Budget honesty charter corrupted

IT’S that time in the election campaign when it disintegrates into arguments about which party has been most careless ensuring their budget numbers add up.

The Charter of Budget Honesty, introduced by the Howard government, allows the opposition to give Treasury its election promises to check the policy costs are correct. If they don’t, the government clobbers them for avoiding scrutiny.

But this week Treasury analysis of the opposition’s promises was leaked to the press by someone in Treasury or Wayne Swan’s office. Swan has played down the leak’s importance. The Treasurer claims he just wants the opposition to submit its policies for his bureaucrats to dissect. That’s because he knows this part of the charter overwhelmingly favours incumbent governments.

The government has had three years to consult with Treasury’s nearly 1000 staff about future policies, test policy assumptions, and get Treasury’s recommendations. Much government policy is formulated by Treasury in the first place.

By comparison, an opposition is just a few people in a room thinking up ideas.

As Ross Gittins wrote in 2004, when it was Peter Costello savaging the Labor opposition over its policy arithmetic: ”The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer.”

From government, Labor is playing the same game against the Coalition that, for a decade, the Coalition played against Labor.

Swan knows it well. In 2007, he too waited to the last minute to submit his policies.

But this isn’t just about policy costing. The integrity of Treasury is in question.

Secretary of the Treasury Ken Henry masterminded the government’s controversial response to the financial crisis. Treasury’s role formulating the stimulus package has been highly political. It even had to release a statement admitting a graph in the 2010-11 budget, which the government claimed showed the success of the stimulus, was misleading.

The Coalition has accused Henry of partisanship for years. In May, Joe Hockey refused to say whether Henry would keep his job under the Coalition. Henry and his subordinates are political players now. Their fortunes are coupled to the fortunes of the Labor government. Shadow finance minister Andrew Robb said Treasury was compromised by a ”political agenda”.

The leak seems to confirm this. Sure, the opposition’s figures would have been released eventually (that’s the point), but it’s likely someone in Treasury is openly batting for Labor.

It’s concrete evidence of the corruption of the charter.

Hockey should commit to sacking Henry if he wins government, and leave Coalition policies to be scrutinised by the press and public.

Without the incumbent’s resources, opposition is hard enough. The Charter of Budget Honesty is a trap, cynically laid by the Howard government and now being embraced by the Gillard team. Hockey is right to refuse to walk further into it.