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A snippet on the Charter of Budget Honesty

June 25th, 2004

At a tactical political level one important issue arises from the provisions of Clause 29 of the “Charter of Budget Honesty”, under which either party may request costings of their election programs from the Departments of Finance and Treasury. Obviously Labor will come under pressure to seek such a costing, pressure to which Kim Beazley succumbed last time around.

Although it’s hard to predict the politics in advance, Labor would probably be better advised to get an independent costing from a consultancy like Access Economics[1] before issuing its policies. Government pressure to submit policies to Treasury and Finance could be the occasion for an attack on the politicisation of the Public Service.

fn1. Just after I wrote this, I read an interesting story in the Fin, regarding large-scale illegal downloading of information from the computers at Access, much of it allegedly ending up in the hands of rival consulting outfit ACIL. An apparent target of the exercise was to determine whether Access was costing Labor’s promises, and, if so, to get hold of the costings. (Thanks to reader John Warburton for alerting me to this).

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  1. Homer Paxton
    June 26th, 2004 at 17:29 | #1

    JQ,
    Access did their costings laat time. the ALPonly gave their costings to Treasury when it was to late for anything to happen and Treasury didn’t quibble with the costings.
    I would back Chris Richardson against anyone at Treasury on costings. Look how silly Chris Murphy got when he chanced to disagree ( Become Costello’s proxy?).

    I assume this will happen again. Indeed I assume itb wil happen to any Opposition

  2. stephen
    June 27th, 2004 at 19:32 | #2

    Homer: actually the costings went, via the PM’s office, to the Department of Finance and Administration – and the actual handover of the policies to be costed was done with some care given the worries about what might happen to them. I know – I accepted them, on behalf of DOFA. Under the CBH Act the request for policies to be costed has to go via the PM’s office. Not all the policies had been pre-costed by Access, and the costings that were done were thorough and professional (again, I can certify that there was no involvement by the government, it was done with scrupulous care to ensure that there was no leakage to the government, staffers etc.). Would the same happen again today? don’t know – am no longer in the Finance department.

    I think this is an interesting dilemma for Labor. The more they claim – rightly in my view – that the APS is operating politically, the less they will be inclined to submit policies for costing. However, they will be tagged with the “irresponsible spendthrift” label by the government if they don’t. However, in the end I don’t think it makes that much difference as long as there is some plausible authority that says the policies are affordable, and that could be equally well Access or the public service.

  3. Homer Paxton
    June 28th, 2004 at 11:26 | #3

    you got me Stephen,

    In terms of the current political debate if I was Iron Mark I wouldn’t release the tax policy until the election is called.
    Then only costello and his advisers could examine it not Treasury.
    They ( costeelo and his advisers) wouldn’t lay a glove on it.
    I think Wayne Swan on Insiders sort of confirmed this is what is going to happen.

  4. derrida derider
    June 28th, 2004 at 14:54 | #4

    Homer, you’re clearly not familiar with the caretaker conventions, which are rigidly enforced by senior management of the APS (if nothing else, out of self-interest in case the opposition shortly becomes the government). The point is that great care is in fact taken that political staff have no hand in these costings.

    As for quality of costings, I’d back the APS against any external body every time. In the first place, their experts are specialists. They do costings all the time – and furthermore, costing of proposals which come to pass so that their accuracy can be gauged retrospectively. In the second, they have much better access to administrative data (eg detailed tax records) than outsiders and know the data well. It is usually data issues that determines the accuracy of a costing.

  5. Homer Paxton
    June 29th, 2004 at 11:09 | #5

    Read again DD,
    I am NOT suggesting costello will override Departments.

    I am saying once an election is called Costello cannot get Treasury etal to ‘analyse’ an opposition policy.

    only he and his staff can do that like Keating and his staff did on Johnny on 87.

    given the quality of costello and his staffI would anticipate little impact.
    as for the quality of the Treasury there are some members of the RBA who don’t agree with you

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