Last week the Minerals Council published a monograph by Tony Makin. A hard hitting analysis of the economic mismanagement of the previous government:
A blistering analysis released today undermines claims that 200,000 jobs were saved by the stimulus as based on “spurious” Treasury modelling and finds the rescue package weakened the economy. It also says stimulus spending such as the $16 billion Building the Education Revolution “failed to deliver as originally expected and left a loss of competitiveness as a lasting legacy” by increasing imports and drawing resources away from the tradeable sector.
Fairly uncontroversial you’d think. But no. As Henry Ergas explained yesterday, Treasury responded:
Last Wednesday, Mathias Cormann, Minister for Finance and Acting Assistant Treasurer, launched a Minerals Council monograph by Professor Tony Makin on Australia’s declining international competitiveness.
Cormann unequivocally endorsed Makin’s finding that Labor’s stimulus spending had aggravated that decline, while making little contribution to Australia’s recovery from the global financial crisis.
Two days later, Treasury issued a press release directly contradicting its minister and criticising Makin’s conclusions. To make matters worse, the release was not cleared with the Treasurer’s office or that of the Acting Assistant Treasurer.
The Abbott government only has itself to blame – it should have sacked several senior Treasury staff on day one. But it didn’t – Martin Parkinson, for example, was allowed to stay on until December this year. This is a government that keeps telling us that the public will respect a government that makes tough decisions – yet has made very few, and can’t even sack Treasury officials who continue to advocate for the failed policies of its predecessor.
This morning Tony Makin comes back at them:
Treasury has clearly lost its way over recent years. It seems incapable of articulating a solution to our competitiveness and productivity problems, and has failed to understand why fiscal activism is a dangerous instrument to use when monetary policy can be used instead. Like latter-day Bourbons, Treasury has seemingly “learned nothing and forgotten nothing” about Keynesian demand management. By so fervently defending it, Treasury makes its own case for fundamental organisational change and renewal at the top.
He is quite right, of course. But don’t hold your breath. Even John Howard didn’t have the courage to sack Ken Henry in 2007, and Tony Abbott is no John Howard.
Already the Liberals are slinking away from a fight:
As the government fell silent on the contentious paper by economist Tony Makin, Labor treasury spokesman Chris Bowen used the new debate to accuse ministers of denying the need for policy action during the global financial crisis.
…
The [Treasury] statement was said to be issued without checking with ministers, but some in the government played that down on the grounds that it was primarily a dispute about economic theory rather than national policy.
The Liberals need to understand that disloyal servants will be the death of them. In Howard’s last year both the Treasury and RBA undermined his government – Abbott has just completed his first year and already Treasury is running amok.
It’s just the establishment playing games with itself, same ‘ol.
Big govt welfare statist like our Tone don’t like causing public disrespect for the Public Service system.
Treasury joined in the sordid spending romp with those economic libertines the ALP, unheeding the unfolding disasters and even encouraging it.
They have no credibility whatsoever.
The Liberals are quite happy to sit back and allow Treasury officials to write Labor’s economic attack script for the next election.
So what – if Tony doesn’t care, why should we?
They are all socialists…..pollies are requires to hang around in packs and committees, some socialists are more conservative than others. Libertarians and minimalists are rarer…..
File under Long Marchers Now Squatters; Adverse Possession.
They’re not Treasury officials. They’re “Debtury” officials. If you can’t bring yourself to giving these dangerous ignoramuses the flick, Mr Abbott, at least refer to them by an appropriate term.
Spot on, Sinc. Frigging pathetic. One term Tony in inaction.
Abbott thought he’d come in and play nice. Be adult, all that crap.
He did not comprehend the level of partisanship in the broader apparatus of government.
Letting these people conduct open warfare against the government is political suicide. Stupid, weak and naive are other expressions that come to mind.
So, arguments about “theory” which contradict government policy in public are just fine now? If they let the second most senior Department gete away with it, prepare for lesser departments to follow suit. Good luck with reforming health, or education.
Mind you, I doubt that Sir Scott would put up with this kind of behaviour from his lot for a nanosecond.
