Institutionalising Deceit: Labor’s Plan To Fiddle Budget Forecasts

THE MASQUERADE of expediency as “principle” is arguably the biggest driver of public discontent with politics — after outright lying — and the ALP is an adept practitioner of both of these dubious arts; today shadow Treasurer Chris Bowen is spruiking an “initiative” in response to ALP claims Joe Hockey manipulated budget forecasts to fit the Coalition’s political goals. The measure clearly seeks to distance Labor from its own incompetence.

There are many people in Australia (and in most other democratic countries, for that matter) who find the idea of removing things from the control of politicians to be a fine idea indeed; as a small government conservative, it should theoretically appeal to me too.

But the idea the shadow Treasurer Chris Bowen is flogging today — that the Parliamentary Budget Office should be invested with the power to “independently” set forecasts for use by Treasury and the Treasurer to then formulate budget policy against — is a red herring, and typical of the sort of sham Labor, with its intellectually lazy but too clever by half approach to opposition politics, has sought to foist on voters since they booted it out of office a year ago.

Chris Bowen is one of the more capable MPs in Labor ranks, and in its depleted state following last year’s election debacle the ALP needs all of the able hands on deck that it can muster.

Yet Bowen — both as Treasurer in the dying days of the Rudd-Gillard-Rudd government, and again as a shadow minister in opposition — has proven highly adept at the cynical, empty sloganeering that has characterised the worst aspects of the Labor Party over the past decade or so, and his latest offering simply continues that inclination to prioritise meaningless drivel over anything of substance.

And it goes without saying that (surprise, surprise!) his “initiative” makes a none-too-subtle attempt to diminish Labor’s shocking record of economic management in government, and to disown the hapless legacy it saddled the country with that will take years to erase, if ever.

Some people will be impressed by this: under the cover of hitting out at what he describes as the Coalition “mythology” of a budget emergency, Bowen advances what I would term a “principle-style” proposal to remove the ability of elected politicians to modify, adjust or otherwise influence growth estimates and other economic forecasts that are used in framing federal budgets.

Those who find such a concept appealing will be further heartened by the fact Bowen nominates an “independent agency” in the PBO to take this task into its remit, thereby setting down a framework of “rules” by which future generations of politicians, both Liberal and Labor, must abide.

But a big part of the motivation for this seems to stem from the fact that Hockey’s estimates of the size of budget deficits over the next four years were double the size of those published by Labor, when Bowen was Treasurer, just four months earlier.

And it can scarcely be a coincidence that in filing a reasonably detailed report on this issue, The Australian alludes to the budget cuts Labor is ferociously opposing and the $667 billion of debt that is forecast to be accumulated by 2024 without them: a figure never even hinted at by Labor in office, and not publicly uttered by the Coalition until the initial phase of its review of the budget was completed late last year.

As the latest empty gimmick aimed at conning votes out of the gullible, the stupid and the (understandably) apathetic, Labor probably thinks it’s onto a real winner here, no pun intended.

So let’s call a spade a spade, and canvass a few scenarios that are firmly grounded in fact.

Labor, under the stewardship of the self-important and contemptible Wayne Swan, made in excess of 600 explicit pledges to deliver a budget surplus by 2013, none of which were met. On all of those occasions, Swan — as Treasurer — had control over the economic settings and mechanisms Bowen now seeks to strip from the grasp of whoever occupies the Treasurer’s office. Would the mooted change (with the improvement in the quality of forecasting it implies) have enhanced outcomes on Swan’s watch? Hardly.

Former Treasurer Peter Costello (who, unlike Swan, actually delivered surplus budgets: 10 of them in 12 years) developed, over his time in the portfolio, a legendary reputation for the uncanny knack of producing forecasts around economic growth, inflation and other key indicators that were almost invariably more accurate than those provided by Treasury; in the years prior to the Howard government, of course, some Treasurers got such questions right and some got them wrong (and in the case of Paul Keating, he managed to get them both right and wrong at different stages in the economic cycle). Would Bowen’s changes have improved Costello’s performance? Such a proposition is insulting to the intelligence, especially when it emanates even obliquely from the ALP.

With an eye on the preposterous claims to astute and rigorous economic management that Labor arrogated to itself in the wake of the Global Financial Crisis — based on nothing more than the ability to fling tens of billions of dollars around the economy in the most inefficient manner it could find — even a cursory look at the budget summaries during the time Swan spent as Treasurer shows the former government consistently overestimated economic growth and revenue, and underestimated outlays, and these estimates (again, presided over by Swan) were the only way the ALP could get within cooee of producing a surplus, and even then only on paper.

And as affronted as Bowen and Labor appear to claim to be over the Abbott government’s estimates of budget deficits totalling $123 billion over four years, as opposed to the ALP’s estimate of $63 billion, there has not been a single detailed case published by the opposition (or by Treasury, for that matter) to discredit the revised figure produced by Hockey in December last year.

There are several points to make.

One, and it’s simplistic to say this, but things change — sometimes very drastically and very quickly. It was Labor that was in power in August and September 2008, when the global economy began experiencing the seismic first strikes of the GFC. It should have learnt this very basic economic fact from its own experience, but quite clearly, it didn’t. The proposal to rely on an annual set of numbers provided by someone offsite is peculiar, to say the least, when considered thus.

