David Leyonhjelm: Alternative Budget 2017-18

There is an old joke about a tourist in Ireland who asks a local for directions to Dublin. The Irishman replies: ‘Well sir, if I were you, I wouldn’t start from here’.

Treasurer Morrison could find some insight from that joke in crafting the upcoming budget. The wisdom of the Irishman is: “If you want a decent budget, don’t start with the old one.”

Traditionally, each budget is a variation of the previous one. The Treasury boffins first set out the same spending and taxing as last year, then Ministers fiddle around the edges. If the Government is bold there might be a reform that noticeably changes a particular tax or spending item, spending may be tweaked up or down, and an old program might be rebadged as a new program. But in the absence of such intervention, the spending and taxing we get this year will be the same as the spending and taxing we got last year.

Repeating such an incremental and conservative approach to budgeting is a mistake. It preserves taxing and spending that to belong to history and should not continue. What is needed, at least once every couple of decades, is to start from scratch. Throw out the old budget and formulate plans for taxing and spending that make sense without reference to history or the current approach. Combine an analysis of where you want to be overall (top-down budgeting) with an analysis of specific programs and taxes (bottom-up budgeting). And accept that this process will be iterative and needs to be politically saleable.

Top-down budgeting

In formulating the upcoming budget, the Government should come to a view on the appropriate size of government. That is, the Government should reject the lazy approach of simply accepting the current size of government as appropriate. To help with this, the Government should look at the size of government in successful foreign countries, and in Australia during successful periods of our past.

Such top-down budgeting would be assisted by the publication of accurate figures on Australia’s size of government through history. The Budget in May will be the first to do this; in exchange for my vote to re-establish the Australian Building and Construction Commission, the Government agreed to publish key spending and tax figures in the budget in real per capita terms. Because of this, we will be able to accurately see the size of government in the Hawke Keating period, or in the Howard years. Anyone who yearns for a return to those governments will have a clear benchmark to aim for.

And whatever size of government Treasurer Morrison deems to be appropriate, this could be legislated. So if spending ever looks like going over the limit, automatic across-the-board spending cuts would kick in.

After setting its target for the size of government, the next stage of top down budgeting would involve the Government coming to a view on the appropriate share of spending between various areas like defence and health.

Welfare spending has risen from 23 per cent of total spending at the end of the Whitlam era to 35½ per cent now. Even if the Government was comfortable with fixing the share of welfare spending at this elevated level, such a commitment would still provide budget discipline. Welfare spending is currently projected to rise to 37 per cent of total spending over the next two years.

Once the Government comes to a view on the spending in each area, it would be up to individual Ministers having responsibility in those areas to negotiate with each other as to how that spending is allocated. This is how the budget in New Zealand is created, and it works well.

After setting its target size of government, the Government should also come to a view on the appropriate share of revenue from various taxes. Corporate taxes have risen from 9 per cent of total tax in the mid-1980s to more than 16 per cent now, one of the highest corporate tax shares in the developed world. Even if the Government were comfortable with targeting a share of corporate taxation around this level, such a commitment would counter the hysterical calls for even more tax on corporations investing in Australia.

Bottom-up budgeting

If you locked a group of people in a room and told them to come up with a range of spending programs and taxes that would best serve the nation, they would never come up with the dog’s breakfast that is our current Commonwealth Government. No group of public policy experts would come close. Neither would the editors of Green Left Weekly or Quadrant. This is because current spending and taxation, rather than serving some coherent ideological purpose, is the result of waves of new programs that have been created and augmented year after year, often without proper scrutiny or regard for duplication, or with an end date.

This is how we end up with Commonwealth Government programs to fund yoga and poetry for public servants, Peruvian surfers in Peru, research into Tibetan philosophy, a Mary Poppins statue in Bowral, and a flagpole in Bathurst. It is how we fund someone to travel through the Middle East and come back to tell us that Islam is the most feminist religion in the world. Even bigger bucks are spent on incentives for aborigines to stay in dysfunctional communities, on welfare for the rich, on denying water for farmers and then paying for their irrigation infrastructure, on subsidising renewables and then paying compensation for high energy costs, on an education department which has no teachers teaching students and a health department with no doctors treating patients.

