Politician’s spendathon takes voters for mugs

Peter Dutton and Anthony Albanese.

While the federal election campaign has not officially commenced, our letterbox tells a different story. It’s been full of ­political campaign material for some time. Sadly, the deliverers take no notice of the No Junk Mail instruction.

Generally, I don’t bother reading the pamphlets; it’s straight to the bin – recycling, of course. But one larger insert did grab my attention, not least because of the clear cost of its production. It was a 12-page, high-quality leaflet headed Community News from the local Labor member. (She’s new to me; we’ve been switched into a different electorate.)

It’s fair to assume that taxpayers footed the bill for this publication and its delivery given the Australian coat of arms on the front page. It was modestly subtitled, Achievements Edition 2022-25, with a very large photo of the sitting member taking up most of the first page.

Now perhaps it’s fair enough that local members can access taxpayer funds to put out information newsletters. But check out this member’s message on page two. “If Australia chooses the Liberal Party and Peter Dutton, there is a real threat to the progress we have made. They have a record of gutting Medicare, pushing wages down and making life harder for everyday Australians. A government led by Peter Dutton would take us backwards, and I’m not willing to let that happen.”

Treasurer Jim Chalmers talks at a press conference at Ampol Oil refinery at Lytton. Picture: Lachie Millard

I’m not sure how this sitting member thinks these sentences could be construed as community news. Should taxpayers really be funding this obvious political campaigning? My guess is these words are not original to the member but have been provided to her by Labor’s campaign headquarters.

Page three is clearly not original but it’s again sourced from the Labor Party. It’s entitled What we’ve done since we were elected. A great deal of the material is of no obvious interest to the member’s electorate but what the heck. The themes covered include cost of living, housing, environment, women, health, education and climate action.

But the most astonishing feature of the glossy is the eight pages telling us what the local member has been delivering for various parts of the electorate, full of multiple colour photos of the local member attending various events.

It’s as if she is channelling a combination of Santa Claus and the Easter bunny as she outlines the 199 projects she has “delivered”. Nowhere in the 12 pages does she thank taxpayers for providing the funds for this largesse.

There are sporting schools grants, the National Student Wellbeing program, the Strengthening Medicare grants, energy efficiency grants, volunteer grants, Australia Day event grants 2025 (if that went ahead), Commonwealth Home Support Program, National Shed Development Program, Community Language School Grants, Regional and Local Publishers Program, Early Childhood Educator grants, and the list goes on.

One can only presume the bureaucrats in Canberra are instructed to provide this program expenditure information for each electorate. Apart from the questionable ethics of using taxpayers to fund clearly political campaign material – and let’s face it, both sides do it – one of the concerning issues raised by this copious list of the member “delivering” is what the hell the federal government is doing funding sporting grants to local schools and the like.

But it reflects the extremely confused nature of federal financial relations as well as the widespread incidence of clear pork barrelling at the micro level. (To be frank, it’s unclear why any level of government should be funding many of the activities listed.)

The thing is that a government “delivering” really begins to add up – just look at the state of the federal government’s fiscal position. When Labor first came to power, federal government budget spending was $627bn, or 24.4 per cent of GDP. This financial year, it is expected to come in at $731bn, or 26.5 per cent of GDP.

Next financial year, according to MYEFO – we will know more at the end of this month when another budget is handed down – spending will increase further, to 27.2 per cent of GDP. Leaving aside Covid, these sorts of percentages are what you might expect during a war!

Note here the Albanese government has used the trick of parking a great deal of expenditure off-budget – think Future Made in Australia, Housing Australia Future Fund, Rewiring the Nation. This is then picked up in much larger negative headline cash balances rather than the underlying cash balances of which the latter measure the government prefers.

According to the latest MYEFO, the headline deficit next financial year is expected to be $70bn compared with the underlying deficit of $47bn – a very substantial gap. There is a great deal of spending now being hidden off-budget.

The real tragedy in these figures is that neither the Treasurer nor the Prime Minister regards the dramatic ramp-up in spending or the forecast of years of budget deficits as problems.

We need to go back to the 2019 campaign to recall a time when both parties attempted to attract voters based on their respective ability to manage the budget, when debt and deficits mattered.

To be sure, then opposition leader Bill Shorten aimed to repair the budget by introducing a raft of new taxes, but at least fiscal responsibility was a consideration. These days committing a cool $9bn over four years to increase the incidence of bulk-billing in GP practices is almost seen as immaterial. The fact is that providing bulk-billing to those who can clearly afford to pay a co-payment makes no sense. But the really important point is there is a massive deadweight loss in this type of spending.

Because a high proportion of patients are already bulk-billed, the real cost of that extra bulk-billed appointment may be as high as $300, even though the actual cost is tad over $40. In other words, because the subsidies apply to already bulk-billed patients, the real cost to the taxpayer for achieving higher rates of bulk-billing is extremely high.

Sadly, the opposition has thrown its support behind this policy, while committing to spend some additional millions targeted at mental health.

A similar point can be made about the government’s decision to spend another billion dollars to establish more Urgent Care Clinics, even though the effectiveness of these clinics has yet to be evaluated. In addition to distorting local markets for primary care, the early indications are that the actual cost per consultation at these clinics may be as high as $200.

These are just two examples of many, many more that could be cited of the government “delivering”, which is just code for using other people’s money to win votes.

Far too little is done to consider the case for spending programs and how they should be designed to provide maximum effectiveness. Very little attention is now paid to the trade-offs inherent in government spending. If it looks like a political winner, this is generally considered to provide a green light to proceed.

There will be a day of reckoning; it’s just that most of the political leaders will be enjoying their retirements at this point.