The Sermon on The Mount – St Bob retires


by Perkin-Warbeck

There is a theory – a story, if you like – that Churchill was always able to “prove” that he was always on the side of decency, fairness, high-mindedness, and principle by quoting from his Cabinet submissions, newspaper articles and speeches from his long career as a Minister and Prime Minister.

According to this theory/story, Churchill was able to cite those self-serving quotes because he began every second paragraph with “On the other hand…” After all, he did say that “History is written by the victors.”

Eighteen months ago PM Gillard recruited the former NSW Premier to the Senate vacancy and he immediately got the plum job of Foreign Minister. Now, having served less than six weeks after being elected for a new six year term from 1 July next year, he has resigned.

This is the same Bob Carr who, when he was appointed, described himself as a “natural Senator” – which is probably true because you don’t have to bother with the little people like constituents – and that he wanted to stay forever as a Senator.

“I’m going to beat Strom Thurmond”, he boasted. Thurmond, who served in the US Senate for forty-eight years, died in office aged 100. Carr is 66.

He would, be vowed, become like “one of those ancient US Senators who just stay on into their nineties, dispensing their wisdom and speaking with more principle as each year passes.”

On the other hand, he also said, “Bob’s here for a good time, not a long time.”

We know now which was true.  

At his farewell media conference he bought the wisdom of the ages when he reflected upon the six years of the Rudd-Gillard-Rudd Governments.

Firstly, and with a confected self-deprecation, he admitted that his solemn vows to stay as a Senator until hell froze over were the products of “irrational exuberance”. Every Abbott Government Minister should keep that handy comment with their Question Time briefing papers if promises don’t quite work out as hoped.

He told the media who hung on his every utterance that, “I did notice a lack of calculation, careful political instinct from 2007.” Good heavens above, it appears St Bob was suggesting that virtually five minutes after Rudd was elected that the ALP Government was losing its way.

Back in March this year, Carr flatly denied that he had lost confidence in PM Gillard yet he disclosed at his media conference that he had supported Rudd’s Second Coming. With friends like that, Gillard had no hope at all.

He realised, he said, that the Gillard Government had “lost its way” when he turned up for a Cabinet meeting expecting a discussion on coal seam gas only to be confronted with a bulky submission about media reform. 

We all remember it was Gillard who said in 2010 that the Rudd Government was “losing its way” – and it seems that this pithy little comment has far greater currency among Labor folks reminiscing about their own governments that, say, silly platitudes  about “The light on the hill.”

Other gems of retrospective insight included the view that the ALP in government showed “a lack of caution, cunning – canniness is probably the best word” and that it should have been “friends with everyone” a year out from the poll and “cooling controversy, not creating it.”

Minister Conroy’s so-called media reforms – dumped without any notice on the Cabinet table according to Carr – got a special mention in this regard and, certainly, they provoked a firestorm. Conroy is now Deputy Leader in the Senate and part of Bill Shorten’s inner leadership group so his appreciation of tactics, if accepted, will be a Christmas gift for the Abbott Government.

The NSW ALP has opened nominations for the vacancy and already Deb O’Neill, the defeated MP for Robertson, the very one who terrorised the elderly about a rising ocean sweeping all out to sea, has put her hand up. In an amazing display of shameless self-promotion, she intoned that she wanted to return to Parliament “so I can continue my work to serve the people of Central Coast and those across New South Wales.” No matter that her electorate gave her a well earned sacking.

A somewhat less-than-impressive 34.8% of Robertson voters at the election wanted her to continue her work, whatever that was. But a chance to keep one’s nose in the trough overrides all such pesky matters, it seems.

Another defeated MP, Mike Kelly who lost his Eden-Monaro seat has also indicated an interest although he really wants to win back his old seat. No doubt warming a seat in the Senate until 2016 would be a very comfy way of waiting for the people of Eden-Monaro to come to their senses. Free passage to the Senate seems to be a “Labor rejects” natural progression—a birthright.

Carr has announced that he will “reinvent” himself as a guru on Asia with nice little jobs at both Sydney and New South Wales Universities. It’s a crowded field, what with K Rudd Esq tying up that market amusing his Asian audiences that are too polite to snigger at his smattering of jerky, Chinese lingo.

And, meanwhile, Maxine McKew – the one-time Labor hero who unseated Prime Minister Howard in 2007 but who only served one term before being defeated herself – has written another chapter for her memoirs.

McKew, who spent part of the 2013 campaign travelling with Rudd and cronies, said the then PM was “off his game”, had advocated idiotic policies and had introduced a “perverse and cruel” asylum-seeker regime that she “couldn’t stomach”.

