Two reports sound the alarm on the challenges Australia will face if governments continue to waste borrowed money
As most Australians come to terms with new COVID outbreaks, new lockdowns, wasted vacations and more vaccine confusion, two reports were dropped on Monday that would otherwise have dominated the week.
One highlighted the challenge Australia will face after the pandemic if governments continue to waste borrowed money. The other detailed more evidence that the current government was doing just that.
The first was the intergenerational report – a look at 40 years into the future produced every five years by the Treasury. These long-term reports are easy to scoff at, especially since the Treasury has struggled in recent times to predict what might happen in six or 12 months.
Nonetheless, the IGR remains a useful exercise for examining trends in productivity, population and spending that may shape the decades to come. And this sends a national alarm signal.
The latest IGR says that in 40 years Australia will be older, smaller and poorer than predicted in the last Treasury report, in part thanks to the slowdown in the birth rate and the influx of migrants by COVID. The budget will remain in deficit as far as the eye can see, with net debt falling slightly over the next 25 years, before rising again until 2060.
The Treasury underlines the urgent need to increase productivity and to be “careful” with public spending. When so much is borrowed, don’t waste it. Which brings us to the other report released on Monday – the Australian National Audit Office report on the “Commuter Car Parks” fund.
The hyperlocal political pig-barrel
As the last election approached, both sides of politics thought it was a smart idea to woo frustrated commuters by promising them to build new parking lots for train stations.
It does not matter whether it is normally and correctly the domain of state and local governments. Never mind, the Commonwealth is already borrowing considerable sums to meet its own responsibilities in the areas of defense, elderly care, health and NDIS.
Apparently, the hyperlocal pork barrel policy, funded by more debt, was seen as a smart way to win votes.
Bill Shorten pledged a $ 300 million National Park and Ride Fund, which was to be provided through “co-investment” partnerships with local and state governments.
The Coalition supplemented this with a $ 660 million “Suburban Parking Fund” which the Audit Office said involved “limited” engagement with local and state governments and a process that “was not. designed to be open or transparent ”.
Instead of a judgment based on merit as to how this taxpayer money should be spent to best tackle traffic congestion and help commuters in real need, the Court of Auditors found that there is no had no evaluation criteria and no evidence that “the approved projects will offer good value for money”.
Instead, coalition MPs, senators and unelected Liberal candidates presented projects that – surprise, surprise – reflected their “geographic and political profile.”
Of the 47 approved projects, 38 simply received the green light from the Prime Minister after “consultation” with his ministers. Most, in fact, were approved by Scott Morrison 24 hours before he called the election and went into interim mode; 77 percent of the projects were in seats held by the Coalition, with the remainder in seats targeted by the government.
This is how the system works, people
In one of the most damning revelations, the audit office said the infrastructure department had ended an initial proposal from the Treasury (the department that sounded the alarm in this week’s IGR), for run a competitive merit-based program to decide how the money should be spent. Perish thought.
Put simply, the Auditor General has discovered that hundreds of millions of dollars of taxpayer dollars were kicked out by the Prime Minister, without any transparency, on the eve of an election, in target seats, without any evidence of any value for money or productivity.
New South Wales Premier Gladys Berejiklian was refreshingly frank last year when she admitted there had been barrels of pork and that she was “not unique “to his government. This does not help matters.
Defending the splash of money from the parking lot, Minister of Urban Infrastructure Paul Fletcher rightly pointed out that no rule or law had been broken. That’s the way the system works, gentlemen.
He also dismissed the blatant pork barrel accusation, saying the government was also spending a lot of money on seats held by Labor, citing the Melbourne airport rail link as an example. It’s a laudable project and of course the rail line is making its way through Labor electorates, but its potential passengers looking for a quick CBD-airport transfer are more likely to be frequent travelers from across the country. city.
If the intergenerational report tells us anything, it’s that governments will have to be extremely careful with every dollar spent for decades to come. With one or two generations of deficits to come, new spending must offer the best value (rather than political).
There is no proof of what happened with that $ 660 million parking fund, nor the $ 100 million “sports rorts” fund that cost Bridget McKenzie’s job who, incidentally, will be. sworn in to Cabinet again tomorrow.
David Speers is the host of Insiders, which airs on ABC TV at 9am Sundays or on iview.