change, its $500 million Green Car Innovation Fund, is not set to start until 2012.

PROLONG Announce spending over a long time frame, preferably 10 years, so only a small cost is incurred in the budget time frame. Pioneered by John Howard with his 10-year, $10 billion water plan, this technique has been more recently perfected by Kevin Rudd and his 10-year, $2.5 billion trades in schools program.

CLAIM SAVINGS Claim savings to offset the cost of your promises. For example, Labor pledged $3.5 billion in new spending at its campaign launch on Wednesday. But it managed to scale down the net cost to $2.3 billion by identifying about $1 billion in spending cuts and ignoring the parts of the program that extended beyond the forward estimates.

REANNOUNCE If all else fails, simply announce money you have already announced. The Coalition's "Super Sunday" roads announcement pledged $5.2 billion for road and rail projects in Queensland which included $2.3 billion for the unpopular Goodna Bypass in May.

The Herald's porkometer is designed to see through these porky pies. From day one of the campaign, it has counted all tax cuts, repackaged money and spending announced beyond the forward estimates. It does not include savings, which are considered separately, or simply re-announced policies.

Other tallies are restricted to include completely new spending only and only that which will kick in over the budget forward estimates, similar to how the Treasury will ultimately account for it.

But the pig smells a rat.

