The raping of a nation by politicians

Everyone except those themselves would be amazed by the speed of change by politicians for political expedience, sometimes for good but mostly for bad. The Swan/Rudd budget 2009 presents another perfect and notorious example.

Conventionally, budget papers contain detailed estimates of the economy for the current and next financial years, then assuming for the following three years to grow at its trend growth. This has been the case for many years and under governments of both political persuasions.

In their 2009 budget, they changed the conventional method used in preparing economic forecast into the outer years, just for the convenience to make their budget deficit look less bad. Instead of making detailed estimates for the first two years, they have now just made for three years. That was not too bad, but that was not their main purpose this time. They also changed the assumed growth for the rest of the five forecasting years. Rather than using the conventional way of assuming the economy would grow at its trend growth rate of about 3 per cent, they jacked up the assumed growth rate to above the trend growth at 4.5 per cent. Wait, that was not the end of their change, they also extended the above trend growth into further future years in their show of their strategy to bring down budget deficits and to eventually to surplus.

Yes they provided reasons for their doing that. The main blame was, of course, the current worst global recession, as they had always done over the past few months. According to them, what else could that be? In their logic, as we have heard over and over again, “the (only) alternative was ‘do nothing’ and that would have been much worse.” How clever that was to fool people!

Another reason was the same approach of using above trend growth was also used in the early 1990s. Here, extraordinarily, they again conveniently left out who had used that trick at that time except the time of its use. But it is not too difficult for one to find out it was the time when the Labor was in government. Again, they concealed that useful information for their convenience! Otherwise, they would have embarrassed themselves and reminded people of not only Labor’s economic record, but more importantly also Labor’ was the one that had changed the conventional. What a coincidence!

Further, they have often tended to use the public services as their excuse too. When it was obvious to the public that their changes were not right or appropriate, they would say it is the fine public servants they have recommended and done that, so they could conveniently hide behind the strong shield of public services. If anyone dare to question their changes, they are quick to accuse the questioner is attacking or undermining the integrity of the public services - in this particular case, the Treasury. Of course it is convenient for them never to disagree with or question the “fine public services” at such a particular time. How fine those services are that those people should all perhaps be promoted!

So much on Labor’s changing conventions. Their main political rival/opponent, the Liberals were not much better, unfortunately. It seems that is a disease of politicians of all persuasions. To just confine my examination on economics side and on numbers, Costello/Howard during their rein in government also had spectacular record of changing the conventions for their political convenience.

Two examples will suffice. One is how to classify a tax by levels of government. They said the GST, for example, was not a federal tax but a State tax, contrary to ABS statistics and international conventions. Their excuse was that the GST was given to the States for their free use according to their own choices. That is true, but that did not and does not and will not change which level of government’s tax it is.

Another example was after a few years of using accrual in their presentation, they changed their way of presenting budget outcomes in accrual terms after the introduction of the accrual accounting standard in government finance accounting a few years before back. It occurred at a time when the budget outcome was looking much better in cash than in accrual accounting. But at that time they had put aside their argument why the accrual accounting was better than the cash one when they introduced the change to the accounting standard.

All the above examples have been so visible and they could not hide them under the carpet. How many of their doings are counter conventions merely for their political expedience? For that no one knows. Of course for any of such doings they were unable to hide, they always spined around so skilfully to make them look good with an underlying message: you stupid we were doing this for your good! They always said what they did was for better. But better for who?

No wonder so many people have got so disillusioned by politicians! But perhaps the skilful displays by politicians each time when they do something out of the ordinary should always be admired by generations to come. After all, that is a trade, for better or for worse!