The way, the truth and the life of Reilly

It might be beyond the wit of any modern man to loot, steal, extort and simply abstract as much money from Bengal and a host of dependent states, allies and petty kingdoms, as Hastings (and before him, Robert Clive) took back to Britain as personal possessions, or the loot sent back as profits to be distributed among shareholders. One estimate is that the system Hastings and Clive set up looted and sent back $45 trillion in today's money. The impeachment - which ultimately failed - was to pitch two contrary theories - that the shareholders had the right to maximise their profits without regard to the rights of Indians, or that the company owed duties of justice and fair dealing to the colonised people. Profit, including profits made from land confiscations, arbitrary taxes, extortions, bribes, and state violence on a grand scale, won.

The House of Lords, in effect, vindicated the remarks of Robert Clive, answering earlier criticism of the personal plunder he had taken. "Am I not rather deserving of praise for the moderation which marked my proceedings?" he asked the House of Commons. "Consider the situation in which the victory at Plassey had placed me. A great prince was dependent on my pleasure; an opulent city lay at my mercy, its richest bankers bid against each other for my smiles; I walked through vaults which were thrown open to me alone, piled on either hand with gold and jewels! Mr Chairman, at this moment I stand astonished at my own moderation."

Although some rather prim people, including members of the Labor Party, have expressed disapproval of the way in which the 2021-22 budget of Scott Morrison and Josh Frydenberg has been appropriated to the Coalition for re-election purposes, frankly I stand rather astonished at the government's moderation. It could have done a lot more to "own" purposes to which it could dedicate public money, to build for itself more monuments to our Prime Minister and his colleagues, and, more particularly, to lay the foundations for a society still recognisable a generation from now as having been constructed from the economic ruins of the pandemic.

There is precedent for treating public money as if it is money that the government of the day can spend for any old purpose, by any old system, including by mere discretion, without tender or operating principles, and to whomever the government likes - including friends, relations, cronies and party mates, captains of industry, and people who donate money to the Coalition. Precedent has also made it plain that no merit principle applies to patronage appointments, including to tribunals and jobs where there is some onus to be, and to be seen to be, impartial. A codicil to this principle is that any old former member or senator who has been rejected by the electorate is entitled to a long-term high-paying government job, regardless of merit. It also seems to have been re-established that, after a partial hiatus a decade ago, public money can be used to advertise Coalition wares, especially around election time.

It is true that many of these precedents were established by Scott Morrison himself, although the purist would note that John Howard, particularly in his last term, threw money with gay abandon at any cause which seemed likely to bring the Coalition votes. Indeed the promised largesse and unaffordable tax cuts were such that the then Labor leader of the opposition, Kevin Rudd, was able, with some initial success, to pretend to be a greater financial conservative than Howard, and to make a virtue of promising less.

Fifty years ago, a famous American senator, Everett Dicksen, examining the estimates for the cost of new military equipment, commented: "A billion here. A billion there. Pretty soon you are talking about real money."

Somewhere along the line the ease with which our economic guardians borrowed and spent money has fundamentally changed the nature of budgetary economics. It has, obviously, knocked for a six old Coalition mantras about debt and deficit, and, probably, the criticism of Wayne Swan, Kevin Rudd and Ken Henry for keeping the economy liquid during the GFC in 2008. Even assuming that future governments try to reduce debt, or reduce the rate of its growth, it has become obvious to many citizens that there is no particular science, or economic advantage, in setting some artificial limit on spending, particularly at the present.

The relative unimportance of the bottom line, and the fact that a billion here or there makes little difference - certainly in terms of the political dangers Morrison faces - is why I am astounded at the moderation of Morrison and Frydenberg. We could have given Murdoch and other media moguls a few billion. Built a bridge to Tasmania. Dredged the Darling River. Extended the Australian War Memorial adventure playground to Lake Burley Griffin. The lack of imagination is worrying.

The new style of government, and the growth of spending by unaccountable discretion, owes as much to the pandemic as to the personality and secretiveness of Scott Morrison. We are on a path to petty tyranny and public poverty. A retreat will be difficult, if only because politicians on all sides of the fence pay only lip-service to the need for public participation, public scrutiny and consultation. Look, for example, at the records of Chris Bowen, Tony Burke or Penny Wong in government, and their irritation then at being called to account. Or, Andrew Barr.

