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Sep 3, 2010

The myth of governmental

Contrary to its claims of administrative competence, the Coalition had a series of costly blunders when in Government.


“Competence” has proven to be a potent tool for conservatives here and elsewhere recently. Republicans have assailed Barack Obama as incompetent, particularly in the oleaginous wake of his handling of the BP oil spill. David Cameron hammered Gordon Brown, whose economic competence was once his principal claim to the Prime Ministership, over it in the lead-up to the UK election. And it was the central theme of Tony Abbott’s campaign against Labor that has him on the cusp of minority government.

It’s a longstanding theme in politics. The Left is soft-hearted, but has no discipline. The Right is hard-hearted, but good at management. In an ancient Simpsons episode from a generation ago, an elephant escapes and rampages through Republican and Democrat gatherings. The Democrats clutch placards saying “We can’t govern!” and boo the animal, while the Republicans, bearing signs like “We hate everything”, cheer. It sums the narrative up perfectly.

However, competence in a Westminster-based system, or a variant of it like Australia’s federal system, is altogether more complex than slogans might suggest, given that elections change governments, but not administrators. Politicians act as executives, and make major decisions, but the implementation of their decisions is left to unelected bureaucrats. Further, as more and more functions of government have been outsourced, much of the implementation of their decisions is increasingly in the hands of the private sector, acting either under contract to government, or acting unilaterally, but with some market-based incentive reflecting policy intentions.

The Howard Government is conventionally viewed as a competent government — fiscally lax in its last term, true, and it left us with a structural budget deficit, but it was solidly reformist in at least its first two terms.

But as I pointed out back in March, if the same standards that were applied to the Rudd Government by the Press Gallery in the context of the insulation saga had been applied to the Howard Government, a different perception might have emerged. There was a direct link between IR decisions by Howard Government ministers and the deaths of building workers. There was a direct link between the failure of the Howard Government to remedy the military justice system despite repeated warnings, and the deaths of ADF personnel. These deaths are far greater in number than those attributed to problems in the insulation program for which Peter Garrett was so unfairly pilloried.

Considered from the perspective of administration, too, the Howard Government’s record was very mixed, and not just in high-profile areas like Bronwyn Bishop’s kerosene bath disasters in aged care, or the nightmarish treatment of Vivien Solon, Cornelia Rau and Mohammed Haneef by a gung-ho Immigration Department. Crikey has examined the reports of the Australian National Audit Office from 1998-2007 in an effort to get a complete picture of how “competent” the Howard Government was, to compare with the ongoing campaign by the Coalition — which boasts considerable continuity with the Howard Government — to claim it is automatically more competent than Labor.

First, some perspective: nearly all ANAO audits find something to criticise. The auditors are advocates of Best Practice — or, as management-speak now renders it, Better Practice. About the highest praise you can get from them is the comment “there are some examples of better practice in the Department’s administration of this program” — the equivalent of a gold star from the hard-to-impress folks at Centenary House.

But we found 29 examples of serious criticism of Howard Government programs from the auditors, where they laid into the way programs were run or policies were implemented, not just for poor filing or not having KPIs identified right from the outset, but for errors that cost substantial amounts of taxpayer money.

Some were, in the scheme of things, not that important. The guns buyback scheme — probably John Howard’s finest moment — was rushed so quickly that millions of dollars ended up being spent buying weapons that were already illegal, from people who should have faced prosecution rather than been given compensation. The private health insurance rebate was initially set up so that people were able to double-claim millions of dollars. The Federation Fund was found to be entirely politicised in its administration by the Prime Minister’s own office. The $400m Plasma Fractionation program was badly administered by the Health Department.

But the Howard Government was repeatedly criticised for mismanagement on a much greater scale. The first tranche of the Telstra sale was badly underpriced, and it cost taxpayers $12b in 1997 dollars (the best part of $18b now). And the sale agency, the Office of Asset Sales and IT Outsourcing, didn’t even bother checking the invoices it got from high-priced sale consultants, and simply paid them, adding a huge premium to sale costs.

In fact, OASITO was ground-zero for mismanagement in the early years of the Howard Government. The agency was carved out of Finance and staffed by ideologues keen to implement the Government’s privatisation agenda, but they were so determined to flog Government assets they frequently botched it. For example, the sale of DASFLEET was badly bungled and led to litigation with Macquarie Bank that was still being resolved when the ANAO went back to do a follow-up audit on the debacle years later.

But it was OASITO’s handling of IT outsourcing that eventually led to it being discredited and scrapped. OASITO oversaw a comprehensive program of public service IT outsourcing that was opposed by nearly every agency head in the Service, and which was so badly bungled that entire departments frequently went days without functioning IT from their new private sector providers. This rarely made the news because it was happening in Canberra, within the Government itself, but tens of millions of dollars of productivity were lost as a consequence.

Private sector providers were so bad, the story went among bureaucrats, that John Fahey had demanded and got the insourcing of IT for his personal office so it could actually continue to function.

An ANAO audit later found that many of the purported savings claimed from the outsourcing program never materialised – and it never tried to account for the tens of millions of dollars lost from public servants going home because their computers stopped working for a day. A specific ANAO audit later of the outsourcing of the vast Health Department (which was still losing whole days to IT problems when I worked there in 2006) found that OASITO had botched the outsourcing process and left continuing problems.

By that stage, OASITO had been wound up and merged back with the Department of Finance, but asset sales were a problem across the board. In 2001, the ANAO looked at the sale of Commonwealth property and its leaseback to the Public Service and found that some departments like Foreign Affairs and Trade were paying so much rent for properties they had previously owned that it was a net cost to the Commonwealth – one agency was predicted to lose nearly $100m over the course of its 20-year lease.

There were other expensive examples of maladministration. Some agencies’ handling of foreign exchange hedging was caned by the auditors, who found tens of millions of dollars had been lost on currency movements. A 2000 review of the reliance of the Howard Government on consultants – worth $370m a year – was scathing, identifying systemic problems in the way agencies hired and used consultants. A review of the greenhouse programs established by the Howard Government as a cover for its inaction on climate change found that what carbon abatement the programs had obtained had been secured at prices ranging up to $150 a tonne. There were process problems in the $60m road blackspots program in the same Department that would shortly yield the monumental Regional Partnerships debacle.

And then there was Defence. Despite the Coalition’s efforts to wrap itself in the flag, it had a terrible time in Defence, with a succession of ministers going there and then promptly leaving politics after failing to pull the uniforms into line. Rare is the audit, big or small, in the Defence portfolio over the last decade and a half that doesn’t excoriate the Department (quite apart from the small issue of its accounts being qualified for several years). Individual acquisitions were criticised, although there were a couple of exceptions, like the Bushmaster vehicle.

Its entire system for acquisitions was criticised. Its testing and evaluation of acquisitions was criticised. The relationship between Defence and the Defence Housing Authority was criticised. The ANAO couldn’t even work out whether any of the tens of millions of savings meant to have been found by Defence in the Howard Government’s “Defence Reform Program” had actually been obtained.

But the point of this list isn’t just to compare conservative claims of competence with their record in government. It’s what this record tells us about how any government operates, and how it carries out its role, regardless of ideological flavour, because the ANAO’s long scrutiny of administration can tell us a lot about the pitfalls of government management no matter which side is in power.

Monday: politicians, bureaucrats and the exercise of power…


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111 thoughts on “The myth of governmental

  1. billie

    And of course you can’t measure the human cost of 200,000 IT professionals retrenched by the Howard government determination to offshore IT jobs to India.

  2. paddy

    Definitely playing to your strong suite Bernard.
    Nicely done and I’m looking forward to Monday’s piece. Ta.

