The devastating double leak

Cabinet leaks are never fun. Unless you’re on the other side of the chamber and can dine out for weeks at a time on the information. There’s a couple of things alarming about the recent leaks, both regarding petrol.The first leak regarded Martin Ferguson’s objections to the Fuel Watch scheme inside the apparent sanctity of Cabinet; and he was forced to front the press with an admission of arguing against it in Cabinet, but he backed the policy as Cabinet had decided it. Embarrassing.

The second, and in my opinion far more damaging, appeared last night in a Laurie Oakes exclusive. It showed that several departments (Finance, Industry, Treasury and the PM’s own DPM&C) had provided advice that the introduction of the Fuel Watch scheme nationally would impose high compliance costs on independent retailers, and eventually have an upward influence on prices rather than the opposite.

The FuelWatch scheme has at its centre an idea to set the prices the night before and not have them change for the duration of the day, under threat of fines and other penalties. Even if this is on a day by day basis, it resembles the introduction of a price floor and a price ceiling, which tends to disrupt prices. The effort of attempting to collate prices from across an entire nation is admirable, but by forcing service stations to set their prices in advance may preclude consumers from accessing fuel at the lower prices. Over the course of say, a week, the average price will be set for the entire week; eliminating the fuel price drop on Tuesdays. Is this really going to help working families*, who know of that lower price?

The Government has firmly relied on the economic modelling from the ACCC, but newspaper headlines around the country suggest he has actually misrepresented the advice. A highlighter was passed across the table in Question Time yesterday, which asked the PM to highlight the relevant sections of the ACCC report, an offer that was passed up. Kevin Rudd was shuffling papers like a casino croupier, putting them into different piles on the Table.

But back to Cabinet leaks. It’s very worrying to have a Cabinet leaking this early into the life of a government. The electronic system for circulating Cabinet papers may not be as secure, or the bureaucrats who had their advice ignored got angry. All sensitive leaks are investigated, but the culprit is often never found. Which leads to the suggestion that Ferguson himself may be angry about being overridden in Cabinet, or that his criticism was not given a fair hearing. Marn’ being of the Victorian Left, could this be the factions reasserting themselves. If their views aren’t respected, they may leak.

As I recall, the various incarnation of the Howard Government rarely leaked, as Howard made sure that each of the opposing views was heard, even if he didn't act on it. Cabinet was tight. If every minister's decision is leaked, it just encourages discussion out of cabinet. Ironically, the corridors of Parliament House are far less secure than the Cabinet Room. As petrol prices continue to rise, maybe a bit of panic is settling in. After the Opposition's divisions on the excise, it must be a welcome change to have some disunity in the government.


*If I hear the term working families once more from Kevin Rudd, I’m liable to put a brick through my television.