An Open Letter to the Federal Treasurer June 2014

Dear Mr. Hockey

I should like to speak to you as one company director to another on the matter of your recent “budget” and in the matters of language.

Your Budget

I do not dispute that a land should “live within its means”, but I fear your methods of shrinking the government to be within those bounds is false and utterly bereft of quantitative grounds.

Let me say more about why I believe this through the accounting concept of depreciation, which I trust will be well wonted to a seemingly intelligent person with actual commercial experience, unlike most of your colleagues. You would know very well, as do I, that if you or I, as directors, tried to declare a profit to shareholders by neglecting to account for depreciation of plant, or brand, or intellectually property or any like thing needed to uphold future profits, then we should likely go to gaol for fraud and we should be not a whit better than the fraudulent directors of Enron.

However, in a very real way, this is exactly what you have just done in handing down your budget, as indeed did all former Labor and Liberal governments in foisting what I consider to be utterly fraudulent figures upon your constituent Citizens and claiming that the utterly simplistic and highly specialised notions of current spending and income are all there is to a full financial statement, especially in the highly complex field of trying to put quantitative metrics in place to reach the goal of meeting a land’s basic needs. To paraphrase what Paul Keating might have said, at this level, “economics is not about money, stupid”. Money is merely an attempt (albeit with definite usefulness and validity to some degree) to bring into being metrics that help us as a society see where we are going and reach that basic goal of meeting the needs of our Citizens.

Let us take the simple example of education, and for a moment think coldly of our children as future units of production, who will take the place of present producers. There is a highly direct analogy here with the follow on from the maintaining, or the failing to maintain, plant that is essential to a profit making company’s ongoing profits. Cuts to education now will certainly beget some kind of future productivity loss. How much? I suspect the nett present value of productivity loss begotten by education cuts is considerable and probably outweighs any “savings” achieved through your government’s cuts to the section. Who knows for sure? But I for one certainly care, and I believe I am far from alone in caring. Moreover, the question “who knows?” is my key point here: neither you, nor Labor, nor the Greens nor anybody who has ever wished to pull the levers of power in this land has done Australian Citizens the most basic respect of correcting what I consider to be frankly fraudulent accounting and either define or even propose to define depreciation metrics for social infrastructure so that a clearer and less blatantly fraudulent picture of the land’s finances can be discussed. Naturally, any metric would be imperfect, but then again so is the financial system we have.

Right now, without any meaningful depreciation figures defined, you are utterly bereft of any quantitative grounds for assuming that your cuts will in the long term save “money”. Right now I consider your methods to be the kind of trifling unquantitative nonsense that might drive the dynamics of a “Monopoly” game. It is a very far call indeed from accurately assessing the impact of your actions on a society.

By all means, seek to improve the land’s financial situation. But at least do Australian Citizens the respect of using sound quantitative methods, not simply whim, to justify your deeds. Even though you claim to be the better financial managers, you seem unwilling – even unable – to submit yourselves to the most basic and flimsiest rigors that shield shareholders from misinformation. As a company director, I am sure you know a great deal better, so this raises the question: What exactly are you playing at, Mr. Treasurer?

Perhaps you have done the above analysis and have decided to write off our children, as companies sometimes do when they retire plant to be replaced by something else. Perhaps you have retired all wish for a meaningful future for most of our children, and instead have decided that we shall concentrate our efforts on a few elite who will make up for the forsaken ones? It certainly seems this way to me as an outsider. This would be a harsh decision to take, but, as the elected government, you are within your rights to take it and bring it about. If this be your thinking, then you, as the superior economic managers, should submit to the minimum rigors that company directors must. That is, you must (i) clearly and openly state your agenda, (ii) state the long term impacts you believe your change in strategy will beget, and (iii) back your analysis with objective evidence. If you were unwilling to do all of this as a company director, you would be tried and convicted for defrauding your shareholders in failing to inform them of your change in strategy. You and your Prime Minister in particular constantly speak for “the Australian people” as though you have consulted every one of us, so it seems that you believe that most people are with you and thus perhaps you believe yourself to be relieved of these obligations for clear transfer of information. However, you as a company director very well know that this would not be so in the corporate world: highly specific and very clear unfair prejudice provisions of the corporate law of this land would hold you to be criminal for failing to inform even a minority of your intentions.

Your English

Let me summarise my understanding of a particular English usage, such as my imperfect understanding of that language stands. There are two verbs, peculiarly English in their lack of infinive, will and can. They are very different in their meaning, Mr. Treasurer: the former expresses its subject’s wish, the latter, its subject’s ability or potential. So when you say we can’t afford an education / health whatever system like the one we have, you express nonsense, pure and simple. What you are really saying is we WON’T afford: in a wealthy land such as Australia has been, a statement like we can’t afford is preposterous. There are always alternative policy settings to yours, and, like your “budget”, your statement we can’t afford bespeaks at the very, very least a profound lack of insight. That’s the most generous interpretation possible. Again, as a company director, you would be beholden to inform all stakeholders of the company’s options and likely follow on from strategy settings. In the hypothetical scenario where you would submit to even the flimsiest of the rules of corporate governance your botched rendering of “We won’t afford” as “We can’t afford” together with the undertext it is clearly meant to convey would count as fraudulent, pure and simple.

Perhaps you are right in assuming Australians do not love or believe in their children enough to pay the necessary taxes to uphold a fair education system for everyone. However, one suspects something else: that you Mr. Treasurer, like the Prime Minister and the wealthy elite of the baby boom and X generations you stand for, having grown up with the all the benefits and security of systems that delivered you all free education up till graduate university level, now want to do a mid life dummy spit and shirk your responsibility to the generations that follow you. As you light your mid life hissy fit at the prospect of doing what your parents did for you, you reek of the rankest hypocrisy. Indeed your government makes a great deal out of the myth of the “bludger” and “freeloader” and yet you cannot see the log in your own eye. The fact is that welfare fraud is very small and seldom, and in my long experience, I find those who whine about “bludgers” and “freeloaders” do so because they judge others by their own shrivvelled, crippled and degraded standards: they are weak people and often the very ones who would do as they say they loathe at the very first opportunity.


Right now I and my family are in the process of migrating overseas. My daughter dreams of being a scientist and contributing to economies of tomorrow. The future you and your government have in mind for my children is quite frankly not good enough for them. Not by a long shot. I have worked in your land for the best part of thirty years and have paid well over a million dollars in taxes to your system. I did so proudly in the hope that we would raise the next generation into a society that valued learning and the human being. I did not do that to have it handed over to mining companies or a privatised, elitist education system. Sadly I now hold that money to be a failed investment in a failed state that I must walk away from. I shall be gone from your land soon, but even before I leave, given I now work for an overseas company, I have taken steps to make sure that my taxation contribution will be paid to that overseas country so that my residual Australian liability will be nought. I do this even though I shall end up paying rather more tax than I would do so by keeping my affairs here. I do this because the overseas land in question believes in its childrens futures in a way I do not think you can even begin to understand. I do this because I refuse outright to contribute any more to what I see as a failed state that loathes its children.

Yours Sincerely

Rod Vance