  3. Delerious

    Kind of reminds me of the art of fascism. The coalition has their own mogul running propaganda for them through most newspaper outlets. As this mogul has the only paper or a major paper in each state we also have the pleasure of knowing that any journalist who wants to work in Australia (possibly overseas as well) needs to make sure they don’t question or look too closely into what News Ltd gets up to. The internet is the only place he can’t control but he sure wishes he could.

  4. shepherdmarilyn

    Of course it’s easy to look competent when the only thing you do for 12 years is the hideous GST and two wars, torture small children and pretend to be tough on border security by bashing refugees.

    You forgot the competence of Ruddock which saw 18 deaths in his hideous concentration camps.

  5. Stressed Chef

    Good piece. Niggly nitpick re the Simpsons reference: at the Democratic Convention the signs read “We can’t govern” and “We hate life and ourselves”. The Republican Convention’s signs read “We’re just plain evil” and “We want what’s worst for everyone”.

    PS is 1994 “a generation ago” yet? I feel craggy.

  6. Acidic Muse

    And just why is it so few Australian journalists were making this kind of comparison prior to the election, she cynically asks.

    The natural centre right bias of most of Australia’s mainstream media means they always hold the ALP to higher standards of accountability than they do the Coalition

    This is specifically why Toxic Tony knew he could run a viciously relentless smear campaign predicated on stopping waste that was massively overstated and paying down a debt that was comparatively small by world standards – and undoubtedly necessary in the circumstances of the GFC. He knew his grossly exaggerated negative narrative would be warmly embraced by journalists who traditionally accept the argument that Labor are poorer economic managers as an article of faith

    It’s a very well written piece Bernard but I would have been far more impressed if you’d had the courage to publish it prior to the election 🙂

  7. asdusty

    Astro? Troy C? Glenn? Where are all the usual suspects…Im interested in seeing how they talk [Moderator- this comment has been slightly edited] their way out of this one…

  8. twobob

    It’s a very well written piece Bernard but I would have been far more impressed if you’d had the courage to publish it prior to the election

    You stole my thunder Acidic Muse, they were precisely my thoughts.
    I also seem to remember that the previous government lost some emails about AWB and children overboard. Not that those two cost us taxpayers overly much but they are still pretty relevant when it comes to issues of competence. Did you run out of word space Bernard?

  9. Anthony David

    The tragedy of IT outsourcing has continued with market dominance emerging for the business that can cut costs the most. After taking on staff with employment conditions similar to those enjoyed by public servants in IT, conditions have been whittled away step-by-step. Training is one of the first expenses to be trimmed along with career planning. One perverse example is refusing to internally promote people to more senior positions because they lacked certificates that they would have gained if they were given the necessary training promised them.

  10. archibald

    After assuming office in 1996 and finding (gasp) the Beazley Black Hole, Howard and Costello made numerous cuts and one was to abolish the Dept of Administrative Services. This department had played a major role over decades in infrastructure construction (eg the Snowy Mountains Scheme, commonwealth housing projects etc). If there was expertise within the federal government that could have more successfully administered programs like the BER and the home insulation scheme, it resided in a department abolished – effectively privatised – by Howard and Costello. That the government was overcharged by private contractors in these schemes is sheeted home to the Labor government. The wisdom of this Liberal decision to outsource a critical government function and the ethics of price gouging private contractors seems to get no comment at all.

  11. John Bennetts

    Lovely article. Based more on facts than opinion (got that, Bolter?) and obviously only scratching the surface of the mother lode.

    Bernard, please re-publish this article and the comments a week after the next election is called. I really hope that all the has-beens on Tony Abbott’s front bench stand for re-election, so that I can witness their demise.

  12. SBH

    not a defence of OASITO Bernard but when originally set up the APS staff put in there did there best to be public servants and refused to implement decisions they rightly viewed as party political rather than government. As a result of their efforts to apply reasonable APS values and ethics several of them were sacked and the rest of the service learned how to operate with a completely new paradigm of government

  13. grimace

    Why are we not targeting the organisations who ripped off the Government at a time when they were desperately trying to save the country from recession?

    Surely some time in the media spotlight for these unscrupulous organisations is due. And no, the government “let” us rip them off (or variants of such) are not acceptable reasons for ripping off the Australian taxpayer.

  14. David

    @GRIMACE..I echo your thoughts. The Coalition saw fit to repeatedly, unashamedly accuse the Labor Govt of causing the deaths of 4 workers during the fitting of bats. So far I can recall only one shoddy company being taken to court for lack of training of their staff and meanwhile that absurd excuse for a shadow minister, Greg Hunt went on and on throughout the election campaign, throwing up the deaths as a Labor act. He was not alone of course.

    The schools programme with disgraceful over charging by some companies, who have never been brought to account. Again all the Govts fault as prosecuted by the Coalition. Hardly a mention of the over 90% of principals who were thrilled with their new buildings.

    Where was the media? Why were they not calling for the prosecution of these rip off merchants. I’ll tell you where the media were. Doing there best to bring down the Govt and placing a crown on the head of a lying, conniving ultra right wing, religious pretender, who hopefully by next week will have been fed his just desserts.

  15. Murray Massey

    All very interesting and worthwhile but much of what is detailed, plus some that isn’t, were the reasons so many of us kicked Howard our of Parliament and his government out of office when Rudd and Gillard offered such a refreshing and enlightened option. Even some staunch Conservative friends of mine joined the rush back then, so thoroughly sick of Howard were they. But Id suggest what is relevant right now is not what Howard did, or failed to do, but what Rudd & Co did with that incredible opportunity with which so many Australians entrusted them. If the focus is to be on efficiency and competency, there are two issues before us now which deserve urgent examination: the mining rent resource tax and the NBN. The initial Mining Super Profits Tax was obviously a massive and reckless miscalculation, presumably by Treasurer Swan, but the MRRT it has transformed into, would appear to be reckless in the other direction, and is likely to see Australian taxpayers screwed by the very biggest mining companies (probably also at the expense of smaller miners). And as far as I’m aware we’ve seen not even an outline of the costings for the $43 billion NBN which proposes the extraordinary, unprecedented expenditure equivalent of $2000 for every single Australian. If I recall correctly, when Rudd first proposed the NBN it was envisaged as a $4 billion project, which suddenly rose to $12-14 billion when the GFC hit when any government spending seemed like a good idea. But then it was announced as a $43 billion plan and there’s been little serious debate about this historic expectation ever since. Given what we now know about the performance of Rudd and those like Gillard and Swan who were apparently members of the ruling gang of four, surely these are two issues crying out for scrutiny before any government we might have from next week proceeds with them, or ditches them. Far more relevant, realistic, crucial and urgent I’d suggest than trying to link Abbott into the failures of Howard three years ago and beyond!

  16. CML

    Great article, Bernard. I too cannot wait for the following installments!
    As I recall it, there were occasional articles in the MSM reporting these events (or some of them), but there was never any criticism of what was going on. It was all made to sound like bad luck or business as usual. Those who wrote letters to the editor or blogs on media sites, trying to explain what was going on, were demonised or called whingers. It is ever thus.
    I agree with many of the comments above asking why no one, especially Crikey, gave us these facts BEFORE the election. Or, for that matter, BEFORE the ALP tore itself apart and sacked a Prime Minister. It is obscene that the public have been manipulated to this extent.

  17. rossco

    Where Labor was incompetent was letting the Libs and the media get away with their lies, with no obvious attempt to tell the story of their success. I accept that it was difficult to overcome the spin put out via the media, but what about when Ministers were being interviewed or messages via the net?

  18. nicolino

    Why do people confuse the spelling and context of the word “their” and “there”?

  19. Hugh (Charlie) McColl

    David, hate pedantry but ‘just deserts’ has one ‘s’ and is not something eaten to top off a meal. It’s about whether something or someone is deserving.

