National

Treasury secretary Dr Martin Parkinson takes swing at critics

Treasury secretary Martin Parkinson has taken a swing at critics in his last few weeks in the top economic job in Australia, saying his department has not "lost its way" in recent years but has found a way to do its job better.

Doing better: Martin Parkinson rejects suggestions his Treasury department has lost its way.
Doing better: Martin Parkinson rejects suggestions his Treasury department has lost its way. Photo: James Alcock

Dr Parkinson – who will step aside from his role on December 12 – singled out some newspaper columnists who have repeatedly derided Treasury's forecasting ability and performance in recent years, as well as its adoption of a "well-being framework" to pursue a broader economic remit than a narrow measure of living standards, to say they are wrong.

Dr Parkinson said his department's push to make it easier for female colleagues to progress into its senior executive positions was another crucial attempt to change the culture within Treasury – much like the adoption of its "well-being framework" – and ultimately the quality of advice it provides to the government.

He said all of these things had helped to make Treasury better at its job, not worse.

"There are some people out there, you can pick up a particular newspaper and go to the commentary pages and you'll find a couple of people who are there all the time slamming Treasury for somehow having lost its way," Dr Parkinson said in Canberra.

"We haven't lost our way. We have actually found a way to do our job better, and that I think is really critical."

Treasury has been heavily criticised by some commentators since the global financial crisis for underestimating the extent to which commodity prices have risen or fallen, how Chinese demand for coal and iron ore has fluctuated, and how Chinese capital controls have affected Australia's economy, among other things.

All of those things have impacted Commonwealth government revenues in recent years, and in turn the fortunes of the former Labor and now Coalition government.

Just two weeks ago, an independent economic analysis estimated the Abbott government's budget will suffer an estimated $51 billion deterioration over the next four years.

Treasury had expected a budget deficit of $29.8 billion this financial year, sliding to just $2.8 billion in 2017-18, but the Canberra consultancy Macroeconomics estimates the deficit will actually slip to $47.8 billion this financial year, and will be a still-high $24 billion in 2017-18.

Part of the reason for the budget deterioration is the bigger than expected fall in iron ore prices, as well as budget savings that are being held up in the senate.

Dr Parkinson made his comments about Treasury's forecasting performance at the official release of a new report from Chief Executive Women that highlights the steps Treasury has taken to promote gender equity inside its walls.

The report, called CEW Case Studies: The Treasury, includes an admission from Treasury that it has not in the past valued women enough as workers, in part because it has not properly valued the skills they have to offer.

The report says the department recognises a number of years ago that it had a "systemic and behavioural gender bias" toward certain types of skills, particularly the way in which it valued conceptual and analytic skills over coordination and people skills, and that this bias was preventing women from gaining promotion to its upper echelons.

"We cannot walk away from the fact that we are the government's economic adviser," Dr Parkinson said.

"We have to have great depth in our conceptual analytic base, but that alone is not sufficient for us to be able to deliver what is required by the Australian community. We've got to have those other skills, and we've got to have those skills balance out." 

Dr Parkinson's replacement has not yet been announced.