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| Morrison trumps even Howard with size of pre-election war chest | Morrison trumps even Howard with size of pre-election war chest |
| (about 11 hours later) | |
| The Morrison government’s $10bn pre-election budget “war chest” is the biggest in 15 years, two and a half times larger than the Howard government’s surprise cash splash on pensioners and retirees during the 2007 election campaign. | The Morrison government’s $10bn pre-election budget “war chest” is the biggest in 15 years, two and a half times larger than the Howard government’s surprise cash splash on pensioners and retirees during the 2007 election campaign. |
| Analysis of every federal budget and mid-year budget update since 2003 (the most easily accessible data) shows Coalition and Labor governments have often used their final budgets in the months before an election to conceal spending decisions that they then announced during the election campaign. | Analysis of every federal budget and mid-year budget update since 2003 (the most easily accessible data) shows Coalition and Labor governments have often used their final budgets in the months before an election to conceal spending decisions that they then announced during the election campaign. |
| Some surprise spending announcements have been minuscule and some have been huge, but the Morrison government’s plans could overwhelm them all. | Some surprise spending announcements have been minuscule and some have been huge, but the Morrison government’s plans could overwhelm them all. |
| On Monday, the government’s mid-year budget update revealed Scott Morrison is planning to announce a $9.3bn commitment over the next three years, probably in the form of tax cuts. | On Monday, the government’s mid-year budget update revealed Scott Morrison is planning to announce a $9.3bn commitment over the next three years, probably in the form of tax cuts. |
| Under the plan the budget will lose $2.5bn in revenue in 2019-20, $3.8bn in 2020-21 and $3bn in 2021-22. The government also plans to announce new spending worth $1.4bn over the next four years, and a decision that will generate $375m in revenue for one year. | Under the plan the budget will lose $2.5bn in revenue in 2019-20, $3.8bn in 2020-21 and $3bn in 2021-22. The government also plans to announce new spending worth $1.4bn over the next four years, and a decision that will generate $375m in revenue for one year. |
| The treasurer, Josh Frydenberg, did not deny the plan for further tax cuts, saying: “We are committed to targeted spending and lower taxes … but we’re not going to make any announcements today.” | The treasurer, Josh Frydenberg, did not deny the plan for further tax cuts, saying: “We are committed to targeted spending and lower taxes … but we’re not going to make any announcements today.” |
| In total, Morrison’s budget will lose a whopping $10.3bn over the next four years. | In total, Morrison’s budget will lose a whopping $10.3bn over the next four years. |
| That will dwarf the next-largest package of surprise election announcements, unveiled in 2007. The Howard government published its 2007-08 mid-year budget update on 15 October 2007, and two days later writs were issued for the election. | That will dwarf the next-largest package of surprise election announcements, unveiled in 2007. The Howard government published its 2007-08 mid-year budget update on 15 October 2007, and two days later writs were issued for the election. |
| Show me the money: budget surplus coming, but wages growth still pathetic | Greg Jericho | Show me the money: budget surplus coming, but wages growth still pathetic | Greg Jericho |
| That update included $4bn of spending decisions that the government made but had not yet announced. In the second week of the election campaign, John Howard played his hand, offering pensioners $4bn. | That update included $4bn of spending decisions that the government made but had not yet announced. In the second week of the election campaign, John Howard played his hand, offering pensioners $4bn. |
| Labor’s biggest pre-election war chest in the last 15 years was worth $1.3bn, in the 2010-11 budget. | Labor’s biggest pre-election war chest in the last 15 years was worth $1.3bn, in the 2010-11 budget. |
| That was delivered by the treasurer Wayne Swan on 11 May 2010, but six weeks later Kevin Rudd was deposed in a party-room coup by Julia Gillard, and Gillard called an election the next month. It fell to Gillard to make the spending announcements for Labor’s election campaign. | That was delivered by the treasurer Wayne Swan on 11 May 2010, but six weeks later Kevin Rudd was deposed in a party-room coup by Julia Gillard, and Gillard called an election the next month. It fell to Gillard to make the spending announcements for Labor’s election campaign. |
| At the time, the Coalition labelled the $1.3bn a “slush fund” and criticised Labor for its lack of transparency. | At the time, the Coalition labelled the $1.3bn a “slush fund” and criticised Labor for its lack of transparency. |
| The size of spending commitments concealed by “decisions taken but not yet announced” in budget papers has been growing as the economy grows. | The size of spending commitments concealed by “decisions taken but not yet announced” in budget papers has been growing as the economy grows. |
| It is important to note that unannounced decisions can either raise revenue, save revenue, permanently lose revenue, or spend revenue. | |
| Add them together, and they will have a net positive or negative impact on a budget’s bottom line. | |
| For instance, in the Abbott government’s 2014-15 budget, the Abbott government planned to save $1.9bn over four years in expenditure decisions taken but not yet announced, and raise $350.3m over the same period in revenue decisions. Therefore, Abbott’s unannounced measures were going to have a positive impact on the budget worth $2.2bn. | |
| Unannounced decisions do not have to relate to specific policies that will soon be announced, either – they can refer to spending on classified projects for national security and defence, or to commercial in confidence issues. | |
| However, in many cases the unannounced decisions are obvious – such as the Morrison government’s tax cut plans, and the Howard government’s 2007 pensioner cash splash. | |
| The director of Deloitte Access Economics, Chris Richardson, said the Howard government was enjoying an embarrassment of riches in 2007, with revenue pouring in from the mining boom. It was regularly handing billions of dollars back to voters in the form of tax cuts, so election “war chests” were not particularly necessary. | The director of Deloitte Access Economics, Chris Richardson, said the Howard government was enjoying an embarrassment of riches in 2007, with revenue pouring in from the mining boom. It was regularly handing billions of dollars back to voters in the form of tax cuts, so election “war chests” were not particularly necessary. |
| “War chests are sometimes accumulated, and their use announced, essentially simultaneously,” Richardson told Guardian Australia. | “War chests are sometimes accumulated, and their use announced, essentially simultaneously,” Richardson told Guardian Australia. |
| “The sheer size of the boom in and around the first phase of the mining boom was such that [the government] had money coming out its ears every six months and it basically wasn’t worth taking a decision and not announcing it.” | “The sheer size of the boom in and around the first phase of the mining boom was such that [the government] had money coming out its ears every six months and it basically wasn’t worth taking a decision and not announcing it.” |
| The Howard government’s tax cuts were regular and huge: the $34bn cuts in the 2007-08 mid-year update were in addition to $31.5bn in the 2007-08 budget, $36.7bn in 2006-07, $21.7bn in 2005-06, $14.7bn in 2004-05 and $10.7bn in 2003-04. | The Howard government’s tax cuts were regular and huge: the $34bn cuts in the 2007-08 mid-year update were in addition to $31.5bn in the 2007-08 budget, $36.7bn in 2006-07, $21.7bn in 2005-06, $14.7bn in 2004-05 and $10.7bn in 2003-04. |
| Australian politics | Australian politics |
| Australian economy | Australian economy |
| Scott Morrison | Scott Morrison |
| John Howard | John Howard |
| analysis | analysis |
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