Federal election 2022: Labor’s debt-laden promises a joke lost in the timing

The sting has gone out of the once tricky question: how are you going to pay for it? Labor’s response is: the same way the Coalition paid for policy proposals – by putting it on the tab.

It’s hard to see how Jim Chalmers’ ­release of Labor costings this late in the piece will affect too many voters. Picture: Martin Ollman

Labor has released its election costings – two days before election day and when nearly one-fifth of the electorate has already voted. The sheer timing no doubt confirms the cynicism that many voters feel towards the political process.

But here’s the thing: the sting has gone out of that once-perennial and tricky political question: how are you going to pay for it ­(insert here you-beaut policy proposals)? Labor’s basic response is: the same way you (the Coalition) have gone about paying for things – by putting it on the tab.

To be sure, Labor has managed to deliver a larger cumulative ­budget deficit over the forward ­estimates than the Coalition – the gap is around $7.4bn from a base of $225bn. Note here that there is some manipulation to Labor ­figures, including shunting big ­expenses like the subsidies to new electricity transmission into off-budget entities.

Clearly, Labor thought it could get away with higher deficits (and therefore more government debt) on the basis of what the Coalition has been doing in the past few years – accelerated government spending and surging government debt.

Calling new spending investment doesn’t make it so. In point of fact, the three policies that Labor is emphasising as productivity enhancing/wage boosting/job creating/planet saving – nothing like a bit of hyperbole at this point in the campaign – all have major weaknesses to them.

Take childcare. Does anyone really think that spreading childcare fee relief to couples earning between $370,000 and $530,000 a year will really lift female labour force participation?

For those couples of an age whose children need childcare, that sort of income would have both of them working flat out. There is virtually no scope for higher female workforce participation (which, overall, is at an all-time high, in any case).

Labor leader Anthony Albanese in Brisbane with the party’s Dixon candidate, Ali France, on Thursday. Picture: Sam Ruttyn

This measure is simply a sop to highly paid professional couples whose votes Labor wants to ­attract. So when the shadow treasurer talks about removing politics from budget decision-making under Labor, he is clearly having a lend. More generally, increasing childcare subsidies in the context of centres that are full and short of staff is simply a highway to higher childcare fees and will have no economic return at all.

Or take offering free TAFE courses. This has been tried in Victoria and has been a flop. People don’t value courses for which they don’t have to bear any cost. The rates of non-completion are very high and the providers often offer substandard courses if they are “free” to the students (and are paid at some average rate).

Labor is also placing a great deal of blind faith in allocating $20bn to an off-budget fund to “rewire the nation”. The ­argument that inadequate transmission is holding back renewable energy needs to be countered with the fact that the cost of trans­mission is passed through to ­consumers.

With wholesale electricity prices now doubling from a year ago, the immediate attention of the incoming federal government will be on the means of reducing electricity prices by accessing more ­affordable firming electricity generation – not building more pylons across the landscape. The talk of lower electricity bills – Labor is promising close to $300 a year – will be quickly forgotten.

It’s hard to see how Labor’s ­release of its costings this late in the piece will affect too many voters. The numbers are just too big; the promises from both sides of politics don’t ring true. There is probably a sinking feeling among many voters that there will have to be day of reckoning given the explosion in government debt – federal gross debt heading to above $1 trillion – but what can they do?