Hockey has gone too far

ScreenHunter_152 Nov. 07 10.05

By Leith van Onselen

Late Friday, Business Day’s Michael Pascoe continued his good recent work arguing that Treasurer Joe Hockey is placing politics ahead of the national interest in demanding that the Federal debt ceiling be raised from $300 billion to $500 billion, instead of the more moderate $100 billion extension agreed to by Labor and the Greens, and threatening to shut down government services if his demands are not met:

There is politics with its usual play-acting and huffing and puffing, and then there’s going a step too far. Joe Hockey has taken that step…

Of course it takes two parties to be as stupid as US politics have become, but it is the Treasurer who has jumped right into the loony bin, raising a genuine question of whether he has abrogated his oath. Certainly he is not putting service of the people first…

If Hockey is prepared to damage Australia’s reputation for sound government, to take us down to the US level, to hurt people dependent on federal services, just to avoid a little political embarrassment down the track, well, you see why I have found it hard to believe – that he would so quickly earmark himself as unfit for his position.

A similar position was put by Business Spectator’s Rob Burgess, who argues that Hockey’s politicking risks damaging Australia’s reputation as a sound destination for  investment:

The problem with this campaign is that Hockey is still playing to a domestic voting audience, when as Treasurer he should be spending more time showing the world that “Australia is open for business” (as Prime Minister Abbott keeps insisting).

The real motivator for Hockey’s argument is political. He does not wish to return to parliament in 2014 for a second serve of debt if something goes wrong with his budgeting – particularly on the revenue side.

The national interest, however, would be better served by Hockey getting out of campaign mode and into governing mode. Asking for more debt next year would be a minor political embarrassment (and let’s not forget that it most likely won’t be needed), but in the meantime we would look less that the scared kid of Asia hiding under the stairs…

That’s the clear message Hockey is sending to the world. And it simply must stop.

Both summations are correct in my view. After spending five years lambasting the former Labor Government over so-called fiscal profligacy, and voting against previous attempts to increase the debt ceiling, it’s a bit rich to demand a $200 billion increase, reject a $100 billion counter-offer, and then threaten to shut down the government. It’s hypocrisy of the highest order and sends entirely the wrong message abroad.

Meanwhile, the Greens, which hold the balance of power and will ultimately decide whether the debt ceiling of $500 billion is granted, is taking a measured approach, seeking the council of Treasury Secretary, Martin Parkinson, before deciding on whether to support the move:

‘‘We are open to taking expert advice on matters central to the Australian economy,’’ [Adam Bandt] told reporters in Canberra.

‘‘But we’ll wait and see what Martin Parkinson has to say, because it is an extraordinarily large amount of money, and we want to know why (it is necessary)”…

‘‘We want to have the case made to us,’’ Mr Bandt said.

With the existing ceiling of $300 billion expected to be reached by 12 December, and Australia facing a potential US-style shutdown of government services, the Green’s decision will be all important. That is, unless the Coalition softens its stance and accepts an increase to $400 billion, as it should.

This government, on election night, declared that “the adults were back in charge”. Now is time for them to back up this claim.

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Leith van Onselen
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  1. I see it the other way – consensus from economic luminaries appears to favor removing the ceiling altogether – opposition from ALP (and potentially Greens) to lifting the ceiling to $500b is misplaced sour grapes. Time for those kids that lost the election is grow up – Hockey is only trying to manage their appalling legacy.

    • It’s been acknowledged by the coalition that they just don’t want to have to raise it again, because it looks bad, especially before the next election.

      To pretend that the Coalition are actually going to fix the structural deficit is naive. What is their official timeframe for a surplus? After 2020?

      I completely agree it serves no purpose. It just gets used as a political sledgehammer by the opposition of the day. The Liberals used it, now Labor is using it. Rusted on voters tend to only see it as bad when it hurts their “team”

    • Spot on guys.. It is yet another cultural import from the US that we could do without.

      On the other hand – Hockey was more than happy to benefit from this debt debate when in opposition. It’s not so easy from the other end of the chamber.

      If you purposefully act like a child when it suits, dont expect others to be adults when it suits. I reckon, suck on those lemons Joe. You reap what you sow.

    • Of course you do.

      ‘Rusted on voters tend to only see it as bad when it hurts their “team”’

  2. Hockey was excellent as an opposition attack-dog. There were a few of them who played well at the opposition game – Christopher Pyne is another who springs to mind. But listen to both of these characters now and they are definitely still playing politics like they are still in the opposition benches, where you can say and do anything without having to back it up, and saying things you would have thought nobody in government would raise publicly anyway until the opposition did. They haven’t grown up until they can get their heads around being in government.

  3. Presumably someone (?) has done some projections of total debt requirements over the period that extension is being asked for? Clearly if $300b is being reached soon then there has been a fairly rapid rise in requirements for whatever reason. If that trajectory is sustained is $400b enough? Perhaps the problem is more than political as well? The trajectory maybe out of control. Surely someone somewhere is doing sensible calculations that should be tabled…..too much to ask I suppose?