What can we expect of a new Coalition Government?

This is the first election in my experience in which, at the end, I don't have a real feel for the policy outcomes from the likely result. I am forced back to guesses and first principles. Still, I thought that I should put some ideas down so that you can judge their accuracy later.

Politically, the most likely outcome is a very large Coalition majority in the House of Representatives, so large that the Liberals may have a majority in their own right. The Nationals have been sidelined to some degree in this election. I don't think that they liked it very much. There has also been sniping against the Nationals on the Liberal side. Again, the Nationals didn't like that very much.

The Coalition will continue, but in my experience the closest working relations come (WA has been an interesting apparent exception) come when the Liberals cannot ignore their National brethren. Expect some tensions that will grow over the life of the next Parliament.

In the Senate, the most likely outcome is a Coalition minority. The exact effect here will depend on the final mix. However, the ability of the new Government to do what it likes will be constrained.

The budget position is reasonably difficult. The Coalition hasn't locked itself into silly surplus promises in the way Mr Swan did, but they are still locked in by their pervading rhetoric. They have very little room to move on either the tax or expenditure side. In the medium term, I expect the Australian economy to improve, with consequent improvements in the fiscal position, but that won't help in the short term.

Their position is further complicated by the myriad of  foreshadowed expenditure cuts. We may not know the full details, they still haven't been released, but we know enough to know that there will be a lot. Those cuts involve pain for some, while many will require legislative change. It's also complicated by their commitments to Gonski, to NDIS and paid parental leave.

The Government also face an action/decision backlog, especially in the Commonwealth-State arena where decision making under existing agreements has been stalled for several months.This is apart from any actions required to bring their new initiatives into affect.

If you now look at the Coalition's six key priorities as defined in the little pamphlet we received through the mail or at shopping centres.

First, we have a stronger 5-Pillar economy = manufacturing innovation, advanced services, agriculture, education and research and mining exports. This will come with lower taxes, boosted productivity and more 21st century infrastructure. A Coalition Government could certainly do something about improving productivity. It could do something about improved infrastructure if it was prepared to borrow, but that's difficult. Lower taxes depend on overcoming budget constraints.

Second, the Coalition will deliver stronger borders' aka stop the boats. Leaving aside value issues or our international reputation, this one is mainly potentially costly atmospherics that stand at the left edge of key national priorities. An Abbott Government must move, but there are going to be stumbles; its been useful in campaign terms, but its actually a distraction that may have other costs.

Third, end the waste and debt. This conjoins two very different things. There is always some waste that can be cut, although its not as much as people think. Debt is very different. because that depends on revenue as much as expenditure. The main effect of this pillar will be to constrain other things that the Government might do.

Fourth, the carbon tax will be abolished. This one is a soft underbelly because it actually depends on two legs, the Government's ability to abolish the tax on one side, problems with its direction action alternative on the other. It is far from clear that the Government can abolish the tax. It is far from clear that the direct action program will work. While Mr Abbott is talking about a double dissolution if abolition of the tax is rejected, Senate obstruction may actually be a blessing in disguise for Mr Abbott in allowing him via negotiation to exit from some of the sillier aspects of his current position.

Then in fifth and sixth we have better roads and services and two million new jobs. mmm!

So what might actually happen? Assuming that the Coalition doesn't get sidetracked by its own rhetoric and by the sheer load of coming back to Government, we can expect the following:

• The new Government will focus as best it can on cost cutting, recognising that it needs to buy space for its own programs and that it needs to do that while its election is fresh. It will then move to patch up the sillier results of its actions. Take a bow, Mr Costello.
• Second. it will try to lag expenditure commitments or modify them at the margin. Parental leave will go through because the numbers are there, but beyond that? 
• Third, it will focus in those area where it can get results, and that means a focus on productivity improvement.  

Let's see how close I am.

Postscript

kvd found this link to an IPA document that gives the line by line Coalition costings. Have a look and see what you think. This tweet from H G Nelson made me laugh.                

‏"@hg_nelson12m Have I got this right? They can starve but we will get new tunnels and freeways going nowhere that will be clogged by boat people".

Seriously, do have a look at the costings. The way this election has been run, this is what we are voting for.

Meanwhile, Michael Pascoe from the Sydney Morning Herald is not impressed.