The crisis of coronavirus is, in constitutional terms, a bit like a war. Once war is declared, government girds itself with all sorts of extraordinary powers, including over matters having very little to do with defence, so that the whole nation, the whole economy, and all of the institutions of society can be mobilised against the external enemy. The very nature of the "emergency" is such that courts are hesitant about restraining officials, or putting too many limits on their discretion to act fast as circumstances require. Where there is some clear connection to the emergency, the courts will not usually second-guess government, even where judges privately think similar outcomes could be achieved by less intrusive means.

The pandemic acquired some of that character, and not only in strangling immigration, imposing lockdowns, creating new forms of unemployment and job guarantee schemes. It involved novel efforts to integrate state and federal responses, including the development of a national cabinet of first ministers, treated as though it were a committee of the actual federal cabinet. At one time it appeared that our Prime Minister would become the supreme overlord, but, to his obvious annoyance, state premiers frequently overrode him when they considered the interests of people of their state were not best protected. Their approach was repeatedly endorsed by their electorates.

At the economy level, however, Morrison has had fewer problems in dealing with first ministers, not least because he has been the one with money and they have had to dicker only about how it is to been spent, if at all. Morrison has skilfully used the deal-making involved in national cabinet governance arrangements both to greatly magnify the area of Commonwealth discretion over spending and to add extra layers of secrecy and refusal to account to the media and the public. In constitutional law, extraordinary powers granted in an emergency tend to shrink as the danger recedes, but one can be sure that Morrison will not lightly surrender what he now has.

Ironically, of course, it has made him a big-government, rather than a small-government, player. But it would be wrong to say that the Morrison government has surrendered its ideology on this as easily and as lightly as it dropped its rhetoric about debt and deficit, and built these up to be the biggest in Australian history. First, Morrison has largely bypassed the bureaucracy in devising and implementing new programs and policies, instead doling out grants to the private sector and arranging delivery systems suggested by well-paid but partisan and unaccountable consultants. The extra power, in short, has come to him, not to his administration, and his control over the dispersal of money has made him a much more powerful figure in the electorate at large, particularly among employers, finance figures and the institutions. With no control over process, a new tyranny is in prospect, and without any protections against opportunities for corruption that are already evident.

Agreeing to reform aged care, childcare and services to women is not in the least impermissibly "political" or objectionable because it is being done by Morrison after previous policy failures in these areas. Attending to shortcomings in current systems is the stuff of politics. But what is different is the risk that many of these new services will be administered by discretion and whim rather than by established processes, carried out by professionals rather than partisans.

But there's another problem. Morrison and Frydenberg deserve credit for the courage (particularly from their side of politics) with which they realised that public spending was the key to weathering the economic shutdown. They borrowed unprecedented sums, and budgeted for extraordinary deficits. Everyone agrees that the now trillion-dollar public debt will not be paid off for decades. Some, less accurately, describe this spending as an impost passed on to the next generation by the Baby Boomers.

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People will speak wisely, even disapprovingly, about mounting debt (particularly if interest rates increase) but there will be little short-term dividend, and not a little political cost for doing anything about it by cutting spending or increasing taxes. There might be a time, for example when mining companies are making super-profits (as now), for putting some of it away for a rainy day, but neither Peter Costello nor Josh Frydenberg have ever seen any practical virtue in doing that.

It is also obvious that no particular discipline has been applied to the spending process, apart from a customary, and still ideological, commitment to keeping the public service to a minimum, and to refrain from giving it new functions. That is to say that it would have made no real difference to the government's bottom line had it given $1 billion extra to the ABC or $50 billion to universities. Not doing so is not an unfortunate consequence of fiscal restraint, having to make hard choices in difficult times, or of having found more important priorities. The meanness is, as it has been since the start of the pandemic, ideological, designed to punish parts of society where opponents of the government - particularly those who habituate wine bars and cafes - are thought to be concentrated. Likewise with spending extra billions on security intelligence with the AFP and ASIO - it ticks boxes among those who like to think society is under threat from outsiders, and regular alarums from its leaders are great campaign fodder.