  20. SBH

    Nicolino, my apologies, I was typing fast and didn’t check.

  21. SBH

    a bigger question is why people are so terrified by the appropriate use of ‘affect’ and ‘effect’ that they use the noun ‘impact’ as an intrasitive verb

  22. Roberto11

    Maz@ 3.55

    “Far more relevant, realistic, crucial and urgent I’d suggest than trying to link Abbott into the failures of Howard three years ago and beyond!”

    No “trying” involved here – Abbott had a major role in the Howard Government and in its failures and the “link” as you put it, is therefore quite relevant given his current attempts to attain the holy grail!

  23. 2b


    I’m no fan of the Insulation Program but I find the logic of people in this country very strange.

    If you gave your son some money to help him go and buy a car and he died in a car accident due to the fact that the car he purchased had a faulty break; now do you blame yourself or the mechanic or the manufacturer?

    Which government in the world is able to guarantee that there is zero industrial accident in their country, could the Howard government guarantee it?

    And the argument about to much industrial regulation leading to the laxing of safety standard come from which side of politics?

  24. David

    Hugh I will be forever in your debt. If that is my major sin for the day, I will not leave this keyboard with a fear of impending doom. Your pedantry worries me not, what will be of concern is the lack of a cold bottle of good Marlborough Sav blanc in the fridge, when I get home. That will be my ‘just desert’ 🙂

  25. David

    2B…agree 100%.

    Also has been mentioned many times here, the personal attacks on Minister Garrett by that weasel Hunt and his equally brain dead collegue Dutton, for political point scoring, over the bats installation, were a disgrace. They are persons without shame.

  26. CML

    All the pedants must be Liberal/National voters! Can’t bring themselves to comment on Bernard’s article or attack the relevant content of the blogs here. Wonder why! Cat got your tongue?

  27. Acidic Muse


    The Labor machine operates like a Feudal fiefdom or Tribal hierarchy. Unless you are already well known to them and/or willing to swear fealty to one of the factional warlords, you simply can not get anywhere within the ALP machine

    The natural outcome of this is that highly intelligent and creative people are systematically excluded while power obsessed, cynical drones like Mark Arbib and Karl Bitar rise to the top of the organisation like grease through a sewerage treatment plant.

    Sadly, three decades of union and ethnic branch stacking within Labor has left the organisation riddled with a cancer that will not be easily cured.

    An almost complete dearth of honest brokers within the party machine was further compounded when after the 2007 election, Kevin Rudd unilaterally appointed himself Caesar and proceeded to snuff out all semblance of open debate on policy and strategy within the Caucus itself.

    It’s hardly surprising that by the time the 2010 campaign began in earnest, no one felt free to question the road Karl Bitars fanatical focus group fan club were driving the party down at full tilt.

    Most of the problems with the Insulation scheme were rooted in poor regulation and oversight at state level. Of course the numbers men in the Federal machine dare not let anyone say that too loudly lest it bring about a backlash from some of their own base in their respective state organisations.

    Julia Gillard is abundantly aware of these problems. Time will tell if she can get the kind of support required to fix them.

  28. freecountry

    All true, Bernard. Except for the gun buyback, where you’ve misunderstood the harm minimisation principle. It was deliberately combined with a time-limited amnesty, because it was considered more important to remove many guns with which killings might occur in the future, rather than drive illegal guns further into hiding by trying to prosecute.

    But the rest of it, fair enough.

    Can I suggest a radical idea: There have been (almost) no good central governments in Australia. I say almost, because everybody has one or two favourites. Personally I think the Hawke-Keating government did enough good to outweigh the bad things it did. Even though, like all others, it did rampage like a bull through a china shop left right and centre, doing more harm to our defence force than the Japanese army ever did, and all but destroying our tertiary education sector.

    Other commonwealth governments rampage like banshees too, but they don’t do enough economic good to make up for it. And the biggest harm they all do is to incapacitate the States by depriving them of financial autonomy, straight-jacketing them with Special Purpose Payments which are then used to offset GST grants, and then using the consequent emasculation and corruption of the States as excuses to invade their constitutional jurisdictions.

    Australians are constantly demanding “vision”. But vision is all around you. State governments have a thousand things they could try out, if they could ever stop struggling with the Commonwealth for money and get enough breathing space to try them out. The greatest vision this country ever had at the federal level, was the federation itself. Abbott claims the federation was a compromise, “the price of nationhood.” Abbott’s full of it.

    The next party to get my vote at the national level will be the one which, instead of promising to fix everything and bring World Peace, offers to back off and let that 1890s vision yield its fruit of a thousand other visions. I fear I may be waiting a long time.

  29. freecountry

    I hate it when i mess up the italics. It was intended for a single sentence: There have been (almost) no good central governments in Australia.

  30. Silver BB's

    Possibly Crikey may be able to clarify and source, but I recently read an article (unsourced) stating that in the case of the Stimulus Insulation batt program, the government wanted to outsource the program to industrial giants who would ensure already developed Health and Safety programs would be followed on any installation.
    In order for this to pass, the opposition party, sensing a poison pill, made the changes to the legislation to open it up to small business enterprises.

    If this is true, why has this not been used as an argument by the government, not a defensive one, but in direct response to the insensitive, hyperbolic fearmongering the opposition has engaged in.

  31. David

    Silver BB’s…odd an artice of such importance was “unsourced”…..

  32. Silver BB's

    David, agree, I requested confirmation from the author who said he has records from Hansard.

    If true though, it means the Coalition intentionally weakened a necessarily fast track program (part of stimulus) which would have been better served by a large organization being such a large roll out.

  33. davidk

    Great article.. It seems to me the only approach Howard ever adopted was to slash the public service( remember Howard’s razor gang of the late 70s), attack unions( MWU BLF), demonise dole bludgers( Paxtons) and blame previous Labor governments for anything and everything( Whitlam Keating) before doing bugger all whilst telling us how great things are because he was in power,positions wholly endorsed by Murdoch and Packer. Given Abbott’s adoration of Howard and the utter incompetence of his front bench we can expect more of the same from him until he is ousted by Turnbull and Murdoch will continue to back him. I take a perverse pleasure from seeing him be so near yet so far from the prize he covets. It must be agonising for him. How wonderful.

  34. zut alors

    And let’s not forget my all-time favourite: the Howard government somehow being unaware (?!) that the Australian Wheat Board had paid $290 Million to the Saddam Hussein regime.

    We must never forget that outstanding show of incompetence and the unconvincing bleatings of the presiding Minister, Alexander “I can’t recall” Downer.

  35. Harvey Tarvydas

    Dr Harvey M Tarvydas

    Quality work BK.
    A tribute to independent intelligent journalism which will always be based on seriously competent hard work as you demonstrate here.

  36. Hugh (Charlie) McColl

    Zut Alors, sorry – pedant alert. The Australian Wheat Board was (repeat, was) a statutory body that bought and sold all wheat produced in the country. That board was done away with and privatised and the resulting corporate entity was called AWB. AWB is not the same as the Australian Wheat Board – as I said, that board no longer exists. It was AWB that did deals with the devil – seemingly overseen and overlooked – by Alexander Downer for the Howard government.

  37. zut alors

    Hugh (Charlie) McColl

    Drat. Like Downer & Co, I was hoping nobody would notice the oversight!

  38. Astro

    @ Assdusty

    All governments make errors, but the gross waste, incompetence and mismanagement of the Rudd / Gillard government is worse than Whitlam / Cairns.

    Look at how Labor governments turn out after they have had several terms. NSW is a national Labor disgrace and Queensland not far behind.

    Abbott too has his issues. Hockey and Robb should be sent to pasture and new smart talent inserted.

