Budget Accountability Office

Australia has a new Prime Minister and a new Treasurer.  Perhaps it is wishful on Spartacus’ part, but can we please have a new fiscal mindset.

Beyond a doubt the thing that sh*ts Spartacus the most about discussions of government policy is the suggestion that more money spent means better results.  The idiotic lines our political overlords mouth about record spending on health, on education, on welfare on whatever blah blah they have in mind that day means nothing more than more money spent.

There is no end to the amount of money that can be spend on health, welfare and education.  Actually there is.  It is 100% of the private sector economy plus any debt dumb investors would loan.

But is what is spent, spent efficiently and have we passed the point of negative marginal returns were every additional dollar of spending costs the economy more than that dollar spent?  Most certainly for sure indubitably.

Yes.  Spending is an easy proxy to communicate to the dumb and ill-informed, a group generally dominated by Fairfax journalists, ABC journalists and Australian Greens members, a grouping that would look like a single circle if drawn as a Venn diagram.  But to say spend more means better results would be like saying the more multi-vitamins you consume, the healthier you would be.

Multiple bureaucratic systems have been set up to measure how much is going into the Government spending machine.  Budgets, costing, the Parliamentary Budget Office.  Yet where are the systems to actually assess how the money is spent and what comes out of the Government spending machine.  Assessment that extend beyond platitudes and histrionics and actually describe outcomes and effectiveness.  Pouring water into a bucket with a giant hole in the bottom will never fill the bucket.  Unless of course the objective is to create water pouring jobs and to never actually fill the bucket.

Spending on health and education is not an investment unless you get a return.  And to assess the return, you actually have to try to measure results.  Claiming a holiday as a capital investment, and then writing it off on tax won’t sit very well with the ATO.

When is the last time an education Minister got up and said that for the $XXX billion spent this year, Australian tax payers got this.  Or a health Minister getting up and saying similar.

Can you imagine at BHP’s annual general meeting the Chairman declaring that last year the company spend $2b last year and next year would be a better year because $2.2b would be spent?  And when asked about profit or production, the Chairman would say that it did not matter because the company was spending record sums.

Dear Prime Minister and Treasurer.  This is your chance.  You are the new (Pepsi) generation.  Start talking about the results of government spending and not the amount of government spending.  If nothing else, this is something the Labor Party will never be able to match you on.

And if you are not willing to do this, can you please set up a Parliamentary Accountability Office whose role will be to do this for you.

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12 Responses to Budget Accountability Office

  1. Bruce of Newcastle

    So Spartacus you are advocating the setting up of another office full of highly paid public servants whose sole job will be to justify all the money spent by the politicians who employed them?
    Ah so. Sure to work.

  2. Mother Lode

    The paroles have no problem with the spending because they think other people are paying for it, and if they arentitis merelya matter of forcing them to.

    Labor always reflexively screams that every reduction is a reduction of front line services, so the choice becomes reducing existing amenity or taxing other people more.

    Too easy.

  3. stackja

    USA has various agencies that supposedly monitor spending. I am not sure how successful. There could be private monitors.

