Tag Archives: lindsay tanner

Faked GDP, Faked Budgets, Faked Legal Advice – Nothing To See Here

28 Mar

Media Release – Senator Barnaby Joyce, 28 March 2012 (my emphasis added):

Government response keeps Murray-Darling in the dark on the Water Act

The Labor government has once again refused to release legal advice on the Water Act in defiance of the recommendations of a Senate inquiry.

Last year, the Senate Legal and Constitutional Affairs Committee found that the provisions of the Water Act create a legal framework where “environmental considerations can be, and are, given substantially more ‘weight’ than social and economic considerations.”

Even the Greens, in their dissenting report, admitted the same stating that “the MDBA and the Minister are required to give environmental considerations precedence in developing the Basin Plan.”

The difference is that the Greens agree with this unbalanced outcome, the Committee recommended the Act be changed to fix it and that all of the government’s legal advice be released.

The Committee’s recommendations were based on legal advice from many sources including an ‘in camera’ briefing from former MDBA chair, Mike Taylor, submissions from Professor George Williams, Professor of Law at the University of New South Wales, and Professor John Briscoe of Harvard University.

The government’s response to the Senate Legal and Constitutional Affairs Committee’s Water Act inquiry has also called into question the validity of the summary legal advice the government has previously released.

So far the government has released just 10 pages of the more than 1000 pages of legal advice they have received on the Water Act.

In its response today, the government claims that the summary legal advice it has made public is “distinguished” from other legal advice because it was prepared on the understanding that it would be made public.

This calls into question whether the summary advice is a full and accurate reflection of the other advice the government has received.

The Murray-Darling is too important for the government to keep it in the dark. It must release all of the legal advice before the basin plan is finalised.

The Murray-Darling is home to 2.1 million Australians, provides water for 1 million others and produces 40 per cent of Australia’s agricultural output, including 9 of every 10 Australian oranges.

Over the past two years, we have seen that the Rudd-Gillard-Swan ALP government has faked GDP, and faked budgets, by becoming adept in the “dark arts” and “using some of what are now  the standard tricks in order to (in the words of former Finance Minister Lindsay Tanner) “maximise political appearances”.

Now, thanks to Senator Joyce, we see that they will happily fake legal advice as well.

Funnily enough, the ALP and the Greens have recently expressed “confidence” that their carbon tax CO2 derivatives scam legislation is legally sound, and does not breach the Constitution.

Hmmmm.

Wouldn’t it be interesting to see their actual legal advice.

You know.

The advice they have not released to the public.

What would be even more interesting is to see their legislation challenged in the High Court.

For that, it seems our fate is in the hands of big-promising-non-delivering Coalition State Governments.

And National Living Treasure, Clive Palmer.

Hide The Recession: Labor’s Grand Deceit On GDP Figures Exposed

7 Mar

Picture this.

You are a new government, following nearly 12 long years in opposition.

You campaigned with the catchcry, “This reckless spending must stop”.

A global financial crisis has struck within 12 months of your taking office.

Your party’s last term in office presided over a “recession we had to have”, so your economic credentials are poor.

You desperately wish to avoid being seen to preside over a “technical recession”, especially in your first term.

You have embarked on a massive “stimulus” spending spree, drawing criticism from many.

You have blown the $20-odd billion surplus left to you by the previous government, and plunged the nation’s finances deep into the red.

Your government’s financial numbers are terrible.

You are obsessed with “managing” the media cycle, public perceptions, and the popularity polls.

What do you do?

In his post-career book Sideshow: Dumbing Down Democracy, key member of the “kitchen cabinet” or “Gang of Four”, former Finance Minister Lindsay Tanner, informed us that what he did was to become adept in the “dark arts”He employed the “standard tricks” – such as switching between different methods of accounting – in order to “maximise political appearances”.

But how do you cook the books to disguise your massive spendathon – and bury the truth of a technical recession – without the media catching you out?

And how do you cover your tracks, so that noone can ever say you lied?

Easy.

What you do is tell everyone about your change in accounting methods.

But you do it in such a way that no one hears you.

