Election 2010: Day 5 (or moving stationary)

Today was Tony Abbott’s best day of the campaign thus far. Ok that’s not saying a lot, but you know – small steps. I note the caveat that I write this before he appears on Hey Hey It’s Saturday as a judge on Red Face. For that I only say for his sake I hope his office has been able to vet the acts.

Abbott appeared at Faith Lutheran College to announce his new education spending measures. He was mobbed by the primary school students which will look good on the TV news. Sure the SMH reported the reaction of a couple of the students:

"I touched him," one of the exultant students screamed.

"I don't even know who he is," screamed another.

But let us not worry about those small things.

The policy he unveiled was to increase the education tax rebate and to allow it to include such things as school fees. I’ll get to the merits of the policy soon, but first it was nice to see that the policy document contained a list comparing the things covered by the ALP’s rebate and by the new Liberal Party policy:

Labor’s Eligible Expenses

• Laptops
• Home computers and associated costs
• Home internet connection
• Printers
• Education software
• School text books
• School stationary
• Uniforms

A few very sharp journos quickly noticed that stationery was misspelt as “stationary”. Ah well these things happen. It’s not like it was a document stressing the importance of education or anything… umm err.

And I am fully aware that now having made fun of the Libs for having a spelling error in their document that I will now unavoidably make a mistake as well. I accept that and just to ensure there is won I will put it in this sentence.

And now to the policy. Here it is:

A COALITION government would deliver parents up to $800 a child in tax rebates to help cover the cost of school expenses, including fees and uniforms, a move that supporters of public education say is designed to undermine state schools.

Oh wait, no that was the announcement made by John Howard in the 2007 election. Sorry. Actually Abbott’s rebate is better than Howard’s. Abbott’s is means tested – meaning only families eligible for Family Tax Benefit A can claim the rebate. Howard’s policy – utterly dumb thing that it was – was not means tested at all.

The rate at which Family Tax Benefit cuts out is below:

No. of children	No. of children 18–24 years
0–17 years	Nil	1	2	3
Nil		$100,290	$110,060	$120,791
1	$98,769	$108,539	$119,270	$130,001
2	$107,018	$117,749	$128,480	$139,211
3	$116,229	$126,960	$137,691	$148,422

So you can see if you have 2 kids of school age the husband and wife must earn below a total of $107k a year to be able to access the benefit. Given average weekly earnings are around $1,290 (or around $67,000 per annum), you can see that if both parents work full time you’re probably going to over that amount. And that of course is a good thing – it is meant to be for lower income earners. The last thing we need is more bloody Howard middle-class welfare.

Here’s the list of things extra you would be able to claim (if eligible) under the Lib’s policy:

Government and non-government school fees

Special education costs for children with disabilities, like dyslexia

Camps and excursions

Extra-curricular school activities, such as music, sports, dance and drama lessons

Tutoring costs

Musical instruments

Sporting fees & equipment

School photos

Now I have to say I have no real problem with most of these. But there is one that I do, and it’s the big one – the one at the top. Why taxpayers should subsidise people’s choice to send their kid to a private school is beyond me (leaving aside for the moment that the Government already provides stacks of funding to Private schools). It’s a typical move though by Abbott – the only thing he hates more than public health is public education. In Abbott’s dream world everyone would be on publically subsidised private health insurance and pay subsidised private education fees, and the public health and education system would be left to the utterly poor.

God help us should Abbott ever come out with an education policy that would target the public system to, you know, make it better.

And the problem with subsidising private school fees is that schools will just raise the fees (obviously).

Back in 2007, here was the reaction to Howard's policy by the private school system:

LEADING private school principals have branded Prime Minister John Howard's education tax rebate plan short-sighted, and accused both the major parties of squandering education money to buy votes.
…
The criticism came as education dominated election campaigning yesterday, with Mr Howard seizing on remarks by an ALP candidate to claim a Rudd government would revive plans to cut funding from a "hit list" of wealthy private schools. As the major parties argued, Melbourne Grammar principal Paul Sheahan accused both Labor and the Coalition of wasting large amounts of taxpayers' money in pursuit of votes.

Mr Sheahan said that rather than offering tax cuts and rebates, the nation's political leaders should promise to spend billions improving classrooms and buildings in poorer non-government schools and across the public education system.

Hmm.. spend billions on classroom, and buildings… gee if only we could have had a Government that would do that.

Abbott’s announcement was also rather odd in terms of the politics. Here was shadow Education Minister Christopher Pyne:

The obvious flaw in Labor's policy is that it only applies to stationery, computer expenses and uniforms. With those of us with children, sometimes numerous children, I have four. I have three that play the violin, two that do the piano, two with special needs.

Anyone here really caring about Pyne’s struggles to pay school fees? Anyone worried about Pyne’s kids violin lessons? Now call me a snob, but how many parents of kids in the Family Tax Benefit A have kids playing the violin? Maybe there are heaps – and maybe more should be, but I have to say Pyne’s “I’m one of you” shtick struck me as a tad odd. It was a bit like Abbott after the 2007 election complaining about his mortgage repayments.

If you are targeting lower income people you don’t patronize them by saying, yeah I find it tough too – those violin lesson really stretch the budget…

But it was a good announcement, and it looked like being a good day … ok there was the small matter of the principal of the school raving about the stimulus money:

… as the cameras moved away, Anthony Mueller, the school principal of the college was generous in his praise of Julia Gillard's $16 billion BER.

Mr Mueller said they were going to end up with a "fantastic" new arts facility thanks to the scheme, even though they had to shift a sports area to build it because of funding conditions. "(We're) very happy with (the BER).... schools have been able to put facilities up that they would only have dreamed of," he said.

"Our schools have been fairly efficient in getting the jobs done, and all the projects completed."

