John Howard famously went down in 2007 spending like a drunken sailor, but that was at the end of an 11-year reign that had delivered enough budget surpluses to reduce outstanding federal bonds on issue to just $58 billion. Howard’s treasurer Peter Costello had also gone a long way to fully funding federal superannuation liabilities to public servants through the establishment of the Future Fund.
However, very little of that Howard largesse resorted to direct handouts to public companies, in stark contrast to what we’ve seen from Scott Morrison and Josh Frydenberg in recent months.
It was bad enough that $38 billion of the $88 billion in JobKeeper payments went to claimants that didn’t qualify under the rules of the scheme, but at least public companies were required to disclose precisely how much they received.
In terms of handouts in addition to JobKeeper, some public companies have been quite transparent, making a special ASX announcement on the day of the political announcement as can be seen on this list.
The large number of WA mining projects backed would suggest that this was a particularly pork-barrelling technique viewed as necessary to minimise seat losses in the state.
Most of the largesse slipped through to the keeper without much criticism, including a whopping $1.25 billion concessional federal loan to fully fund Iluka Resources as it pursues its integrated critical minerals refinery at Eneabba in WA. Iluka has a market capitalisation of $4 billion.
There was a bit of tut-tutting from the likes of Peta Credlin on Sky News when Tasmanian whisky maker Lark Distilling received a $4.5 million grant to help deliver a $20 million expansion, but Labor has spent more of its time matching Coalition spending commitments than criticising them.
Victorian political watchers with long memories will recall the saga of the Victorian Economic Development Corporation (VEDC). The VEDC was a commercial funding scheme by the Cain Labor government in the late 1980s, which ended up dropping around $100 million and being panned endlessly by the Liberals and the media for maladministration.
This is nothing on what the Morrison government will lose shovelling cash at marginal commercial projects. For instance, did the Japanese multinational Nippon Paper really need a $25 million federal grant to build a $125 million indoor barramundi farm in Gippsland near its Maryvale paper mill?
No wonder many people laughed when Frydenberg told the AFR last week he was committed to budget repair.
Having just overseen one of the biggest campaign spends in a single seat that we’ve ever seen at the federal level, the Frydenberg reputation for spending restraint is shot, particularly given the growing backlash over JobKeeper. Of all the videos posted by independent Kooyong candidate Dr Monique Ryan in recent weeks, this JobKeeper exchange from the Sky News debate was one of the few to crack 100,000 views. Meanwhile, Frydenberg’s approximately $5 million spend trying to save Kooyong smacks of panic and indulgence.
This list of grants and loans to ASX-listed companies barely touches the sides in terms of the nation-wide largesse, which is very difficult to track. The Guardian had a crack at tallying up sports grants last week and came up with $260 million of commitments from the Coalition and $290 million from Labor.
Sadly, there has barely been a dollar committed to public libraries, which just don’t have the grant-pulling power of football and netball clubs because they are staffed and run by local councils.
Let’s hope someone is independently keeping track of all promises and commitments made by the two major parties, including by way of private letters to lobby groups. Even better, the parties should voluntarily disclose their full commitments list.
There are growing calls for improved transparency and processes around federal grant-giving, which has tied into the integrity commission debate during this campaign.
Back in 2017, the Productivity Commission called for a significant overhaul of grant-giving in its “Shifting the Dial” report, but the situation has clearly got worse under the Morrison-Frydenberg regime.
After loading up with sports rorts and car park grants programs ahead of the 2019 election, Morrison doesn’t appear to have changed much about his game plan, despite being excoriated in multiple auditor-general reports.
The major difference this time is that Coalition candidates have been told they can only fund council-backed projects. However, for all the announcements that have been made, the actual delivery of many remains up in the air.
For instance, in our local seat of Menzies, Liberal candidate Keith Wolahan has announced funding for four projects, but only one of them ($1 million for new Headspace facilities) is guaranteed to go ahead regardless of the result on Saturday.
The Labor candidate in Menzies, Naomi Oakley, has matched a couple of the other announcements, but these promises appear to be contingent on Labor winning the seat, which is most unlikely given the margin of around 7%.
If Jim Chalmers is sworn in as treasurer later this month, he can expect an avalanche of requests from MPs on all sides ahead of his post-election budget later this year, which Albanese is promising will be partly focused on identifying and eliminating Coalition rorts.
And for all these public companies that have announced big federal grants from the Coalition in recent weeks, they probably should check the fine print and reassure the market that the funding won’t be clawed back by an incoming Labor government.