    Stephen Smith is the smartest on Labor side and should be leader.

    The election outcome will be good for Australia whichever way it goes.

  39. mrflibble

    “gross waste, incompetence and mismanagement” is nothing more than assertion – a very subjective assertion at that, and does not resemble a fact in any way, shape or form.

    As has been stated in this thread and on many, many others there is NO government of any stripe that cannot be held to have elements of waste, incompetence and mismanagement. My problem is with use of “gross”, the lack of definition of “gross” and then an unwillingness to compare apples with apples.

  40. Sausage Maker

    Lets not forget Senator Alston’s 4 million dollars for his department’s web site that was complete rubbish.

    We, the Crikey readers, know the Coalition were no angels when it came to waste. Do the people in Queensland and western Sydney know this? How would they? Lets face it, the people who read Crikey are not going to be your typical Sydney Westie or Bogan Queenslander.

    This is an issue that Labor has to deal with. The main media sources in these areas are News Ltd papers and talkback radio. Both are so biased towards the Liberals its not funny. And when it comes to TV check the OzTam ratings. Queenslanders have the lowest ABC and SBS viewership. There is no Fairfax paper in QLD, the Fin Review doesn’t count and how many people out in Western Sydney read the SMH? Not that the SMH is pro Labor, the Devine Miss Miranda, pompous fart Henderson and mad dog Sheehan can match it with the Bolts and Akermans on any given day.

    So how does Labor get its message out to these areas? They can’t. They failed miserably this election and I don’t see Crikey, or anyone else, finding a solution.

  41. asdusty



  42. Johnfromplanetearth

    You’re comparing the Howard years to Rudd/Gillard? Good god almighty! You ain’t seen nothing yet BK, wait till you see the mess that is about to be created with this new Labor/Green axis of evil !!!! You won’t even remember Howard and Costello’s first names as we all look for ways to keep our caves clean! The lies, deceit, mismanagement and extraordinary spending will be like something you have never seen or heard before.
    Rudd was mad and got the boot, Gillard is just desperately seeking approval and Bob Brown is quite insane! Yep, we’re gonna be in good hands from now on! Stable Government here we come.

  43. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @ASTRO Posted Saturday, 4 September 2010 at 9:17 am
    Where you educate @ ASSDUSTY with the exquisite yet fundamental lament …… “All governments make errors, but the gross waste, incompetence and mismanagement of the Rudd / Gillard government is worse than Whitlam / Cairns” …..
    This is an emotional tirade backed with or spored from crap for facts by which you are attempting to mislead … or if not … you have been misled.

    Psychology, psychology, psychology is everything. (Dr Harvey’s nickname)
    1. Examine the independent report on BER into your education waste claim, yes, “2.7% of the projects (24,000 +) had legitimate complaints attributable.” That’s not even 2.7% failed projects.
    That’s greater than a 97.3% success rate. A success rate for huge projects that has never ever been achieved on planet earth before by any nation. The problem with this information is that it was dealt with by Aussie pollies that are either dumb or sinister and dishonest. Labour pollies were the former, dumb, as they couldn’t realise that expressed as a success rate it was an invincible hot shit winner. Coalition pollies (the ones that went on about it) were liars out to deceive the population destroying trust and abusing the ordinary of the population.
    2. Examine the home insulation programme – never have so many homes (1/2 a mil or was it 1 million or was it more than that) been insulated in one nation in such a short period of time in the history of the world for so little cost and damage (there will always be some because there will always be arsehole Aussies that will stuff something good up) and have such a big effect on greenhouse gas production for many years to come.

    Why have so many Aussies listened to the crapheads and not understood the facts achieved by so many valuable Aussie public servants.
    Because so many Aussies are crapheads who can be led to believe that they should pay more tax so the world’s richest foreign companies can pay less tax while they make super profits from the good ol’ Aussie people’s assets handed over to them (seems like those Aussie sorts may have descended from convicts or something). This must be the most potent and subtle way to beat the evil communists in the name of Menzies (the fight goes on). Or is there some other explanation for this Aussie mental disease that the great Aussie psychiatrists are just too impotent to diagnose.

  44. Astro

    @ Dr Tarvydas,

    Not sure what you got your doctorate in.

    Brad Orgill investigated what he was given and not everything. Public school Principals who were interviewed said they did not want to report waste of it could impact on their schools / careers. Understandable. If a competent and impartial audit was done, you would find that over half the BER’s in Public school BER’s have waste, and I dare say the figure would be closer to 100% rather than 50%.

    Even Orgill noted that when comparing the square metre costs of Public v Independant schools.

    So Doctor, if your scientific expertise is 100 – 2.7 failed = 97.3 success, than I suggest you retire before you get found out!!!

  45. Fireflying

    “It’s what this record tells us about how any government operates, and how it carries out its role, regardless of ideological flavour… can tell us a lot about the pitfalls of government management no matter which side is in power.”

    I agree with Bernard on this point (his overall contention it seems); all governments are incompetent regardless of ‘ideology’ and that is why small government is better.

    I prefer a ‘do-nothing’ government than one infected with a fanatical love of central planning.

    For that reasoning the Coalition tends to be slightly more competent, only because they have the discipline to balance the budget. The Coalition have on many occasions expanded government power (which I detest), but Labor typically expand by a greater factor.

    It’s a downright shame Australia does not have a ‘Ron Paul’ equivalent.

    But most importantly for me, both parties are loathe to consider serious monetary reform. On that score both parties are incompetent and have no good ideas other than ‘tax, spend, ban & regulate’.

  46. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @ASTRO Posted Saturday, 4 September 2010 at 2:21 pm
    Leaving the personal aside, you discuss general operations/corruption issues that are all the same and will all be in play when you go in for your heart operation expecting to come out alive. That’s the world, then there are smart people like you and me (you deserve a doctorate in the ‘and I dare say’ phenomenon) who are above all the crap and you will bloody well do the ‘competent and impartial audit’ yourself instead of reading Brad Orgill mind out to me.

    Don’t worry about me and my doctorate, my Einstein moment is coming and it’s not in this subject.

  47. davidk

    @ Fireflying I thought the point being made was that every government relies on PS beaurocrats to implement their policies and are thereby reliant on the competence of said beaurocrats.
    Perish the thought that governments should tax or spend. Maybe we should put executive power in the hands of Australia’s CEOs or philanthropists.
    @ Johnfromplanetearth
    And you call Bob Brown insane! Talk about the pot calling the kettle black.

  48. Astro

    @ Dr Harvey M Tarvydas

    Dear Doctor, there is corruption / waste in just about every government program of the size of the BER, insulation etc. Look at NSW – hundreds of examples with current government, some of which have been dealt with by ICAC.

    The FACT that the cost per square metre in the same area for the same buildings was considerably cheaper for Indepenent schools v State schools is proof.

    Even Lindsay Tanner said they did not have time to dot i’s and cross t’s cause they were spending like drunken sailors to ‘save the econony’.

    If the waste was a few million (this is unacceptable but defendable), but it was billions. This is a national disgrace and waste of taxpayers money.

    Add the Insulation fiasco and you have two programs that should seen Ministers sacked and Department heads and others removed and the matter referred to ICAC and the Courts.

  49. mrflibble

    If Ministers should have been sacked for the insulation “fiasco” & the BER “disgrace” (why use appropriate words when there are emotive ones which can be sidled in to convey a sense of immense scope) – then by the same yardstick Lord Downer (and realistically others) should have been sacked, and then found guilty of perjury and quite possibly fraud. Just sayin’…

  50. Astro

    @ Mr Flibble,

    Exactly. We need accountability.