Joe Hockey is a fool and/or a knave.
‘but some in the government played that down on the grounds that it was primarily a dispute about economic theory rather than national policy.
And that makes it different how?? And imagine the outraged squeals from the Treasury hierarchy, and the following swift disciplinary action, if a middle level Treasury analyst stood up at some public meeting or other, or wrote some article, disputing the economic theory of his bosses. Same principle, or lack of it.
This so called government is composed of a cringe inducing, expedient pack of dishonest, hypocritical cowards who stand for absolutely nothing.
Electoral oblivion awaits, you imbeciles.
Parkinson is to climate change what Henry was to the MRRT
A complete misunderstanding of reality obscured by intellectual conceit.
If that is at the top imagine the dross in the rest of the system
Seriously, can anything be done to save the liberal party, or is it simply a hollowed out husk that is beyond redemption?
I say this after reading a piece (on Quadrant online) on those morons in Victoriastan, who are also (quite rightly) headed for electoral oblivion.
Absolutely bloody infuriating.
Funny how in 2010 it was obvious to me that diverting every builder / tradesman in the country from mining to school halls was damaging at a time of all time record commodity prices and hyperinflation of qualified worker costs. Funny how with none of the resources of Treasury and a fraction the salary of the Wombat Botherer I could so confidently declare to everyone I know that the Stimulus had no positives and was almost certainly highly negative for long run GDP. Funny how I needed no fancy econometric models with dozens of PhDs running them. Funny how right after that I had an identical experience with the World’s Biggest Mining Tax, and then a year later with the World’s Biggest Carbon Tax.
People said I was nuts when I said these were all lies and treasury was corrupt.
Tripod I once told me to attribute stuff to incompetence rather than malice. But when EVERYONE makes the same mistakes every time and one guy with basic logic knows more than all these people, it really starts to look like they’re all doing it on purpose. Mining shrank in Q2. It’s probably in recession. Mission accomplished by the Fabian socialists – a recession during “rivers of gold” commodity prices better than Costello ever saw.
And still in Victoria, ambulances are used as anti government mobile billboards.
Dear Tony and Joe,
Grow a pair. Ask Simon, I’m sure he can help.
Kind Regards,
Piss weak.
Steps should be taken to Privatise many of the Statist governments functions.can you imagine a private company with the contract to run Treasury and make a profit for its shareholders,letting the country run up billions in debt on stupid idealogical rubbish like the useless pollies have? I dont think so ,I can just see swannie trying to sell his bullshit to them ,they would tear him a new one ,he and his comrades would be in tears whenthey were thrown out of the meeting for stupidity.
Makin puts forward a strong, coherenet argument based in well reasoned theory and with robust empirical evidence.
Treasury is now covering for Kevin Rudd, an egomaniac no one could work with, Julia Gillard, who is basically a crook from the Australian Communist movement and Wayne Swan, an uneducated ideologue so incompetent he lost his position at an Australian university AFTER he had tenure.
Really guys? Hit the bricks. You’ve screwed up beyond all recognition.
I can understand not sacking Parkinson et al. as reflecting a commitment to the non-political nature of the public service as part of the conventional separation of powers model.
But surely that must work both ways?
If the Liberals really are committed to the traditional separation of powers model surely it’s their duty – not their right, their duty – to sack whoever was involved with that press release.
I think that Infidel Tiger had it right on a recent thread when he said (something like) the Libs’ only aspiration is that the progressives, while cornholing them every single day, occasionally give them a reacharound.
There’s absolutely no excuse for this behaviour by Abbott. He’s been in government since 1994 and previous to that he was an advisor. He knows the system.
This is an act of political cowardice, and I will be tearing up my ballot paper – for the first time ever, rather than giving him or anyone else my vote.
The lefties I know actually really believe their economic theories are correct etc., and remain frustrated as a result but blaming anything and everyone else for their failures but never ever considering the possibility that the theory might be the problem. Same mindset behind global warming.
These people think with their hearts and feelings, which means they don’t actually think at all.
