Labor has no choice. It should acccept Gonski 2.0 and argue for more funding | Greg Jericho

Unlike the US’s Congressional Budget Office, Australia’s Parliamentary Budget Office does not provide analysis on the real-world impacts of policy

This week, Guardian journalist Ben Jacobs was assaulted by Republican congressional candidate (now congressman) Greg Gianforte after Jacobs asked him about the Congressional Budget Office’s report on the Republican party’s healthcare plan. Such an event would not happen in Australia – not because we don’t have politicians who wouldn’t hit journalists (although one hopes that is the case) but because we don’t have an organisation that analyses policy as does the CBO.

One of the biggest issues for the Australian Labor party in responding to the May budget is that there is more talk about cuts to growth in spending than about actual cuts. The $22.3bn cut to education, which Labor has spent much of the time since the budget prosecuting, is a cut compared with what it was promising to spend.

Such arguments are more difficult to make because, as Joni Mitchell would put it, you don’t know what you’ve got till it’s gone, and if you never had it in the first place it is even less likely you would know you lost it.

In 2014, Joe Hockey gave Labor a massive help by including within the budget papers a graph and a line boasting that the changes to funding of education and health “will achieve cumulative savings of over $80bn by 2024‑25”.

Scott Morrison was not so silly.

This year’s budget papers instead argue that “the government will provide an additional $18.6bn in funding over a decade for schools”. The government, in its briefing to journalists on the “Gonski 2.0” funding, did admit in the documents that “compared to Labor arrangements” its spending would “represent a saving of $6.3bn over four years ... and $22.3bn over 10 years”.

But “compared to” is different from actual cuts.

The problem for Labor is that the issue is no longer just about money. Hockey was cutting funding and replacing it with nothing other than a likely return to the Howard government model. By actually adopting the Gonski framework, the government has shifted the talk from cuts to who gets funding.

And the argument waged by Labor is not particularly suited to question time. Any questions around $22bn worth of cuts, or even comparatively less funding to certain schools, have merely given Turnbull a chance to talk about the increases in funding from this year onwards.

There is nothing wrong with arguing for more money for schools – $22bn is not an insignificant amount – but Labor is now essentially arguing the negative, arguing about cuts rather than celebrating they no longer have to ever worry about hit-lists for cutting funding to private schools.

They should ditch their old policy and run with the government’s model but with extra funding. But that will also require Labor to do some heavy policy lifting explaining the need for their level of funding and how they will pay for it.

Labor is hindered by the difficulty of explaining the impact of education policy. Turnbull loves being asked about funding cuts because he can (as he did this week) wheel out the government’s “school funding estimate” calculator and argue that instead of cuts, a school will receive more money.

But that calculator only includes commonwealth spending, and of course only refers to increases compared with the current situation, not those proposed by the Gillard government.

It makes for a pretty complex argument for voters to grasp. They are in effect being asked to compare apples and oranges as they are being juggled by both parties.

Such problems apply to any non-welfare policy area where the purpose of government spending is not just the money.

Education and health policy, for example, are notoriously difficult to navigate – but even estimates on the impact of tax cuts on the economy are mostly left unclear in the budget. The budget papers tell us how much they will cost the budget but very little on the impact to the economy – except for a line or two about increasing growth in the long-term.

It doesn’t need to be this way.

In the US, the Congressional Budget Office is an independent government body that analyses all legislation. In March its “score” of the Republican’s healthcare plan found the plan would lead to increased insurance premiums for the elderly and would see 24 million fewer people insured.

So strong was the backlash that the legislation was dumped and the revised version was rushed though the House of Representatives before the CBO could issue its latest analysis. When it did so this week, it found again that premiums would rise for the elderly and that this time 23 million fewer Americans would have healthcare insurance than under the current Obamacare system.

And it was when Gianforte was questioned on this analysis that he confronted Jacobs.

But in Australia we don’t have the same processes in place. Our Parliamentary Budget Office does not analyse every piece of legislation and does not provide analysis of second-round impacts of policy – it just adds up the cost or savings to the budget.

This year a review of the PBO recommended it not be authorised to examine “second-round” effects. The main reason given was the belief that if the analysis was shown to be wrong it would make the PBO seem partisan.

But that means we are left with mostly partisan analysis.

The real reason, I suspect, is that to enable the PBO to provide such analysis it would need a large boost in spending – making it in effect a mini-department.

But the cost of not having such analysis is that policy can get framed purely in terms of impacts on the budget deficit, whereas the real impact of policy is on people. And it also means fights over policy end up becoming debates over what numbers to use to judge that policy, as much as debates about the policy itself.

For now, Labor is struggling to adjust to the new numbers. And without any independent score from the PBO, it would be better for it to accept the government’s new figures and model – and then explain to the public not why the government’s policy is worse than theirs but why Labor’s policy is better.


Greg Jericho

The GuardianTramp

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