The Turnbull Government has been quick to cover its arse following Tuesday night’s online Census debacle, pinning the blame wholly on the ABS since it was the agency running the show. Here’s Prime Minister Malcolm Turnbull:
“Which heads roll, where and when, will be determined once the review is complete,” Mr Turbull said…
“This has been a failure of the ABS… The fact is the measures that were put in place were inadequate.”
Treasurer Scott Morrison was similarly seething at the ABS:
“The results the other night were completely unsatisfactory, and make us, frankly, pretty angry. Damn angry”…
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Superficially at least, it would appear that the Government does have a point. In the lead-up to the Census, Australia’s chief statistician, David Kalisch, assured Australians that the ABS was “ready” and had “the best security features [for which] you could ever ask”.
An alternative view put forward by Greg Jericho is that continued funding cuts have hampered the ABS to such a degree that it can no longer perform its functions adequately:
The reality is almost no one outside of the ABS was surprised the site crashed. It was utterly foreseeable…
The signs were evident long ago that the ABS was struggling.
Early last year – in what was mostly understood to be a desperate attempt to wake up the government – the ABS floated the idea of moving the census from every five years to every 10 years.
The problem had nothing to do with efficacy of a five-yearly census, but was all about funding. After years of “efficiency dividends” the ABS was holding itself together with duct tape and prayers.
The census in 2011 cost $440m, so for an agency under severe budget constraint, stopping a half a billion dollar exercise is not just one way to save money, but given the importance of the census, is also a good way to make the issue of ABS funding very public.
And it worked – in the 2015 budget the government included $234.7m in funding over five years to the ABS.
But it was too late to help this year’s census and too late to undo what has been a long running and bipartisan approach.
…the prime minister also showed a complete disregard of the census. It wasn’t until Wednesday last week that it was clear that Michael McCormack was the minister responsible – less than a week before the census…
But really when you get down to it, the failure of the census on Tuesday night is not just about poor risk management, poor government oversight, poor administration; rather it is as the ABS’s head, David Kalisch suggested part of a “confluence of events”.
It is the culmination of thinking that paying fewer people to do the same work and to put off spending to upgrade IT systems to “save money” is good budgeting.
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Jericho makes some pertinent points. The ABS has been savaged by funding cuts and jobs losses under the prior two governments (both Labor and Liberal), which has hampered its ability to perform its functions.
In addition to the Census fail, we have seen the sample size of the monthly Labor force survey reduced, which has resulted in wild gyrations and erroneous figures, leading to widespread ridicule and condemnation from analysts and commentators, as well as damage to the ABS’ once esteemed reputation.
Other agencies have also been savaged by Budget cuts, which have hampered their abilities.
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Earlier this year, The Australia Institute released a detailed report, entitled Corporate malfeasance in Australia, which found that corporate wrong-doing is endemic in Australia and lamented the Budget cuts that have hamstrung Australia’s regulators:
There are fewer cops patrolling the corporate beat than there were three years ago. The regulators and other government agencies that monitor corporate malfeasance have had staffing cut by 3,926 people (or 14.9 per cent) between the numbers budgeted for in 2013-14 and that for the present year, 2015-16.
I find the deep cuts to ASIC particularly galling, given the escalation of scandals by Australia’s banks. As ASIC chief Greg Medcraft noted in April, it is precisely the Coalition’s cuts to ASIC in the 2014 Federal Budget that rendered the regulator impotent:
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Asic suffered a cut of $120m over four years in the 2014 federal budget.
The chairman of the commission, Greg Medcraft, said the cuts had “absolutely” resulted in less surveillance.
“Seventy per cent of our resources are devoted to surveillance and enforcement and when you have cuts in the budget what happens is actually you reduce the level of proactive surveillance because proactive surveillance is discretionary,” he told ABC Radio. “What it means is that we see people less than we may have in a proactive setting”…
“That is a matter for government and it’s a matter of determining what level of resilience you want in the financial system,” he said.
The irony in all of this is that the Turnbull Government recently vowed to boost ASIC’s powers and resources in a bid to head-off Labor’s call for a banking Royal Commission.
Just like the ABS, maybe it shouldn’t have cut the agency’s resources in the first place?
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.
