Ben Eltham theguardian.com, Thursday 1 May 2014
The prescriptions advocated by the Audit are stock-standard 1980s-era neoliberalism: privatise government assets, abolish government agencies, charge citizens more
The report of the Commission of Audit, which weighs five kilos. Photograph: Lukas Koch/AAP
We always knew the Commission of Audit would produce a small government, low spending, neoliberal report.
Why? Because that’s what the government set it up to do.
The Commission of Audit was announced as a supposedly independent body. But the people doing the auditing are mostly rusted-on, hardline conservatives. Tony Shepherd, a former chairman of Transfield, is also the former boss of big business lobby group, the Business Council of Australia. Peter Boxall is a former chief of staff to Peter Costello. Howard government minister Amanda Vanstone is there too. This is a political body, set up to do a very political job.
The giveaway is there in black and white, in the Audit’s terms of reference. These give it “a broad remit to examine the scope for efficiency and productivity improvements across all areas of Commonwealth expenditure, and to make recommendations to achieve savings sufficient to deliver a surplus of 1% of GDP prior to 2023-24.” Top of the list: to “ensure taxpayers are receiving value-for-money from each dollar spent” and “eliminate wasteful spending.”
Framing an exercise like this as delivering value for money and cutting waste ensures that the debate is all about government spending. There is no acknowledgement that the real cause of the current deficit is a shortfall in revenues, not a blow-out in expenditures. Nor is there any mention of the fact that the Commonwealth’s spending is low by OECD standards, and in fact is broadly consistent with spending levels in the later years of the Howard government.
The Audit ignores all this. “We have spent beyond our means for too long,” it complains, bemoaning the “sixth consecutive budget deficit.”
It’s as though that minor event known as the global financial crisis never happened. This is truly the “autistic” economics that a group of French university students protested about in June 2000.
The prescriptions advocated by the Audit are stock-standard 1980s-era neoliberalism. Privatise government assets. Cut red tape. Abolish or amalgamate government agencies. Charge citizens more for government services, like visits to the doctor. Slash government benefits, especially for the most vulnerable. Make students pay more for their education. Reduce foreign aid. Abolish national protections, like a national minimum wage. Halt Commonwealth support for the homeless.
This is a recipe for a poorer, nastier and more brutish Australia. If implemented, it would mark the beginning of the end of the Australian fair go.
By far the most radical proposal is to junk a century of federal-state relations and return huge swathes of the Commonwealth’s functions to the states. This is cloud cuckoo stuff. The states are struggling to fund the services and functions they currently provide. It is absurd to believe a tiny state like Tasmania can provide the kind of advanced public services that all citizens demand. Australians should not be condemned to lower standards of living and poorer public services just because they live in a small state.
The idea to give the states a 10% income tax tells you all you need to know. Despite a mania for reducing complexity, the Commission of Audit wants to cut federal tax rates, only to increase them again with an extra income tax for the states. At the same time as it complains about duplication, the Audit wants to take single, federal programs and devolve them to eight separate states and territories. Go figure.
We don’t need to ask ourselves what Australia would look like if this radical plan were implemented. Just look across the Pacific. The United States has a small federal government as a share of GDP, and devolves many public services to its states. It has a vestigial or non-existent social safety net. It has low taxes and many social services are privatised. In other words, it is exactly the sort of country the Commission of Audit would like to see Australia become.
How is the small government, market-is-best ideology working for the US? America has endemic intergenerational poverty, massive inequality, crumbling infrastructure and lower life expectancy that Australia. America’s public finances are much worse than Australia’s, with huge deficits and a growing public debt. Its economy has grown much more slowly than Australia’s over the past decade; its middle classes have actually shrunk since the mid-1970s.
You’d have to be a certain sort of person to want this future for Australia. You’d have to be driven by ideology, not evidence. You’d have to have internalised a certain type of economic theory that tells you that markets are always better, and that governments are always worse. You’d have no fear of cuts to government benefits or services, because your large personal fortune ensures you can always pay the best for everything.
Needless to say, no one who worked on this Audit was a homeless person, a worker on minimum wage, or someone with a permanent disability. Instead, an unrepresentative and partisan group has used shoddy arithmetic and junk economics in an attempt to destroy a century of Australian social welfare.
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