It’s also how we end up with 16 different tax rates on alcohol, when interest groups of all political persuasions favour a single rate. It is what leads to a cooked chicken being taxed differently from a frozen chicken. And it is what leads to the ‘simple’ income tax return form for individuals being 12 pages long, not including the voluminous instructions and tax return ‘supplements’.

Through bottom up budgeting, Ministers and public servants would be required to design and budget for each program they believe the nation needs, starting from scratch. Current programs not identified as sufficiently worthy would be slated for retirement. The results of bottom-up budgeting would be different under different Governments. If I were in control, the result would be a government roughly half the size of the current one, as estimated by Parliamentary Budget Office costings (available at www.ldp.org.au and summarised in the chart). But regardless of who is in power, bottom-up budgeting would lead to decisions to abolish at least some of the unjustifiable programs currently soaking up taxpayer funds.

Overcoming resistance

There would inevitably be plenty of reasons the Government could manufacture for not applying a bottom-up approach with its upcoming budget, and for not seeking to abolish unjustified programs. The Government often blames the Senate for blocking spending cuts, and it is true that $340 billion of the annual Commonwealth Government spend is based on legislation passed by previous parliaments. So if cuts are to be made to that spending, Senate approval is required. But $100 billion of the annual Commonwealth Government spend is not underpinned by legislation. So cuts to this spending can be achieved in the budget bills, which are routinely passed by the Senate. No additional legislation needs to pass.

As the chart indicates, the spending that can be readily cut without risking Senate hindrance (shown in blue) is spread out across all government portfolios, with a lot of it falling under the Defence, Communications & Arts, and Foreign Affairs & Trade portfolios. Given the capacity to cut in these areas, the Senate is no excuse for continuing budget deficits.

The $340 billion of annual spending that is underpinned by legislation and can only be cut with explicit Senate approval (shown in red) largely reflects state grants and welfare, health and education spending. There are a number of reasons for optimism in winning Senate approval for cuts in these areas.
Firstly, Prime Minister Turnbull did not promise before the election that there would be “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS”. That was a different Prime Minister, before a different election. Prime Minister Turnbull actually made an election commitment to live within our means.

Secondly, the Senate has changed. Glenn Lazarus, Ricky Muir, John Madigan and Palmer United’s Dio Wang are gone. Each of these former Senators voted against spending cuts in the last parliament, such as cuts to subsidies for bachelor and higher degrees at public universities. Each spending cut from the last parliament should be retested in the new parliament, which has already shown greater fiscal responsibility than its predecessor. Cuts to subsidies to doctors under Medicare, cuts to drug subsidies under the Pharmaceutical Benefits Scheme, and an increase in the eligibility age for the age pension, should be back on the table.

A third cause for optimism is that, although Jacqui Lambie and Nick Xenophon are still in the Senate, Senator Xenophon is feeling more heat to pass spending cuts now than he felt in the last parliament. Recent media attacks on his opposition to spending cuts have stung. He hates being compared to the Greens based on his voting record. Increasingly he will have to back up his centrist claims with support for financial responsibility. And even Xenophon has to acknowledge that, since it’s a decade since the Global Financial Crisis and the wave of baby boomer retirements is nearly upon us, if we don’t balance the budget now, we never will.

The real resistance to responsible budgeting comes from within the Government. A backbench driven unwillingness to make sensible spending cuts, such as including million dollar houses in the age pension means test, is a good example. And yet, early in the parliamentary term, now is the time for the Coalition to grow a pair and deliver a budget the nation needs.

The Treasurer has a choice when it comes to drawing up the coming budget, and it would serve us all if he considered the option of not starting from where the last budget left off.

David Leyonhjelm is a Senator for the Liberal Democrats

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59 Responses to David Leyonhjelm: Alternative Budget 2017-18

  1. Nicholas (Unlicensed Joker) Gray

    Anyone can criticise, but can the Lib-Dems put up a budget that looks good, and which Treasury could assess as fit for the job? I’m sure the Liberty and Democracy Party don’t want to just be a protest party, but hope to grow into a viable alternative party.

  2. Motelier

    Trouble is DL is correct about using previous budgets to frame the new budget.

    Business does it, gov departments do it and so all levels of gov do it.

    Even households do it.

    I do not have an answer.

  3. Cactus

    Nicholas – with respect one could say the same of your comment. It is easy to criticise, David’s missive above – but at least it is a start. We have a voice trying to get the debate back on the right side. Let me commend David’s piece and can we hear more of it. Can I encourage David to continue to prosecute this case.

