Melaleuca Media
Not just beer and skittles

Budgets are as much smoke and mirrors as high finance. Susan Brown, a former senior political advisor, survived being locked up for six budgets and was thus in an ideal position to explain the process in The Canberra Times, and various web and electronic media outlets

The budget of a country is not something to be taken lightly. There are taxes, which need to look as they are going down or at least about to go down while revenues keep rising. There is expenditure, which has to either look like it is going down when it is going up or look like it is going up when it is going down.

And there is the perpetual need for what is called skimming in any criminal context - stealing money from existing programs to plug a political hole, fund a foolish promise or progress some prime ministerial preoccupation.

There are times – like usually – when such competing considerations can’t be made to balance. Take the experience of Hugh Culling Eardley Childers, Chancellor of the Exchequer in a Liberal Party government facing almost certain defeat on any number of issues in Britain’s House of Commons in 1885.

The budget was due, the books wouldn’t balance and revenue options were down to the choice between a wine tax and a beer tax. No one in Cabinet supported the wine tax.

Childers kept pressing for amendments to his own budget, came in for a Cabinet bollocking and resigned in a huff.. “If we can endure the odium of it, surely he can,” noted Cabinet member and future PM, Lord Rosebury. Home Secretary Sir William Harcourt retrieved the errant treasurer and glumly summed up the political prospects in these terms: ‘So far as I know the budget is as good a question to go out upon as any other, and Tuesday as good a day.”

Things possibly don’t look that gloomy for Peter Costello next Tuesday (22 May). Or at least, he is not required to fund an answer to The Irish Question, as Childers was. What is similar is a budget that is a mix of impromtu solutions pasted over a complicated web of accounting. From the stock exchange to getting a packet of fags at the local shop, its effects are instant.

The big end of town takes it seriously enough to have lobbyists for lower taxes and increased spending in their areas stalking Parliament house year round. When they aren’t talking to Ministers and advisors, the mobiles glued to their ear are connected to the desk of a beaurocrat providing advice to a Minister or advisor.

At the same time Departments are jostling with each other to get a bigger cut of the take. The critical period is usually well before the more amateur lobbyists – those that might be more aligned with some “public” interest - are aware of any pressing necessity to hit the corridors of power.

Departments that plan and undertake long term campaigns can be spectacularly successful. A cursory glance at the Defence Department shows that the latest ‘we need new toys’ campaign commenced years ago with the placing of articles about old equipment, dated methods and insufficient trained personnel.

It has been remarkably successful – the department that gets one of the largest slices anyway has limited its losses and achieved a good share of new funding. It is not bad in a country that owns its own borders and isn’t at war and isn’t likely to be. Meanwhile real – but internal – threats like massive land degradation tend to get funded at lip service rather than fighter plane or submarine levels.

Those framing the budget must at least consider a year’s worth of ad hoc policy announcements, sometimes grounded in nothing more substantial than a media release. There may be leftover promises from the last election campaign and interest groups pursuing overdue action.

Making room for the promises component sometimes means that another program which has been funded ad infinitum is suddenly and inexplicably dropped. The lobbies are not active in the program’s defense because there is not the slightest indication it is under threat. And because the lobbies are not active, it seems a reasonable prospect to cut. The now dead Dental Health Scheme is a useful example in this context.

At least in theory, all new spending proposals have to jump several hurdles with the most difficult being described in the phrase “Treasury and Finance”. However the function is described, in practice it comes down to keeping the purse shut.

One prime ministerial advisor recounted trying to get a few thousand – a mere bagatelle – through a Finance officer. Many more thousands would be saved through this trifling expenditure. The Finance officer remained stony faced until the end of the presentation and then commented: “I am sorry I must advise against this spending proposal.”

‘Why?” asked the exasperated advisor. “Because I am from Finance and it is my job to advise against all spending” the officer said.

Politicians can pull rank on treasury and finance. But not on everything.

Come the early part of the year, the Expenditure Review Committee- originating in Malcolm Fraser’s Razor Gang – is going through all the departmental and government proposals and slashing.

By April the budget is pretty much sorted out and it is really time for the leaks and speculations, final tizzying up and then printing. The Government usually manage to organise prior leaks of any bad budget news they think will be noticed so that what is new on the night is all the good news.

Sometimes the strategy does call for a good news leak – too much negative pre-publicity is not a good political look and there is always the risk that some of the good news risks being buried on the night. What has to be guarded against is the unauthorised leak finding its way to the press, the opposition or the minor parties. Usually, security is good but not complete.

On the afternoon, there is the quaintness of a lock-up and the full stage management of speech and the follow-up processional through the TV studios

The professional pontificators pontificate, the usual suspects are conveniently on hand to be rounded up for comment but in some minds, the most influential comment is passed mostly the following day by the stock exchange and money markets. While awaiting this judgement, interstate journalists, politicians, lobbyists and their entourages set off to thoroughly investigate the effect of the budget on Canberra nightclubs leaving thick sets of white volumes and a large piles of slim yellow portfolio spending statements on the darkened desks of the chamber.

The documents are a wonderful tribute to accrual accounting - cleverly organised to hide real figures, highlight unreal ones and ensure columns don’t add between documents and aren’t easily comparable year to year. This is not incompetence. This is very deliberate.

Sorting out what is hidden in the columns is ostensibly the function of Senate estimates committees. These have degenerated somewhat from serious accounting of spending figures to a media side show of political sabre rattling worthy of a real life TV series.

Public servants afraid of political retribution defend their ministers and in a departure from frank and fearless can stoop to craven and cowed in an attempt to hide government stuff ups. Parliament could insist on its privileges – in this case, real answers – but doesn’t use the range of santions available. Today’s opposition is, after all, tomorrow’s government.

The process is hardly over before it is beginning again – usually with revised estimates. In theory the budget brought down in May looks forward from a financial year for which the final figures won’t be in for months.

Like Childers before him, Costello has had to indulge in quite a lot of relatively last minute rewriting on Tuesday’s budget, not least as a result of recent government somersaults on first home buyers assistance, fuel and beer excises. Resigning in a huff probably isn’t on his mind, but he should at least be aware of the portents.

Childers eventually brought in the 1885 budget and, as predicted, the Liberals fell. Lord Rosebury confided to his diary: “Here lies a Cabinet, I’ll tell you why
It spelt its funeral bier without an ‘I’.”