Pollies don't get it: small government is the best

A SIMPLE attempt at political point-scoring in a press release by the Communications Minister back in May last year tells you everything you need to know about why small government is best . . . that is, if people are in favour of their tax dollars being spent efficiently.

It also acts as an eye-opener into how the current government views our ever-expanding public service. Sadly, I am not sure the opposition is much better, but we'll come back to that later.

"Fact: the $350 figure is an average cost for the assistance package per household." That was Senator Stephen Conroy talking about the cost of installing digital set-top boxes in people's homes as part of the government's scheme to help the disadvantaged - namely pensioners - keep up with the digital revolution.

In fact, he admitted last week that the figure was wrong because it "did not include the administration of the program by the department". He had previously had a crack at reports in this newspaper for overestimating the cost of the scheme (you can buy digital set-top boxes for as little as $19, incidentally). The administrative costs of the department were included in our figures. What's the crime in that?

Only a politician could leave out administration costs when assessing the cost of implementing a scheme, or deny they should form part of the total cost.

To suggest that costs associated with running a bureaucracy enlarged by additional government service delivery should not count towards the cost of the service is patently absurd.

Could you imagine a chief executive trying to get away with the equivalent in business? If they didn't have to include administration costs in their financial accounting, profits would go through the roof.

The public service is bloated because too much is being asked of it. It's part of an ethos that government can solve society's problems. To the extent that governments should be engaged in service delivery, it is state - not federal - governments that traditionally should be doing so. The rise and rise of interventionist federal governments (John Howard did it too) is yet another way in which federalism is being eroded.

In the home insulation pink batts debacle we saw what happens when a federal government department without service delivery expertise (in that case, the Environment Department) is charged with delivering a service.

The set-top box handouts may not cause fires in people's homes, but they are unlikely to represent value for taxpayers. Few would argue against a left-of-centre political party (indeed any party) supporting handouts for disadvantaged Australians, especially pensioners. They need all the financial help they can get. It's about the method used to do so.

In the case of the opposition, it talks tough about cutting unnecessary departmental waste, including public service jobs in Canberra. But such rhetoric doesn't match up with the reality of Coalition policies already on the table. These represent a continuation of big government.

The paid maternity leave scheme, the green armies Tony Abbott wants roaming the countryside, and the administrative oversight required for the government to pick winners through the Coalition's Direct Action alternative to the carbon tax would all soak up the time of public servants.

If the Coalition plans to cut the public service, as it claims it will, the quality of what's delivered will be compromised. If it doesn't, so much for doing something about a public service larger now than at any point in our national history.

The problem with tolerance of big government is that it manifests itself in far more ways than just a larger-than-necessary bureaucracy. It infects politicians' thinking in other ways. For example, government rescue packages for ailing business models such as the car industry. ANZ chief executive Mike Smith is right when he criticises short-term political thinking which props up manufacturing in this country, as he did at an ASIC function on Monday.

Every dollar spent by government on rescue packages that save nothing in the long term is money that could have stayed in the hands of taxpayers.

Now there's a novel idea.