    Can I suggest looking at all of the agencies in this list, doing a cost benefit analysis and conclude 1) keep 2) defund/shut down or 3) sell.

    http://www.australia.gov.au/about-government/departments-and-agencies/list-of-departments-and-agencies

  4. Cactus

    As a follow up to my earlier post. I just looked up 1 of the agencies. The Australian Egg Corporation. In the Annual reports it looks like it gets $1.7m pa of government funding. Can I ask why? From what I can see the corporations mission is to promote Egg consumption in Australia. Fine, but why is the government funding promoting eggs, by in part taxing avocado farmers, bakeries and pig farmers? Or do they have their own bodies….

    As far as I can tell that is $1.7m I can save the budget right there. You might think chump change, but I bet if I went through every agency I would save the budget a lot of money.

    https://www.aecl.org/about-us/annual-reports/

  5. Cactus

    Ok now I look at Australian Pork Ltd – they have their snouts in the trough too, living high on the hog. It appears they get $5m of government funding…

    http://australianpork.com.au/

  6. H B Bear

    Poor Xylophone. Imagine starting your own party and then have people realize you are just another Green. No wonder he is pissed.

  7. incoherent rambler

    First mistake. The joke is English/Welsh in origin, not Irish.

  8. Dr Fred Lenin

    The only way I can see out of this financial ineptitude I can see is to scrap all allocations and force the relevant money seekers to submit reasons why they should exist Egg thingus , shoomin rites , energy destruction because of a lying scam scum rentseekers , duplicating state departments that obviously do the actual work .cuts in politicians and public service salaries and perks salaries to be based on productivity , Defunding of subsidising useless uni degrees , eliminating the communist giliards land mines , gonski and ndis , u.n.donations ,borrowing money to give away in foreign aid the list of waste is endless , any capable housewife could save billions common bloody sense ,never mind the economics crap stop wasting money .

  9. DM OF WA

    How about we stop wasting taxpayer funds on these obsolete federal government agencies:

    The Australian Broadcasting Corporation: $3.1 billion over the three years.

    The Special Broadcasting Service: $814.2 million over three years.

  10. Norman Church

    Senator Leyonhjelm is to be commended for his contribution to the debate. Just by recognising that budget repair is achievable by an appropriate exercise of political will, he has distinguished himself from the overwhelming majority of members of the political and media classes.

  11. sabena

    The starting point for the budget is “what money was raised last year?”
    The next question is “what money is the government likely to receive this year?”
    Any proposed spending should be limited to those figures.If the spending for last year exceeds it,all items should be reduced by the % of the overspend ie.if taxes were $100bn and the spending was $120bn,all spending has to be reduced by 17% which the ratio produced by dividing 100 by 120.Any spending for which it is undesirable to have a reduction should then justify why that level of spending is required,not, as is now simply complaining that it can’t be done.
    Given human behaviour the percentage reduction would start off higher on the basis that all departments will claim that a reduction in spending in their case is impossible.
    We also need to stop legislation that mandates a benefit independent of the budget,so that a benefit in legislation in conditional on Parliament voting funds for it.

  12. Sydney Boy

    At least DL recognises the problem and explains it in terms that even the voteherds can understand.

  13. Pickles

    Go back to basics and any spending in excess of fundamental responsibilities shall be determined by way of Trial by Ordeal.
    Fundamental responsibilities.

  14. Tezza

    I join those commending you for this effort, Senator L. Please keep at it.

  15. H B Bear

    The Budget in May will be the first to do this; in exchange for my vote to re-establish the Australian Building and Construction Commission, the Government agreed to publish key spending and tax figures in the budget in real per capita terms.

    Per capita figures don’t capture the size of the problem when so many of the capita don’t pay any net tax to begin with.

  16. Snoopy

    Why is DL talking about the composition of the Senate when two years ago both he and dot were claiming that the budget provisions could be bundled in such a manner that they couldn’t be rejected by the Senate?

  17. tgs

    Brilliant article, this is the message LDP needs to stay on as much as possible.

  18. Chris

    Anyone can criticise, but can the Lib-Dems put up a budget that looks good, and which Treasury could assess as fit for the job? I’m sure the Liberty and Democracy Party don’t want to just be a protest party, but hope to grow into a viable alternative party.

