The attorney general, Christian Porter, has responded to (the former LNP president) Gary Spence’s loss in the high court. The case had a little sting for the commonwealth, with the court ruling the provision of federal law that provides immunity from state donation bans is invalid.

Porter:

“The government respects the decision of the high court. Given that the reasons for the decision have not been published, it is not possible at this stage to comment further.”

The Labor states have written to the Morrison government demanding an “urgent confirmation” that commonwealth surpluses won’t be “built on funding cuts to hospitals, schools and infrastructure”.

This is a straight chip-and-chase from the Labor states – backing in their federal colleagues to continue putting pressure on the Coalition to explain if there will be a $40bn cut in federal spending, as suggested in an analysis by the Grattan Institute.

From the letter:

The Treasurers of Victoria, Queensland, Western Australia, the Australian Capital Territory and the Northern Territory are calling on you to confirm that there will be no further funding cuts to hospitals, schools, infrastructure and other essential services that Australians rely on.

The 2019-20 Australian Government Budget confirms that spending as a percentage of GDP will decrease from 24.9% in 2018-19 to 23.6% in 2029-30. At the same time, receipts as a percentage of GDP are projected to increase from 25.0% in 2018-19 to 25.5% in 2029-30.

This is a significant departure from the medium-term forecasts included in the 2016-17 Budget which stated that “payments as a proportion of GDP are forecast to fall to 25.2 per cent by the end of the forward estimates but rise and then stabilise over the medium term”.

Analysis undertaken by Grattan Institute indicates that the Commonwealth Government’s projections require a cut to spending of about $40 billion a year by 2029-30 – the equivalent of $30 billion in today’s dollars. Grattan Institute have stated that “achieving such a reduction would require significant falls in spending across almost every major spending area”.

Yesterday Scott Morrison dismissed the Grattan Institute analysis as “absolute, complete rubbish”.

Yesterday Labor went on the attack with a Grattan Institute analysis that found the 2019 budget’s projections of a shrinking ratio of government spending to GDP implies a cut of $40bn a year in spending.

The Liberal senator Arthur Sinodinos responded that cuts would not be needed because the Coalition has kept spending growth to 1.9% of GDP and it will “grow the pie” of GDP.

Danielle Wood, the budget policy program director at Grattan, isn’t buying it.

“The figure of 1.9% spending growth under the Coalition is wrong, I get 2.6%,” she told Guardian Australia.

Wood explains a few tricks are behind the 1.9% figure:

• Taking 2013-14 as the baseline and blaming Labor for that year – even though the Coalition were in charge for three-quarters of the time, during which they gave a cash injection to the RBA to make the last Labor year look worse; and
• Assuming that the spending restraint projected over the next four years comes about - so the Coalition is running not on its record but its projections.

Grattan’s analysis assumed nominal GDP growth of 4.5% from 2021-22 to the end of the decade. Wood said that projecting growth beyond that would be a “non-standard assumption”. “Are the Coalition seriously saying they can boost GDP growth beyond that?”

Too long, didn’t read – it seems spending restraint/grow the pie logic can’t magic away the projected fall in government spending.