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Tuesday 20 Feb 2018 | 19:21 | SYDNEY
Tuesday 20 Feb 2018 | 19:21 | SYDNEY

Tabloid gems in Treasury\'s Red Book



30 September 2010 14:37

If The Interpreter went shock-jock, this piece would offer wonderful tabloid headlines: 'Treasury flames free trade deals' and 'Agony over foreign aid cash gusher'.

It's all true – details in a moment.

Canberra may not be able to do 'new paradigm' politics, but we are certainly going to see some different ways to do business. Let's hope bureaucratic changes imposed by a knife-edge Parliament can become permanent parts of the landscape. A prime example of new things that should become an established habit is Treasury's release of its Red Book briefing for the new Gillard Government.

Much amazing stuff has happened in Australia's capital in the last few weeks. But Treasury giving out the guts of its formal briefing to the new Government ranks as a gobsmacking moment.

It would never have happened under John Stone or Sir Frederick Wheeler. The mandarins of previous eras believed that Freedom of Information was an oxymoron. In fact, give information to an ox or a moron before giving it freely to the public, much less the jackals of the press gallery.

The jackals have been having fun wading through the details of the formal advice Treasury proffered the new Government. Even with a tenth of the material censored, it is still a great read. As an example, here's a commentary by the ever-excellent Tim Colebatch. As Trade Minister, Tim Fischer always called Colebatch 'The Professor', and Professor Colebatch delivers a typically tough mark.

Most of the reporting of the Red Book has been about the domestic political dimensions – especially Treasury's discussion of the mining boom and call for continuing high population growth – yet the Red Book also offers clear views about the international flavour of the challenges. The long-term trends identified are the rise of China and India, Australia's ageing and growing population, climate change and technological change.

Looking back at the Labor's first term in office, Treasury ranks the big international wins of the Rudd Government as the elevation of the G20 and managing to avoid an even bigger blow-up with China over its surging investments into Australia:

Helping embed the G20 as the premier forum for global economic cooperation and navigating the intensification of Chinese investment flows into Australia were major economic and foreign policy achievements.

The hard calls on foreign investment, especially from China, are not going to get easier. Legal tinkering may help. Treasury argues that Australia's foreign investment regime has to be refined 'to address its complexity, its excessive coverage and poor targeting and its reliance on policy unsupported by legislation.' Further, the various cash thresholds for investments don't necessarily match 'strategic indicators of national interest.'

The new golden aid consensus means Australia's foreign aid is on track to double from $4.3 billion this financial year to $8.6 billion in 2015-16. The scaling up is the planned bit. The hard part is how to get 'value for money':

Additional aid funding will not necessarily greatly accelerate development outcomes. More than just increased aid spending is required. There is a risk that the increase in the ODA budget, if not handled well, will result in less effective delivery and public criticism of the aid program. Economic problems in the Pacific could lead to further instability and place additional demands on Australia.

Casting an eye on the South Pacific, Treasury opines that Fiji's economy 'will continue in a precarious state' unless Suva negotiates a deal with the IMF. The 'fragile state of the Solomon Islands' economy' calls for a careful draw-down of the regional intervention force, RAMSI. According to the brief, security problems in Papua New Guinea 'may see greater calls for a considerably scaled-up engagement from the Australian Federal Police.'

Treasury hates the proliferation of so-called Free Trade Agreements. The purist view is that these treaties are really discriminatory bilateral political handshakes that don't deliver economic benefits.

Current approaches to preferential free trade agreements (FTAs) are not meeting Australia's needs. The proliferation of FTAs has not built support for multilateral liberalisation and is delivering only modest preferential market access outcomes at the cost of reduced government policy reform flexibility...Australia is negotiating seven FTAs, including some with our most important trading partners and regional allies. The Productivity Commission has found that the potential benefits of the FTAs under negotiation have been oversold and the negatives largely undersold.

Bet that the Red Book from the 'Trade' part of  'Department of Foreign Affairs and Trade' comes out on the other side of this argument. With a bit of nudging from the jackals, DFAT might return fire by using the Freedom of Information argument to lob its Red Book onto the web. With lots of sensitive bits blacked out, of course. The new paradigm can be stretched only so far.

Photo by Flickr user mtsofan, used under a Creative Commons license.

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