    The LDP wrote some incredibly over-detailed policies, eg firearms, for a party that has zero chance of actually forming Government.

    Its much better that DL spends his limited resources on pointing out principles and places where he has done good homework, than second-guessing EVERY detail that is someone else’s job.

  19. Tel

    The LDP wrote some incredibly over-detailed policies, eg firearms, for a party that has zero chance of actually forming Government.

    They always write the word “Liberal” on the folder in big black letters.

    That way, if the Australian Liars Party ever get into a pinch with no idea how to govern they will rush around in a panic, see the policy conveniently placed on someone’s desk, think it must be a Liberal policy and steal it. With luck it will already be enacted before anyone realizes what just happened.

  20. Empire GTHO Phase III

    Why is DL talking about the composition of the Senate when two years ago both he and dot were claiming that the budget provisions could be bundled in such a manner that they couldn’t be rejected by the Senate?

    Agreed. I can’t fathom why a party with one MP isn’t able to miraculously fix the political defects of the others.

    Carry on sniping. That’ll fix it.

  21. Empire GTHO Phase III

    The LDP wrote some incredibly over-detailed policies, eg firearms, for a party that has zero chance of actually forming Government.

    This is politics. DL has base support from folks who give a shit about firearms regs. They demand an alternative policy.

  22. Scavenger

    In reply to Motellier re using last years budget to frame a new one. Yes very common & very lazy way of doing it. When in business (long since retired) I always used zero base budgeting. Every client & every product that I expected to flog to them in the coming year assessed on that basis. Of course I had three levels of budget to submit eg: disaster, realistic, & optimistic. It involved more work but gave a better focus/targets on where to go.

  23. Tel

    And whatever size of government Treasurer Morrison deems to be appropriate, this could be legislated. So if spending ever looks like going over the limit, automatic across-the-board spending cuts would kick in.

    I like the system where if the total gross debt ever crosses a certain threshold then all sitting members become automatically retired and blocked from ever running for election again, ever. It’s clean and efficient.

  24. Norman Church

    Tel #2365570, posted on April 27, 2017 at 6:14 pm

    I like the system where if the total gross debt ever crosses a certain threshold then all sitting members become automatically retired and blocked from ever running for election again, ever. It’s clean and efficient.

    I like the system where any person who was active in student politics is permanently barred from holding public office. Same goes for anybody who has never felt the chill wind of market forces on his or her back.

  25. The BigBlueCat

    Just a reality check … I doubt the public service will be spending much time on any serious bottom-up budgeting, when the desired effect (reduce government size) will see many of them out of a job.

    While it’s nice to think that MP’s run government, it’s really run by public servants who then provide “advice” to their Ministers. Yes, Minister! was more a documentary than it was a comedy.

  26. Norman Church

    Sadly, the BigBlueCat (at 6.23 pm) is correct. The day has long since past when we were governed by our elected representatives.

  27. Roger

    I do not have an answer.

    I do.

    I volunteer to be on a net tax paying citizens’ razor gang.

    We’ll start with DFAT and work our way around.

    It’s a thankless job but someone’s got to do it. And you can only trust net tax payers to do it properly.

  28. .

    Empire GTHO Phase III
    #2365560, posted on April 27, 2017 at 6:03 pm
    Why is DL talking about the composition of the Senate when two years ago both he and dot were claiming that the budget provisions could be bundled in such a manner that they couldn’t be rejected by the Senate?

    Agreed. I can’t fathom why a party with one MP isn’t able to miraculously fix the political defects of the others.

    Question answered. I think, I can’t remember what the original question was, but Snoopy is obsessed.

  29. Snoopy

    Question answered. I think, I can’t remember what the original question was, but Snoopy is obsessed.

    It began publicly with a throwaway line by DL on Sky’s budget night coverage. But your dogged defence is still here. I can dig it out if you want.

    In DL’s defence I think he was being advised by an over enthusiastic law student who had just completed Constitutional Law 1xx.

  30. .

    Care to point out where he was wrong, Snoopy? I don’t even think I was enrolled in my law degree back then, champion.

  31. Snoopy

    I don’t even think I was enrolled in my law degree back then, champion.

    May, 2015?

