All Government Spending On-line
Halfway across the world, an ancient civilisation finds itself teetering at the edge of the abyss. Through lax spending and an engorged government sector, Greece has racked up €320 billion in debt, a staggering 177 per cent of its domestic product. Unemployment stands at 26 per cent. Families struggle to make ends meet, and the country faces total financial ruin. Economic Armageddon awaits the Greeks. The economic crisis in Greece is a warning to all nations about the perils of high, prolonged, unaccountable government spending. Big government is the enemy of economic liberty. Big government spending is the enemy of personal liberty. Big government debt is the enemy of national liberty.
Last week, I called for bold tax reform with the decrease of productivity taxes, with a shift and a reduction to a tax system based on consumption. Today, I am calling for boldness when it comes to transparency on government spending. Today, I am calling for the introduction of transparency portals for government spending. All government spending is money that has been taken as taxes today or debt to be paid for by the taxes of tomorrow. As the custodian of taxpayer funds, government has a strict obligation to spend those funds wisely and openly.
As believers in small government, the coalition understands this requirement, in stark contrast to those in the Labor Party. It is worth remembering the blow-out in spending that occurred under the Rudd/Gillard/Rudd governments with the support of the Greens. While this parliament has been obsessed by The Killing Season and the political intrigue of Labor infighting, those political crimes provide cover for the economic thuggery and quite spectacular incompetence of the former Labor Green government.
Despite his protestations of being an economic conservative, Kevin Rudd turned John Howard's $20 billion surplus into a string of record deficits. Under the previous government, Labor never delivered a surplus, despite promising to do so over 500 times. In fact, Labor delivered a total of $240 billion in deficits over their six years in power. This represented the fastest budget deterioration in modern Australian history, going from $44.8 billion in net assets to $202.5 billion in net debt.
Under Labor, spending as a proportion of GDP increased from 23.1 per cent to 25.6 per cent. What the taxpayers of Australia have to show for this Labor/Greens legacy is a $1 billion a month interest bill. Thankfully, this coalition government is taking measured, reasonable and fair decisions to bring Australia's finances back under control. Because of the coalition's plan, the deficit reduces each and every year, and the cumulative deficits will be over $40 billion lower than those we inherited from Labor. Real spending growth will be 1.5 per cent per annum, on average, compared to Labor's real spending growth of 3.6 per cent per annum. More importantly, the size of government as a share of the economy is shrinking.
At the macro level, these actions represent a sizeable shift towards smaller government in Australia, and should be commended as such. The challenge at the micro level is ensuring that government spending is accountable, transparent and achieves value for money for taxpayers. To support the ideal of low, open and accountable government spending in Australia, it is my view that all government payment details should be made publicly available online. We have started on this journey, as the budget papers and department annual reports are already accessible online. Also, the coalition has already introduced annual tax receipts to break down how income taxes are spent at a portfolio level. The transparency portal approach, which is used overseas and has been advocated for in Australia by interest groups such as the Australian Taxpayers' Alliance, would allow taxpayers to find details down to the payment level—how much, to whom, for what, and where—in a format that would be simple and universal across government departments.
Different models for 'transparency portals' have been adopted overseas. The examples of the United Kingdom and the United States provide valuable insights into how such a system could work and the benefits to government accountability, government transparency and value for money for the taxpayer. Upon coming to government in 2010, the Conservative-Liberal Democrat coalition government in Britain faced the reality of high government spending, a deteriorating budget position and rising national debt. The inheritance of another failed Labour government.
The new British government commissioned a report by the Cabinet Office and the Efficiency and Reform Group on practical steps to improve the availability and use of management information. The goal was to improve the operational efficiency of government departments and enable greater public accountability. The Read report recommended the implementation of common data and reporting standards for all government department spending, and the publication of department finances in a consistent and public format. The result is the Government Interrogating Spending Tool, or GIST. The GIST is an online visualisation tool that allows individuals to analyse government financial information as well as internal government management information. Charts are presented in area, bar, pie or doughnut form, with a colour-coded representation of each department and area of spending. By clicking through a department, a further breakdown of expenditure can be viewed that uses consistent accounts across agencies, such as staff costs, grants, purchases of goods and services, income, pensions, and depreciation.
Such an approach in Australia would be a significant step forward, enabling greater scrutiny of departmental expenditure. But the model in the United States goes even further. The Federal Funding Accountability and Transparency Act 2006 requires all federal spending on contracts, grants, loans and other financial assistance greater than $25,000 to be made publicly available. USAspending.gov, administered by the Department of the Treasury, collates the data in a visual format similar to GIST, and provides for data downloads. To meet their requirements, federal agencies are required to report information, including the name of the entity receiving the funds, the amount received, the recipient's location, and the place of performance. This provides extensive ability for analysis by agency, recipient and state and territory. The Spending Map allows further breakdowns to the county, congressional district, and ZIP code level.
In conclusion, greater data is the key to greater public accountability for government expenditure. Australia should implement a model similar to the United States, for amounts over $500 to begin with, and then with all receipted expenditure, which should be online. Obviously most defence and security expenditure should be excluded. It is by bringing in a system of online transparency for government expenditure that we can achieve greater accountability for taxpayers. Equally importantly, we can achieve reductions in government expenditure by highlighting online the how, what, why and when of government spending.
With easily accessible information, every Australian taxpayer will become an auditor of government spending. Every Australian taxpayer will be a judge of how the government spends their money—the taxpayers money. As a result of this transparency, and the resulting accountability, a reduction in wasteful government spending will see a fall in government expenditure. We should not forget that big government is the enemy of economic liberty, big government spending is the enemy of personal liberty, and big government debt is the enemy of national liberty. Only by reducing taxes and reducing government spending, through transparency portals, will we be able to free Australians from the economic imprisonment of Labor and the Greens.