No Minister

Posts Tagged ‘Treasury.

Accountability and other Laughter

As the MSM slowly dies – because of an increasing lack of trust, shallow, ignorant, ideologically-biased reporting and pathetic attention-getting behaviour – and as Social Media reveals similar problems, I’m hoping that the blogosphere may make a comeback to where it was in the 2000’s.

As such, one of the things I want to do here at NoMinister is to support other blogs by linking to them explicitly and making sure that arguments and opinions I support get wider coverage.

To that end I think it’s well worth your time to read this review of the recent Budget security cockup, written by former Reserve Bank economist, Michael Reddell: On Makhlouf and standards in public office.

Reddell details, from the persepective of a former insider at the Reserve Bank, just what went wrong in general and specifically with Makhlouf himself:

Makhlouf and his senior IT staff (and their bosses) must have known very well by this point what had actually happened  (and if Makhlouf personally did not sufficiently understand the point, that too reflects poorly on him, for not having asked hard enough questions, or ensured he was on totally solid ground). 

Nobody expects a senior person to know minor details, but they are expected to ask enough questions to fully understand what’s going on, especially before opening their mouths in public.

… they attempted to get ahead of the story again.  This was the 5:05am statement. But it wasn’t just another Makhlouf statement, as he managed to get the State Services Commissioner to issue a parallel statement.  One can only wonder how much consultation with ministers (Finance, State Services) or their offices went on through this period –  but it is hard to believe that Peter Hughes would have put out such a statement, getting in the middle of a political controversy, with little or no notice, little or no consultation.

And now the same applies to Peter Hughes. Did he just take Makhlouf’s word for what was an IT technical matter that Hughes surely must have known was not Makhlouf’s area of expertise? I’m reminded of the discussions in the Central Committee, as portrayed in the recent TV series, Chernobyl..

But even then is keen to muddy the waters. Embargoes are irrelevant here –  they only apply to people who accept information under embargo, on terms and conditions set by the person releasing it.  There was no embargo here, simply insecure Treasury systems.  And then there was the final sentence, again playing distraction. 

There is no “longstanding convention around Budget confidentiality”. There are obligations on public servants to keep “Budget secret” information secret, an obligation that applies especially to the Treasury Secretary, responsible for Treasury systems, and there are rules in the Budget lockup. But none of that applies to anyone else.  A journalist who receives a leak about Budget material isn’t breaking the rules or any conventions in breaking the story – in fact, they’d be failing in their job if they chose not to run a newsworthy story.

Reddell captures the heart of the matter:

It was an extraordinary couple of days, and an extraordinary display of poor judgement by one of our most senior public servants. He’d made a series of very bad calls, all his own personal responsibility, and in the full glare of the public spotlight.
….
A decent and honourable person might have taken a day and then announced his resignation. After all, human beings make mistakes, and when they are serious enough, and public enough, sustained enough, and committed by someone very senior (in whom the system reposes considerable trust), bad choices need to have consequences.

And given that Makhlouf was leaving anyway, to head the central bank of Ireland I understand, how badly would it have hurt him to do that?

But no. That’s not how things work.

The State Services Commission has announced an inquiry, but based on history, Reddell accurately sums up where this will go – which is the same place that things like the whole Murray McCully-Saudi sheep affair went:

The State Services Commissioner is fully part of that same self-protecting establishment –  appointed by them, from among them, and now supposedly reporting independently on actions (of another member) that he himself was part of as recently as last Thursday morning.

 The MSM is not the only institution in which trust is being lost.

Written by Tom Hunter

June 6, 2019 at 9:48 pm

Charter Treasury

There’s an interesting opinion piece in this morning’ Australian newspaper – **the only credible paper in Australasia.  It points out some of the absurd inaccuracies of treasury forecasts in Australia.   

Treasury can’t even accurately predict revenue next year.

For 2016-17, the width of the 90 per cent confidence interval on the estimate of the budget receipts is approximately $50bn either way, which is nearly 3 per cent of GDP.

If the Treasury can’t even forecast revenue one year out with any degree of accuracy, what hope is there for 10 years’ time?

I recall the same malaise affecting NZ’s treasury but I’m not quite sure what its current performance is like.  Certainly forecasting in NZ is made easier by the absence of mad socialists like Turnbull and Ruddd throwing billion of dollars down the storm water drain.

Adolf has the answer.

Remove forecasting duties from Treasury and contract them out to the private sector.  Lets have some Charter Treasuries.  If they get their forecasts wrong by a factor greater than five percent, sack them and appoint a different firm.

** For six dollars per week you can rread the whole thing.

Written by adolffinkensen

May 6, 2016 at 9:53 pm

Posted in New Zealand

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