After being savaged for years by funding cuts and jobs losses under the prior two governments (both Labor and Liberal), thus hampering its ability to perform its functions, the Australian Bureau of Statistics (ABS) in October 2017 released its Forward Work Program 2017-18, which foreshadowed another 500 job cuts as well as further cuts to various surveys, including housing finance:
The ABS does not have the resources to undertake all the activities that our customers demand, and this has more than likely been the case for at least the last decade. I noted in the Forward Work Program for 2016–17, that we would be reviewing our work program, in consultation with governments and other key stakeholders in order to prioritise our product and service offerings…
To ensure the ABS has sufficient resources for these enhancements while maintaining core statistical outputs within our diminishing budget, we have had to make some choices regarding the statistical work program…
The ABS appropriation is reducing in real terms due to continuing efficiency dividends, whole-of-government savings and reduction in new policy proposals over many years.
The ABS has had an average annual appropriation of around $290 million over the past 20 years (and less in recent years) to deliver our regular annual statistical program, together with around $36 million in user funding… Over the next three years the ABS’s appropriation will fall by approximately 10 per cent. In line with this decline in funding, average staffing levels will need to decline by around 17 per cent over the next two years…
Stakeholders were advised that the ABS will need to cease, change or seek user funding for some of the lower priority statistics…
Yesterday, Fairfax’s economics editor, Ross Gittins, described as “Orwellian” the efficiency siege being unleashed on the ABS, which is “a flowing fount of false economy”:
You don’t have to be very bright to see that as we enter the information age… we need the Australian Bureau of Statistics to be at the top of its game. But you do have to be brighter than our econocrats and politicians.
They’ve been cutting the bureau’s funding every year for more than a decade – meaning both parties have been at it – in the name of increased efficiency. The Orwellian annual “efficiency dividend”, cutting up to 2.5 per cent off running expenses, is a flowing fount of false economy.
According to the bureau’s boss, David Kalisch, it has suffered a reduction in real resources of more than 20 per cent over the past decade…
It has reduced or stopped a number of statistical collections…
The bureau’s data inform “fiscal and monetary policy settings, social support programs and infrastructure spending . . . many pertinent public policy debates, such as housing affordability, income and wealth inequality, cost of living energy prices, the quality of life in our cities and regions, education and health outcome, needs-based school funding, immigration policy and much more,” Kalisch told a conference of economists.
That’s not to mention that official data are “key to the effective functioning of our democracy, with population data helping establish fair electoral boundaries and our official statistics informing choices by voters and political aspirants”…
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I’m with Gittins. Cutting funding and resourcing to the ABS 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 federal government should boost the ABS’ funding to ensure that the RBA and policy makers are not left in the dark during what will continue to be a massive structural adjustment over the next few years as various forces collide, both domestic and global.
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.