This is the problem and we have had it since Plato’s time. It’s the demos and the bell curve – especially when the mode/median/mean of said curve gets political power.
The man was named the world’s greatest treasurer in 2011.
What have you ever achieved of similar note?
Wayne Swan has created nothing of value in his life. If he wants to award himself nonsense awards no one cares about, fine.
And Baird has just hired Comley to run NSW DPC. . . .
I again offer this reminder of the ALP and Treasury:
Bloody hell. Sir Fred should have been Governor-General! What an incredible career.
stackja – thanks so much for that quote. Notice that governments of both persuasions trusted Wheeler and valued his advice, even if they didn’t always take it. Notice also that he didn’t take his policy debates into the public arena.
Senior bureaucrats have always been players – they wouldn’t be doing their job properly if they weren’t. But there are right and wrong ways of doing this, and Martin Parkinson’s way of being a player, not for the first time, is utterly wrong and ethically indefensible.
I can understand not sacking Parkinson et al. as reflecting a commitment to the non-political nature of the public service as part of the conventional separation of powers model’.
Tim, as I pointed out in a comment on another post yesterday, portfolio secretaries are, for better or worse, political appointments for all practical purposes. They’re exempted from the merit based selection processes that apply to all other public servants, the Minister’s views have to be taken into account in their appointment and they can be sacked at any time for any reason. It would be honest to
formally acknowledge this
There is a good case, in terms of effective government, for having Secretaries who can work with a Minister and who understand his or her concerns and priorities. And a political appointment shouldn’t and doesn’t mean one sided political partisanship in policy development and programme management. Secretaries are still covered by the APS values that stress impartial and frank advice.
And while someone like Wheeler would doubtless still be an ornament to the APS today, many of his contemporaries were arrogant and vicious bullies.
“The man was named the world’s greatest treasurer in 2011.
What have you ever achieved of similar note?”
Dear Clive,
Using your link I would say without a shadow of doubt that Dot learnt how to read. You should try it; advancing one’s vocational experience is one of life’s small pleasures.
I also assume that Dot at least knows how to do elementary maths, something that the goose Swan apparently has/had an objectivity problem with, notwithstanding, the absolutely incredible goose Swan pie-chart depicting all the tax that miners pay but absent ‘Company Tax’ and in which the goose was unable to explain to the media why corporate miners failed to pay any company tax, thru the company tax absence recorded on the gooses pie-chart, yet were expected to pay a super-profits tax. The mind boggles.
Any attributes above that level of incompetence is indeed an achievement of not similar note, but of a higher note and easily achieved by any post-modern moron.
No disrespect intended towards any pre-school number-cruncher who twerks to Bruce Springsteen music.
Labor – the far enemy. Treasury – the near enemy.
The Libs know this well – why do you think they were reluctant to submit their costings to this mob before the election?
Des, yesterday you weren’t sure that the situation under people like Wheeler were any better.
We should care because it ultimately comes out of our pockets.
‘Des, yesterday you weren’t sure that the situation under people like Wheeler were any better’
Blogstrop, if Wheeler really was the model of integrity, professionalism, integrity and energy that his mates say he was, then he would, of course, be an ornament to any system of public administration, including even a Caliphate.
My point was that if, on the other hand, he’d been incompetent, lazy, impervious to reason, devious or downright bonkers, the old culture of permanence would still have protected him indefinitely. Under the old 1922 Public Service Act, it was almost impossible to terminate a Secretary without his/her consent, and even in the nineties, I understand that there were still Secretaries hanging around on the public payroll, even though their departments had been abolished in the 1987 rationalisation.
As for Wheeler, he may have been a marvel, but I didn’t much like the bit about him keeping his staff hanging around in long after-hours meetings with not very subtle threats about what might happen if they wanted to go home.
What an acolate, he was voted the least inept Keynesian in the world by very inept Keynesians.
So why are they keeping them on? Wouldn’t it be reasonable to remove them?