  51. Harvey Tarvydas

    Dr Harvey M Tarvydas


    PM John Howard was shit for Australia and planet earth. Didn’t you know that? Where have you been? I know, you’ve been twanged you poor bugger. (‘Twanged’ is the psychological phenomenon of shock and excitement when the reality dawns that the ‘girl’ you’ve been getting hot with in the really dark dark isn’t a sexy young girl but an old guy).
    Maybe you didn’t know that humans on this planet try to get away with fooling each other to that extent.
    Read about PM John Howard’s warts, they’re the ugliest not just on planet earth but in the whole universe. It’s been proven.
    He’s a nice guy as Aussies born in Parliament House go, but those warts uuuggghhhh, he should have had them surgically removed.

  52. Astro

    @ Harvey Tarvydas

    Seek help

  53. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @ASTRO Posted Saturday, 4 September 2010 at 5:52 pm
    I actually appreciate your statements but I am sure when you’ve done the real audits you will discover your tendency to blow things out of proportion.
    In relation to the latter (super huge proportions) just examine so many of PM John Howard adventures with the Australian peoples finances and all your complaints (legitimate complaints are always worth making forcefully) fade to secondary concern and even less when these projects actually gave some actual long term assets rather than Howard’s expensive smelly fresh air.

  54. Astro

    @ Dr Harvey M Tarvydas

    What Howard project wasted around 5 billion in 20 months?

  55. davirob

    The most interesting thing about J Howard (to me) was not what he did/represented but how many of our fellow Australians thought he was right.This to me means our country is not what I was bought up to believe it thinks it is.

  56. harrybelbarry

    Can somebody ring the “White suit men” , he’s back ! So who are you today ? Telstra worker ? Coal altions finance Guru ?

  57. Fireflying


    Small government =/= concentration of corporate power. Most monopolies are created by government interference into the market. Those other monopolies (not created by governments) are only temporal due to insufficient level of technology combined with vast capital requirements, e.g. rail & water supply.

    Considering how much corporate welfare the current system endows I would of thought you’d be all for decentralising federal power & small government.

    Our current monetary system favours the banks, encourages individuals & companies to go into debt & disfavours those who save. There are some serious issues with central banking, fractional reserve banking & the government monopoly on currency issuance (which is fiat; backed by nothing), I wish to see these issues debated by our politicians.

    We see in Europe & the USA their monetary system is failing them horribly. Ours is remarkably the same as theirs.

    I am not against taxation & spending per se, it’s just that most government expenditures are inefficient & ineffective.

  58. freecountry

    There have been no efficient commonwealth governments. Some spend more, some spend less, but all spend like drunken sailors and rampage like bulls in a china shop through education, industrial relations, taxation, infrastructure, anything they feel like.

    Labor, Liberal, makes no difference. They are all bulls in a china shop.

    Yet we persist in denouncing the state governments as incompetent – the same state governments that provide the overwhelming majority of our public goods, most of it very competently. And we persist in giving the commonwealth a mandate to “get in there and fix it”.

    This is not a Labor vs Liberal problem. This is a problem of central governments of all flavours, vastly overreaching their constitutional mandate and subverting the ability of real governments to do their job.

  59. asdusty

    Thankyou Dr Harvey, you are a man of infinite wit and a gentleman.

    Ahh, asstro. Again showing your vast intellect and capability for reason. Not only are you a graduate of the school of ‘things my neighbour told me’ but you are obviously a postgraduate student of the university of ‘what some fella at the pub said’.
    The pertinent word we are looking for is Facts. What facts do you possess that back up your assertions. Indeed, what facts do you possess that contradict the reports that have been publicly released in regards to the home insulation scheme and the BER? You claim corruption and misconduct, so where is the basis for these claims? Have you informed the relevant authorities and provided them with your proof?
    I look forward to your reply…
    Oh, and I have one question.
    If, as you assert, the ALP government is incompetent, why is it that two days before the election, the Treasurer, Wayne Swan, was pointing out a $12 Billion black hole in the coalitions costings?

  60. john2066

    Good article Bernard, but I think you left out one of the worst Howard govt wastes – the sea sprite helicopter disaster. 1.2 billion for literally, nothing, the helicopters taken away for scrap. It seriously would have been cheaper to burn 1.1 billion of taxpayers money in a dumpster than this disaster.

    In fact, given the gross waste and fraud now a permanent feature of defence, (and the fact that any minister like Joel Fitzgibbon who challenges it is quickly disposed of) it would be easier to just let defence staff hack in to all australian’s bank accounts and directly steal their money. Cut out the middleman!!

  61. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @ASDUSTY — thank you, but you are doing bloody well yourself especially with your super wedge in your closing two lines. Now there is a wedge pressure condition for which there is no known treatment and is mostly fatal.
    Will ordinary citizens like us ever be appreciated appropriately?
    Hey, Crikey is seeing to it I think.

  62. sickofitall

    Is neither side fit for Govt? The Howard Costello years were really one inefficient lurch of incompetence to another – Rudd was better (though far from ‘good’), and they dump him, and now, who is it?

  63. Outstanding Outcome For Australia

    The changes that this term will bring will be good for Australia.

    I also think Bob Katter makes sence with his comments on the serious issues we will have for food production and the dire issue we and the region will have mid century.

    I am glad we have the independants controlling things.

  64. angrymouse

    A very informative piece. Thank you.

  65. 2b

    I wonder if the 3 independents will take into account the fact that the 11 billion black hole in the Coalition’s costing was hidden from voters who were bombarded with constant assertion that they are better economic manager and will bring big surplus and relentlessly discredit the government’s credential, and ask themselves what the election result would be if it was revealed prior to the election.

    I think it will be better for them to decide to go back to the poll rather than backing the Coalition simply because of the number. If they lock themselves in with the Coalition the number is tight at best 76 seat, there will be no room for any of them to dissent if the Coalition force some policy on them since they said from the outset they want stability and do not want any early election. So the Coalition could have just as much if not greater bargaining power over them.

    I though hope the independents have the power to bring forth reforms and much needed attentions to areas long been ignored by both sides of politics.

  66. Jeremy Yapp

    Outstanding outcome sez: “I also think Bob Katter makes sence with his comments on the serious issues”.

    This is the same Katter who denies climate change and calls Nick Stern a “lightweight”, but doesn’t mind seeing some renewable-energy pork come the way of his brother-in-law. Have I got that right, OOFA?

    Mate, you wouldn’t know sense if it bit your balls. Hell, you can’t even spell it.

  67. AR

    Re the balance of governments’ doubtful decencies – the Rodent’s pursuit of the Customs ‘whistleblower’ and Krudd’s valiant rectification, having fair-weather freinded him in Opposition. Not to mention dishonourable mentions for individual heroic efforts, like the Cadaver (“…the gov does not direct the AFP.”) & Albanese’s sheer, vaunting courage.
    Waddya expect? They’re politicians. Would you employ them to empty your garbage can? Yet they run the country. Supposedly.

  68. freecountry

    AR: “Waddya expect? They’re politicians. Would you employ them to empty your garbage can? Yet they run the country. Supposedly.”

    Actually state and local governments run the country. Federal government does little but interfere. using Special Purpose Payments to override the democratic budget allocations of states; using “fiscal needs equalization” to divide up the GST pie (after deducting SPPs as general state revenue); nationalizing state services like education and hospitals (leaving the states enough responsibility to blame them for everything the federal government breaks); lashing out on local pork-barrel spending to secure marginal seats; and getting all the media attention as if the whole country were sitting on their shoulders.

    But, while federal government loves interfering, it has no attention span for its own exclusive responsibilities. One example is Defence as JOHN2066 points out. Another example is international trade, where we are tangled up in a spaghetti of preferential trade deals, misleadingly labelled “free trade deals” even though they oblige us to deal preferentially with certain countries.

