It seems Ken Henry will retire to the accolades of many. He and the government must be hoping that the Christmas spirit will lead to some charity – but I’m afraid not. Also announced today is yet another Rudd-Gillard government failure – the Green Loans scheme. To be fair the Green Loan scheme was a 2007 election promise and not one of Henry’s big spending ideas. But still poetic I think.
Here is Joe Hockey showing again why he is unfit to be Treasurer.
The Coalition thanks Dr Ken Henry for his long and constructive contribution to the Australian Public Service.
Here is Milton von Smith reminding us of Henry constructive contributions.
1. “Few of us will ever see a hairy-nosed wombat”. At the height of the most severe economic shock since the Great Depression and at a time when the RBA was due to hold a critical Board meeting, Dr Henry took a holiday, deciding to redefine the economic concept of the “social welfare function” by including wombats in its domain of definition. The rest, as they say, is history: Dr Henry invented an entire new economic apparatus: the social wombat function (and just for good measure, he redefined the concept of freedom to include the freedom to see wombats). Wombats must like high interest rates – at the July 2008 meeting, at the height of the GFC, the RBA decided to leave the cash rate unchanged at 7.25 per cent. Three months later, Australia’s economic growth plunged into negative territory. But hey, never mind: at least the wombats were happy.
2. “Go early, go hard, go households.” Based on this pearl of economic wisdom, Henry presided over Australia’s largest ever postwar budget deficit, and some of the most wasteful (and indeed, ultimately, extremely lethal) government spending in Australia’s history;
“Assume a multilateral, globally enforced can opener.” Treasury confirmed the community’s worst prejudices about economists when Henry’s department released modelling of the government’s proposed emissions trading scheme, which assumed that all other countries would also implement an emissions trading scheme. To paraphrase Dr Phil: how’s that assumption workin out for ya?
3. “A tax of 99 per cent would have no effect on investment incentives.” On the back of this galactically stupid piece of economic idiocy, the Rudd government attempted to implement the RSPT, which threatened to cripple the very industry that helped Australia avoid the worst of the global financial crisis. In the end, it crippled Kevin Rudd’s prime ministership. Given subsequent political events, the jury is very much still out on whether this has improved matters. Somehow, I doubt it.
4. “Build it and they will
slide into bankruptcycome”: the National Broadband Network. The corporate plan notes that 13 per cent of households are currently wireless only, but assumes that by 2040, wireless penetration will rise to a massive…16.4 per cent. And not a single word of criticism from Treasury. Do I really need to say more?
In comments Harry Clarke tells us that Henry is a top civil servant and a good bloke. Maybe, I don’t know Henry – but others have told me he is ‘a good bloke’ too. His legacy as a civil servant, however, is not good. The 2007 speech should have seen his resignation or sacking, the ‘go hard, go early, go household’ spendathon has badly damaged our public finances, and his participation as chair of the tax review was wholly inappropriate. He did do a good job on the GST, but that was a long time ago.