What you do is bury the notice of your change in accounting methods in the fine print of the Mid-Year Economic and Fiscal Outlook (MYEFO) budget update, released 2 November 2009. You do not mention any numbers that might reveal the actual impact of the change. And you include a reference to an obscure Appendix of “revised” historical data*, that you know journalists don’t ever bother to read, much less take the time to cross-reference against previously published budget figures.

In your Treasurer’s press release announcing the MYEFO, you do not mention the changed accounting method at all. Nor do you mention it in Parliament, or in interviews with the media.

Instead, you issue another Treasurer’s press release that, while still opaque and misleading, does admit (in one sentence) to just how much your changed accounting method has impacted on the critical budget number – the GDP figure.

But … you delay issuing that press release until 8 December 2009. Over a month after the MYEFO. Two weeks after Parliament has closed for the year. And, the same day (UTC) as the opening of the 2009 UN Climate Change Conference in Copenhagen, where the eyes of the world are focussed, where your party’s Prime Minister is playing a headline role … and where you have brought a massive Australian media delegation.

Voila!

You did not lie.

No one heard you publicly admit that you cooked the books to hide a recession. And you spend the rest of your days in office loudly and incessantly referring to your brilliant economic management … using figures always expressed in terms of “per cent of GDP”.

A GDP number that you made a “substantial increase” to, just by changing the method of accounting.

Hard to believe that our government is that crooked?

It is true.

They have admitted it.

You just have to follow the carefully hidden trail of evidence, to discover that admission. And the deceit used to hide it.

Two years ago on 3 March 2010, your humble blogger revealed that Labor’s much-heralded low debt-to-GDP ratio figure was a fraud (emphasis in original):

In the 2009-10 Mid-Year Economic and Fiscal Outlook (MYEFO), the government refers to a change in the methodology used to calculate GDP for the previous 2008-09 year, and for the historical data series.  This change results in a “substantial increase” in the published level of GDP.

The flow-on result from this change is obvious. The government’s spending, as a percentage of that artificially increased GDP figure, will appear lower than if the change had not been made.

And because all of its spending is being done using borrowed money, the debt-to-GDP figure will also appear lower too. Perfect cover for a government that needs to defend itself from Opposition attacks, and smooth over public fears, about rising government debt.

Two weeks later, I calculated the actual amount by which Labor had artificially increased the reported level of GDP (see Labor Fakes GDP By 4.5%):

In the fine print on the Rudd Government’s Budget 2009-10 MYEFO website, we learned that Rudd Labor made a change in the accounting method that was previously used to calculate Gross Domestic Product (GDP).  This change resulted in a “substantial increase” to the official GDP figures:

* The 2008-09 Annual National Accounts show a substantial increase in the level of GDP over history due to the ABS adopting the new System of National Accounts 2008. Given the degree of increase in the level of nominal GDP, the Government has released updated tables of fiscal aggregates contained within Appendix D of the 2009-10 MYEFO.

So just how much is that “substantial increase”?

4.5%. Or $47bn. In just one year.

Of course, we can easily perceive just why Rudd Labor would wish to do this.

By making “revisions” to the historical data – revisions that all very conveniently result in a “substantial increase” in reported GDP – their spending (as a percentage of GDP) looks lower.

Their annual spending growth (as a percentage of GDP) looks lower.

Their debt as a percentage of GDP looks lower.

And their Interest-on-debt as a percentage of GDP looks lower too.

Fast forward another two years, to this week.

In response to my mentioning the fudged GDP figure, fellow Macro Business reader Steven Shaw kindly drew my attention to Treasurer Wayne Swan’s press release No. 122.

While it is gratifying to see confirmation that my March 2010 reverse calculation of the “substantial increase” to the GDP figures was accurate, it is far more interesting to observe the date of the press release – 8 December 2009.

A press release date (in Australia) that happily coincided with the opening day of the Copenhagen Climate Change Conference:

The Annual National Accounts also show a substantial increase in the level of GDP over history due to the ABS adopting the new System of National Accounts 2008 standards.

The ABS has taken the decision to adopt these new standards to better capture new economic developments and to reflect revised international standards issued by the UN Statistical Commission.

The level of nominal GDP is now 4.4 per cent higher in 2007‑08 than published in the 2007-08 Annual National Accounts, bringing the size of the Australian economy to $1.25 trillion in 2008-09.