  32. Snoopy

    .
    #1681788, posted on May 13, 2015 at 8:42 am

    Snoopy
    #1681785, posted on May 13, 2015 at 8:38 am
    Now he wants Hockey666 to deliver 186 Budgets so that somehow magically they can bypass the Senate.

    DL should expand on this strategy in a post on the Cat.

    He should.

    Oh dear!

  33. .

    Oh that’s right you were trying to absolve Hockey of any wrongdoing because of that nasty Senate.

    You poor thing.

  34. Rabz

    The Green Windbag of Wentworth and Goose Morristeen “know exactly where they want to be”, budget wise.

    Handing down circa $40 billion plus deficits until they are duly consigned to electoral oblivion and the rubbish bin of Australian political history, duly consigning this country to yet another unspeakable and seemingly interminable R/G/R style goat rodeo.

    No guts, no integrity, no determination to act in this country’s best interests and above all, no frigging idea.

    They are an absolute disgrace.

  35. Snoopy

    Here I was quoting a comment from someone else who caught DL’s unfortunate smartarsery.

    Now he wants Hockey666 to deliver 186 Budgets so that somehow magically they can bypass the Senate.

    Read that budget thread. At no time did I defend Hockey. On the contrary…

    Dot, you fucked up and caused DL to beclown himself. Admit it.

  36. .

    At no time did I defend Hockey.

    LOL!

    Give it up. No one here is going to defend Abbott, Sindodinos, Turnbull, Morrison or Hockey.

    Except you and Sinclair.

    You’re defending Hockey because you’re saying being a responsible let alone a conservative government requires hard work.

    Now he wants Hockey666 to deliver 186 Budgets so that somehow magically they can bypass the Senate.

    You’re basically deriving a lot of heat and excitement over a comment you made yourself, DL didn’t make, that no one else supported and I said should be explained.

    Now what did you actually think of the alternative budget this year, or in 2014, 2015 and 2016?

    …crickets.

  37. Paul Farmer

    The other element of budgeting that is a farce is the trick of making the deficit reduce over the out years by having unrealistic assumptions about economic growth over the forecast period. This makes the budget look far more prudent than it is. Swan took that trick to a whole new level of deceit but the Libs haven’t been much better.

    This goes to the point sabena is making above about limiting spending to this years projection of income. The problem is they bullshit on this figure to avoid making hard decisions. They really should drop the whole out year process as its a total farce, and we are not communist Russia with 5 and 10 year plans, so the relevance of claiming any figure that far out is meaningless.

    We also need a legislative mechanism that can give an executive government greater power to make change if a budget misses it forecast by a margin. Often the actual outcome for the year as opposed to the forecast is given scant media attention yet you can make an argument it’s just as important.

    The U.S. has laws for it senate called “reconciliation” that limit debate and the ability of the senate to filibuster if a bill relates to budgetary matters. It is time in australia a major party took up this idea and pushed it through. I would argue if the executive passes a budget with measures that are blocked and in consequence the budget misses it s target, the executive then she be given power the following year that allows the senate ability to block budget bills to be reduced. This ultimately would provide a way out of deadlock and give some meaning back to the budgetary process.

  38. Snoopy

    Dot, that’s enough about me. Let’s talk about you. You fucked up and caused DL to beclown himself on national television. Admit it.

    Break up a Commonwealth budget into dozens of appropriation bills to stymie the Senate? Why isn’t DL still running that line? I suppose he doesn’t possess your genius.

    And if you had studied accountancy and not economics you would know that an A4 page of bits and pieces is not a budget.

    But hey, let’s import those fine upstanding Saudi gents that featured in the video JC linked to yesterday. I’ll bet they could each rustle up $50k.

  39. Empire GTHO Phase III

    Dot, that’s enough about me. Let’s talk about you. You fucked up and caused DL to beclown himself on national television. Admit it.

    Well my, that is serious.

    Tell me Dot, do you control the Senator with hidden strings or is he the old hand up the clacker style puppet?

  40. John constantine

    Sadly, like their feckless viclibs before them, any budget savings will just be handed to the incoming labor government to squander.

    There is already a trillion dollar federal debt in existence, the unfunded infrastructure and welfare and medical liabilities just haven’t been acknowledged yet.

    The shorten foundation oligarchy coalition will happily dump the trillion debt mountain on the proles in return for a slice of the action.

