The Centre for Independent Studies (CIS) has released a new explanatory video based on Adept Economics Director Gene Tunny’s paper, Gorillas in the Mist: How Government Obscures Its Spending. The video distils the paper’s central findings on how Australian governments increasingly rely on off-budget mechanisms to undertake large amounts of spending that do not appear in headline budget figures.
Gene’s research shows that federal, state and territory governments are collectively engaging in around $27 billion in off-budget spending each year. These activities, often classified as “equity investments” or channelled through government business enterprises and special-purpose vehicles, can obscure risks, reduce transparency and weaken fiscal accountability.
As Gene sets out in his paper, off-budget arrangements allow governments to obscure the impacts of projects and programs on public finances and ultimately taxpayers.
Two recent examples highlighted in the CIS work include:
These cases illustrate how off-budget measures can mask the financial exposure ultimately borne by taxpayers.
Gene argues that clearer reporting requirements, more rigorous evaluation of major projects and greater disclosure of fiscal risks are essential to improving public accountability.
While CIS has produced an accessible video overview, the full depth of the analysis is found in Gene Tunny’s paper, Gorillas in the Mist: How Government Obscures Its Spending. Readers seeking to understand the scale of off-budget activity, the mechanisms involved and the reforms needed for better fiscal transparency are encouraged to read the paper at cis.org.au.