The developing trouble with the government’s economic stimulus package is that it is now pulling in two different directions at once; one economic, the other political.
There is now no argument that the injection of emergency taxpayer funding into the economy in the face of the global financial crisis (GFC) has been a stunning short to medium term success. Witness the 0.6 per cent growth rate evidenced in the National Accounts this week.
But just as its economic success is confirmed, the package risks haemorrhaging politically. While Treasurer Wayne Swan basks in the good numbers, for the first time in her career in government the chief implementer of the package, Deputy Prime Minister Julia Gillard is under real pressure.
Two things have happened to Gillard; the costing of this program has blown out by $1.5 billion. The sloppy accounting was only exacerbated by repeated reports of money going to schools for things they’d never asked for or didn’t need; in one case a $250,000 grant to a school with just four students that was slated for closure.
Then came the revelations that while Gillard and Kevin Rudd hadn’t been able to keep track of the money, they had been diligent enough to insist that all schools that received stimulus cash put up signs acknowledging the beneficence of the government.
After the Opposition initiated intervention of the Electoral Commissioner this week, the government was forced to concede the signs were nothing more than political advertising.
Now comes another, and potentially much more serious, charge against the stimulus package, that it is politically skewed in Labor’s favour.
The strength of this analysis, by up-and-coming Victorian Liberal Senator Scott Ryan, is that it is mathematically based and backed by the apolitical resources of the Commonwealth Parliamentary Library.
Here’s how Ryan has broken down the numbers: The so-called Science and Language Centres for 21st Century Secondary Schools (SLC) is one part of the $14.7 billion Building the Education Revolution (BER).
On June 30, Gillard announced that 537 projects would receive $810m. Each of the 537 projects has been allocated to the electorates by postcode and Parliamentary Library information. Using the AEC classification of seats and compiling the projects by electorate, Ryan asserts the political bias is obvious.
Labor marginal seats receive, on average, nearly $1m more than Coalition seats.
Inner metropolitan seats held by Labor receive three and a half times as much as Coalition seats.
Labor seats in outer metropolitan areas receive almost double that of Coalition seats – $5.6m to $2.9m.
When all metropolitan seats are considered the difference in favour of the ALP is more than double – $4.4m to $2.1m.
When all non-rural seats are added together the bias remains – $4.3m to $2.9m per seat.
Even rural seats see a discrepancy in favour of the ALP, albeit smaller: Labor seats receive $9,559,905 compared to Coalition seats receiving $9,348,173.
The trouble for Gillard is that on top of the school signs fiasco, for many voters, Ryan’s claims will start to ring true. The case against the stimulus on political grounds is building.