Gunner Government: Budget misuse and democracy collide

The Territory election is two months away, the COVID-19 shutdown is relaxing, and voters now have to grapple with its impact in the context of  the Gunner Government’s fiscal chaos. That has resulted in a record debt – so far – of more than $7 billion.

 

The CLP is going to have a field day with that, as this graph circulated by Namatjira candidate Bill Yan shows. No doubt so will the Territory Alliance and the growing number of independent candidates.

 

Opposition Leader Lia Finocchiaro said yesterday: “In line with the Chief Minister’s secretive attitude, questions remain over what our actual fiscal and debt position is.”

 

In our democracy it is profoundly troubling that not even the Opposition is in a position to know what’s going on.

 

When we asked Michael Gunner (pictured) in March about the collateral for his massive borrowing he said: “This is a commercial arrangement and I can’t discuss this.”

 

Professor DON FULLER is casting a light on these issues, which many tend to leave in the too hard basket, in a series of five articles.

 

 

Good government has five main characteristics.

 

First, it can manage budgets efficiently and effectively. Second, decisions related to budget expenditure are accountable, transparent and honest. Third, decision making is seen to be ethical. Fourth, the Government is responsive to community input and suggestions and actively encourages input. Finally, good governments are good at communicating with the community.

 

Accountability and transparency are key tenets of good governance. Public accountability requires office holders to provide clear and honest explanations for their actions and decisions.

 

Transparency requires that information should be provided in easily understandable forms.

 

It should be freely available and directly accessible to those who will be affected by government policies and practices, as well as the outcomes that result from Government decisions.

 

In addition, decisions taken and their enforcement need to be seen to be in compliance with established rules and regulations.

 

The International Monetary Fund defines fiscal transparency as “the clarity, reliability, frequency, timeliness, and relevance of public fiscal reporting and the openness to the public of the Government’s fiscal policymaking process.”

 

Raising, allocating, and spending public resources are among the primary functions and policy instruments of Government.

 

Budgets and how they are managed profoundly affect economies and society.

 

In recent years however, interest and action with respect to transparency, participation, and accountability in fiscal decision making have heightened around the world.

 

Darwin Turf Club, pork-barrelling, many allege.

 

Over the past two decades, several broad trends have brought fiscal transparency, participation, and accountability into sharp focus:

 

• The proliferation of good governance norms and standards that emphasise greater transparency, participation, and accountability in all Government matters.

 

• Transitions from closed, authoritarian political regimes to ones characterised by policy contestation, separation of powers, political party competition, an organised civil society, an engaged citizenry, and an active media.

 

• The introduction of modern public finance management systems.

 

• The rapid growth, spread, and use of information and communication technologies around the world.

 

The way in which political decision-making takes place within a government can have a major impact.

 

For example, political decision makers who benefit from a lack of accountability and transparency by shifting public funds to their political supporters or preferred projects often hold powerful positions and are well organised to defend their interests.

 

On the other hand, those who would benefit from increased openness and inclusion in fiscal processes and practices are typically numerous and poorly organised. They may for example, include Government officials who have been excluded from the budget-making process and citizens who use and pay for public services such as health, housing, education, and transportation but are excluded by a lack of information.

 

 

Accountability has become a core value in measuring the performance of governments. In the 19th century politician Benjamin Disraeli wrote: “All power is a trust; that we are accountable for its exercise; that from the people and for the people all springs, and all must exist.”

 

More recently, the Secretary General of the Organisation for Economic Co-operation and Development (OECD), of which Australia is an active member, stated: “Openness and transparency are key ingredients to build accountability and trust, which are necessary for the functioning of democracies and market economies.

 

“Openness is one of the key values that guide the OECD vision for a stronger, cleaner, fairer world.”

 

Where the public’s power is entrusted to others, there is an important constitutional requirement that those entrusted with public power are accountable to the public. The public’s trust in government is closely related to the level of confidence the public has in government.

 

Accountability requires the government to demonstrate competence and honesty in a manner that allows the public to judge how trustworthy the government is, particularly in the use of public money.

 

The prevention of corruption in the public sphere, and the effective monitoring of the fiscal responsibility of Government have become key values of public accountability.

 

• There needs to be timely, accurate, adequate and relevant information made available on the decisions and actions of government.

 

Anzac High School being demolished while the the national Aboriginal art gallery proposed for the site remains the subject of a debate splitting the community.

 

• There should be external, independent institutions able to examine, evaluate and report on Government processes and decision making.

 

• There needs to be an ability for those affected by a breach of accountability to seek recourse. Appropriate sanctions must be available for clear breaches of accountability.

 

• Public accountability needs to be supported by clear legal and institutional arrangements. A “public accountability system” needs to be in place that brings together principles, procedures, regulations and arrangements to enable effective Government accountability.

 

The first two points are essential to ensuring that people can become aware of the reasons for decisions by Government. This is often referred to as a need for Government “transparency”.

 

Integrity in public procurement, budget transparency, the transparency and integrity in lobbying and managing conflict of interest in the public service not only help mitigate corruption risks but also improve efficiency and ultimately contribute to public trust.

 

It is on these fundamental principles that this series of articles will examine the performance of the Gunner Government since assuming office in August 2016, with a particular focus on budget accountability and transparency.  Their absence can lead to the breakdown of government, social order and key institutions in society, social instability where economic development is severely curtailed and affected. It can

 

• Facilitate corruption;

 

• Facilitate the ability of public representatives and government officials to not act in the public interest;

 

• Create informational advantages for privileged groups, by which they may profit;

 

• Incentivise opportunism and undermine cooperation;

 

• Limit the ability to select for honesty and efficiency in public sector positions and contract partners;

 

• and hinder social trust, and therefore development.

 

 

The next instalment will be published on Tuesday.

 

 

The author of this series, Dr Don Fuller (pictured), holds a first class Honours degree and PhD in economics from the University of Adelaide. He has worked as senior public servant in the Territory and as Professor of Governance and Head of the Schools of Law and Business at Charles Darwin University. He grew up in Darwin and attended Darwin High School.