Malcolm and Sco-Mo: Dude, where’s my Budget?

IN the hangover following their post budget euphoria, Turnbull and Sco-Mo couldn’t explain where they‘d parked billions in the Budget, says Simon Benson.

MALCOLM Turnbull and Scott Morrison yesterday made a considerable contribution to cinematic mimicry.

For those who have never seen Dude, Where’s My Car? Jessie and Chester are two stoner dudes who wake one morning after a night of revelry to find that they had forgotten where they had parked their car.

After reliving a hallucinogenic epic, they eventually find their way back, emerging as ill-fated but eventual heroes. But it is not without some agonising realisations along the way.

Sco-Mo and Malcolm have just relived that experience.

In the hangover following their post budget euphoria, they could not retrace the steps of the previous 24 hours to explain where they had parked tens of billions of dollars in Tuesday’s Budget

For a crack team of economic salesmen, it was inconceivable that they would not have factored in the possibility that they would be asked this obvious question: How much is the 10 year plan to cut company tax to 25 per cent actually going to cost?

It is even more astonishing that they would not have prepared a credible answer to it.

It is usually the small tricky stuff that trips up otherwise sound and credible budgets, not very large things like the cost of a 10 year tax plan.

The nightmare began with a collective moan of exasperation from the backbench after the six minute inquisition of the Prime Minister yesterday morning by Sky News journalist David Speers.

The PM was asked almost a dozen times what the plan would cost in the six last years that weren’t contained in the four year forward estimates of the budget.

“The Treasury has not identified the dollar cost of that particular item,” the PM said.

“It has set out a medium term outlook that takes account of the company tax cut.”

It is hard to believe that Treasury hadn’t modelled the entire cost of the tax plan.

How else could it make an assumption that the Budget would still be in surplus in 2026 if it didn’t know the cost of such a massive Budget measure?

Artwork: John Tiedemann

Turnbull only added to the confusion by saying that former Treasury economist Chris Richardson’s forecast that it would cost $55 billion could well be right.

“It may well be ...” he said vaguely.

The PM wasn’t aided by his Treasurer’s attempt to come to the rescue by ringing in to a Melbourne radio station to declare that the number was in fact wrong.

“No that’s not what it’s going to cost,” he said.

So what was the number?

“You’ll find it in Budget Paper Number 1,” Morrison said.

“You will find there is a projection of, what’s called the underlying cash balance over 10 years and what that shows is its projected to go back up into a surplus position in 2021 and remain above that for the entire 10 year period.

“Now, all of our enterprise tax plan has been included in those projections.”

So what’s it going to cost?

“Well, mate, it’s set out in that projection in the Budget Paper,” Morrison continued.

In fact it is not.

Attempts to defy mathematics didn’t help.

The only conclusion that could be drawn from day two of the big Budget sell was that either both the PM and his Treasurer didn’t know the number, or did know it and didn’t want to say it.

One frustrated MP said privately: “I just don’t know why they didn’t say what the number was, because whatever the number is, it will be eclipsed by the economic dividend the tax cuts will deliver.”

Finance Minister Mathias Cormann bravely argued that it didn’t release 10 year cost projections because Labor never released its costings for 10 year plans.

Given there are at least two more elections in the period between when a 10 year plan is announced and when it will be fully implemented, it is understandable why you wouldn’t.

But a little providence would have served the Government well.

In using Treasury a day before the Budget to model Labor’s 10 year tobacco tax policy to find a $20 billion blackhole, it failed to consider that Labor may have already had the Parliamentary Budget Office model the cost of a 25 per cent company tax rate.

Of course it had. This very policy was in fact Bill Shorten’s own idea — which he announced in last year’s Budget Reply speech.

So it was hardly a surprise that this piece of old modelling — which suggested a cost of $37 billion — found its way around the press gallery on Wednesday night.

So much for Budget 2016. It took less than 48 hours for its centrepiece policy to be taken out to the back shed and shot.

Fortunately for Sco-Mo and Malcolm, not much of this ‘modelling at ten paces’ stuff will actually filter out into the votersphere.

The beneficiaries of the tax cuts will be more concerned with getting them than how much they will cost the other taxpayers who will be paying for them.

And by this morning the heat will be back on Shorten over his Budget Reply speech last night which did little to address how Labor was going to pay for what the Coalition alleges is its own $62 billion budget blackhole.

Ah, the tedium of Budget bastardry.