Ursula Irregularity, a philosophising sole subscriber and business guru, muses that government accounting is often more dodgy than corporate accounting yet politicians and bureaucrats are clearly not driven by greed.

However I’m also astounded at the ease with which almost everyone who writes or talks about these matters assumes that it is all the result of “corporate greed”, and that such greed is the inevitable result of “economic rationalism” and the “worship of the market”. (A particularly egregious example of this sort of line is in Michael Prowse’s column in last Saturday’s London Financial Times, but there are plenty of Australian examples).

No denying that these guys do seem to have been motivated at least in part by self-enrichment. But, hey, let’s recollect what was actually involved in most of these scams. Setting up off-balance sheet entities to conceal debts and other commitments; falsely classifying recurrent expenditures as capital investment; booking revenues not actually receivable until some period(s) in the future as having been received in the current period and so on.

Any of these sound familiar?

They should – all of them have been done at some stage by Australian governments during the past twenty years. In fact, all of them (and more) were done by the Cain Labor Government in the 1980s (remember FTMUT and PSUT and all of those things?).

What about governments which claim the proceeds of auctioning off mobile phone licences as ‘revenue’ rather than ‘asset sales’?

This week’s Economist relates how the State Government in Wisconsin has used the revenues it (like other State governments) expects to receive over the next 20 years from the legal settlement with tobacco companies as collateral for a bond issue. It then booked the proceeds of that bond issue as current receipts to conceal the deficit it would otherwise have to report.

The EC last month had to tick off the Italian government for hiding debts in ‘off-balance sheet entities’ in order to fake compliance with the Maastricht Treaty requirement to keep its budget deficit under 3% of GDP.

In other words, “greed” isn’t the only reason why people falsify financial reports and flout the spirit as well as the letter of laws, conventions and regulations intended to ensure that people are provided with accurate financial information.

Politicians do it just as blatantly as corporate executives.

Is it any less venal because it’s done for ideological reasons, or simply to get re-elected, rather than to get rich?

CRIKEY: Excellent points. This subscriber has given us a great start for a new list “Governments guilty of dodgy accounting”. Send ’em in, folks. To start with, this is what was sent to subscribers on July 17:

WALL STREET ON THE SLIDE

The tumbling markets are hitting super funds and government budgets around the world. AP reported yesterday that the US budget deficit has blown out from a $226 billion surplus last year to a forecast $295 billion deficit for the year ended September 30.

The White House said: “Tax payments to the Federal Government, which have historically risen and fallen with the economy, have been weaker than expected. This is due almost entirely to stockmarket-related income.”

Crikey is prepared to stick his neck out and say that the majority of state and federal budgets are now headed for deficits this year courtesy of the tumbling markets. Queensland have already admitted as much.

And whilst the Federal Government and the ASX create laws and rules that require companies to issue public warnings if profits are going to rise or fall more than 15 per cent, there has been no such warning from the Feds or any state government.

The claims of a federal surplus are a fraud anyway because Howard and Costello have allowed unfunded superannuation liabilities to keep climbing, just so they can announce budget surpluses.

No company is allowed to carry unfunded super for employees let alone $83 billion worth of it as the feds have done. The remaining 50.1 per cent of Telstra should just be transferred across to help plug these holes in various superannuation funds which would save heaps in transaction costs and be easier to sell to the Senate.

Then you have the issue of raiding our national reserves to prop up the budget. Since coming to power in 1996, the Howard government have raided about $15 billion from the Reserve Bank.

You now have the situation where Australia has one of the lowest ratio of foreign reserves to GDP in the world. We’ve barely got $30 billion stashed away for a rainy day whereas South Korea, which just 5 years ago was bailed out by the IMF, has built up a war chest of $120 billion.

The island economy of Singapore has almost $200 billion set aside in foreign reserves and that rock with 6 million people known as Hong Hong has a similar warchest.

For some reason the Australia media and analysts have allowed successive federal governments to produce accounts that would make Enron blush, yet the ratings agencies, commentators and analysts just let them get away with it year after year.