    Taxation is another area of almost exclusive federal responsibility – due to nationalization, rather than the Constitution – in which the federal government’s attention span can only be described as infantile. A wide ranging 138 point review (not quite comprehensive, since the PM specifically excluded the most important tax of them all, GST, without giving a reason) but Cabinet got bored after working through just three points.

    The federal government has important work to do, which it does not do or does very carelessly, regardless of which party is in power. Real government is done by the States and by local councils, struggling uphill to do everything in spite of federal interference, while federal government takes the credit for everything good and shifts the blame for every failure.

  69. Acidic Muse

    The independents are merely going through due process to tick all the right boxes before they make the only choice they could make, which as I’ve said all along is to back Labor.

    Meanwhile our political punditry continue to prattle on, mentally masturbating over ever possible permutation and outrage against democracy they can think of simply to fill the void.

    This is something that actually should concern us all. Just imagine how they would react if we were ever to face a REAL crisis

    With the independants announcement imminent it’s timely to remind Crikey’s resident wing nuts that Lifeline Australia provides 24hr crisis support on 13 11 14

  70. freecountry

    News flash, ACIDIC MUSE: The election is over. No one cares about clever little pieces of pro-Labor or pro-Coalition polemic at this stage. Why don’t you save it for the next election, you may not have long to wait.

  71. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @ACIDIC MUSE Posted Monday, 6 September 2010 at 10:35 am
    Australia faced an historically monumental crisis just very recently and had it very own super hero (looked a bit like Clark Kent but not as tall and with really lovely grey hair) to save us all so spectacularly that all the worlds leader are still talking about it as just the best.

    @SHEPHERDMARILYN Posted Friday, 3 September 2010 at 1:58 pm
    Great summary safe in your brain (left most other Aussie brains who couldn’t deal with the reality).

  72. Harvey Tarvydas

    Dr Harvey M Tarvydas

    @FREECOUNTRY Posted Monday, 6 September 2010 at 8:38 am
    While you make some important points you do a lot of spewing. What’s your real gripe?
    Local Councils, State Governments are very important and stuff up a lot also but the federal government makes us a ‘Nation’. Lot’s of smaller organizations need supervision by one. Maybe you alone? Is that it?

  73. Outstanding Outcome For Australia

    @ Harvey Tarvydas

    I dont understand your last jibber.

  74. SBH

    but to the point of Keane’s piece (and Free country, I think this is your point too) that all governments make mistakes and waste money and so on. The real difference then is why was the stimulus package (keeping Australia out of recession when all other developed economies tanked) which included the BER (spending money on education infrastructure) and the insulation scheme (making houses more energy efficient and cheaper to heat or cool, employing semi-skilled workers) the victim of such a malicious and dishonest campaign?

    I know we all think politicians lie but the persistent and demonstrably false campaign against the stimulus package was quite different to the normal spin. The real difference was the failure of the LNP coalition to act in anything approaching the national interest. We saw this with the mining tax and climate chaneg but thesehad their own simpler dynamics. The way they behaved towards the stimulus shows that their singular goal is power not public service and I don’t think the ALP has sunk that far yet.

  75. Acidic Muse

    @Free Country

    As alien as it obviously seems to you, some of us maintain a perennial sense of humour about most things regardless of the election cycle.

    No doubt you would have been just as critical when the Coalition began campaigning for the next election as soon as they received the bad news about this one – but for the fact that most on the right already began campaigning for the next election about 10 days ago *laughing*

    I am hopeful the impending period of Chicken Little Conservatism won’t see you begin carrying on like Glen and Astro – your contributions here are generally much more thoughtful


    I was in the US when the GFC hit so wasn’t watching the local journalistic bed wetting as closely as I might if I’d been down-under.

    Nonetheless, I agree Kevin Rudd performed heroically in the aftermath – it’s a great shame he dropped the plot so badly after Copenhagen because aside from an incapacity to consult broadly within his own party, he had all of the makings of a great Prime Minister.

  76. twobob

    The reason for the coalitions consistent criticism of the stimulus?
    Easy, what else did they have?
    And what would they have done differently?
    Easy, they would have given the money to their business mates, not the consumers.
    And I agree the ALP have not sank so far just yet, but they are well and truly on the way down as Gillards acquiescence on the mining tax showed.

  77. Acidic Muse

    @Two Bob

    Yes, the Coalition would have have directed the vast majority of their stimulus to big business just as happenned in the US. Our old mate Blind Freddy can see how well that has worked out for the Yanks – the trickle down never happenned and unemployment is still rising

    The primary problem with conservatism is that ideology trumps rationale time and time again

  78. SBH

    Yes Twobob, I don’t hold out any great hope of a visionary progressive reformist government especially given the way they’ve trashed the idea of evidence based policy. If you remember the LNP wanted to wait and see how the GFC turned out so thay hadn’t even planned to give money to business. This was one of the most mendacious pusilanimous abrogations of duty to act that I can recall.

    Acidic muse, I think traditional conservatism holds up a little better than that but the modern day variant is not even driven by ideology just fear of the other and the exploitation of that fear for self interest.

  79. freecountry

    [Lot’s of smaller organizations need supervision by one.]
    If you think the purpose of the federal government is to “supervise” the other governments, you’ve completely misunderstood the constitutional design of Australia. The purpose of the federal government is to take care of national and international issues best done by a single government.

    I’ll give an analogy: the purpose of the Australian Wheat Board was to present a united front for farmers selling grains on the international markets. Not to “supervise” farmers or tell them how to grow wheat; behind the united front, farmers continued to compete with each other (until the AWB blew it, which is pretty much what the federal government does almost all the time).

    SBH, the war of words over the stimulus is over. Personally I think it was not a total failure or a total success, the truth lies somewhere in between. It certainly saved a lot of jobs, even if a bit more flexibility for states and councils to spend the money on things they really needed might have saved more jobs for less cost; but it’s done and I’m all for “moving forward”. The federal micromanagement and interference I’m talking about is a very long term problem, dating back to world war 2 but getting worse in recent years.

  80. SBH

    Freecountry I don’t disagree. What worried me was a complete breakdown of any kind of reasoned or rational discussion of it’s pros and cons aided and abbotted (sorry abetted) by a cow like media who seem to lack any capacity for indepenent or critical thought. No one, conservative or progressive benefits out of this situaton.

    To matters structural, I’d rather see no states and bigger regional councils supported by commonwealth (as opposed to federal) grants. Your view?

  81. Fireflying

    Truth be told SBH, the Chinese stimulus had a greater effect on our economy than Labor’s. But you’ll never hear them admit that.

    Interestingly the Chinese actually spent their stimulus on real national building infrastructure; roads, ports, irrigation, rail, airports, reconstruction of earth-quake affected Sichuan. This maintained their demand for our minerals.

    Keynsians make a lot of dubious ‘assumptions’ that just does not match up with reality, yet it seems to be accepted as gospel nowadays. Likewise towards the neoclassical assumptions pre-GFC.

    Nevermind the Austrians who actually predicted the GFC…

  82. Outstanding Outcome For Australia

    @ Fireflying

    Absolutely correct.

    Rudd / Gillard stimulus went to construction companies, state government bureaucracy, tradies, insulation companies, more tradies and the $900 splashes went to the pokies, electronic retailers and other retailers. A few would have stuck it on the mortgage.

    In all pretty ineffective at stimulating more than a few.

  83. freecountry

    SBH: “To matters structural, I’d rather see no states and bigger regional councils supported by commonwealth (as opposed to federal) grants.”

    That view has garnered a lot of support in recent years. Largely based on two reasons:
    1. Federalism in its present form has lots of problems (but are these caused by the design, or do we misuse it?)
    2. The present states do not encapsulate areas of homogenous conditions and needs – for example the needs of Sydney and Perth have more in common with the needs of Sydney and Broken Hill, or the needs of Perth and Kalgoorlie.

