The hot topic in Canberra at present is Joe Hockey’s Commission of Audit.
Its mandate is to find major budget savings via ‘anything that is reasonably necessary or desirable to improve the efficiency and effectiveness of government generally’. This includes the streamlining of services, merging of agencies, privatising assets, new charges for services and unnecessary duplication.
However the defence, health and medical research budgets are quarantined, as is education for at least four years, because of the pre-election commitments. Defence expenditure will actually rise due to the ‘2% of GDP’ commitment! (Hardly a murmur from the masses! Where is the war?).
Whoever thought up the membership of the Audit Commission is quite brilliant. While it’s standard practice to have someone like Tony Shepherd (Australian Business Council) as Chair, there is a mind-blowing troika of Peter Boxall (ex-Secretary of Finance), Tony Cole (ex-Secretary of Treasury) and Amanda Vanstone (ex-Liberal Minister). I guess the Brotherhood of St. Laurence or Mission Australia was never going to be invited onto the Committee.
Boxall is the classic toe-cutter. He was unrelenting in his job at Finance, shaped presumably by a spartan upbringing on a small bush block at Scotts Creek, near Timboon in western Victoria. His well-educated parents reportedly settled there in 1948 – an acre of cleared land, a two room shack with lean-to verandas, raising pigs for a living and milking a few cows on the side.
An ANU document quotes him: “We always ate well and we were well dressed. But that was about the extent of it.” At the age of 14 he went to Ballarat Grammar as a boarder where he was terribly homesick. Since Ballarat winters can be grim, it was surely a character forming period of his life. He later observed that “some people need help if they’re in a tight spot, but usually there’s an issue between receiving help when you’re in a tight spot and help on an ongoing basis.” Think about that ‘ongoing’ word.
Tony Cole too has a strong reputation as a tough administrator, including spells as the Chairman of the Industry Commission and Secretary to the Department of Human Services and Health. And Amanda Vanstone has the no-nonsense persona.
Hockey has been railing about the creeping entitlement culture – so family benefits and welfare payments will be centre stage. The promised $1.2 billion-a-year schoolkids bonus will go, and a significant overhaul of Centrelink, Medicare and AusIndustry is likely.
Regional programs
But what will the Audit Commission say about regional programs?
Hard to say. At the Sustainable Economic Growth for Regional Australia (SEGRA) Conference last month, Minister for Infrastructure and Regional Development, Warren Truss, spoke of his new Stronger Regions Fund ($200 million/year over five years). But this is not much on a national scale, and isn’t kicking in until July 2015. Truss also observed that the performance of the Regional Development Australia network varies widely and that the current arrangements are being reviewed. This presumably means that he’s asking the Audit Committee to advise him.
But how will rational economists like Boxall and Cole see things? I am concerned that the needs of regional Australia could be largely missed in the upcoming hullabaloo.
We have a vast continent with numerous small communities losing people and revenues because of the consolidation of farming properties, supermarket price wars, falling tourism patronage and the pervasive impact of agglomeration economies.
As a result, their economic and social infrastructure is falling into disrepair. Councils must depend on a drip-feed of federal allocations for infrastructure work. This is hugely overlooked. In most other nations, local governments have tax revenues that allow them to attract co-funding for community infrastructure (swimming pools, sewerage systems, roads, streetscapes, community hubs, health centres etc). But in Australia the regional areas literally don’t have two bob to kick in.
The smaller councils also can’t afford an economic development officer and have no means of getting on the radar of potential investors.
The big risk is that a rational economist will view the decline of small communities as the invisible hand of the market, and conclude that governments must not intervene in this adjustment process. The counter arguments won’t find much support i.e. space defines our national mindset; regional towns are connection points in the vast brown land; local communities are the natural custodians of the environment.
These regional realities must be recognised in the Audit process. Could we inject some parameters into this policy debate? We figure that the big federal infrastructure budget should be integrated, wherever possible, with the Stronger Regions Fund and other federal programs (education, training, health, sports, industry, environment, defence) to deliver coordinated solutions to regional areas.
The other departments will probably fight this, but Warren Truss is the Deputy Prime Minister after all. And his RDA Committees could provide the strategic intelligence to all federal agencies to underpin this work.
Opportunity for local councils
The Audit Committee says it will also examine, inter alia, how local councils can assume some of the Commonwealth’s functions.
We are thinking of undertaking research to identify where the feds could outsource functions. The departments don’t freely offer up such information, and the Audit Committee won’t have enough time to delve into this either, while wrestling with countless other issues. We reckon we can.
If you’d like us to identify out-sourcing options and prepare a submission to that effect, please contact us.
P.S. Nelson is a superb speaker
Brendan Nelson addressed the National Press Club (NPC) last month, and wowed the audience with his clear and eloquent messages on the EC, NATO, ANZAC etc. He did not read from any text, nor use a teleprompter (I checked with this with the NPC), not one um or ah— absolutely remarkable. His mastery of a range of subjects is also amazing. He is now the Director of the Australian War Memorial.
You can view it at www.youtube.com/watch?v=eidtsFWrAlo
Rod Brown is a Canberra-based consultant and lobbyist specialising in industry/regional development, investment attraction and clusters, and accessing federal grants. He also runs the Cockatoo Network.
Phone: (02) 6231 7261 or 0412 922 559
Email: apdcockatoo@iprimus.com.au
Blog: www.investmentinnovation.wordpress.com (750 articles)
