MH370 farce highlights Budget’s contradictions

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ScreenHunter_2636 May. 30 09.46

By Leith van Onselen

I argued a few weeks back why the Australian Government should ditch the search for the wreckage of Malaysia Airlines Flight 370 (MH370), which went missing around three months ago, taking with it 12 Malaysian crew members and 227 passengers from 14 nations.

Despite exhaustive efforts by all concerned, the international search effort has failed to find any traces of the wreck, leaving the fate of the passengers and crew unknown.

And yesterday, it was revealed that the search for MH370 will now shift hundreds of kilometres, likely resulting is “a dramatic widening of the potential search area” and a “lower probability of success than experts originally indicated” – akin to admitting they are trying to find a needle in a hay barn.

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It was also revealed last week that Australia had agreed to split the costs of searching for MH370 with Malaysia, despite only two passengers on the plane being Australian citizens.

While the crash of MH370 was obviously a tragic event, particularly for the families involved, the question has got to be asked whether committing Australia to fund a search effort of unknown duration and limited probability of success is a wise use of taxpayer funds?

Indeed, according to the Budget papers, the Australian Government has committed to spending $89.9 million on the search effort over two years (see below table).

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ScreenHunter_2637 May. 30 10.06

The decision makes even less sense when viewed in light of the $50 million cutback to Australia’s key statistical agency, the Australian Bureau of Statistics (ABS), not to mention a raft of other worthwhile initiatives and programs.

Is blowing taxpayer funds on locating a plane wreckage worth pulling back funding to the ABS, and in the process robbing Australians of accurate and timely data on the state of the nation and economy?

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I, for one, would prefer to see scarce taxpayer funds spent on institutions and programs that benefit living Australians, rather than on a ‘needle in a hay barn’ search for dead foreigners that may never even prove successful.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.