    But regional differentiation is not one of the major rationales for a federation; indeed, the similarity of the states provides an ideal playing field for competition to produce the best laws and living standards.
    I see three problems with converting to regionalism:

    1. We would have to scrap the Constitution and start over, and I think the current level of political sophistication in Australia today is far inferior to that of the 1890s, when Australia was one of the most educated and far-seeing societies in the world.
    2. We have stopped giving federalism a chance. Central government in Australia interferes with its states far more than in any other major developed federation, including Germany, Switzerland, Canada, and the USA. It’s a bit premature to scrap something because strangulation has stopped it from working properly.
    3. The regions would have the same problems that the states currently do without solving any of the real underlying problems. Regionalism is really an excuse for Canberra to take over everything.

    Bear in mind that even the municipal governments within the Nordic countries, which I admire just as much as progressives do, have more financial autonomy than the Australian states do. That’s part of the reason why those countries are so efficient.
    There’s also a loose confederation between Denmark, Sweden, Norway, and Finland, which has a lot of the features of our federation including a common labour market and competition for comparative performance, which is part of what has made them so successful since the 1950s.

    The Henry Tax Review suggested that the states need more autonomy to raise their own revenue. International experts on federalism suggest this lack of fiscal autonomy and accountability is at the heart of the Australian problem. Don’t you think we should give something a chance before we tear it all down and create the same problems all over again?

  84. freecountry

    In the first point 2, “more in common with …” I meant “more in common than …”
    – for example the needs of Sydney and Perth have more in common than the needs of Sydney and Broken Hill, or the needs of Perth and Kalgoorlie.

  85. SBH

    OOFA no of course, it didn’t help anyone. That’s why our economy continues to grow and unemployment (unless you’re an Aborigine) continues to fall.

    Fireflying, Yes that John Maynard Keynes spent his whole academic career just assuming stuff and therefore none of his theories have any place in the real world. Hayekians on the other hand cannot be questioned DESPITE the wrack and ruin wrought on western economies by their callous adventurism with other peoples money.

    The Chinese undoubtedly helped. Although the mining sector did it’s level best not to pass any of that on and helpfully reduced its labour force during the downturn. But Australia’s not the only place China imports from yet those economies didn’t do so well. And yes they spent lots of money on infrastructure which I guess is what you can do if your economy is growing at 10%. But it seems like they are very happy with a Keynsian approach. Who are these Austrians anyway? There now you’ve made me start three sentences with conjuctions! Happy?

    By the way many conservatives seem to have read only the fist bit of wealth of nations when they start using Keynesian as a perjorative.

    Freecountry thanks for something to think on.

  86. 2b

    I’m sure China’s stimulus had an impact on the Australian economy and I actually haven’t heard anyone deny it. However for people to use that to discredit the government’s stimulus is quite unfair.

    First of all, are we supposed to sit back and do nothing and wait for China or some other countries to rescue us? We don’t take responsibility to help our economy?

    It is not just China but the concerted effort of world nations to do something to fight the global down turn. We have to acknowledge that our trade does not entirely depend on China. We have exposure to other economies as well. Our total export trade with the Japan, the US and the UK (where the countries experience economic woe) in 2009 is about 1.5 times that of our export trade with China; not to mention we have to take consideration other trading partners as well in world context.

  87. Outstanding Outcome For Australia

    @ SBH

    The growth in economy and employment is 90% non BER / Insulation etc mining induced (and its mostly mining) and the BER / Insulation etc is 1% or less.

  88. SBH

    and it’s negative in the mining sector so seems like the free marketeers let us down

  89. Fireflying


    You’ve confused neoclassical economics with Austrian economics, which you’ve termed ‘Hayekians’. Do watch that.

    The Keynsian multiplier is one of those assumptions I was referring to. Do try and restrain that straw-man arguement I see creeping into your arguement.

    “Who are these Austrians anyway?”

    Just off the top of my head, Peter Schiff & Ron Paul predicted the GFC.

  90. Fireflying

    “But it seems like they are very happy with a Keynsian approach. ”

    Well the Chinese can afford to due that considering the massive trade surplus they’ve been running for decades, the accumulation of savings & foreign currency reserves.

    You conveniently ignore the events proceeding the GFC that allow the Chinese to fund such large expenditures.

  91. SBH

    Ah economists, the saviours of the world.

    No I’ve highlighted the approach of disciples of Hayek who reckon we should all just let the market swing along without intervention and the fact that Keynsians aren’t the only ones who make assumptions. Would there be a reason why Keynes is enjoying something of a resurrgence?

    Maybe it has sonmething to do with the way unregulated markets don’t actully work very well for most people.

  92. Fireflying

    Well SBH, neoclassicals & Austrians are similar in many respects, so I can understand why you continue to confuse the two.

    But considering Austrians advocate the return to currency backed by hard assets (e.g. gold, silver), the abolition of central banks & fractional reserve banking, there is no way you claim the Austrian School has been implemented by politicians.

    I’ll grant you that neoclassicals have used Hayek as a template for many of their policies, but funny how when it comes to banking the idea of free markets is out the window & they are all for monopolistic control over the supply of currency.

    By the way, I’m no advocate of “unregulated markets” as you seem to imply, but of minimally regulated markets (yes, there is a difference).

  93. freecountry

    Suppose after to the cash splash, Canberra had simply provided funds to the states, they might have taken different approaches and we would be able to compare results, which would be helpful for next time. Say for example:

    – NSW says, we need a tightly controlled school building program and an insulation scheme;
    – VIC says, we’ll fast-track a lot of infrastructure problems already planned, and keep some money aside for bailing out failed financial institutions, like we did so well with Pyramid;
    – WA says, we’ll just use the money to offset a reduction of company and income tax, and invest in local listed companies to support market confidence, giving the public a dividend stream later;
    – TAS says, we’ll give most of it to local councils and hospitals and monitor closely;
    – QLD says, we’ll just let wages self-adjust downwards (assuming IR was still a state function) and use the funds to offset the lowered taxes (assuming income tax was still a state function);
    – NT says, we’ll follow the Commonwealth’s recommendations and request their help monitoring results;

    The Commonwealth says: COAG will hold a special meeting in three months time, together with Treasury and the RBA, to compare the results, make suggestions which programs should be discontinued and which ones should be adopted by other states.

    Then maybe everyone wouldn’t still being having this stimulus argument in a vacuum, arguing round in circles from first principles and ideological trenches.

  94. Acidic Muse


    I am in complete agreement with you regarding the abolition of the states with a move to two tiered government involving bigger regional councils supported by commonwealth. The arguments for such a change are as strong as they are many but would inevitably run into a brick wall at any referendum where the parochial self interest of the lowly populated states would always trump the national interest.

    Nonetheless, one day when I’ve got a few hours to spare I might just lay some of those reasons out

  95. Outstanding Outcome For Australia

    @ Acidic Muse

    I also agree, get rid of State Governments quickly. They are a relic of 100+ years ago and are no longer needed.

  96. SBH

    Fireflying you accuse me of things I didn’t say and didn’t imply seemed or otherwise. Freecountry is right it’s a waste of time.

    Freecountry, Wouldn’t you say that the way the BER money was spent was just like that? the money was dispensed to or with state education authorities (and yes with the commonwealth puddling around in the dleivery side about which they know so little) and spent according to there priorities? Perhaps a sound analysis of this excellent education infrastructure program (according to independent analysis) might show a way forward for the type of arrangement you suggest?

