From the Australian:
May 20, 2009
Mr Rudd hates admitting the outcome of his budget plan
IN avoiding answering an obvious question, Kevin Rudd did not play a straight bat on ABC TV's Lateline on Monday night as much as build a brick wall across his crease. Six times interviewer Tony Jones asked the Prime Minister what public debt would reach in the context of the present crisis and five times Mr Rudd responded with a storm of spin. He wandered and waffled all around the issue, explaining debt is often expressed as a percentage of GDP, telling us tax revenues are down and infrastructure outlays up, adding that the debt would be no different under the Liberals. But when Jones finally wore Mr Rudd down all he would admit was that the projected debt would reach what he called "300". Everybody watching knew he meant $300 billion, but Mr Rudd could not bring himself to say it, lest we were all distracted by the debt and forgot everything he had just explained. It was an extraordinary exercise in obfuscation by Mr Rudd in his preferred persona as the nation's headmaster, intent on telling us what he has decided we need to know. Wayne Swan had tried the same tactic the morning after last week's budget when, at the end of a long interview on ABC radio, he was asked why he had not mentioned the deficit number in his speech. The Treasurer suddenly had nothing much to say beyond replying "57". Not "$57 billion", just "57".
This is stage one of the spin cycle the Government is using on the economy - sound authoritative and when anybody asks difficult questions take cover behind swags of statistics, while doing everything imaginable to avoiding stating the size of the deficit as anything other than an innocuous number. And if that does not work, ministers go to stage two, which involves invoking ostensibly independent experts. This approach was also on show the morning after the budget, when Mr Rudd was quizzed over optimistic assumptions in the forward estimates about the speed with which the nation's finances will return to surplus. Treasury thinks the economy will roar ahead in 2011, growing by 4.5per cent for two years and then 4per cent for the following four years. Instead of answering the question, Mr Rudd turned it into an attack on Malcolm Turnbull, who he said was criticising the credibility of Treasury officials. It was too cute by half - while the Reserve Bank is charged with setting interest rates independent of government, Treasury gives ministers advice. And when officials' ideas are integrated into policy the politicians own them. In questioning the Treasury figures, the Opposition Leader was not attacking the men and women who read the economic entrails, but the political use to which their work is put. The problem for politicians in frank and fearless advice is that it is exactly that - best estimates that carry no guarantee. When Treasury secretary Ken Henry defended the growth projections in the budget yesterday, he was standing up for the Government more than his own officials.
The possibility that he could be wrong on the economy obviously upsets Mr Rudd in a way that goes beyond the obvious importance of keeping the budget in surplus, employment high and inflation low. The Lateline lecture was almost embarrassing in the way it displayed Mr Rudd's desire to demonstrate he is across the issue and that there are no alternatives to his approach. But while Mr Rudd is determined to demonstrate he knows what is going on, few others are as confident. The Reserve Bank board's minutes from its May meeting, released yesterday, made a case for masterful inactivity because of inclusive evidence on the direction of the Australian, and world, economy. Yesterday, RBA boss Glenn Stevens went one very small step further, suggesting the world economy could start to grow towards the end of this year, but only slowly. The case for caution is obvious with the International Monetary Fund unconvinced that our economy will improve as fast as Treasury forecasts. According to IMF staff estimates, the Australian economy will struggle to reach its long-term growth figure of 3 per cent by 2014, making the budget forward estimates less optimistic than outlandish. But before Mr Rudd ticks the IMF off for attacking Treasury's independence, the international agency uses Australian numbers. The truth is that nobody, including Mr Rudd, knows what will happen to the world economy. For all of Mr Rudd's command of the detail, his Lateline performance combined soothsaying and spin.