No doubt interest rates will go up significantly just before the next federal election, just like in 2007 (rises on 8 Aug, 2007 and 7 Nov, 2007 – the election was on 24 Nov, 2007). Of course in 2008 the RBA then had to rapidly lower interest rates. This assumption assumes no change in leadership at the RBA before the next election.
1 Who authorised the Press Release.
2 Who issued it.
3 Get rid of them.
To allow your Minister to be attacked by his Department and allowing that twat Bowen to criticise is not Prime Ministerial Mr Abbott and action immediate, must be taken or it will spread through the Laborites in the APS like a mini Ebola
Actually, the more I think about Wheeler and his after hour meetings where you could leave if you like but if you did you were finished, the more I dislike him. Prima facie, he comes across as a manipulative bully, or inefficient, or both.
As for his mates who wrote it up as a charming little peccadillo rather than a serious lapse of integrity, can you really trust their judgement when it comes to their account of his other alleged accomplishments?
Point Deer, Call Horse.
What’s the basis for this ?
The reason is that Abbott has a misguided sense of honour, and wishes to treat his enemies well.
This is all very well—to slam TA for not sacking Parkinson et al—but , despite his baleful record—- since the election, Parkinson [ despite his passion for carbon pricing, which was what saw him chosen for the post] , has been the only one apart from the Budget Office head—to go public in support of the government’s claim that the budget was in crisis and drastic measures have to be taken now rather than later.
Almost everyone else was [ and still are] pretending to buy the fiction that there was nothing wrong with the budget and the economy—- and consequently Labor gained enormous momentum in the opinion polls
Did Professor Makin —or any other business people or academics speak publicly in support of the urgent need for spending cuts and productivity measures? I don’t think so—not that I’ve seen anyway—not even Judith Sloan, [who played it down]— and delivered some serious kicks at Abbott et al along with it.
With regard to voices in the MSM and on television where it really counts as far as getting consumers/voters on side—- this government has been absolutely on its own except for one or two blogs and their commenters—friendless—sneered at for trying to shore up Medicare—for making it possible for highly-paid women to be treated as equal to everyone else when it comes to taking an economic hit in order to have a family—for it’s higher education policy and education in general—for the co-payment —even carbon tax, mining tax etc.
How about some business people and academics—and academic commentators like Judith Sloan —getting themselves informed on the real status of climate change—the alternative science—the failure of the models—the low sensitivity—the absolute madness of the consensus claims that were set in concrete decades ago [ we’re told], before most of the science was even undertaken.
The political pundits in this country have been the most supine and craven of lemmings when it comes to the issue that threatens to bankrupt the country—just lapping up the LW propaganda—the flogging it to the already brainwashed electorate.
Business wanted the government to get rid of the carbon tax and other CAGW imposts for them—but except for one or two like David Murray and Maurice Newman— they offer no support—just carp or lie low with a foot in each camp.
What about the business and academic community helping a bit by giving some moral and vocal support to the government when it proposes or introduces policies that are difficult to explain, but are very helpful to them, their business or industry and the economy.
The business community comprehensively threw Howard under the bus on Work Choices, so that even to mouth the words now would be the kiss of death for the Abbott government.
We saw all kinds of Labor academics and economists wheeled out by Labor’s MSM to tell fairy stories, under the guise of ‘independent experts’—– and nothing to counter them from business people .
Is it any wonder that Tony Abbott and team have trouble being tough enough—they’re assaulted from every side and supported from none—and the most powerful entity in the country—the airhead collective of the MSM—is almost completely in the Labor camp and pretending that the last six years of disaster never happened.
Howard was helpless against a partisan Treasury and RBA in 2007 because the MSM ‘journalists’ were barrackers for Rudd and turned every point he tried to make into a slogan and charge of ‘negative politics’, while allowing Rudd to lie his way around the country—facilitating him in his lies and in the cover-up of his disastrous record in governance in QLD—in order to deceive the Australian people instead of informing them—because they wanted the madness of Rudd.
TA knows he has to tread on eggshells or the very same fate as that of JH will befall him—and you can’t reform and restore economies if you’re not in government.