Ken Henry has clearly become a new bogeyman for conservatives. Today’s lengthy editorial spray from The Australian — including an hilarious justification of Peter Costello’s “China tsunami” howler — indicates just how seriously the Right takes the head of Treasury.
Obviously Henry’s years of loyal service to the Howard Government have been forgotten — although he famously blotted his copybook when he said — in private — that Treasury needed to redouble its efforts to keep that Government to some sort of policy discipline. It’s peculiar, too, that the Coalition is now so eager to attack Treasury, but repeatedly claims what a strong economy and fiscal position it left the incoming Rudd Government, as though all the hard work had been done by the Howard Cabinet and not those bumblers down the road in the Treasury building.
Treasury’s error of course has been to stay within the mainstream of economic orthodoxy as the economic crisis has unfolded. Only a few right-wing economists, and the Federal Coalition, have seriously argued that the Government should not have adopted a highly expansionary fiscal policy. As if we’re going through a repeat of the debates of the 1930s, the Right is claiming that such an approach is a cover for socialism, a term even the normally sensible Malcolm Turnbull has taken to throwing around about the Government. Opposition figures have even taken to distributing this cartoon from the FDR years.
But, to paraphrase Abraham Lincoln’s response to pro-slavery advocates’ warnings about miscegenation, just because Governments want to stimulate their economies doesn’t mean they want to control them. This claim of a latter-day Red menace is one of the laziest canards seen for a while.
Estimates hearings commence next week, and doubtless Ken Henry will come in for another ill-mannered grilling from Coalition senators. In truth, though, Henry should also blame himself and the Government for some of the fire being directed at him. It is clear, for example, that Henry isn’t always a fan of public debate, ridiculously complaining about how “unhelpful” public discussion was of whether there were differences between Treasury and the Reserve Bank. He also has a decidedly unbureaucratic manner of public speaking (his speech this week is not a bad read at all for a macro-economic dissertation) and a willingness to have a go at critics. While this makes for good copy, the long-standing reasons why public servants should generally be seen and not heard and, if heard, heard to speak in highly-measured tones — that it, that they are not elected like their political superiors — still holds.
The Government, too, has been willing to exploit Henry as much as it can, repeatedly stressing how it has acted on Treasury’s advice, as if we elected Henry and not Kevin Rudd and Wayne Swan to make decisions. Henry has become a rhetorical crutch and a visual prop for Rudd and Swan during the financial crisis and as such has been wilfully dragged into the political line of fire.
Henry does have a position different to most bureaucrats. He is leading a major tax review and that requires a higher profile; he has also overseen a significant change in Treasury forecasting practice at a critical time in Australia’s economic fortunes. That change should be explained and justified. But some circumspection from all sides — the Government, the Coalition and Henry himself — might improve the quality of economic debate.