Will Joe Hockey raid the RBA? Another integrity test for Hockey Joe Hockey has a test coming up in the form of a Reserve Bank dividend, or not. Michael Pascoe comments. PT4M49S http://www.brisbanetimes.com.au/action/externalEmbeddedPlayer?id=d-2vvsf 620 349 October 21, 2013 - 11:13AM To borrow a Dick Johnson metaphor, it looks like Joe Hockey is down to picking the fly dirt out of the pepper in his effort to make something out of the fiscal policy formerly known as a "budget crisis." So will he follow Wayne Swan's example by raiding the Reserve Bank coffers for spare cash? We'll find out on Thursday. That's when the RBA publishes its annual report. It's likely to include a rather miserable operating profit thanks to low interest rates, but a fat bottom line thanks to foreign currency gains as the Australian dollar weakened. That bottom line could be tempting for a treasurer desperate to be seen to be making some sort of impact on the deficit. When Swan was in that position last year, he ripped a $500 million dividend out of the RBA, overruling the governor's desires to retain all the profit to rebuild the RBA's depleted reserve fund. Hockey was suitably scornful of Swan's heist when that news broke, but that was back when he was in opposition. And even then, the feigned outrage was quite constrained by Hockey's standards - he didn't promise to let the RBA keep the profit, merely saying that a new Coalition government would "as a matter of urgency, meet with the Reserve Bank to discuss its Reserve Fund requirements," noting that it was essential to the public interest that the RBA had appropriate reserves at all times (whatever that means). Treasurer Joe Hockey is keen to be seen to be making some sort of impact on the deficit. Thus Thursday could be an interesting test of the public interest versus the former deficit fixation, which coincidentally had another little outing on Friday. In a joint media release with Finance Minister Mathias Cormann, Treasurer Hockey took pleasure in the Parliamentary Budget Office's final costing of the Coalition's election promises trimming a little more from the deficit. After Labor's laborious and fruitless "black hole" scare campaign, it turns out the Coalition had indeed been conservative. Nonetheless, you'd have to be rather desperate to get excited about it. The PBO found the Coalition's election policies would improve the budget bottom line by $7.1 billion, rather than the Coalition's estimate of $6 billion - but that's over four years. In the context of a roughly $400 billion annual budget, instead of shaving an average 0.37 per cent off it, the saving will be 0.47 per cent. A difference of one-tenth of one percentage point isn't much to crow about when you've been ranting for four years about a cataclysmic deficit that threatened to enslave our grandchildren and end civilisation as we know it. A quick lift of $500 million from the RBA "in line with previous practice" would be much quicker and easier and make a bigger difference than the fly dirt exercise promised in the "line-by-line" budget audit, particularly when Mathias and Joe find themselves confronted by nonsense items like $5 million for the Brisbane Broncos and $16 million for Cadbury chocolates. Whoops, it's hard to claim fiscal credibility if you're approving that sort of rubbish. Too bad that they are Tony Abbott promises. But the surprisingly immediate potential cost of confirming that the Coalition really is much the same as Labor was dramatically demonstrated on Saturday by the 27 per cent swing against the Liberal Party in the New South Wales state seat of Miranda. About the last thing imaginable in Australian politics right now is that the NSW Labor Party could win anything, but it won Miranda. The political pundits, particularly on the losing side, have been quick to downplay the result as a purely local matter, but Tip O'Neil's accepted wisdom applies: "all politics is local." And you have to keep in perspective just how unlikely it should be for NSW Labor to win even a one-horse race. Effectively, there is no opposition party in NSW. The Independent Commission Against Corruption is only halfway through dragging what was left of NSW Labor through corruption hearings. Mike Carlton rightly observed that the so-called leader of the opposition, John Robertson, only has the title because no one else wants it. Robertson was the union leader who thought nothing much of being offered a $3 million bribe by Michael McGurk - just waved it away and carried on as if nothing had happened, allowing McGurk's interests to tender for the purchase of union property, albeit unsuccessfully in circumstances that were dubious for other reasons. It's impossible to take him seriously. Federally, a new Coalition government is still in the honeymoon phase and Labor is concentrating on what it does best - publicly ripping away at itself over past betrayals. The people's preferred Sydney candidate for federal leadership has been passed over by order of caucus factions for a Melburnian union heavy, yet Miranda saw a 27 per cent swing against a state government that is only two years old. Maybe the electorates' dissatisfaction level is running high against whatever party happens to be in power, even with the alternative is rabble. Maybe the honeymoon was over as soon as we found out who had been billed for the wedding. Such a political climate should add a touch of the blow torch to every decision.