We owe more than we realise to our best econocrats

If you believe, as all of us do, that governments need to be accountable to the voters who elect them, then someone has to care about the way those governments account for all the money they raise in taxes and charges, plus all the money they borrow. Governments spend this money on myriad services they provide and the huge array of infrastructure they build for us, ranging from police stations to grand spaghetti junctions.Our...

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Lest we forget the unknown public servant, working to inform us

Have you ever wondered how much taxpayers’ money is wasted by our politicians and public servants? Do you hope that every dollar governments spend is fully accounted for?And would you like it to be made public not just how much was spent on public servants’ wages, rent, grants, paperclips and other administrative expenses, but how much was being spent on each of the individual programs within education, health, police, courts,...

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PwC: How are the haughty chartered accountants fallen

As we watch the Albanese government and the Senate crossbench getting to the bottom of what’s become “The PwC Scandal”, it’s important to join the dots. It’s not just a question of who did what and when, and how they’ll be held accountable for their actions. It’s more a question of how did a formerly highly respected firm of chartered accountants come to behave in such an unethical and possibly illegal way. And how did the federal...

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Boring auditors-general our last defence against dodgy governments

You may be appalled by the ever-declining standards of propriety as the two main parties chase each other to the bottom of the barrel, putting career advancement ahead of their duty to voters. But recent events show our courageous auditors-general haven’t lost their commitment to upholding honest behaviour.Which, particularly in the absence of a federal independent commission against corruption, is one thing to be thankful for.Just...

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Budget Office finds the bigger picture is looking OK

There’s a weakness in the way we think about the government and its effects on the economy that economists and politicians usually don’t see. We draw macro conclusions from micro data because we forget the need for what accountants call “consolidation”. The problem arises because we keep forgetting that the responsibility for governing Australia is divided between the federal government and eight state and territory governments...

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How our budget repair problem has been exaggerated

Before the budget Scott Morrison promised us "good debt" and "bad debt". What we actually got was less radical but more sensible. The government has come under increasing pressure from the Reserve Bank to draw a clear distinction between its borrowing to cover "recurrent" spending (on day-to-day operations) and borrowing to cover investment in capital works ("infrastructure"). It was wrong to lump them together and claim the...

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Uni economics declines at hands of accountants

If you think economists have too much influence in the halls of power - or that Australia would be better off if its accountants and business people knew less about how the economy works - or that the political debate would be improved if fewer citizens were economically literate - I have good news: academically, the economists are being cut down to size. And it's the accountants who are doing it. While business and management...

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This budget less dishonest than last year's

When it comes to forecasting the economy - and thereby the budget balance - the econocrats of the Reserve Bank and Treasury are on a hiding to nothing. When they get it pretty right that's no better than it should be. But when they get it wrong - for whatever reason - they're fools and probably knaves as well. The obvious truth is no economists are consistently good at forecasting the economy. It's those non-economists who...

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How spin doctors have taken control of budget papers

What if I told you the true expected budget balance for next financial year wasn't the much trumpeted surplus of $1.5 billion but a carefully buried deficit of $8.7 billion? I'd be justified in making such a statement because that deficit figure is officially known as the "headline cash balance" and, as a journalist, I'm in the headline business. I'd also be justified in drawing it to your attention because the government in...

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Swan's innovation: the budget as bulldozer

A closer look at the budget papers reveals just how contrived the budget's return to surplus is. Wayne Swan is hardly the first treasurer to resort to "reprofiling" (a word his people invented), but he's the first to use it on such a massive scale, turning the budget into a bulldozer. Reprofiling means changing the previously announced timing of budget spending or taxation measures. Deciding not to proceed with previously promised...

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Pre-budget primer: how pollies fudge the figures

When governments discover their self-imposed budget targets are harder to achieve than they expected, they face an almost irresistible temptation to cover the gap with a little creative accounting. As we wait to see on Tuesday night the herculean efforts the Gillard government has made to keep its promise to achieve a budget surplus in 2012-13, let's review some of the tricks governments get up to when they find themselves in...

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We're all paying a high price for hiding our debt

IT DOESN'T seem to have occurred to Julia Gillard that her resolve to make this the "decade of infrastructure" - with a gold-plated national broadband network as its centrepiece - doesn't fit with her core promise to return the budget to surplus in 2012-13 and eliminate government debt ASAP. Indeed, the two policies laugh at each other. Both Gillard and Kevin Rudd succumbed to Costelloism - a brand of fiscal populism holding...

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Use your brain before joining the bank lynch mob

When the punters, the pollies and the media all get their knickers in a twist over rising mortgage interest rates, any argument - no matter how misconceived - is fair game. We're being assured that the banks' huge and growing profits are obvious evidence of "gouging". And any increase in mortgage rates in excess of the rise in the official interest rate is obviously immoral and probably should be made illegal. Sorry, but no...

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