Lest we forget the unknown public servant, working to inform us

Have you ever wondered how much taxpayers’ money is wasted by our politicians and public servants? Do you hope that every dollar governments spend is fully accounted for?

And would you like it to be made public not just how much was spent on public servants’ wages, rent, grants, paperclips and other administrative expenses, but how much was being spent on each of the individual programs within education, health, police, courts, roads and all the other government departments?

Better yet, would you like to see what were the outcomes of all that spending on this program and that? That is, hard evidence on whether they were achieving their stated purpose, and by how much things were getting better or worse.

You don’t have to be keen personally to spend hours poring over the books to believe that such information must be made available for others to study: the government’s auditor-general, of course, but also the opposition, the media, nosey investigative reporters, academic experts, and even the special interest groups.

I’m pleased to tell you that all those things you’ve just agreed we need are being provided. But I need to remind you that 40 years ago, they weren’t.

In those days, government financial reports – state and federal – were a dog’s breakfast of facts and figures. If you were able to form a conclusion from them, it would probably have been wrong.

The accounts concealed about as much as they revealed. This was partly because no one had made the effort to make them more reliable and informative. And partly because this laxity made it easier for bureaucrats and politicians to fudge the figures, making things look better than they were.

But we’ve had much improvement since those bad old days. Many people have played a part in this reform, and much has happened under pressure from professional accounting bodies, the International Monetary Fund and the UN Statistical Commission.

But if you were to single out one person who drove most of the many improvements over many years, it would be Don Nicholls.

Never heard of him? That’s the way he wanted it. He was a shy, self-effacing Treasury officer, who wore a cardigan in the office and always ate a long pink iced bun for lunch. He joined the NSW Treasury straight from school in 1948, he retired in 1990, and he has just died, at 93.

If he sounds boring, know this: when he told his first wife, a writer, that writing seemed easy, she challenged him to enter the SMH short story writing competition. He won it with a story about cricket.

Some people assume only second-class minds join the public service. They’re wrong, and never more so than in Nicholls’ case. He went to a selective school, Fort Street High (one of two I went to), gained an economics degree and an accounting qualification while working and, a year after he retired, he published the tome Managing State Finance, which became the Treasury bible.

Many public servants are intent on ensuring things are done the way they always have been, but Nicholls had a strategic mind and was always thinking of ways things could be improved.

These days, all the states produce multiple performance indicators for their many activities, on a uniform basis, collated and reported annually by the federal Productivity Commission.

Nicholls introduced “program budgeting” to Australian government accounting, and he also consolidated the NSW government’s accounts so they showed the “general government” sector separately from all the businesses it owned, plus a balance sheet outlining the state’s assets and liabilities. Money hidden from view in “special deposit accounts” was brought into the open.

Before Nicholls, the government didn’t even know the value of all the buildings, businesses and land it owned. Since the year dot, businesses have used “accrual” accounting to accurately match the amount they earned during a year with their expenses during that year.

It wasn’t introduced to state and federal government accounting until about 2000. Nicholls played a big part in this, insisting on uniform rules for the measurement of budget deficits and surpluses. (Federal Treasury, however, has stuck with the old “cash” accounting, so it can still fudge the figures.)

Nicholls’ influence spread throughout Australia because he was asked to conduct separate independent audits of the finances of the NSW, Victorian, Tasmanian and South Australian governments. He was, for a time, Victoria’s Treasury secretary.

A lot more Australians are indebted to his influence than they know.

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Let's use this election to raise the quality of the politics we get

This may be my 18th election as a journalist, but I confess I find the thought of a six-week campaign a bit daunting. Six weeks of unrelenting political argy-bargy?

Still, it does afford the luxury of one column discussing how we approach elections, before we get down to the many economic challenges the new government will face: climate change, wage stagnation, unaffordable home ownership and wasteful spending on infrastructure, not to mention integrity in government.

In elections, it’s always tempting to vote for the devil you know – a line pushed by all governments. But when you think about it, you see this notion is biased completely in favour of the incumbent. It seeks to shift the voter’s attention away from the government’s performance and play on our timidity.

What do you know about the other lot? Not much. How do you know they won’t be worse? You don’t. But, then again, they could be better.

If we always stuck to the devil-you-know rule, one side of politics would stay in power for ever. The other side would never get a go, and so would become more unknown – more unelectable – as each election passed.

Does that sound like the path to better government? Not to me, it doesn’t. In my experience, the longer governments stay in power, the worse they get. They get lazy and complacent. They worry more about helping their friends and less about keeping the rest of us happy.

They develop a sense of entitlement. They think they own the place and it’s their own money they’re spending. They get more and more reluctant to be held accountable by nosy outsiders and more inclined to keep their failures buried deep.

And that’s just the deterioration in government. The side kept out of power for year after year also goes off. Fewer and fewer of their leading lights have ever been a minister. They lose their corporate knowledge of how to run the country.

I’m old enough to remember the election of the Whitlam government in 1972, after 23 years in opposition. Wow, didn’t it show. And it wasn’t just their inexperience. They wanted to cram 23 years of “reform” into their first three years. Which, of course, is all they were given.

It wouldn’t be good for our governance if government changed hands every three or four years. But I long ago formed the view that no government – Labor or Liberal, federal or state, whether you voted for ’em or whether you didn’t – should be left in office for more than about 10 years.

With their ever-declining standards of behaviour, it’s tempting to give up on our politicians. “They’re all liars.” Actually, they rarely tell outright lies, though some do seem to have very bad memories.

What’s true is that they’re always saying things that are true from some limited perspective, but are calculated to mislead. “Record spending on health”, for instance, means provided you ignore inflation.

But when we give up on our politicians, it means they’ve won. They still get to run the place, but we’ve forfeited our right to a say in how it’s run. We’re happy for other people – including the pollies – to decide our fate. You want to make decisions that benefit your mates at my expense? Be my guest.

The trickier our politicians are, the more closely we should watch them. Whenever I speak to young people about politics, I warn them that the groups the politicians are most likely to screw are the ones that aren’t watching.

Another dangerous attitude is that there’s little difference between the two main parties. It’s true that both sides can be badly behaved, and that many policies are bipartisan. But there are differences between the parties’ approaches and, though the casual observer may find them hard to see, over time they do make a difference.

Paul Keating’s claim that when you change the government, you change the country, is right. Who we vote for in this election will change where we end up in 10 years’ time.

But the more the two major parties seem the same, the more people chose to vote for minor parties or independents – a trend likely to grow in this election. I regard this as a healthy development that will force the duopolists to lift their game.

As the number of independents grows, the possibility of a “hung” parliament increases. Both sides want us to believe this would be a bad thing, leading to instability. That’s the reverse of the truth. Minority governments are so common at state level that their presence goes unremarked.

And independents have a record of using their bargaining power to achieve reforms neither of the big parties fancy – fixed four-year terms in NSW, for instance – and moves towards greater transparency and accountability, such as freedom of information laws, and more resources for ombudsmen and auditors-general.

The way we vote in this election will make a difference. We should be using our votes to impose better quality governance on our wayward and self-serving political servants.

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