  97. davidk

    The reason there is a resurgence of Keansian economic principles is because they work. Interestingly he warned us to be more wary of surpluses than of deficits.
    @ Fireflying
    re government interference being responsible for most monopolies , I think history tells us a different story ( see US pre Roosevelt)
    I’m not for decentralisation per se, just for our pollies to all work for the national interest. They claim to, but they obviously lie, or are simpletons, or think the rest of us are.
    re China’s stimulous I agree but would draw their attention to my first point.

  98. Fireflying


    You said above:

    “Hayekians on the other hand cannot be questioned DESPITE the wrack and ruin wrought on western economies by their callous adventurism with other peoples money.”

    Those are your own words. You seem to think that “Hayekians” (whatever that means) are responsible for the current economic mess the world is in.

    This is where you are equating so-called “Hayekians” with neoclassical economic policy of the past two odd decades.

    Hayek’s work has influenced both the neoclassical and Austrian schools of economic thought, but they are distinct disciplines and you need to stop equating the two via your use of the word “Hayekian”.

    I repeat, neoclassical economics =/= austrian economics.

    The first is what we’ve seen for the past two decades (often associated with ‘neoliberalism’), which you refer to in your above quote. The second, has not been implemented.

    There is only so many ways I can rephrase this; economic nomenclature appears to be not your strong suit.

  99. Fireflying


    What makes you think that the monopolies of those area were not assisted by government policy and corporate welfare?

    Is there any specific example you would like to discuss?

  100. freecountry

    SBH, No I don’t think it was like that.
    It was more like, your boss gives you an account and says here spend it like this, one two three, make sure you read the fine print or it’ll come out of your salary, see you later.
    You say, “Boss, do your think maybe we should –”
    But the boss is not listening, comes back later and says, “Geez you made a hash of that, didn’t you. I’m really thinking of making you redundant. It’s been on my mind for some time now.”

  101. davidk

    @ Fireflying
    Governments will always have policies just as people will always try to take advantage but that’s not the fault of government. The trans continental railway was a case in point I think as was the unfettered timber industry when Yellowstone national park was established.

  102. freecountry

    Those of you who want to abolish the states are in the good company of Tony Abbott:
    [The states don’t exist because Australia’s constitutional founders thought that three levels of government were needed to avoid tyranny. They exist because it was the only way to make a nation out of six colonies … Let’s amend section 51 of the Constitution to empower the national parliament to make laws generally for the peace, order and good government of the commonwealth.]
    Abbott’s not all that bright, and he’s not particularly conservative either. He talks the talk about small government, but he’s really a big-government man prepared to bulldoze his way to a vision best known to himself.

    One of the highly influential books in the lead-up to Australian federation was Edward Freeman’s History of Federal Government, 1863. The Australian colonies and the ties that bound them were considered the ideal building blocks for what Freeman had called:
    [… the full ideal of a Federal Government. That ideal, in its highest and most elaborate development, is the most finished and the most artificial production of political ingenuity. It is hardly possible that federal government can attain its perfect form except in a highly refined age, and among a people whose political education has already stretched over many generations.]
    – which Andrew Inglis Clark read out loud at the 1891 Australasian National Convention.

    Wayne Swan, educated in public administration, is far better informed on this subject than Abbott, or indeed the vast majority of Australians.
    [In the past decade, centralised spending and stringent controls wielded by Canberra bureaucrats eroded the responsibilities of the States and shackled the country’s capacity to tackle important microeconomic and social issues … We believe Australia’s federated structure can finally be harnessed to drive change in this country. Change which will make our economy stronger, our lives better, and our appetite for continued progress even greater … After 100 years of trying, we’re going to get federalism right, for the long term.]
    So, those of you who want to abolish the states and who think the Commonwealth can do everything better, do I take it you now prefer Abbott to Swan?

  103. Wagram

    Bernhard I have to say this is an article that was needed 6 months ago, but better late than never.

    One important Howard (and by association the Cabinet of the time) stuff up and complete waste of money, you did not mention was the Iraq war. At over a billion per annum for the four years of our involvement, not to mention that the first few months would have spent that amount each month. Proflegate unnecessary spending of a high order, far beyond anything the Rudd Government managed.

    To be more direct about the Abbott lack of competence we should also remember that his troop of shadow ministers pressed the Government in a manner that also ended the Insulation Program and put 16,000 workers out of a job. If the shadow cabinet are so immature as to press a political oponent to that point then their competence is either very questionable or they just do not care about people that rely on a wage to survive.

  104. davirob

    So, those of you who want to abolish the states and who think the Commonwealth can do everything better, do I take it you now prefer Abbott to Swan? <FREECOUNTRY,I take it your having a laugh?

  105. freecountry

    Yes I’m having a laugh. Or make that, a groan. Rudd’s “Cooperative Federalism” turned out to be just a more smiley, cuddly way of bulldozing the states into either submission or oblivion – their choice, all the same to him.

    See this article by Tim Colebatch of the Age during the 2007 campaign:
    [Almost the entire election campaign has been fought out on state government turf. Schools are run by the states. So are hospitals. So are roads.
    Community health centres, water, skills training, the hundreds of millions of dollars being promised to footy clubs, community organisations and little projects all over Australia — most of these billions in new spending we’ve been promised would be spent in areas run by the states.
    Why are two federal parties campaigning largely on state issues? Because we have a dysfunctional federal system. The Federal Government has too much money and too little to spend it on. The states have too little money and too much responsibility.
    Of every $100 we pay in tax, $82 goes to the Federal Government, just $15 to the states and $3 to local councils. Yet of every $100 that governments spend (excluding money given to others to spend), the Federal Government spends just $36, while the states and councils spend $64. Nowhere else in the world has a system like this.

    Rather than fix the system, federal governments have built up parallel bureaucracies in Canberra to duplicate state functions, overseeing huge transfers of funds and reporting on their use.]

  106. freecountry

    Bernard Keane will like this part. Continuing the same article:
    [Nowhere else in the world has a system like this. Yet Hawke is the only prime minister who has tried to fix it. Howard has made it even worse with a policy Professor Greg Craven calls “opportunistic centralism”, in which the Federal Government buys into any state area it wants to, whenever it wants to, and in the way it wants to.
    Rather than fix the system, federal governments have built up parallel bureaucracies in Canberra to duplicate state functions, overseeing huge transfers of funds and reporting on their use.
    Since 1998, the federal bureaucracy in Canberra has grown by almost 50 per cent, partly due to its widening invasion of state areas. And in state capitals, bureaucratic armies have evolved to handle relations with Canberra. In a study for the Business Council, Access Economics estimates this duplication costs us $9 billion a year.]

  107. SBH

    Thanks Fireflying, I learned so much from that last post

  108. Bruce

    “…if the same standards that were applied to the Rudd Government by the Press Gallery… had been applied to the Howard Government, a different perception might have emerged. …deaths of building workers. …deaths of ADF personnel. These deaths are far greater in number…”

    Why does this NOT happen? It is infuriating.

    Remember the Sea Sprite helicopter – $1 billion plus written off for nothing. Utter incompetence.

    Time and again Howard failed to get value for money and failed to demonstrate economic competence. How ridiculous to privatise a virtual monopoly like Telstra or Sydney airport. The examples are legion.

    Why are the press so utterly useless at showing the myth of conservative economoic competence is baloney?

  109. sickofitall

    It took Joe Hockey, who, let’s not forget, came within an ace of becoming Treasurer, to finally disprove conservative economic competence (and let’s look at this: Of all the Labor Govts, only possibly Scullin and Whitlam weren’t good economic managers: Watson, Fisher, Hughes, Curtin, Chifley, Hawke, Keating and Rudd were all noted for their economic management. this is not to say that non-labor weren’t good: for the last 3 decades, they’ve been hampered by John Howard (first as Treasurer and then as PM), and Billy McMahon has not looked so good in retrospect…

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