JIM COOMBS : Bean Counters Stand Up and Be Counted

Budget problems arise for governments who don”t control spending. Where are their financial advisers when gross overspending takes place. No business could survive the profligacy of our government’s spending.

Our Political discourse is full of complaints of waste of tax-payers money, well, more exactly, of government revenue. Yet even a cursory view of government spending, let alone any analysis of “The Budget” shows absurd overspending.

This government would happily support Adani’s coal mine in Queensland to the tune of over a billion dollars. This is not only a gratuitous gift to a foreign corporation, but the cost to the nation of the destruction of the Barrier Reef’s tourist industry (dare one say jobs and growth), and supporting an activity which contradicts our commitments at Paris to carbon reduction, not just here but generally. But as a bean counter, you’d have to ask, “Why spend the money?” A few jobs at the beginning and our natural resources exported to pollute an already choking India, where nationally renewables are government policy.

Defence spending is of an order beyond telling, not just the odd billion, but billion dollars per item, submarine, fighter bomber or warship, which we are unlikely to see until they are superseded. Doesn’t any accountant in the government service ask, “Isn’t this a bit exxy ?” Worse, the money seems mostly to go to military-industrial-complexes of other countries, US, UK, France, etc. Jobs and growth, but not much here for the billions spent. While people may feel content that we are spending on our defence, it is a huge part of our spending which is remote in terms of what I am likely to see in my lifetime. The accountant in me, small though he is, shrinks at the disproportion, let alone the lack of product. Remember the F-111 ?

More morally despicable is the huge amount, again in billions, being spent to keep 20-40,000 refugees coming here by boat, as opposed to those who can get in by plane freely. It is a fact that most of these desperate people (mostly genuine refugees) could be accommodated and cared for by their own ethnic communities here at minimal expense. The simple way to defeat the “business model” of the people smugglers is simply to undercut them. If we assisted the boat people to get here, there would be NO people smugglers. We could even charge these desperate folk a nominal fee to get off a boat here (the accountants should like that !). But to spend billions on “border protection”, Manus and Nauru, apart from being in breach of human rights law, and the Refugee Convention, makes no sense, especially in economic terms.

Another great sink-hole for government funds is the extensive and oppressive operation of pension and unemployment benefits. The monumental costs of operating a system for the unemployed which requires persistent and multiple job applications for jobs which do not exist, is simply throwing money at a problem which does not lend itself to a solution by persecuting the victim. This money should be spent finding jobs for those who are out of work. But, beancounters take note, the government has actually privatised job finding, which is even more replete with shonky operators than the education sector. Job-seekers are charged for a job being obtained and then garnisheed during the period of employment, and the employer also pays for the service. The government subsidises this travesty. Where is the value for money here? Even the administration of the age pension, the last lifeline of human dignity for many, is wastefully bureaucratic and less than helpful, with constant reviews. To speak on the phone to Centrelink usually entails a wait of hours. There must be a beancounter who can get better value for money.

Well, we hardly need to get onto the “privatisation” and commodification of education. While our universities are now directed to selling a product to wealthy overseas students, which hardly fits with Newman’s concept of the university as a place of study and search for truth, that is sad but not as bad as the selling of “educational products” through profit-oriented businesses. That the government has funded this denial of what education should be ought to start beancounters’ bells ringing. Only now are the shady operators selling dubious “qual;ifications” with doubtful incentives, ripping off the revenue to pay for the process, and when they are caught , they disappear into the woodwork. Where is the value for money, once we’ve prosecured the shysters.

If we stopped throwing money away on all these things, we might even not have the ludicrous election “debt crisis” propaganda. Come on, beancounters, speak up !

Jim Coombs is a retired magistrate and economist.


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5 Responses to JIM COOMBS : Bean Counters Stand Up and Be Counted

  1. Malcolm Crout says:

    The Federal Government is not a business and should never be compared to one. As a currency issuing sovereign, the Government is never financially constrained in it’s own currency and the budget is simply an accounting tool. We need only ask ourselves where the numerous deficits over many years are stored to be repaid later and it becomes abundantly clear that they are not, they simply are balances at points in time. So let’s leave behind this economic mainstream nonsense about the need to balance budgets and accept that we are constrained only by the quantity of productive resources in the economy. Deficits and surpluses are mopped up by movements in the value of the currency so there is no need to apply austerity measures to citizens while there are idle resources (unemployment) yet to put into production.

    This is the current economic paradigm and anyone who disputes such is either practising obfuscation, or out of their academic depth or simply lying. There has not been a need for internal devaluations (austerity) since Australia like other nations moved away from the gold standard, fixed or pegged currencies and floated the dollar. This has been the fact in excess of three decades now so we need to get up with the game. For the private sector to accumulate wealth, the public sector must spend and if that means deficits then so be it. Unemployment, health care, pensions and all other forms of spending are an unconstrained choice and a social objective. The balanced budget meme is an ideological tool and should be abandoned with measures of social well being the order of the day.

  2. Dog's Breakfast says:

    All true Mr Coombs. The recent news that North Korea would be able to target Darwin/northern Australia with their latest missiles led to calls from fools that we should be spending money on a missile defence shield. Even a submarine looks a bargain compared to what that would cost, for minimal to no benefit. How many Australians are really worried that North Korea has us firmly fixed in their sights. I’d rather we kept the dollars and stopped living in fear.

    While the threat of terrorism is ramped up, how much of that is being well spent. It is an example of exponential costs increases. At 95% certainty it costs an amount, but to eliminate all possibility of a threat requires a stasi-like secret police and unlimited expenditure. Of course, these questions aren’t allowed to be asked because then one might be accused of being ‘soft of terror’.

    What about criminalising everything, and the costs of running gaols? Never a thought given to that, because that would be ‘soft on crime’.

    And then there are the gaping holes in our tax legislation, creatively explored by every multi-national for no economic benefit to the community.

    The opportunities for improvement are immense, in fact there could hardly be more.

  3. Eugenie Lumbers says:

    A really great statement on the way money is being spent- it makes one very angry about the profligate waste of the Turnbull government. Can nothing be done.
    The Adani coal mine is in the public eye but drawing attention to cost of managing unemployment benefits and refugees -really makes a point

  4. Jaquix says:

    Could not agree more John Coombs! There are of course other areas of wasteful “spending” which is the bleeding from the budgetary coffers, endless billions in tax “concessions” which is tax foregone. As reported by the Australia Institute today, “family trusts” are costing us in the order of 3.5 billion per year – slipping through the government’s fingers (a huge proportion of the Liberal members use this legal tax avoidance device). These trusts have increased by 50% recently. Negative gearing also employed by the government members, is purely subsidisation of speculation in residential housing, squeezing ordinary people from having a place of their own. Thats just 2 examples of “concessions” which have become rorts, and which could be reasonably easily plugged up by a brave government. Whether Australia will vote one such party in, is another matter. At the moment they are trending that way, but the propaganda machine seems to have ramped itself up already, suggesting an election earlier rather than later. We can live in hope. Right now its all very depressing.

  5. David Brown says:

    well done… covered the main massive wastes of Australia’s public resources

    and foolish destructive outcomes achieved and initiated

    by recent Australian governments

    add in the energy systems fiasco

    and now how to redirect and recover?

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