  41. Ray

    Absolute twaddle from Leyonhjelm. Governments and businesses employ bottom up budgeting because programs exist and have costs. If those programs are to continue then the costs associated with them must also continue.

    A rational budgeting approach is to ask what are we doing today, how much does it cost and what is the utility gained from this. If the answer is that the costs do not justify the utility gains, then redesign or replacement of that activity is in order and this redesign and / or replacement may well call for a top down budgeting approach. However, if the cost and utility are in order, then we do not restructure just for the sake of it, that is a recipe for chaos.

    Bottom up budgeting works well in business because the planning process has a very simple measure of utility, it is called profit. As a result, strategic planning in business is a regular cycle.

    However, the absence of a profit motive makes budgeting in government more difficult because there is no single measure of success, leaving them open to weak assessments of utility. As a result, projects are allowed to continue long after their use by date or without any real assessment of efficiency.

    It is natural that public servants will have a vested interest in maintaining the status quo, after all, few of us like change in the workplace as it adds uncertainty and effort. Thus public servants can be relied upon to justify the status quo for just about every program imaginable. Add to this the inexperience of ministers and personal staff, most of whom have never worked in the real world, never built a business plan nor ever been held accountable for the profitability of a business.

    As a result, the problem is not bottom up budgeting but an environment in which the efficiency of programs cannot be determined with any precision, leaving public servants with the power to conceal failures from ministers who lack the background to assess the information being fed to them.

    No budgeting process, whether bottom up or top down, can overcome poor analysis of utility. Public servants generally have no incentive to carry out a genuine analysis of the programs they administer while ministers do not have the ability, or indeed, the motivation to second guess their public servants. This is the cause of much of the failure of government, not where you start the budgeting process.

  42. Baldrick

    Ray
    #2365807, posted on April 28, 2017 at 5:56 am
    Absolute twaddle from Leyonhjelm. Governments and businesses employ bottom up budgeting because programs exist and have costs. If those programs are to continue then the costs associated with them must also continue.

    Who says we need all those programs to continue? You could slash government in half and still get the same outcomes.

  43. .

    Ray
    #2365807, posted on April 28, 2017 at 5:56 am
    Absolute twaddle from Leyonhjelm. Governments and businesses employ bottom up budgeting because programs exist and have costs. If those programs are to continue then the costs associated with them must also continue.

    Ray outs himself as Frank Gelber/any other garden variety socialist.

  44. .

    Bottom up budgeting works well in business because the planning process has a very simple measure of utility, it is called profit. As a result, strategic planning in business is a regular cycle.

    Hi Frank!

  45. .

    Snoopy
    #2365765, posted on April 27, 2017 at 10:25 pm
    Dot, that’s enough about me. Let’s talk about you. You fucked up and caused DL to beclown himself on national television. Admit it.

    Break up a Commonwealth budget into dozens of appropriation bills to stymie the Senate? Why isn’t DL still running that line? I suppose he doesn’t possess your genius.

    And if you had studied accountancy and not economics you would know that an A4 page of bits and pieces is not a budget.

    This is hilarious.

    1. Something Snoopy made up is “my idea”. I just wanted an explanation of it.
    2. I “never” studied accountancy and economics. Hello Homer Paxton/Septimus.
    3. Snoopy reckons mini-budgets are illegal or economically impossible.
    4. Snoopy has never read a budget paper.
    5. Snoopy won’t shut up about his theory.
    6. Snoopy won’t make any actual comment about any budget proposals.
    7. Snoopy won’t admit he is sadly still deflecting for Hockey/won’t admit he is a member of the Liberals that just trolls here religiously.

    But hey, let’s import those fine upstanding Saudi gents that featured in the video JC linked to yesterday. I’ll bet they could each rustle up $50k.

    You imbecile. Why aren’t they here on student visas paying a mere $8,000 to come here?

  46. Grandma

    Anything that requires this Government to grow a pair is never going to happen. Bring on some more unicorns Senator.

  47. Ray

    A quick message for Dot and Baldrick, we could probably slash you brains in half and still have the same outcome. After all, half of nothing is nothing.

