xAnts

The debate around election promises and their potential costs has intensified, with former Treasurer Peter Costello delivering a scathing assessment of Finance Minister Katy Gallagher's proposed policy-costing unit. Costello argues the plan doesn't go far enough, highlighting the need for a robust, publicly funded body capable of accurately assessing the financial implications of all major election commitments.

Gallagher recently unveiled plans for a dedicated unit within Treasury to cost election promises, aiming to provide greater transparency and accountability during campaigns. However, Costello, a long-serving and influential figure in Australian politics, believes the proposal is a missed opportunity.

“What we need is an independent body, not something that’s part of Treasury,” Costello stated in a recent interview. “Treasury is inherently biased towards the government’s agenda. An independent body, funded by the Commonwealth but operating at arm’s length, would be far more credible and trustworthy.”

The Core Issue: Independence and Scope

Costello’s primary concern revolves around the issue of independence. He argues that situating the costing unit within Treasury, a department directly responsible for advising the government on economic policy, creates an inherent conflict of interest. “It’s like asking the fox to guard the henhouse,” he quipped.

Furthermore, Costello suggests the scope of Gallagher’s proposal is too narrow. He believes the unit should not only cost specific election promises but also provide ongoing analysis of the financial impact of existing policies. “It shouldn’t just be about reacting to promises made during an election campaign,” he explained. “It should be a continuous process of evaluating the cost-effectiveness of government spending across the board.”

Why This Matters for Voters

The debate over policy costing has significant implications for Australian voters. Accurate costings allow voters to make informed decisions about which parties and policies offer the best value for money. Without reliable information, promises can be made without a clear understanding of their financial consequences, potentially leading to budget blowouts and economic instability.

Calls for a Model Based on the UK

Costello points to the UK’s Office for Budget Responsibility (OBR) as a potential model. The OBR is an independent body that provides impartial analysis of the UK’s public finances and forecasts economic trends. It has gained widespread respect for its independence and accuracy.

“The OBR is a fantastic example of how an independent body can enhance transparency and accountability in government,” Costello said. “Australia should seriously consider adopting a similar model.”

The Government's Response

The government has defended its proposal, arguing that the Treasury-based unit will be sufficiently independent and capable of providing accurate costings. They maintain that locating the unit within Treasury allows for access to the necessary expertise and data.

However, Costello's critique highlights a growing concern about the politicization of economic analysis and the need for greater transparency in government spending. The debate is likely to continue as the next election approaches, with voters demanding greater clarity on the true cost of election promises.

Ultimately, the effectiveness of any policy-costing mechanism will depend on its independence, scope, and the willingness of politicians to embrace its findings. The challenge for both the government and the opposition is to ensure that voters have the information they need to make informed choices at the ballot box.