A key aspect of our system of government is an impartial public service. In fact, this impartiality is enshrined in the Australian Public Service Act 1999, where it states:
(1) The APS Values are as follows:
(a) the APS is apolitical, performing its functions in an impartial and professional manner.
When this impartiality is undermined, our system of government is undermined. But this means very little to the Gillard Labor Government. This week, we have seen Wayne Swan direct Treasury officials to cost Coalition policies for no other reason than to try and discredit his political opponents. If this is not undermining the impartiality of the public service, then I don’t know what is.
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Former NSW premiers seem back in fashion this week which might inspire Tony Abbott to announce that Nick Greiner would be on his proposed Commission of Audit.
The Opposition Leader wants the audit as a potential threshing machine to run through national public spending should the Coalition win government, so he might as well hire someone who knows how to drive one.
Abbott says the heritage of his plan for a full and arguably independent audit of government books lies with John Howard and Peter Costello back in 1996.
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In the general pandemonium surrounding the unveiling of the carbon tax package last week, it was easy to overlook the dodgy little purchase incentive that came as part of the bundle. Shrink-wrapped to the side of the carbon tax box was something called the Clean Energy Finance Corporation (CEFC).
Behind the feel good name, this new bureaucracy is little more than a $10 billion, off-the-books venture capital fund, underwritten by the taxpayers and created for the sole purpose of providing generous loans and guarantees to highly speculative startups in the renewable energy sector.
This shonky “Gillard Bank” will involve an unelected board, chosen by Julia Gillard and Bob Brown, picking winners with minimal public scrutiny, no apparent requirement for cost benefit analyses and no apparent tender processes with objective criteria to ensure value for money. In all probability the CEFC will direct funds to projects that conventional financiers wouldn’t touch because they would be deemed too risky. While the actual policy documents are silent on where the $10 billion will come from, Government sources have suggested the money will come from the issue of billions of dollars in government bonds.
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When Tony Abbott is scrambling for something new to say he can occasionally come up with pretty dubious statements. One outstanding example last week was his warning that the mining industry was fighting for survival.
This was a singular view of the fate of that billionaires’ collective. However, Prime Minister Julia Gillard has come to Mr Abbott’s rescue. She is prepared to offer the calculators of Treasury so that the Opposition will no longer have to struggle to find something fresh to say.
Mr Abbott will be able to speak about his own, fully-costed policies.
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For all its flaws, there is one thing this Labor Government can be proud of – a cohesive ability to ignore the reality of its spending addiction.
I applaud every Labor Member of Parliament who has successfully stood in front of a camera and said with a straight face that Wayne Swan is a good economic manager.
It must be tough, because a close look at the Budget’s spending column clearly proves otherwise.
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Australia is not heading for a recession but our precise economic destination over the next few years can’t be forecast because of the swirl of factors buffeting certainty around the globe.
We simply don’t know exactly what is going to happen in Greece, Spain, Portugal, the United States and China. Or even in Australia.
This means the Government will have to be careful as it tip-toes towards a Budget surplus in 2012-2013; and the Opposition will have to use caution when predicting calamity from carbon pricing.
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New Treasury secretary Martin Parkinson got married last Saturday and had a splendid ceremony and celebration in the tourist-depleted north Queensland resort of Port Douglas.
He will now spend time which might have been allocated to a honeymoon doing all-nighters in the Treasury Building as the May 10 Budget is locked into place.
Crazy honeymoon. And it will be a crazy Budget in crazy economic times.
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Wayne Swan could be forgiven if he puffed out his chest a little during a TV interview in New York couple of days ago.
“You’re a combination of what, in the US, would be Timothy Geithner and Joe Biden all in one person,” said CNBC business anchor Erin Burnett.
Geithner is the US Treasury Secretary, Biden the Vice-President. All Burnett was trying to do was explain Swan’s twin roles as Australia’s Treasurer and Deputy Prime Minister, but she made him sound like some kind of super-politician.
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If the worst of the global financial crisis is behind us and Wayne Swan’s bank deposit guarantee no longer exists, why are many Australians still fighting with investment firms over frozen funds which have been locked away for almost two years?