Given the degree of increase in the level of nominal GDP, the Government has released updated tables of fiscal aggregates contained within Appendix D of the 2009-10 MYEFO. These tables include receipts, revenue, net debt, payments and expenses as a proportion of nominal GDP and are available at: www.budget.gov.au. The adoption of the new standards only affects those Budget aggregates which are expressed as proportion of GDP.

Quelle surprise!

Have you ever noticed, dear reader, that this government always … always … boasts of its economic record by quoting figures expressed as a proportion of GDP?

How very, very convenient that “substantial increase” in nominal GDP has turned out to be.

No need to worry about two consecutive quarters of negative GDP (a “technical recession”) making your new government look like it has blown tens of billions of borrowed dollars on “rushed and bungled” “stimulus” for nothing.

Simply change accounting methods. Tack on an extra 4.4% of GDP “growth” out of thin air to the year’s “official” figures. And revise all the historical data as well.

And make sure you tell everyone … in such a way that no one hears you.

Mind you, dear reader, the reason for the change in accounting method was solely to “improve the accuracy and comparability of the data through time” (MYEFO excuse). And/or “to better capture new economic developments and to reflect revised international standards” (Treasurer’s belated-and-buried press release excuse).

Of course it was.

Nothing to see here. Move along now.

If a corporate executive engaged in these kinds of “dark arts”, these “standard tricks”, they would be prosecuted and jailed for fraud.

Our government is a pack of crooks.

If you accept any claimed government statistic at face value, you are a fool.

It is that simple.

* On Labor’s revising of historical budget data, reader “vk” summed it up best two years ago: “Any similarity with the book 1984 – where the Ministry of Truth kept revising old encyclopedias and newspapers in the libraries – is purely coincidental.”

I Was Right: Labor Hid The Increase

9 May

On 3rd March 2010 I published “Labor: Hide The Increase“, showing proof of exactly how Labor had changed accounting methods in order to fudge the 2009-10 Mid Year Economic and Fiscal Outlook (MYEFO) budget report.

Now, former Finance Minister Lindsay Tanner has openly admitted that this is precisely the kind of “dark art” that Labor practices.  To lie to the public, and cover up their financial mismanagement:

He became adept at “the dark arts”, he confesses, “using some of what are now the standard tricks employed to maximise political appearances”.

These included switching between different forms of accounting, choosing different indicators of spending “according to which . . . suited the argument better”, classifying annual spending as capital, and making commitments beyond the years of the budget period.

Why did Labor hide the increase in spending in 2009-10?

They had made a promise not to increase real spending growth by more than 2%.  They had broken that promise. Hence, a little “dark art” with the accounting method.  To present figures that would instead show that they had not broken their promise at all.

Read “Labor: Hide The Increase” for full background on how they fiddled the books.

For now though, take a look at how Labor’s own MYEFO numbers have again changed. Proving once again that “estimates” are a bad joke. And that Labor just can’t help but spend far more than even their own estimates.

In the 2009-10 MYEFO, their “Estimate” for real spending growth as a % of GDP for this year (2010-11), using their new accounting method of “CPI” instead of “NFGDP”, was -1.3% (click to enlarge):

MYEFO 2009-10 | Appendix D, Table D1

Ok.  Sounds good right?  In November 2009, they “expected” to reduce government spending growth in 2010-11 by 1.3%.

Now, what is their most recent “Estimate” for real spending growth in 2010-11, as updated in the November 2010 MYEFO?

+1.5%

MYEFO 2010-11 | Appendix D, Table D1

So, even using their new accounting method, Labor’s spending still blew out anyway.  Rather than cutting by 1.3%, their own budget mid-year updates show a spending increase of 1.5%.

What’s that in actual dollars?  Look at their tables under “Payments” and “$m”.  In 2009-10 they estimated government spending for 2010-11 of $340,995 million ($340 billion).  A year later, that estimate was revised up to $351,660 million ($351 billion).  A blowout in spending of $10.66 billion, over their own estimates.

What’s more, this comes on the back of an increase in government revenue. Not a decrease, as Labor are complaining loudly now, as an excuse for their massive budget deficit black hole.

Look at their own tables again.  In MYEFO 2009-10, their “estimate” for “Receipts” in 2010-11 was $297,131 million.