    If you had bothered to read my comment you probably would have noticed that I said nothing which could be interpreted to support any government program or the size of government. The point I was trying to make is that assessing government programs is not about the process, namely whether you employ top down or bottom up budgeting, but about the quality of the analysis. No matter what approach you use for budgeting, if the analysis used to measure the utility of programs is weak, then nothing will change.

    The reason government fails to deliver is that it is far too concerned with process and far too little about outcomes. Leyonhjelm makes the same mistake here. Thus it would be better to concentrate upon a thorough analysis of the utility, outcomes and efficiency of programs if we are to improve the welfare of the residents of this country.

  48. dweezy2176

    Is there some claim that the budget whether it be the yearly, half-yearly, monthly or weekly is still relevant .. how long is it since a federal Budget had any meaning? .. Lotza waffle on the night but the end result is mostly shelved as it fails to pass thru Parliament .. the troughers are only there for the feed and jostling for the seats in the 1st class carriage on the gravy train. The well-being of the country and the vote-herd are forgotten the day after any election!

  49. Ellen of Tasmania

    We once had a neighbour with, what was then, an enormous mortgage.

    She said it kept her awake at night for a few weeks; then she just got used to it.

    Everyone is used to debt now and it doesn’t seem to keep anyone awake. But can debt just keep growing forever or will a ‘debt bubble’ (if you can have a negative ‘bubble’?) eventually pop?

    It should embarrass and shame a politician to present a budget deficit. It’s a big, fat fail. But they don’t care, which must mean most of the voters don’t care. Until it’s too late.

  50. Once again David illustrates that he is the only parliamentarian capable of logic and reason.
    As for commenter “Motelier” that this is the way it is always done” in business; only in business that fails. Successful business employs what is known as “zero based budgeting”: start with the assumption that no funds will be expended, then add in those which are justified in order of priority.

  51. Dr Fred Lenin

    I would like to nominate Gomer Pyle as PM bring him here. Fast track citizenship like a cricketer ,abolish the mac sennit ,and go for it Gomer . He would be a bloody sight more honest than any lawyer or unionthug pollie ,and ,dim though he is ,would know the difference between “good debt bad debt ” ,unlike the ecommunusts in treasury ,to paraphrase his Mamas words ,”politicians are like a box of chocolates , you never know what your gonna get till expediency make the pollie move ” .

  52. Empire

    The reason government fails to deliver is that it is far too concerned with process and far too little about outcomes. Leyonhjelm makes the same mistake here. Thus it would be better to concentrate upon a thorough analysis of the utility, outcomes and efficiency of programs if we are to improve the welfare of the residents of this country.

    Bollocks. Government will grow like a malignant tumor unless actively constrained and spin non-existent utility , efficiency and positive outcomes to satisfy political goals with the support of a compliant media.

    Without a well defined limit on the size and purpose of government, we get what we got. If you really want to devote resources to rigorous analysis of utility of every program, introduce a public goods test on 100% of government spending. That in itself would be a good start in the journey towards constraining the powers of both Commonwealth and State governments by constitution.

  53. .

    The reason government fails to deliver is that it is far too concerned with process and far too little about outcomes. Leyonhjelm makes the same mistake here. Thus it would be better to concentrate upon a thorough analysis of the utility, outcomes and efficiency of programs if we are to improve the welfare of the residents of this country.

    I’ll give you a hint. We have too much government.

  54. Tel

    We once had a neighbour with, what was then, an enormous mortgage.

    She said it kept her awake at night for a few weeks; then she just got used to it.

    Something tells me her mortgage was not increasing at a rate of about 4% of her household annual gross pay, per year.

    Let’s say her household was pulling in a combined gross pay of $100k, the equivalent would be a mortgage INCREASING at a rate of $4000 per year. After 10 years it’s got to 40% of the household gross pay, next 10 years and it’s up to 80%… etc.

  55. Rabz

    if we don’t balance the budget now, we never will

    LOL. Hands up anyone on this blog who thinks we will ever see another “balanced federal budget” in our lifetimes.

    Zero. Gee, who’da thunk it?

  56. EvilElvis

    Good job Ray, another department or independent board to oversee government based outcomes.

    You’re going backwards already old salt.

    Surely it’s not hard to look back at empirical evidence, on actual finance figures and start the machete rolling. Non critical elements, state sponsored TV stations, human rights quangos, higher education and the arts should all be cut 30% straight up, redundancies and payouts deducted from the remainder. Just a start…

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