Public servants let Australia down with their flawed advice. By Judith Sloan.
It is hard to escape the conclusion that public servants have let the side down on too many occasions by providing poorly reasoned, defective recommendations that have proven costly and ineffective. …
It’s easy to feel exasperated by the Covid-related restrictions, for instance, because of the lack of transparency in relation to the health advice. We don’t know whether the failure to disclose the evidence that forms the basis for imposing damage to the economy and our psychological wellbeing is decided by politicians or the bureaucrats. But after listening to chief health officers day after day it’s clear they are happy to live with the secrecy because to release the evidence (or lack of it) would be to generate serious questioning of the restrictions.
Consultants are often required, because (especially in IT) the private market pay more than public service wages. But on the other hand, there are scads of generalist public servants paid well over what they could earn in the private sector.
Let me make another general point about the quality of bureaucratic advice, and that is the obscene reliance on expensive outside consultants. We are talking about hundreds of millions of dollars being doled out for tasks any normal person would regard as core functions of the public service. A large contract recently was awarded for advice on the vaccination rollout, for example. …
In 2019-20, Treasury spent $19m on “consultants/secondees/contractors”, but this did not include information technology contractors, which added another $15m. (Treasury employee expenses were $152m.) There was a time when Treasury would have regarded the use of consultants to this degree as a mark of shame. …
We expect our well-paid and tenured public servants to step up to the plate and provide suggestions for actions that are implementable, effective in achieving their aims and provide value for money. …
We still see commercially naive advice being doled out by Treasury. To propose that the government implement JobKeeper — “the largest one-off fiscal measure in Australia’s history” (to quote Treasury) — on the basis of anticipated revenue declines by organisations, with no clawback provisions, was fiscally irresponsible. It also underscored Treasury’s gullibility about how organisations would respond to receiving “free” money.
At one stage, Treasury thought JobKeeper would cost $120bn — a staggering figure — only to amend this by $60bn. As for the justification it saved 700,000 jobs out of 3.8 million, the other way of putting this is that 3.1 million jobs were subsidised that didn’t require government handouts.
This rot, like the welfare state in general, is subsidized by the ability to manufacture money out of nothing. If governments could only spend what they taxed, and money supply growth was restricted to matching the growth in population and productivity, then the welfare state would be smaller and government would be a lot more prudent. Real tradeoffs would have to be made. If the money wasn’t cheap and meaningless — if the decision makers really thought they would have to pay it back — then different decisions would be made.
Instead, we avoid conflict and hard decisions by printing ever more money, either directly by government (5 – 10%) or indirectly by the private banks (90%+). The bill is becoming clearer, however: the increasing meaningless of money, the disparities in real wealth as paper shufflers and money handlers do better than actual workers, overpriced asset markets, the increasing difficulty for normal wage earners to buy a home, and, last and inevitably, spiraling prices in everyday goods.
Until the 1970’s, the word “inflation” meant an inflation of the money supply. Banks and government have conveniently redefined it to mean price increases in the relatively small part of the economy that is everyday goods, services, and wages, which they mismeasure with “CPI”. They steer us away from thinking about “money supply” — what is that, they sneer? Prices are already at nosebleed level in most parts of the economy (real estate, bonds, shares). CPI elements and general wages are always the last to feel the effects.
