It is Groundhog Day at the Australian Bureau of Statistics (ABS).
The organisation has already been savaged by funding cuts and jobs losses under the prior two governments (both Labor and Liberal), thus hampering its ability to perform its functions.
When the former Labor Government cut funding to the ABS by $20 million during the GFC, it reduced the scope and sample size of the both the Labour Force and Retail Trade surveys, significantly reducing their reliability. It also ceased the job ads survey, whose impact can clearly be seen in the next chart, where data is missing for the crucial post-GFC period. Thankfully, all surveys were later reinstated to their former glory.
Then under the Abbott Government’s first Budget, the ABS was forced to cut its expenditure by $50 million over three years, which led to 100 staff being cut from the organisation. This left the ABS to perform its functions using a reduced sample in some surveys, less staff, and an antiquated computer system.
The effects were most evident with respect to the monthly Labor force survey, whose sample size was reduced, resulting in some 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.
Back in October, Fairfax’s Peter Martin revealed that the ABS was about to cut some critical surveys because it does not have sufficient resources, with the monthly retail sales survey, those related to housing and lending finance, as well as a number of surveys on international trade all in the firing line.
And of course last year we also witnessed the massive Census fail.
Sadly, the job cuts continue to bite the ABS as it battles to remain within its slashed budget. From The Canberra Times:
The troubled Australian Bureau of Statistics is to axe another 80 to 100 of its public servants, staff were told on Monday.
The Community and Public Sector Union says the Bureau has officially notified it that between 80 and 100 staff will be offered voluntary redundancies, with budget cuts blamed for the decision.
The new cuts come come in the wake of 120 ABS staff who were axed after a similar process announced late last year.
The job cuts are the latest in a string of bad news stories for the Bureau which finished last financial year more than $36 million in the red…
CPSU Deputy Secretary Melissa Donnelly said the Bureau, whose performance has taken a mauling in the wake of last year’s Census debacle, could not sustain more losses.
“The ABS is being stripped of more than 200 staff in less than six months,” Ms Donnelly said.
This is complete and utter madness. Timely and accurate data are vital to good decision making, and these cuts risk hampering the Government’s ability to formulate policy, the RBA’s ability to accurately read the economy and formulate monetary policy, as well as the public’s decision making and ability to evaluate policy. It is a retrograde move that will provide minimal cost savings at potentially great long-term cost to the Australian economy.
If anything, the Turnbull Government should boost the ABS’ funding to ensure that the RBA and policy makers are not left in the dark during what is likely to be a massive structural adjustment over the next few years as various forces collide, both domestic and global.