When science broadcaster Karl Kruszelnicki publicly repudiated his support for the government's Intergenerational Report, he said he had been duped about the report's status and purpose. When he had earlier agreed to be the frontman for the government's advertising campaign, he had assumed the report was an independent, bipartisan and non-political document. However, when he read the full report (he had only been offered selected excerpts before signing up), he saw it as highly political and "flawed". In particular, in his view, it did not take enough account of the possible effects of climate change on the nation's future.
Was Kruszelnicki naive in thinking the report would be non-political, or was his assumption reasonable? On the issue of substance, there can be little doubt that some of the document's content is partisan. While much of the standard material on issues such as population, participation and productivity is balanced and impartial (if inevitably speculative), some parts appear designed to support the government's policies and discredit the opposition. Apart from the obvious downplaying of climate change and its effects, partisan intent can plausibly be inferred in the choice of other assumptions relating to the likely tax intake and the costs of health provision. In addition, as well as commenting on the long-term sustainability of current government policies, as required under the Charter of Budget Honesty Act, the report adds two other possible scenarios designed to address the government's immediate political problems over the budget. One scenario is based on a tendentious account of the previous Labor government's policy settings, which is unfavourably contrasted with a hypothetical future derived from "proposed policy" outlined in last year's failed budget. In general, the report is an uneasy combination of genuine, evidence-based projections, which could be of interest and value to all sides of politics, and partisan speculations aimed at bolstering the government's arguments with the Senate over the budget.
Granted that the document is at least in part politically biased, whose document is it? Interestingly, no one appears willing to claim ownership of it. Treasurer Joe Hockey certainly sees the Treasury as responsible. In response to Kruszelnicki's complaint that it was politically biased, Hockey said the report was produced by the Treasury and was not a political document. A spokesman was reported as saying the document "had been released for both sides of politics, and presented an opportunity for discussion on the challenges and opportunities facing our country". Prime Minister Tony Abbott said similarly in Parliament that the report was an "expert" document produced by the Treasury. Most media reporting naturally followed suit, assuming it was a Treasury report that was merely issued by the Treasurer.
The governing legislation, the Charter of Budget Honesty Act, allows some wriggle room on the issue of final responsibility, requiring the Treasurer merely "to publicly release and table" the Intergenerational Report. This supposedly arm's-length relationship is suggested by the report itself, which, on its title page, says the report is "circulated" by the Treasurer. In his own "foreword" (another distancing term), Hockey says the government will "respond" to the report, as if it came from somewhere else.
At Senate estimates, however, Treasury officials were careful not to admit parentage of the report. The secretary, John Fraser, said clearly that the report was the "Treasurer's document". As secretary, his role was "to speak up, and speak up loudly, if I think things are unreasonable" but final responsibility lay with Hockey. At the same hearing, Finance Minister Mathias Cormann also endorsed this position. "The budget documents and the Intergenerational Report are documents of the government," he told the committee. "The government takes responsibility for them. We rely on the best advice from high-quality public servants in Treasury. But ultimately the government is responsible for what is put forward and the government will justify and explain the implications." With this statement, Cormann explicitly contradicted both the Treasurer and the Prime Minister.
Cormann's bracketing of the Intergenerational Report with the budget documents is significant. The Treasurer traditionally presents the budget papers to Parliament as government documents and takes responsibility for the stated policy directions and overall economic strategy. But the papers also contain much material of a technical and factual nature for which the Treasury traditionally accepts responsibility and for which Treasury officials answer to estimates committees. By implication, the Intergenerational Report has a similarly dual parentage. Some more technical and politically uncontroversial matters are effectively owned by the Treasury, which is happy to answer publicly for them. But where the government has placed its own political slant, Treasury officials immediately raise the shutters and refuse to comment on matters of "policy".
In effect, neither the Treasurer nor the Treasury fully own the report but each has responsibility for different aspects. The document is an amalgam of impartial forecasting and policy advocacy, a combination that is fully within the relevant legislation and seems to be well understood by those directly involved.
Where one party's responsibility ends and the other's begins is not always clear. In the budget context, controversy has often surrounded the medium-term economic forecasts that underpin the budgetary strategy. Officially, the forecasts have been attributed to the Treasury acting independently of political influence. Indeed, successive Treasury secretaries have strongly and publicly defended the integrity of their forecasts against opposition scepticism.
It was Hockey himself, as shadow treasurer, who most loudly attacked the supposed impartiality of Treasury budget forecasts under the previous Labor government. With characteristic chutzpah, Hockey, having tried to trash the Treasury's reputation for independence from the opposition benches, is now exploiting that same reputation to give a spurious degree of objectivity to the Intergenerational Report. At the same time, the Treasury's current secretary, far from defending Treasury independence on this issue, finds himself insisting that his department played an ancillary role in preparing the report.
Unfortunately, in the case of the Intergenerational Report, the de facto division of responsibility between the Treasurer and the Treasury appears to be less widely understood than in the case of annual budget papers. Intergenerational reports are relatively few and far between and their function is clearly in flux. The media and interested members of the public, being accustomed to the Treasury as a source of independent budget forecasts, appear to see the report in the same light, as another set of Treasury forecasts. Hockey himself has been happy to encourage this misapprehension for his own political purposes, as has Abbott. Within this deliberately confused context, Kruszelnicki is hardly to blame for assuming the report would bear the imprimatur of the Treasury and would therefore be impartial and objective.
In the meantime, the Treasury is left in an invidious and ambiguous position. It finds itself publicly exposed to scathing, expert criticism of a report over which it lacked full control or ownership. It has been unfairly cast in the role of a government-owned consulting firm, ready to provide plausible economic analysis in support of any proposal that the paying client wishes to nominate. If that is what the government wants, there are plenty of mercenary consultants in the private sector who would be willing to oblige.
But the government, and the public, should expect better of the Treasury. Its central role is to provide the government of the day with the soundest possible economic advice based on intellectually robust and unbiased argument and evidence. It helps the government develop policy but only as expert adviser, not as author. Its name and intellectual mana should not be attached to politically controversial arguments simply to assist ministers in their immediate political battles. To co-opt the Treasury as an independent policy advocate for the government is to abuse its status as a repository of impartial economic expertise. In the long run, such abuse will compromise its reputation for accuracy and impartiality. More broadly, it will weaken the authority of the Australian Public Service as a whole, on which the integrity of the government system depends.
Richard Mulgan is an emeritus professor with the Crawford School of Public Policy at the Australian National University. email@example.com