I was going to write a piece on the much anticipated paper from ANZ’s chief economist on government spending. But now I’ve tracked it down and read it, there’s hardly any point. It’s just 4 pages in the Bank’s monthly market report and it reads like something I would expect from an excitable commerce student, not a professional economist.
Allegedly, the report shows ‘back-room’ government spending has increased 40% faster than ‘front-line’ spending but it takes a bizarre, self-serving definition of ‘front-line’ vs ‘back-room’ spending. No logic or arguments are provided for assigning spending to either category. Areas that have grown rapidly are lumped in backroom spending to bolster its growth figures. Health spending is not even included – if health were included in the ‘front-line’, there would be virtually no growth difference in ‘front-line’ and ‘back-office’. It then compares the percentage increases in these two stupid categories (which hides the fact that nearly all government spending is ‘frontline’) with the automatic conclusion that spending on the second category is bad.
In fact, the whole report is premised on the childish position that anything non-‘front-line’ is waste – but you can’t have a ‘front-line’ without back office support. Hell, ANZ’s chief economist has a back office job, is he a waste of money? (don’t answer that)
[Update: “Stick to Banking CTU tells Bank Economist“, ouch]