Bowen hammers triple-A rating in budget reply

As difficult as it may be to recall, there was a budget last week, and as is the case in normal circumstances, the shadow treasurer today gave a budget reply address at the National Press Club — his last one, Chris Bowen hoped, since he intended to speaking as treasurer next year.

As was reported this morning, Bowen’s main announcement was that he would bring forward the Mid Year Economic and Fiscal Outlook to within 90 days of the election (i.e. up to the end of September) in order to revise economic forecasts, put in place spending trajectories for Labor’s proposals and amend savings measures. The job of undertaking economic forecasting would, as previously announced by Labor, be that of the Parliamentary Budget Office, rather than Treasury, which is “an arm of the government”, according to Bowen, and the subject of criticism under both sides of politics for the optimistic nature of some of its forecasts.

This made for a fiscally conservative response from Bowen. He dwelt at length on the importance of maintaining Australia’s triple triple-A credit rating, arguing that losing it would lead to higher government borrowing costs (a matter of dispute, but anyway) and that, once lost, history suggested it could take decades to get the highest rating back.

Bowen also played the conservative on superannuation tax concessions, another topic he devoted quite some time to, arguing that retrospectivity in tax was deeply damaging and that the government’s superannuation tax concession changes violated this principle. “You don’t expect a Liberal government to believe in very much, but you expect it to stand against retrospective tax changes,” he said. However, he also argued that such changes would deter people from directing savings to superannuation and undermine the entire system, and he reiterated Labor’s commitment to confine superannuation changes to every five years on the recommendations of an independent council.

The address was short on other announcements, partly because there is an election campaigning to come — “there are eight weeks to go — bear with me”, he said in response to one question asking him for more policy details — but mostly because, as he repeatedly emphasised, Labor had already, and unusually, rolled out an extensive suite of policies. There was, however, plenty of criticism of the government, including the potent line: “The Liberal-National re-election pitch amounts to this: ‘Please let us have another chance. We have wasted three years. But we’ll try harder next time.'”