Rudd, she wrote, “went off the deep end” saying that he favoured tax breaks for companies re-locating to the Northern Territory and that Labor’s “already diminished credibility was practically shredded” when senior public servants disowned the government’s claim that they had verified a “black hole” in the Coalition’s policy costings.  

You get the feeling that there won’t be a lot of two-way Christmas card deliveries between the comrades this year.

It is also patently clear that the Australian Labor Party has learned nothing from their mistakes and seem to believe they have made none. With that attitude in play Labor will assign itself to the political wilderness until the elites within learn how to be a servants of the people, not the reverse.

Let’s open up the books at the Reserve Bank

Henry Ford, the American automobile manufacturer, once said that “It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning”, writes Sukrit Sabhlok.

Indeed, if there’s one thing central bankers have been successful at, it’s using obfuscation and jargon so the public finds it difficult to understand what exactly it is they do.

Even when experts try and figure out what central bankers do, a range of legal barriers prevent a complete accounting of their activities. When former Congressman Ron Paul tried to audit the US Federal Reserve System a few years ago, for example, he faced opposition from a range of economists and politicians keen on preserving the Fed’s secrecy.

In Australia, the opaqueness of the Reserve Bank’s discretion doesn’t seem to trouble many people. But it should, because the RBA wields a significant power that influences the level of prices in the economy and consequently affects the hip pocket. The inflation it creates hurts the poor – and if more people knew the RBA was the culprit behind rising prices, and that much of the erosion in purchasing power we have seen over the past 100 years was unnecessary, there is little doubt that there would be protests on the streets.

The RBA’s aversion to scrutiny can be seen in the way that it shies away from the media spotlight, preferring instead to stage-manage the appearances of its officials in carefully scripted testimonies before parliamentary committees. The agency also enjoys significant exemptions from freedom of information legislation, and furthermore, doesn’t provide reasons for its decisions in a way that allows the public hold individual board members accountable for their views (one can contrast this to the Bank of Japan where individual board members’ votes are recorded).

Perhaps most troubling is the Reserve Bank’s budgetary processes, which are ‘off-the-books’ in the sense that the Bank just prints the money it needs to carry out its functions without needing to seek parliamentary authorisation for its spending. Although legislation does specify that the RBA is to return profits to the Treasury, the process is removed from other departments or agencies of the state.

How does the RBA justify its lack of accountability? The organization’s defenders have typically pointed to the doctrine of ‘central bank independence’ which rose to popularity in the 1990s. The doctrine aims to remove political considerations from central banking by insulating the technocrats at the RBA from transparency so they can carry out their work in the ‘best interests of the community’.

But a degree of latitude from intervention by politicians, while a noble objective, has become a code-word for secrecy. The need for free and frank discussion outside of the democratic realm is cited by central bankers as a reason for not releasing transcripts of the open market committee or for keeping hidden agreements with foreign central banks and governments.

This should be viewed as the self-serving tripe it is. The High Court as the nation’s highest court exercises equally important responsibilities yet its judges provide detailed reasons for their decisions so the public can hold them accountable for their views, and also has a budget authorized through the parliamentary process. It is doubtful that the RBA, as the custodian of the nation’s money supply, is so special that its individual board members should not have to justify every cash rate decision made.

In practice, the much vaunted ‘independence’ of the RBA is greatly exaggerated, so the doctrine of central bank independence fails to persuade in any case. Appointments to the board, which are made by the Treasurer, have been politicised, undermining its so-called independence. It makes sense that Treasurers would take into account more than just merit when making appointments: they are likely to select someone that already agrees with Cabinet’s own policy preferences. A blatant example of this was the appointment of Robert Gerard – a donor to the Liberal Party who had contributed $1 million to its coffers and was said to be a supporter of low interest rates – by Peter Costello.

The board itself is a coalition of vested interests populated with representatives from lobby groups and commercial entities who are heroically asked to set aside their sectional interests and prioritise the ‘public good’. The current board comprises powerbrokers with links to Walmart, Origin Energy and other major firms. Even the only academic member of the board, Professor John Edwards, was formerly employed by HSBC Bank and was an advisor to Prime Minister Paul Keating – a detail that would’ve been looked upon favourably by the Labor government that appointed him.

Consider also, that the RBA seems to accommodate its political masters through its reluctance to raise interest rates before elections. Ian McFarlane himself admitted in Australia’s Money Mandarins that "[the 2001 election] did have some small weight in our decision. If there was a really strong case to do something, we would always do it regardless of the election campaign. But it would have to be a pretty strong case". Since it gained ‘independence’, the Bank has only raised rates once before an election, and that was during the 2007 campaign.