  4. Cynic of Ayr

    That’s the trouble!
    It costs an enormous amount of money, just to spend money.
    #1 crew are paid to figure out what to spend it on, and come up with a worthy project.
    #2 crew figure out how worthy #1’s project is. (It’s always worthy, so really, #2 is just a waste of money.)
    #3 crew looks at #1 and #2, how much they’ve spent on themselves so far, and decides how much more is needed. They then apply for funds.
    #1 and #2 look at the funds, and decide if it’s worth spinning a yarn for more funds. It always is worth spinning a yarn, and they do so.
    #3 look s at #1 and #2 again, deciding that the spin in the yarn was worth it, agreeing that more funds would be a great thing.
    (A lot of money has been spent already, but not on the project.)
    #2 bows out, their job is done.
    #1 now looks for #4 to actually carry out the project. Funnily enough, #4 always requires additional hiring.
    #4 now is in the picture, looking at how much money #1 and the now redundant #2 fleeced the taxpayers for. Naturally, the “looking at #1” part cost money, which soon runs out.
    #4 now bypasses #1, and goes to #3 looking for more funds. The spin is that offices need to be rented, computer bought, cars bought, paper, paper clips, teas cups etc etc. if this project is to get off the ground.
    #3 naturally agrees, because… well… so much has been spent so far, it’d be a waste to stop now.
    #4 now has a project Manager on 400 Large a year, consultants, assistants etc. Time to look for some workers to actually work on the Project. Funnily enough, this entails additional hiring.
    #5 are the workers. Suitably attired, insured, benefited and vehicled, they go out and install the new sign on #1’s office building.
    #1 now applies for funds to dismantle the whole thing. Computers are sold, office equipment given away, vehicles sold and so on. Any funds raised from these fire sales is put in the “Savings” column, to illustrate the frugality of all the #s.
    Any arguments?

  5. Boambee John

    Yet where are the systems to actually assess how the money is spent and what comes out of the Government spending machine. Assessment that extend beyond platitudes and histrionics and actually describe outcomes and effectiveness.

    This was once the principal function of the Department of Finance. In his memoirs Confessions of a Failed Finance Minister, Peter Walsh addressed this exact question.

  6. .

    There might be an institutional argument to abolish the Treasury, ATO and Finance in toto and call the new joint the revenue service or exchequer. These places have a very bad culture and are utterly wasteful.

  7. Squirrel

    The over-spending, masquerading as “investment” (noting that governments no longer spend money, they only ever “invest”), will go on for as long as the fiscal Magic Pudding allows it – buying votes is core business for our political class.

    The only restraint will come if the international markets stop providing cheap, easy credit for our debt-funded consumption and asset price speculation (both of which provide lots of easy revenue for the federal and state/territory governments) and stop buying as much of what we sell – particularly minerals.

  8. Tel

    Cynic of Ayr #2803080,

    The Goobers call it a “self-licking ice cream”, which pretty much explains everything you need to know in a lot fewer words 🙂

  9. max

    “Dear Prime Minister and Treasurer. This is your chance.”

    Mr. I am Spartacus and Mr. Steve Kates, I don’t know what you are smoking but I need some of that staff too.

    If you did not donate couple of millions no change for you from politicians

  10. Chris M

    Mate as treasurer he was only slightly less a dud than Swan. But your desires are most admirable indeed…

  11. Colonel Crispin Berka, Kings' Fusiliers Corps.

    The Conversation once crowed [ https://theconversation.com/how-efficient-is-australias-public-sector-short-answer-very-19908 ] about how efficient the Australian public services are:

    The international evidence is that Australia’s government is highly effective compared with similar nations. The World Bank’s measurement of government effectiveness places Australia as ninth most effective amongst OECD nations in 2010.

    But the assumption that the private sector is always necessarily more efficient than the public sector is not supported by theory or evidence.

    After studying a metastaudy of multiple miscellaneous other studies, here is their rationale for how the evidence against public services is downplayed:

    For example, outsourcing frequently results in significant job cuts, and the welfare costs of increased unemployment may exceed any savings.

    So there you have it. The government is not only the first option for employment but allegedly the only option, dear workers.

    Using ILO figures [ https://en.wikipedia.org/wiki/List_of_countries_by_public_sector#cite_ref-OECD15_1-0 ], there’s only 2.2 percentage points difference between Australia and the USA in the fraction of the total labour force employed by their public sectors.
    Would the bureaucratic efficiency (haha) remain the same if total government spending decreased?
    Would the service efficiency be the same if services are transferred to the private sector?
    I’d like Australia to find out with a full scale practical experiment. Of course this experiment will not be done because all contrary evidence has been reasoned away and the science is settled.

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