Treasury secretary John Fraser said Treasurer Scott Morrison’s office had been given a copy of the paper prior to its publication. Photo: Andrew Meares Shadow treasurer Chris Bowen said the report’s release seemed to have been designed to pre-empt calls for further stimulus. Photo: Alex Ellinghausen
A long-term critic of Labor’s controversial economic stimulus package was paid more than $16,000 to deliver a Treasury commissioned paper downplaying its role in saving from the worst of the global financial crisis.
Tony Makin’s paper found there was “no evidence fiscal stimulus benefited the economy over the medium term” and had been counterproductive, concluding it had “worsened ‘s international competiveness and damaged industries in the internationally exposed sector, particularly manufacturing”.
The decision to commission Professor Makin to write the paper for the Treasury Research Institute, which was “formally launched” on December 9, the same day his paper was published, surprised many given Treasury had previously censured Professor Makin for criticising the economic stimulus package during the GFC.
Labor’s treasury spokesman Chris Bowen said its release seemed to have been designed to pre-empt calls for further stimulus in the wake of national accounts figures showing the economy going backwards.
He wrote to Treasury secretary John Fraser seeking clarification over the commissioning of the “so-called analysis” and its release, given two newspapers were given access to it before it was published on the Treasury-run site.
In his response, Mr Fraser said Professor Makin’s employer, Griffith University, was paid $16,500 to deliver the paper, as part of efforts “to broaden our research and analysis profile” and Treasurer Scott Morrison’s office had been given a copy of the paper ahead of its publication, as part of a “long standing practice under successive governments”.
Mr Fraser, who was appointed as secretary to the Treasury under the Abbott government in 2015, said he made the decision to commission the paper, “in consultation with my senior colleagues”, and believed a wide range of views was important “if we are to deepen and extend our thinking”.
“The Institute seeks to deepen understanding of contemporary economic developments and promote debate on important and topical policy issues, including by publishing papers written by either current Treasury staff or external authors,” he wrote.
“As we are making clear, where appropriate, the views expressed in such papers – including by our own staff – may not necessarily represent those of Treasury.”
‘s economy was one of the few in the developed world to have not entered recession during the 2008 economic crisis.
In the days leading up to the paper’s release, Mr Morrison attacked Labor’s spending response during the financial crisis as giving “money to dead people [thinking] that was going to grow the economy; that was nonsense”.
Mr Fraser said demands on Treasury resources had increased “dramatically in recent decades” and, in response, had increased its outsourcing of research, with future papers to examine immigration, taxation, the social welfare system and reasons for low interest rates.
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