But in MYEFO 2010-11 – released just 6 months ago – their new “estimate” was $313,205 million.  An increase in revenue.  Not a decrease.  An increase of $16,000 million ($16 billion) over their own estimate a year earlier.

Labor’s promise not to increase spending by more than 2% came with eerily similar “tough talk” rhetoric before last year’s budget:

Tanner Warns of Austerity Budget

Finance Minister Lindsay Tanner has flagged that the 2010-11 budget will contain tough savings measures

The collapse of revenue caused by the global economic downturn would be compounded by the early effects of the ageing of the population, Mr Tanner told the Ten Network yesterday.

“There’s going to have to be tough decisions and ministers are aware of that,” he said.

Deja vu.

Again this year, we hear lots of tough talk about the coming budget.  Again we hear all the (same) excuses about why it has to be tough.

I have no doubt that tomorrow night, once again we will receive a Labor budget contrived by the “dark arts”.

What “standard tricks” will they use this time?

Tanner: Barnaby’s Got A “Brilliant Niche Brand”

7 May

Lindsay Tanner reveals why he is so envious of Barnaby Joyce:

Barnaby Joyce has got a brilliant niche brand, so that he’s regarded as a bit of a Froot Loop by a majority, I suspect, while having a loyal following.

Ah, jealousy. ‘Tis a terribly ugly thing.

UPDATE:

Chris Kenny gently destroys Tanner and his new book, in an insightful piece in today’s Australian.  Once again, the real reason behind Tanner’s jealousy of Barnaby is revealed:

In page after page Tanner wonders at the workings of the media, he strives to gain its attention, he despairs at what it highlights and what it misses… his book is replete with examples of his own craving for attention over political substance.

Behold, Wayne’s Große Lüge

4 May

Treasurer Wayne Swan is busily preparing hearts and minds for his fourth consecutive Budget … deficit.  A deficit that’s going to be epic.

Oops.

Time to wave a big red herring:

We created 750,000 jobs since we came to office when other nations shed millions of jobs…

Let’s take a bite out of his red herring.  Is the jobs claim true?

Wayne’s former colleague Lindsay Tanner –  recently confessed expert in the “dark arts” of lying with numbers– has given us this timely warning:

“… whenever a politician cites… figures to show what a fine job he or she is doing, examine the fine print very carefully.”

Ok. Let’s do that.

If it’s true that Labor has created 750,000 jobs since coming to power, one would think this “fact” might be reflected in some official statistics.  Say, in the official government Final Budget Outcome reports.

According to the 2007-08 Final Budget Outcome, the last year of the Howard Government brought in $126.135 Billion in Total individuals and other withholding taxation:

Source: Final Budget Outcome 2007-08 | Part One, Table 2: Australian Government general government sector revenue

Now, if Labor really has created 750,000 jobs since they came to office, then you’d expect the Total individuals and other withholding taxation for last year (2009-10) to be a lot higher than in 2007-08, right?

After all, even if these “750,000 jobs” were all only modestly paid jobs – say, $35K p.a. – then you would expect the government should have received around 750,000 x $4,350 = $3.26 Billion more individual income tax revenue than in 2007-08 … right?

Wrong.

According to the 2009-10 Final Budget Outcome, the Labor Government brought in $3.31 Billion less from individual income taxes last year than in 2007-08:

Final Budget Outcome 2009-10 | Part Two, Table 8, Note 3: Taxation revenue by type

There you have it.

In Wayne’s World, 750,000 jobs created means $3.31 Billion less income tax revenue.

Who knew?

Rather than adding to Government revenue, “job creation” actually loses money.

On the eve of Budget 2011 … and a fourth consecutive mega-deficit … this is Wayne’s headline argument for Labor’s record in economic management.

“750,000 jobs created”.

But wait … there’s more!

“Half a million more”. “In the next two years”.

Be-holed, Wayne’s Große Lüge.

If you are going to lie, make it a Big Lie. And repeat it often.

Everyone will believe you because –

“They’re government statis…. they’re facts(2.27min)

Grattan Slums For Tanner’s Crumbs

2 May

Here at Barnaby Is Right we have documented numerous lies and deceptions perpetrated by former Finance Minister (and now Barnaby-envier), Lindsay Tanner.

