An ‘extraordinary’ leak from Treasury reveals that Labor was advised to spend less and tax Aussies more. Should we have known this accidental revelation before the election?

The shock, horror revelation from Canberra is the so-called news that Treasury has told the Albanese Government that they’ll have to spend less and tax more. This calls for a young person’s reaction such as: “Well, der!”

To normal people, this bottom-line advice about our deteriorating budget deficit outlook might be a shock. To an economist, however, it’s straight out of the book of The Bleeding Obvious. Since the start of time, Treasurers would’ve been told by their advisors that they must raise taxes and cut spending.

There are two pieces of revelation that make this story newsworthy. First up, this was a leak from Treasury. And second, why didn’t we get told this before the election?

The good news for the Government was that the leak wasn’t intentional from a Labor-hating public servant.

In the Daily Telegraph, Samantha Maiden tells us that this “extraordinary blunder” was accidentally released under a Freedom of Information (FOI) request. Even more newsworthy, Treasury pleaded to the ABC to destroy it and keep stum. Of course, the ABC didn’t.

In summary, the advice actually said:

1. Tax should be raised as part of broader tax reform.
2. Indirect taxes, like the GST, needs to be raised.
3. Economic growth had to be raised.
4. Less spending and more taxing were necessary to reduce the projected budget deficit.
5. The promise of 1.2 million homes in five years, looks ‘like pie in the sky’ — these are my words not the number crunchers in Treasury.

Believe it or not, while journalists and others can request copies of “secret advice” like this from Treasury under the FOI laws, they’re heavily redacted, which means important stuff is blacked out. However, the redactor failed the black out test!

“In this instance, public servants mistakenly included headings and subheadings from the redacted sections, revealing sensitive elements of Treasury’s briefing to the national broadcaster, the ABC,” Maiden explained.

The ABC denied Treasury’s request to destroy the document claiming that “it provides a rare insight into how top advisers view the major economic and policy challenges facing the Albanese government as it begins its second term in power and so is in the public interest.”

They’re right because it has become an indirect way of showing ‘normal’ people in this country what ‘abnormal’ people like economists already know and have to live with!

For his part, Treasurer Jim Chalmers is relaxed about the revelations. Like a true politician, Jim says Treasury’s speculation on the Government’s housing promise problem might be informed guesswork, but time could prove them wrong.

This is a guy who one day could easily do an Albo and become the country’s Prime Minister, as he has seemingly learnt from his fellow Queenslander, former Labor Premier Peter Beattie. While ‘Pete’ was never worried about admitting a mistake, he’d always promise to do better or spin the news to show himself as the kind of Aussie that other Aussies would give a fair go.

Beattie and now Chalmers are smart politicians the Coalition should learn from, if they ever want to beat the current crop of Labor winners.