In politics, perception is everything. It’s critical for the Coalition to create a sense of desperation around the state of the nation’s finances, because their vision for Australian society is so deeply unpopular that without it they don’t stand a chance. After all, it’s a tough job to advance a position that benefits those with wealth and privilege at the expense of ordinary people, to ditch Australian egalitarianism for a dog eat dog dystopia.

The Abbott government’s political strategy is all about theatre, and in their Greek tragedy the Liberals are the heroes rescuing our sinking economy from the clutches of the incompetent former government, preventing us from meeting the fate of modern Greece. The numbers that demonstrate the real facts about our economy have been reduced to props in the play. Privatisation, cuts to services and the transfer of wealth to the big end of town are a necessary evil because the villains (read: Labor) have bankrupted the country. If the political equivalent of a good opening night is success at the ballot box then this play was a sell-out.

To continue the fiction in government, the Coalition established a National Commission of Audit. To ensure they got the answers they wanted they handpicked the actors – a who’s who of corporate Australia – and wrote the script, which went something like this: we have a structural budget deficit that can only be fixed by drastically cutting government expenditure, our high debt means this deficit must be reduced urgently, we cannot add to the already high tax burden, we must tighten our belts and make deep cuts starting with health, welfare and the public service.

The Greens established a federal senate inquiry into the National Commission of Audit because we wouldn’t buy the lie. We heard evidence from economists, academics, unions and business groups from across the country, and they told a very different story about the state of the Australian economy – one that is completely at odds with the Commission of Audit report.

Australia’s debt crisis is a fabrication and our level of public debt is amongst the lowest in the OECD. Far from being a crisis, we are the envy of most other governments. Government spending is low by world standards and commensurate with the level of services Australians expect. Borrowing money makes good sense when interest rates are low, infrastructure is run down and the jobs market is softening. Inadequate investment in infrastructure and people (through training and education) are the real long term threats to our global competitiveness.

The Commission’s goal of a surplus by 2023-24 is motivated by politics rather than evidence. Far from the economy being shackled by high taxes, Australia’s tax take as a percentage of our overall economy is low by world standards – and well below the OECD average. If we do have a budget problem it is on the revenue side of the equation.

By ignoring the billions of dollars in public subsidies going to big business each year, the Commission chose to ignore the largest and most wasteful areas of government spending. If they were serious about ending the “age of entitlement” they would have recommended the abolition of the huge handouts to mining corporations through the diesel fuel rebate, addressed the other enormous tax expenditures that cost us billions each year and divert money away from the services that define modern Australia.

When it comes to cutting the critical health and welfare supports that so many Australians rely on, the Commission’s recommendations are an evidence free zone. In the area of health their recommendations for co-payments, abolishing Medicare for people on middle and high incomes and the proposed PBS changes are a prescription for an increasing costs and a more unfair health system.

Take the issue of co-payments. The average number of GP visits per year is less than six, rather than the 11 per year quoted by the Commission. Leaving aside this fundamental error, the evidence is that co-payments would reduce both "inappropriate or unnecessary" medical care and "appropriate or needed" medical care, which is exactly what you’d expect. And also leaving aside that the whole point of going to a doctor is to get advice and reassurance that your symptoms don’t require treatment, the real concern is that people who have a serious problem requiring treatment are also deterred.

This is a triple whammy for people on low incomes, because they are more likely to have a higher burden of disease, have the lowest health literacy and are most sensitive to a price signal. Many of these people will end up in hospitals requiring far more serious and expensive treatment.



The Commission of Audit recommendations were entirely predictable. This is what happens when you write the script and choose the actors. The real surprise is that many of the recommendations in the report do nothing to address our long term challenges and are a recipe for spiralling costs and a worsening budget bottom line.