It’s little wonder, then, that between 1991 and 2007 Australia was a high inflation country. Investor Chris Leithner points out that monetary aggregates rose at a rapid rate: M1 increased 404%, at an annualised compound rate of 10.2%. Naturally, this has significantly devalued the currency in Australians’ pockets and reduced standards of living – and all the while the Bank has continued to keep a lid on information that could be crucial in evaluating its performance.

Although it has been argued by central bankers that their role requires secrecy, they are overstating their case. To the contrary, when markets get more information, this can be expected to reduce uncertainty, bolster confidence and improve economic outcomes. Economic historian Robert Higgs, for instance, has shown how lack of investor knowledge about the government’s expected policy actions delayed recovery during the Great Depression. Similarly, studies have shown that greater transparency is often associated with less inflation variability.

A monetary system consistent with the rule of law – where accountability and transparency is the norm rather than the exception – demands opening up the books at the RBA. The public deserves to know.  

Sukrit Sabhlok is a Masters candidate at Monash University and editor of the Journal of Peace, Prosperity and Freedom

Nothing to hide? Then show us the money

DORE_TIM_Andrews-9911Tim Andrews argues for the creation of taxpayer transparency portals: 

As the Peter Slipper expenses saga shows, taxpayers are in the dark as to how their tax dollars are spent.

If not for Slipper's prominent political position as the Speaker, these expenses would probably have remained undiscovered by the media. What else is occurring that we do not know about?

More than a billion dollars of our taxes are spent daily, yet there is little transparency, accountability or public disclosure of how and where.

It is a foundational principle of good governance that taxpayers should know how their money is being spent, and governments should be as open as possible. Taxpayers who wish to discover how their money is being used must trawl hundreds of pages of budget documents and submit time-consuming and costly freedom-of-information requests. Even then, information is scant. Ask any journalist. And these requests, as a Herald report showed on Monday, could be rejected in future as certain parliamentary departments are rendered exempt to FOI laws.

But it does not have to be this way. A transparency revolution is under way overseas, empowering citizens, opening governments to scrutiny, and transforming governance.

In 2006, in the US, the senators John McCain and Barack Obama co-sponsored the US federal funding accountability act. Its premise was simple: that taxpayer expenditure be placed online in an easily searchable database, so all taxpayers can find out how their money has been spent.

Since then, the City of London, the European Union and 38 US states have enacted similar online portals – many with no thresholds, so every cent of taxpayer expenditure is publicly available. In some cases, literally every expense of government is made public after being entered into a database.

The benefits are obvious: not only are taxpayers empowered, but also savings can be easily identified, waste exposed and unethical behaviour discouraged. Those who want spending to remain hidden might argue that informing people is too costly, that it just cannot be done. But international experience proves this to be false. The website, which provides the details of all US federal government expenditure of more than $US25,000 ($25,800), cost less than $1 million to set up – and the software is now available free of charge in the public domain.

Texas, with a population greater than that of Australia, was able to create a spending portal for $380,000, and Nebraska did it for only $30,000. Such minor costs are nothing compared with the benefits such portals bring.

It is time Australia joined this revolution. Everywhere that transparency portals have been tried, the results to date have been breathtaking. Citizens have been searching these websites in record numbers. In Missouri, with a population smaller than NSW, 15 million hits were reported in the first year. Millions in savings have been identified. To use just one example, Texas reported $8.7 million in savings directly attributable to their transparency website in just the first year of operation.

Opening the government books to an army of online citizen investigators has uncovered waste and duplication, and made junkets or pork-barrel spending near impossible. Corruption and rorting cannot occur when the records are freely available – sunlight truly is the best disinfectant.

Such portals should be a ''no-brainer'' for policymakers. This is not a partisan issue – people on all sides of politics should agree that empowering citizens through transparency can only lead to higher outcomes. There is no logical argument to oppose their creation, unless you have something to hide.

Once the cost argument crumbles, the only opposition to transparency portals can come from vested interests seeking to preserve their misuse of taxpayer funds.

It is time our politicians stood up for the average taxpayer against these special interest groups and rent-seekers, and called for the establishment of transparency portals at all levels of government.

The Australian Taxpayers' Alliance is calling for all politicians and political candidates to publicly pledge their commitment to taxpayers by supporting this initiative. If they truly represent their electors, and are not beholden to other influences, if they truly have nothing to hide, they should support it without hesitation.

 Click here for further resources on transparency portals and to join the Australian Taxpayers' Alliance campaign! 

Tim Andrews is the Managing Editor of Menzies House, and the Executive Director of the Australian Taxpayers' Alliance. This piece was originally published by the Sydney Morning Herald