Business backs independent office to crunch the numbers
Article by Nicola Berkovic published in The Australian 16 May 2009
MALCOLM Turnbull's call for a new independent office to scrutinise the budget received the backing of business leaders yesterday, amid widespread unease that Treasury's growth forecasts were too optimistic.
The support came as former senior Treasury officials raised concerns that Treasury was forced to contend more and more with interference from its political masters.
The Opposition Leader, who called for the new parliamentary office in his budget reply speech, yesterday denied he did not trust Treasury but he said it was not independent.
"It is not independent because it is part of the Government, it works for the Government," he said.
Arguing for a new body that was independent, Mr Turnbull said there was "no way" Treasury had predicted six straight years of growth of about 4.5 per cent.
"There may have been a range of figures with 4.5 per cent at the nose-bleeding high end of it and the Government has plucked that out of the air. It's just not credible," he said.
Treasury projected that after nearly two years of recession and a third year of slow recovery, Australia's growth would rocket to 4.5 per cent a year from 2011-12 for two years, followed by four years of growth at 4 per cent.
Mr Turnbull's other policy recommendations in Thursday's budget reply -- to allow taxes paid to be reclaimed for three years for small business, "fairer" insolvency rules and incentives to take on apprentices -- also won support. The Council of Small Business of Australia welcomed the measures, saying they would help small business through tough times.
ANZ chief economist Saul Eslake backed the call for an independent office to analyse the budget, saying: "I think it's a good idea."
A spokesman for Wayne Swan last night insisted Treasury independently derived its forecasts and assumptions.
Former Treasury officials doubted that the new office was a good idea.
Former deputy secretary of the Treasury and Institute of Private Enterprise director Des Moore said the budget's growth forecasts were "grossly optimistic".
He was concerned Treasury officials were increasingly influenced by treasurers, though the extent of the problem was difficult to gauge.
But he said a body of the sort Mr Turnbull was suggesting was not feasible.
"You can't really assess the budget unless you're involved in directly dealing with other departments that are putting forward submissions on behalf of their minister," he said.
Instead, he said it would be useful to conduct regular reviews of the Government's expenditure priorities.
Former Treasury secretary and National Party senator John Stone also had concerns about the relationship between Treasury and politicians.
But he said creating an independent body with oversight of the budget would be "a very major step".