Now he’s back, spruiking his new book.  And no great surprise that The Age’s political editor Michelle Grattan gives this self-confessed snake-oil peddler some free advertising.  Nor is it a great surprise that she fails to do the right thing – (ie) tear Tanner a new one – over his admissions as to how he and the rest of the Labor ‘gang of four’ blatantly set out to mislead and deceive the public over the nation’s finances:

As the budget approaches, his insights into the conjuring that goes on are valuable. He became adept at “the dark arts“, he confesses, “using some of what are now the standard tricks employed to maximise political appearances”.

These included switching between different forms of accounting, choosing different indicators of spending “according to which . . . suited the argument better”, classifying annual spending as capital, and making commitments beyond the years of the budget period.

When you hear, for example, on budget night what the government is doing on mental health, remember Tanner’s salutary warning: “It sounds impressive when the responsible minister announces that health spending is to increase by $1 billion dollars over the next four years, and it sounds even better when we’re told that it will be at record levels. But there’s a fair chance that we’re being misled by such claims…

“The lesson is simple: whenever a politician cites spending figures to show what a fine job he or she is doing, examine the fine print very carefully.” Indeed.

Does Tanner really think that we’ll give him any credit now, for trying to make money from exposing the kind of deceitful accounting “tricks” that he himself conspired in?

Does Grattan really think that it’s good enough for the political editor of a leading broadsheet to simply brush over as mere “conjuring” these blatant admissions of Government ministers engaging in deliberate misleading and deceptive conduct?

Worse, one even senses an overtone of gratitude from Grattan for Tanner’s “valuable” “insights”.

Her obsequious sycophancy concludes:

One thing is certain, however: politics misses him. The Labor ministry is the weaker for his departure.

No wonder the political illuminati in this country are so disconnected from (and often reviled by) normal, “average” Australians, (ie) all those outside of the commentariat’s own incestuous little circles.

The morality of Grattan and her ilk is almost as “flexible” as that of the politicians (and former politicians) under whose tables they slum, awaiting their daily crumbs.

Better “Incoherent” Honesty, Than “Thoughtful” Deception

30 Apr

Former Finance Minister Lindsay Tanner, on a spruiking tour for his new book (no ulterior motives here), goes green with “thoughtful” envy over the popularity of Barnaby Joyce:

”Look at Barnaby Joyce, a one-man sideshow, totally incoherent but virtually a household name,” he says. ”The message is to be flamboyant, be ridiculous, wave your arms around a lot and go red in the face and at least people will know who you are. But be considered, serious and thoughtful and you’ll have a very productive relationship with a tiny number of people and the rest of the nation won’t even know who you are.”

No Lindsay.  We know who you are, all right.

The message is that Things Have Changed.  For the better.

We do not trust the “considered”, “serious”, “thoughtful” politicians like you anymore.  We know that you are lying to us.

We watch you pause to “consider” your answers, and we know you’re “constructing” a clever lie.  We see your “serious” furrowed brow, and your “concerned” head-tilt, and we know that you are just faking sincerity.

Now that we are evolving into a Gaian “super-organism” (thanks Climate Commissioner), we have a great big “collective” memory.  So we remember your past lies and coverups, too.

Oh yes, politics is a sideshow all right, Lindsay.  It’s show business for ugly people.  In the midst of all that ugliness, it takes a truly remarkable character to be the circus “freak”.

The “freak” is the one who always responds to direct questions, with direct answers.  Spontaneously.  Off-the-cuff.  Who fumbles and stumbles and trips flat on his face over his own words occasionally.  Because, he is not taking time to pause, evade the real question, and smoothly enunciate yet another bullsh!t story.

Bring in the clowns.

UPDATE:

Peter van Onselen says Tanner is missing the plot.

UPDATE 2:

Tanner pleads guilty to being “angry” (petulant?), admits that politicians are robotic spin-merchants… and in typical Labor fashion, blames everyone else –

“I happily plead guilty to starting with a sense of anger, and particularly an anger at the way politicians were being constantly attacked for spin and being robotic,” Mr Tanner told The Australian this week.

“And what I wanted to do was say ‘why do you think this is happening?’. (I believed) politicians were responding to the way they were being treated in the media.”

Victim complex, much?

Poor petal.  We used to care but…

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