Sunday, August 18, 2013

Sunday snippets - the importance of PEFO in an economic policy free zone

This has been a most disrupted weekend.

Some of has been good. Eating eldest's pork belly plus salad (it's a nice combination) while watching first a film and the Rugby test between Australia and New Zealand with both daughters. Then today somewhat unexpectedly watching youngest play hockey; her season had ended, but she had a last game as a sub.

Some of it has been not so good. Really, oh Wallabies, with 55% of the possession, how did you let the All Blacks beat you so badly?! Eighteen points no less. Did you let the Haka put you off? The photo is from the Canberra Times. Then youngest let some goals in, although she played well and did stop a penalty shot. That's one on one and quite hard to do.  Haka 17 August 13 

Some of the weekend has been just plain bad. Waking in the early morning today to do some writing, I turned the air conditioner on to get some warmth. Half an hour later, it blew the fuses. Hours later, the electrician got things working again. Grrrr!

So what to write now? Well, just one thing.

For those who like acronyms, PEFO stands for the Pre-election Economic and Fiscal Outlook. Prepared by the Commonwealth Departments of Treasury and Finance, its purpose is summarised in this way: 

The Charter of Budget Honesty Act 1998 (the Charter) provides for the Secretary to the Treasury and the Secretary of the Department of Finance and Deregulation (the Secretaries) to release publicly a Pre-Election Economic and Fiscal Outlook report (PEFO) within 10 days of the issue of the writ for a general election. Such a writ was issued on 5 August 2013.

The purpose of the PEFO is to provide updated information on the economic and fiscal outlook. The information in the report takes into account, to the fullest extent possible, all Government decisions made before the issue of the writ and all other circumstances that may have a material effect on the economic and fiscal outlook.

The objective is, to use a phrase popularised by former Australian politician Don Chipp, to keep the bastards honest. As an aside, where are the Australian Democrats when we really need them? They provided a middle of the road alternative to those who find themselves unable to vote for either of the major parties or, today, the Greens. 

I digress.

This year's PEFO has attracted varying views. Economic columnist Ross Gittins is supportive (The devil's in the detail of Treasury data), fellow economic columnist Alan Kohler is not (PEFO a work of pure fantasy). For those who want to read the original, you will find it here. Ross Gittin's piece provides the best summary.

In many ways, this election campaign has been an economic policy free zone. What PEFO does is to lay down some parameters that both Labor and Coalition will have to deal with. How those parameters are interpreted depends upon particular bias, yet ignore them at your peril. The capacity of either of the leading contenders to deliver on their other promises depends on those parameters.

I make this point because, to my mind, neither of the main sides has yet provided a clear explanation, a clear picture, of the way that they are going to manage economic uncertainty. The policy elements may be there, but I need a simple explanation that I can test.  


Anonymous said...

To continue your digression, I had exactly the same thought about the Democrats when I read Neil's comment that he couldn't see himself voting for either major party (back a couple of posts). I've continued thinking about which party to place a vote for, and have reached a sort of decision to hold my nose, and vote Liberal.

This will continue a long (Liberal voting) tradition, but I do it with no little disgust and disillusionment at where the Liberal Party finds itself today.

The things I 'hold my nose' about (not in any particular order) are:

NBN; parental leave scheme; border protection; SSM; threatened severe cuts to services; refusal to release costings; lack of 'talent depth' in probable ministry.

This is not to suggest that Mr Rudd's crew has 'better solutions' in each of these areas. More it's a case of recognising the lack of marked 'positive differences', so I turned to 'least worst'.

But I just hate that I'm forced to make my vote on that desultory sort of analysis.


Jim Belshaw said...

Please don't do that, kvd. Think of tactical voting. Exclude Libs, Labor and Greens, and then vote for the least worst of the rest with Libs as second preference.That way at least you deny the Libs the small sum of public funding that they might get from your first preference vote while still giving them your reluctant vote in the end!

Anonymous said...

Jim, if I voted as you suggest I'd be voting for one of a variety of single-issue candidates. I consider them a blight on national political discussion.

I object to that on principle, and for me this very much outweighs the quite valid point you are making.


Jim Belshaw said...

If my electoral analysis is right, you are in Gilmore. Looking at the candidates, I see your problem. Still, I fear that you will have to give Lyndal Harris (Palmer Uniting Party) a go. That way the Lib candidate still gets in, but you have saved the taxpayer a bit under $2. That is assuming that PUP doesn't get over the minimum vote margin to collect it instead. If it does, what the hell?

Anonymous said...

Jim if I'm reading the AEC website correctly it says a figure of 2.48 per first pref votes recorded by any lower house candidate getting more than 4% of votes cast, and same for any group in the Senate.

Can't bring myself to make my mark for Messrs Palmer or Nile.

Jim Belshaw said...

Ah, but you are not voting for them, just against, and then you main vote goes to the least worst main.