Two, Bowen’s proposal reeks of seeing to “invest” in Labor’s future by outsourcing the blame, in advance, to someone else to provide cover for any future repeat of the ALP’s utter incompetence as an economic manager. On all three occasions Labor has been kicked out of government in the past 40 years, it has left behind an absolute quagmire where the financial affairs of the country are concerned. Being able to point the finger at someone else for providing “dodgy” numbers to work with seems a very cynical pretext for fiddling with official economic forecasting. Costello certainly didn’t need such a crutch, and whatever you think of his budget, the fact Hockey is prepared to put infinitely more dire numbers against his own name suggests he doesn’t seek such a ruse either.

But three — and this is important — there’s a bigger factor here: what do we actually elect members of Parliament to do? So many functions of government are outsourced, handballed, thrown into the laps of disposable advisors (and yes, I say that despite my criticisms of the Abbott government’s advisors) and otherwise placed at arm’s length to those supposedly accountable to Parliament that you have to wonder just how much responsibility for anything some of those in politics are even prepared to accept.

Unsurprisingly, this outsourcing — to “independent” bodies, statutory authorities that are laws unto themselves, committees, reviews — tends to occur disproportionately whenever Labor is in office.

I think anything that prevents ministers of the Crown from exercising the responsibility their offices invest in them is dangerous; further — and especially so in this case — ministers must be able to exercise control over their portfolios. If a Treasurer is responsible for producing a federal budget, he (or she) is also responsible for the assumptions, forecasts and settings that underpin that budget. It is almost an abuse of process to suggest these critical functions be handballed to somebody else.

Bowen may complain of fiddling the figures. But the real nature of what he advocates is to absolve a Treasurer of responsibility for something he (or she) would have neither input to nor control over, and that is not representative of the sort of governments we need in this country.

All of this is to be outlined in a speech to the National Press Club later today, the text of which has been obtained by The Australian, and some of which is quoted in its article.

“A government unafraid of accountability and transparency would not be afraid of outsourcing this forecasting in their budgets and economic statements (sic),” it apparently says. Where is the causal link between accountability and transparency, and the total abdication of a key element of the budget management process? There is no such link, of course.

In other words, rather than allow the nasty Liberals (who are “onto” Labor’s shocking mismanagement of the budget in office) to “fiddle” forecasting onto what might be a more accurate footing, Labor’s latest grand plot is to fiddle the entire process altogether: to masquerade as upholders of the “principle” of accountability and independence, aiming a kick at the Liberal Party in the process for daring to expose the ALP as the economic wrecking ball it is, and washing its hands of as much responsibility for its own actions as it can.

Ironically, Bowen inadvertently hits the nail on the head in another passage from his speech reproduced by The Australian today when he says that “while budget decisions will always be a matter for the Treasurer and the government of the day, the underlying forecasts should not be a political plaything.”

Exactly so. Which is why — as the minister responsible for them anyway — the Treasurer should be able to go about his business, free of this kind of semantic nonsense that doesn’t even pretend to pay lipservice to the improvement of final budget outcomes, instead of having it cheaply politicised by Bowen and his cohorts in the name of trying to slither back into government by way of the greasiest and most intellectually dishonest means they can engineer.

 

 

Advertisements

2 thoughts on “Institutionalising Deceit: Labor’s Plan To Fiddle Budget Forecasts

  1. This gibberish of Bowen’s reminds me of a couple of things.
    Being a retired project management professional, I am very conscious of the free enterprise principles of responsibility and accountability. In this country it is not uncommon for a project manager to be assigned to a project which has already been estimated, in terms of financial, time, and quality constraints and scope by a committee reporting to the project sponsor.
    To accept such as assignment as manager of a project is often suicidal. It is a “damned if you do and damned if you don’t situation”. If the project is successful, it is deemed to be a result of the infinite cunning and fore site of the project sponsor. If it fails to meet objectives, it is all blamed on the project manager. My advise is that if offered a project management assignment to a project in which you have not had responsibility for the budget, tell them to stick it where the moon don’t shine. If you had total control of the project planning (including the budget) and it tanks, you deserve the crap. If it is successful, you deserve the accolades. If you are handed a project dreamed up by a useless scheming bastard (a good example of which is the NBN) then run for the hills. The essence of Bowen’s argument is a plea for this country to be run like the European Union, and if you take five minutes to watch Pat Condell here you will thoroughly understand Yales’ position, and at the same time you will comprehend that Bowen and the entire ALP camp is Hell bound on destruction. https://www.youtube.com/watch?v=DV3nOAg87R8

  2. Two races of aliens came to this world thousands of years ago. One race were the rubiccubers, a race of innovation, advanced technology and culture. The other alien race were the baboonians. The baboobians were primitive and identified by having huge bone structures on their foreheads. Early cave paintings depicted baboonians headbutting cliff faces, trees and each other.

    The rubicubers studied the baboonians and could not find how this race got to this planet. There was no intellect, any form of society, other than the practice of group meetings where lots of grunting could be heard. Eventually the rubiccubers worked out the language and found that these grunting meetings were actually for choosing the chief fugger. Fugger was too close to a word that rubiccubers had in use for the identification of unnatural acts performed on sheep. So the word was changed to Thugger, and it was eventually changed to Thug. Throughout subsequent generations, the word underwent many transformations and is now known as Labor. Incidentally it was thought that a baboonian with a speech impediment (who of them didn’t have a speech impediment by the way) could not pronounce Thug and it came out Labor.

    Throughout evolution the baboonians observed the rubiccuber society and tried to adopt some of their ways. But alas speaking words did not go hand-in-hand with performing actions. Their knowledge base was seriously flawed. Modern Labor is inflicted with this evolutionary trait, those that can – do, those that can’t practice thuggery, or should that be fuggery.

Comments are closed.