Ideas@TheCentre
Independent is the wrong word for Treasury
The Treasury’s ‘independence’ has featured in the post-budget commentary. As a former Commonwealth and state treasury official I find this surprising, because I can recall very few moments of independence in 27 years. I suspect that the current generation of treasury officials around the country has even less reason to feel independent.
Claiming independence for the Treasury, as the Prime Minister did on a post-budget television interview, is a way of ducking government accountability, even though a glance at the budget papers shows that they are ‘circulated by the Treasurer and the Minister for Finance for the information of honourable members.’
The reality is that the Treasury is a department of state whose constitutional role is to give policy advice to the government, implement policy decisions of the government and administer certain pieces of legislation. It has statutory obligations which cannot be overridden by ministerial command, but in any other sense it is not ‘independent.’ It is not a think tank or a university. It is not even like the Reserve Bank, which does have independence in monetary policy and issues its own forecasts.
So ‘independent’ is the wrong word, but stopping the story there would be selling the Treasury seriously short. There is something else the Treasury should be allowed to be. The nature of its responsibilities and the talent and motivation of its staff are such that as an institution it can contribute enormously to the rigour of public policy – provided it is allowed to do what it does best without political second-guessing. It can be a protector of the public interest and a bastion of fiscal discipline and credibility when there are precious few others to serve in those essential roles. This is what a former Secretary to the Treasury meant when he often described his department as a ‘national treasure.’
But it can only be a national treasure if the government of the day allows it to be. It is up to the government how much free rein Treasury is given to do and present its technical work and participate in the public debate on matters within its domain.
There is no reason to think that the economic and revenue forecasts in the latest budget are anything other than Treasury’s best guesses. For all that has been said, they look plausible. But the more the government feels it necessary to make false claims about the Treasury’s independence, and the more the Treasury is drawn into the political process, the more it seems we really do need a new and truly independent fiscal authority to put the budget basics beyond political temptation.
Robert Carling is a Senior Fellow at the Centre for Independent Studies.
