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The Currency Lad

- For Independence And Liberty Since 1832 -

Monday, May 5, 2008

FOI Papers Emerge: Everything Howard's Fault

MORE evidence this evening of the con that is the Rudd government's grand rhetoric of 'new ways' and open government. The day after that story on the rejection of a Freedom of Information request for papers relating to the inflationary impact of Labor's new workplace laws, it's now being reported by The Australian and Fairfax that an FOI request by Channel Nine - for minutes of the official advice on inflation given to former Treasurer, Peter Costello - has been successful. The minutes supposedly prove Mr Costello and senior Howard government figures were warned about the probability of inflationary and other negative effects of high government spending - six and then four months from the 2007 election. The politically convenient story comes on a day when the ongoing war of words about spending cuts in next week's Budget - and the true magnitude of the inflationary "crisis" - escalated between Wayne Swan and the Opposition's Malcolm Turnbull.

As we wait in vain for the Public Sector Union to lament the knowing provision of "certain sorts of advice" relating to FOI requests, several observations on Mr Swan and the present economic situation come to mind. Here is what the Treasurer - speaking to Channel Nine (imagine that) - said this evening: "Well, these documents show that the Liberal Party ignored Treasury warnings that excessive spending would put upward pressure on inflation and upward pressure on interest rates." This demonstrates two things. First, the Treasurer is yet to make the transition from Opposition salesman to authoritative Treasury boss. The minutes tell us absolutely nothing about the economic debate in early to mid 2007 that we didn't already know. Second, Labor signed on to $31 billion in tax cuts at the beginning of last year's election campaign and its own spending promises were not much different - were about the same, in toto - as the Howard government's.

What we're seeing with Mr Swan's historical vendetta is an attempt to create something he didn't inherit: a major crisis. His narrative is not merely for the public's consumption but, more importantly, for the enlightenment of the government backbench. Everyone knows Julia Gillard covets his job. Mr Swan not only has to be seen as a passably competent Treasurer; he also has to be seen as a zeitgeist Treasurer - fighting the good fight in desperate times. That's why a constant of his hyperbole has been the inflation Boogie Monster. Yes, spending cuts - a repudiation of last year's bipartisan consensus on the desirability of generous outlays (free laptop anyone?) - are prudent. But next week's projected surplus of $17 billion - and a less than alarming inflationary cost to the economy for what remains the lowest unemployment in 30 years - are achievements of the previous government. Mr Swan is no hero and no magic minutes can turn him into one.

Update: No double standards, says Mr Swan. It was the bureaucrats.