Thursday, November 13, 2008

Ken Henry postscript

When denying the "suspicions" of the opposition about the budget forecasts, Treasury Secretary Ken Henry made two attacks on their current tactics. Firstly, their undermining of the public service was "unhelpful". In Yes Minister terms that equates to the strongest criticism.

His second point, though not directly mentioning his Liberal Party critics, touched on the irresponsibility of white-anting financial institutions such as the Treasury and the Reserve Bank at a time of financial crisis.

Fundamentally, what is driving weaker economic outcomes globally at the moment is fractured confidence. So anything that can be done to help restore confidence in real growth in the strength of the economy right at the moment, is valuable.

We can talk ourselves into worse outcomes; of course we can. People do; it wouldn't be the first time. But we don't have to...
Henry slams Opposition's manipulation claims
The key people talking down our financial institutions in Australia are the Federal Opposition. Malcolm Turnbull must know the implications of this.

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2 comments:

Richard Veryard said...

Hi

I'm puzzled by your use of the term "white-anting". Doesn't this mean invisible damage, causing some apparently sound structure to collapse without warning? Which is exactly what happened to several banks and other institutions earlier this year, thanks to an accumulation of unwise decisions by their traders and executives. Indeed, the whole international economy has already been chewed to pieces by white ants.

There is now a clear need to rebuild confidence, and the words and actions of the Federal Opposition may well be unhelpful in this regard. But to my mind they are not like white ants at all; because they are not chewing away in the darkness but seeking maximum publicity for their point of view. And if this point of view itself causes a further collapse, this collapse will not be a sudden and surprising event but a slow and visible decline. Perhaps if I can suggest another Australian simile, it is more like the rotting timbers being noisily kicked over by irresponsible kangaroos.

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