Over the past 12 months, governments have dramatically increased their spending in an attempt to head off a looming national recession threatening the jobs of up to one million Australians.
According to the latest available budget figures, federal, state and territory governments across Australia will spend about $431billion in 2009-10 or 37 per cent of gross domestic product. At the height of the recent commodities boom, in 2007-08, governments spent $358 billion or 31per cent of GDP.
As Australians are becoming all too aware, governments are not only funding their spendathon through current taxes but by putting claims on future tax liabilities through significantly rising debt. For their part, the Prime Minister, State premiers, and Territory chief ministers have exhaustively assured us that the increased spending is to be directed to major projects and programs adding value to the economy and supporting jobs.
It is in this context that more transparency about how governments operate is essential. More public information allows the general public to review and scrutinise government decisions about the use of taxpayers' money. This helps to identify clear instances of unnecessary spending, promoting trust and confidence in government and political affairs.
Governments that are prepared to open their conduct to parliamentary and public scrutiny also help lay the foundations to crack down on damaging corruption within the layers of the public sector.
A number of governments internationally are already setting an example by shining a torch light on the breadth of their own operations. For example, the US state of Missouri's Accountability Portal mapyourtaxes.mo.gov/MAP/Portal/De fault.aspx publishes spending by agency, contract or vendor, tax credits, and the amount of funds received from the US federal government. It even provides information on the amount of pay received by public sector employees in that state.
Other examples of US fiscal transparency initiatives include the Louisiana LaTrac website prd.doa.louisiana.gov/LaTrac/port al.cfm, Oklahoma Open Books site ok.gov/okaa/ and the Texas Where the Money Goes portal window.state.tx.us/comptrol/expen dlist/cashdrill.php.
As part of its $US780 billion ($A960billion) stimulus package, the Obama Administration has established a website recovery.gov/ enabling people to record the progress of spending and evaluate the outcomes of the expenditure.
In the United States, non-government bodies and concerned citizens have gotten in on the transparency act by setting up their own government watchdog websites. For example, a Seattle-based company has established an alternative site recovery.org/ to the Obama web portal to more closely monitor the government's stimulus projects. Another example of this is a Wiki-site called the Sunshine Review sunshinereview.org/index.php/Main -Page.
Although there is scope for improvement even in the US transparency initiatives, their existence shows the gap that Australian governments need to close if they are to be fully accountable to citizens for their spending, taxing and borrowing decisions.
The nation building website economicstimulusplan.gov.au/pages /default.aspx represents a start in what should be a broader move to provide detailed information on every aspect of government spending across Australia.
In other words, the net of transparency should be extended much further to cover other forms of spending not explicitly covered under the $A42 billion stimulus. All taxpayers are entitled to see where their money is going in an easy to read online format, from defence equipment acquisitions right down to stationery spending by a government department.
At the state level, governments must provide comprehensive data on the split of expenditure contributed by states' own revenues and Commonwealth grants. This will help identify whether states are substituting their own expenditures with money from the Federal Government.
For all levels of government, there is a need to go beyond spending transparency to cover taxes and other current revenues as well as borrowings. With governments increasing their debt loads significantly, it is vital that taxpayers know how much borrowed money is being spent on which project or program.
The Federal Government and states should also reveal to taxpayers exactly how they plan to repay the principal and interest on public debt. To date, taxpayers have been left with a confusing shroud of vague promises that debt will be repaid once future economic growth is sufficient.
There is much for Australian governments to do to open the books on their activities across the board than just printing budget papers and creating websites for portions of total expenditure. With its potential to promote fiscal responsibility, trust in government and stamping out corruption, there is plenty of upside in greater fiscal transparency.
Julie Novak is a Research Fellow with the Institute of Public Affairs, Melbourne.
Email a friend