The government’s bank deposit guarantee, introduced at the height of the financial crisis, was meant to stabilise financial markets and restore the flow of credit. It covered all deposits of banks but excluded investment funds. This triggered a lockdown of deposits in investment funds and left hundreds of thousands of Australians in the lurch.
When the government decided to remove the bank deposit guarantee in March this year, sighting improved conditions in the banking sector, many expected it to facilitate the release of frozen funds, particularly those smaller funds held by ordinary Australians. This decision was a sign and an expectation that things would start to return to normal.
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The likelihood of interest rates rising is back on the agenda, following explicit warnings from the Reserve Bank that it is considering the need for tighter monetary policy.
The Coalition has consistently warned that the Labor Government’s heavy borrowing and build up of debt will put upward pressure on interest rates.
These warnings have been rejected by the government and by a few select commentators in the media.
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There are a couple of reasons why Tony Abbott rebuffed the independents demands to have Treasury and finance cost their policies: they probably are a bit dodgy, he doesn’t trust treasury not to leak it and it’s an attempt at a show of strength from someone who’ll probably end up on top in the seat count.
During the campaign Abbott refused to submit his policies to Treasury under the Charter of Budget Honesty because he couldn’t trust treasury, or more specifically the Treasurer’s office, not to leak the findings.
Abbott appeared to refine his argument for not releasing the costings down to this reason this morning on ABC radio, calling a leak during the campaign from Treasury on Coalition costings: “an act of political bastardry”.
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Taxation reform as a political issue may not float many people’s boat but in an election year it promises to be as entertaining as a day in the life of Jack Bauer. We have two political leaders - Kevin Rudd and Tony Abbott - who are equally unconvincing on the economy and who must grapple with a political hot potato.
The Rudd Government will soon respond to the final report of Australia’s Tax System Review Panel. The Panel, headed by Treasury Secretary Ken Henry, will recommend the most comprehensive reform of the tax system in a generation.
Taxation reform is a policy challenge more complex than quantum mechanics. Australia’s existing tax system has outdated Commonwealth-State financial arrangements and effective marginal tax rates that discourage people on welfare from participating in the workforce. Australia also faces significant economic challenges that are intimately related to the taxation system, such as an over-reliance on mining for national wealth; an aging population; and the need to reduce the carbon output of the economy.
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In conventional Wayne Swan fashion, he was triumphant as he unveiled Treasury’s stern rebuttal of Frontier Economics research report into an alternative emissions trading scheme.
Given the Rudd Government’s deeply flawed Carbon Pollution Reduction Scheme, the Coalition had commissioned the report in order to inform discussions about a better carbon trading scheme. But yesterday Mr Swan informed reporters that a $3.2 billion hole had been found in Frontier’s alternative by the Treasury Department.
So where is the modelling? Mr Swan has refused to release it and until he does, Treasury’s alleged rebuttal amounts to zip.
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We knew something was up when the party pies ran out. There was a whiff of the end of times that the cheap percolated coffee couldn’t quite hide.
And so it came to pass. The state Budget lock up was no more.
South Australia – first state to give women the vote, to ban plastic bags and forbid groups of people who ride motorcycles from hanging out together, has now become the first state to lose the lock up.
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WAYNE Swan and his mates at Treasury put a lot of effort into producing pretty graphs whose sole intention seems to be to make us feel OK about all the bad news in the Budget. There’s little that needs to be said here except that a lot of this is clearly spin, but under the very last chart below I’ve pointed out a few things worth thinking about.
Here’s a confronting concept to grapple with first thing in the morning: opposition assistant treasury spokesman Tony Smith saying that Kevin Rudd’s deficit will last longer than the Second World War.
Or so long that, if your first child is born on budget night next Tuesday, they will have enrolled at primary school by the time the Budget is back in the black.
The Daily Telegraph’s Sue Dunlevy reports this morning that next week’s economic statement may contain a deficit figure as high as $70 billion, $10 billion higher than most other estimates in the pre-budget marketplace. Wayne Swan and Kevin Rudd remain sanguine about the enormity of this figure.
But there’s one very big problem with their laid-back approach.
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