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Rudd,Treasury, policymaking « Previous | |Next »
April 5, 2007

Kevin Rudd, the leader of federal Labor has an op-ed in The Australian on Treasury's criticisms of the Howard Government's economic policy making and the way it has been sidelined in policy making under the Howard Government:

Treasury.jpg
Geoff Pryor

The simple tactic attack and discredit of Treasury by the Howard Government----'Treasury knows nothing about water' spin of Malcolm Turnbull, for instance--- will not work. Rudd, in praising the role of Treasury in economic policy making, shows why:

Treasury is staffed with the most competent policy elite that can be attracted to the Australian Public Service. They are part of a tradition that sees their role as the continuing custodians of the nation's long-term economic wellbeing, providing robust advice to the government of the day, irrespective of the political complexion of that government. The Treasury, like all agencies of state, also recognises the role of the democratically elected government to accept or reject the advice it is provided.

Ken Henry, the Treasury Secretary, has too much creditability for the old blow torch approach. Though Rudd defends the old style mandarin offering advice without fear or favour, there is still the politics that evaluates the advice, and that can give you policy being made on the run. That leads to inferior or bad policy.

Ruddd goes on to highlight the core issue raised by Henry's speech ---bad policy. He says that:

both the tone and content of Henry's address underline the fact that on two core economic policy challenges facing the nation in the coming decade (climate change and water scarcity), the Howard Government and its Treasurer, Peter Costello, are happy to throw Treasury's advice to the wind. And we can only conclude the reason for doing that has been Howard and Costello's chronic addiction to short-term political advantage against the long-term economic interests of the nation.

A reasonable inference. Policy has fallen hostage to politics.That undercuts both the reformist credibility and economic credibility of the Howard Government. It is a also a shot across the bows of the Howard Government about expansionary fiscal policy--- spending up big or big tax cuts in the budget--- to claw back its standing in the polls----that increases inflationary pressure.

Good economic policy, Treasury says, should concentrate on the long term public interest by boosting productivity, participation and population. Rudd concurs. Howard and Costello have a political problem.

| Posted by Gary Sauer-Thompson at 8:55 AM |