Australians have not been not told the truth as to what is really behind the spending cuts that were started by Wayne Swan but have now been multiplied many times by Joe Hockey. It’s time to tell them.
And it’s also time to face the fact that we have had two sham election campaigns where voters were again not told the truth. The combination of these two events means that politicians on both sides are no longer trusted.
These were some of the issues we put to shadow treasurer Chris Bowen in his KGB interview. As you will see in the video, Bowen is facing the implications of both parties not telling the Australian public the real truth about the need for cuts and of what happened in the 2010 and 2013 election campaigns.
The simple truth about the cutbacks is that after a decade-long boom, the mining party is over and its demise comes alongside the budgetary implications of an ageing population. Under questioning from the KGB, Chris Bowen became the first senior politician on either side to frankly confront these twin issues issue facing both parties. Fascinatingly, on the demise of the mining boom, BHP and Rio Tinto both understand that the game has changed and are drastically reconstructing their strategies.
The politicians are following but have not yet let voters in on the secret as to what is happening. Maybe Bowen’s KGB interview will help. The big spending of mining dollars started with the Howard-Costello regime and then was multiplied many times by Wayne Swan, partly as a reaction to the global financial crisis. The Swan spree went way over the top and he introduced a mining tax that added further to yield revenue. In anticipation that a further boom would take place, the expected revenue was spent before it arrived. And it did not arrive.
In fairness to Wayne Swan, near the end of his reign as Treasurer he finally woke up that the mining game was over and population ageing was real, so he started on the process of cutting expenditure.
But leaders Kevin Rudd and Tony Abbott had an election to win and ignored the fact that whoever won it would confront a major budgetary problem. Accordingly, neither party was honest with the electorate in the 2013 election campaign. In fairness, there were some alerts, but voters had no idea that no matter who won there would be a crunch.
Australia now requires cuts in the proposed big spending on education, health, disability care and parental leave. In theory these proposed spending sprees were on good causes, but the funding is also needed to pay for existing programs now the boom is in decline.
It was the second election in a row where voters were seriously misled by the winner. In 2010, Julia Gillard assured voters there would be no carbon tax. In his KGB interview it is clear Bowen understands the damage. In specific changes Bowen would like to see in the Hockey budget, Bowen says he would swap the $7 medical co-payment for the proposed research and drop the pension indexation proposal for abolition of a parental leave boost.
But Bowen understands the fall in iron ore and coal prices, plus the decline in mining investment and population ageing, mean that budgets will have to be tough. That's good news.
And he also understands that the misleading of Australia in the last two elections will require politicians to adopt a different approach in 2016 and effectively be honest with the voters as to what can be done. But that goes against a deeply ingrained Canberra culture that has become part of our political life.