Hockey faces facts on debt. Now for revenue

Editorial

When does a debt emergency end? Apparently, it's the moment when those raising the alarm win government. Treasurer Joe Hockey's move to raise the Commonwealth debt ceiling by two-thirds, from $300 billion to $500 billion, is an implicit admission the current debt is sustainable. Once again the hypocrisy of the Coalition's claims in opposition is exposed. First, it was the private plundering of MPs' entitlements while publicly condemning wasteful spending. Now promises to cut debt to ''bring the budget under control'' are being tested by the realities of government.

Having long insisted the rise in debt during the worst global recession in 80 years was not a budgetary ''disaster'', The Age welcomes Mr Hockey's change of heart. There has never been a better time for governments to raise funds at very low rates, provided these are invested in the nation's productive capacity.

A $200 billion jump in the debt limit nonetheless demands a better explanation than Mr Hockey offered. Comparisons with the US debt stand-off are ludicrous; statements by Australia's Treasurer need to be credible. Predictably, Mr Hockey also blamed ''the legacy of a bad Labor government'' for the move. So much for Tony Abbott's pledge of ''no surprises, no excuses''.

What is no surprise is the creation of a commission of audit to review all spending and public sector performance. This was long promised, although the extent to which business interests will set the agenda, with the audit to be headed by Business Council of Australia president Tony Shepherd, and the rush to do the job in five months are of concern.

Mr Hockey's mantra is still ''we must live within our means'', but neither the Coalition's rhetoric nor the audit's terms and personnel suggest the government will tackle the budget's biggest problem, the collapse in revenues.

The Age would remind the government of Peter Costello's warnings when, as treasurer, he released the first Intergenerational Report in 2002. The message, summed up as ''demography is destiny'', was that an ageing population would inevitably require increased spending. Government spending then was 25 per cent of gross domestic product; it is now 24.3 per cent. It was assumed the 2002-03 level of revenue, 25.5 per cent of GDP, would be sustained. Instead, revenue is down to 23.2 per cent (the 2009-12 average was 22 per cent). One would hope the government has the sense to fix the budget's revenue holes as well as reviewing spending. The Coalition, though, vowed to cut taxes and spending, and has given big business, one of the strongest anti-tax constituencies, a big say in its planning.

Whatever the audit's outcome, it will not create a mandate for major policies that were not revealed, or were ruled out, before the election. Having pilloried Julia Gillard for that political sin, Mr Abbott should honour his vow to put any significant new policies to voters at the next election.

 

Still a long way to drive

The news that Victoria's road toll has fallen by more than 16 per cent, with 240 deaths recorded in the 12 months to October 21, is welcome. That we are on track to have the lowest annual road toll on record is encouraging - but should not be the end of the story. As Victoria Police Assistant Commissioner Bob Hill said on Tuesday, there is never cause for celebration for as long as the families of those killed or injured on our roads continue to grieve.

It must be said, however, that Victoria has come a long way in improving road safety. In 1970, the year compulsory seat belts were introduced in this state (a world first, quickly emulated elsewhere), 1061 people died on our roads. Since then, the perils of drinking and driving have been graphically and effectively depicted through constant public awareness campaigns matched by increasingly stringent checks and appropriately severe penalties. The result has been a dramatic and welcome change of culture, as markedly important to road safety as anti-smoking laws have been to public health.

A new enemy, however, needs to be tackled with the same gusto: the dangers of technology. As Mr Hill observes, there has been a dramatic increase in the number of drivers using hand-held mobile phones not only for calls, but for texting and checking social media or as a GPS device. In a moving vehicle, even a momentary distraction can prove calamitous and should be discouraged.

Technology's good side, however, could prove useful. For example, VicRoads' ''Road Mode'' app, which stores incoming calls and messages until it is safe to retrieve them, could work as a future mandatory preventative measure.