Oh well, at least the costings of the policy were all fine…

Uh oh. Later in the day Simon Crean came out to announce that the Libs’ policy that they had said would cost an extra $760 million over the next 4 years, would actually cost an extra $1.4 billion.

Crean’s reasoning is pretty good actually – as the rebate has been widened, many more parents will take it up, and many more will claim more than they do under the current system. Under the current system you need to buy a text book or computer or stationery etc and you need to keep the receipts and them claim it. Many would not be bothered unless they bought something big like a computer – which most would not do each year (would you really keep the receipts for every pencil you bought?). But if you can just claim school fees or the cost of a school camp? Well that’s easy to claim, and given that private school fees will all be well above the $1000 per year that you are able to claim, you can quickly see that more people and more rebate is going to be claimed under the Libs’ policy.

Meaning – blowout in costs.

Channel Nine news led with that aspect of the story.

Bugger. And the day was going so well.

***

Over on the ALP side of things, Julia was also going hard on the education side. She was pledging:

$25 million to give around 50,000 school students hoping to do an apprenticeship the chance to do some work experience.

The main topic of the early morning though was whether or not the Libs in promising yesterday to remove the provision for the Government to reimburse the cost to unions of conducting elections through the AEC meant they were actually going to have to change the Fair Work Act – the very same Act Abbott had pledged to never, ever change (fool that he is). The issue is that in the Fair Work Act there is a provision that says these costs will be reimbursed. It turns out though you can change the Electoral Act and that will render the provision in the Fair Work Act redundant.

That is, this is a change to the Fair Work Act through the backdoor. You can bet the ALP will make more of this – and suggest more could be done this way during the next 4 weeks. Especially when the Liberal Party themselves are quoting a law expert, Dr Andrew Lynch saying:

“If the legislation is changed in the Electoral Act then that will override whatever provision deals with this issue in the Fair Work Act, and sure that’s not technically a change to the Fair Work Act, but it does bring about an alteration”.

You’re always looking dodgy when you have to use “technically”. And something which brings about an alteration is now no longer a change? Interesting…

Julia then went on to make a speech at the NSW Nurses Association Annual Conference. Her speech made a very good point about Abbott’s inability to hold to any pledge. She quoted his Budget Reply speech – rightly pointing out that it is essentially the most important speech an Opposition Leader makes in Parliament each year. In that speech (only 2 months ago) he said this about IR:

We all know that the former government’s workplace reforms went too far but they also helped to create more than two million new jobs, lift real wages by 20 per cent and more than double net household wealth between 1996 and 2007. The coalition will seek to take the unfair dismissal monkey off the back of small businesses, which are more like families than institutions. We will make Labor’s transitional employment agreements less transitional and Labor’s individual flexibility agreements more flexible because we have faith in Australian workers who are not as easily pushed around and exploited as the ACTU’s dishonest ad campaign is already making out.

That was his policy then – he wrote it down. It was was an absolutely calm, considered, prepared, scripted remark. And now he doesn’t believe any of it. None of it. Not a jot.

I’m not sure when Tony Abbott will next be on the 7:30 Report, but were I Kerry O’Brien, I’d be quoting that passage to him. And then I’d ask, “Mr Abbott, just what do you believe?”

Julia speech however was (according to news.ltd and Sky news) ambushed by Kevin Rudd 750 kilometres away in Brisbane giving a speech at a local primary school in his electorate.

This event, which he had let the media know prior to that he would not be taking question, was a huge distraction for Julia because he made a speech about the benefits of the stimulus and then didn’t answer any questions! It was such a distraction for Sky News that they crossed live from Julia’s speech to Rudd’s. And yep Rudd’s speech was dynamite for Julia. He praised the school’s stimulus spending. What a bastard!!! You can see what he’s doing can’t you? And then not answering any questions?! My God what a cad! He’s doing all he can to undermine her. All those unspoken threats and criticisms!!!

Seriously – on Sky news John Hewson, Cheryl Kernot and Kieren Gilbert were getting themselves in a huge lather just thinking about what could possibly be going on with this scene of a local MP giving a speech at a school. The subtext was amazing! Especially as his speech was on at the exact time as was Julia’s (let’s ignore the fact that Julia was about 10 minutes late – you just know Rudd anticipated that!)

Yep this was an “upstaging”. Why? Because the 13 people watching Sky news at that time would have seen Sky News switch from Julia’s speech to his. Everyone else on the planet? Well they were oblivious.

The media will soon tire of this story – especially as Rudd will obviously not say anything to pour fuel on the fire. And there’s only so long you can go on talking about his not saying anything meaning something, before it is obvious even to Sky News that it means nothing.

***

On the inflation and interest rate front, Glenn Stevens yesterday made a very interesting speech:

"There is virtually no net public debt in the country at all in contrast to much of the developed world. The most recent figures out of Canberra was a peak of five or six per cent of GDP. So far from that being the highest in history, it is closer to the lowest."

So much for the Libs’ economic credentials. However, coming off the back of the minutes of the previous RBA meeting, the market has got a bit jittery about the chance of a rate rise next month. The market has moved significantly in the last two days:

Trading Day	No Change	Increase to 4.75%
12-Jul	82%	18%
13-Jul	84%	16%
14-Jul	80%	20%
15-Jul	82%	18%
16-Jul	84%	16%
19-Jul	87%	13%
20-Jul	78%	22%
21-Jul	76%	24%

The shift yesterday was due to the Minutes – and the market always plays it safe on such things, and any suggestion of a rate rise from the Governor will have the speculators racing in to bet on that outcome. Today it settled down a bit, but were I Wayne Swan and Julia Gillard I would be keeping a close watch on them, and have their lines nicely prepared for next Wednesday.