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Ending government wastage

Comments on Henry Ergas “Ending waste even more important than deficit”, 9/05/2011, http://www.theaustralian.com.au/national-affairs/ending-waste-even-more-important-than-deficit/story-fn59niix-1226052136291

Ergas is obviously correct in stating that ending wastes is more important than ending deficits.

Both are required in general, although the general theory and practice for budget balance is over a reasonable timeframe to achieve.

Most western government, due largely short term politics and irresponsible fiscal policy have abused the general policy prescription and resulted in rather large government debts and persistent budget deficits.

Government wastes should by all means be avoided in the first place and eliminated when they are discovered, even though some would argue that they are impossible to completely avoid in the first place no matter how hard a government may try to do it.

Here the short term politics comes to play. Few governments if any are selflessly working in the interests of their whole nations and virtually all governments have their own political interests that are not necessarily always the same as their national interests.

When the two conflict with each other, many government can pursue their own political interests but do it in the disguise of the national interests, or they say are in the national interests.

Australia has some good examples of government wastes recently – the bungled home insulation programs, the wastes in BER programs, and the NBN is most likely to be a much larger measure of government wastage.

The government, however, have all its reasons. And that is hardly surprising, isn’t it?

In terms of budget deficits, if the benefits to the government of the day outweigh the costs to it, then it is not too difficult to understand the incentive to have it.

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