The Federal Government has confirmed Treasury secretary Ken Henry is resigning from his role.

He will finish up early in the new year and will be replaced by Climate Change Department secretary Martin Parkinson.

Confirming Dr Henry’s resignation this morning, Prime Minister Julia Gillard called him “one of the greatest of all Treasury secretaries”.

Bernard Keane at Crikey summarizes his career. Keane is clearly a big fan, reserving his biggest praise for Henry’s work (along with that of the RBA) during the global financial crisis:

But hundreds of thousands of Australians have jobs that wouldn’t have them if Henry, Stevens and their teams had repeated the errors of the late ‘80s and early ‘90s – chiefly using the levers of monetary and fiscal policy too late and ineffectively.

Hundreds of thousands of people in jobs. While he may not get the public recognition, it’s hard to think of a more fitting legacy for Australia’s most senior financial public servant.

Update: And while we’re doing resignations, let’s note that John Brumby has resigned from Parliament, effective immediately. Both as Treasurer and Premier, he ran a government that, while not without its flaws, did more things right than not.

Yesterday, in her address to the National Press Club [see previous LP discussion here], Prime Minister Julia Gillard made a point of stating that any concessions to the Independents involving expenditure would be funded from savings, and there would be no resulting change to the budget bottom line. She revived her argument made during the election campaign that the Coalition had reached new heights of fiscal irresponsibility, promising a billion a day in un-costed spending.

All this comes as the Reserve Bank Deputy Governor warns of the possibility of a double dip recession, and the latest economic stats show that from the perspective of many regions around the nation, we’re definitely in the two-speed economy space.

Politically, Gillard is tweaking the notion of stability to encompass economic management.

Tony Abbott has refused to match Gillard’s budget pledge.

Gillard has also used her response to Andrew Wilkie’s list of demands, and Bob Katter’s protectionist musings, to underline a claim that Labor does not intend to go on a spendathon to secure government, or to depart from what the ALP believes to be sound principles of economic policy.

These moves in the game highlight the importance of the costings issue, and also represent an attempt to leverage claims about the “unedifying spectacle” of pork-barreling the Indies’ seats – emanating from both business and the media – into a different story about the Coalition’s preparedness to buy its way into office.

The credibility of that particular narrative has been somewhat enhanced by the loud urgings of Nationals MPs and Senators earlier in the week that they get what they see as their rightful share of pork.

Labor, it should be added, is not quite coming to this debate with clean hands. The now notorious Epping-Paramatta rail link certainly didn’t emerge out of the assessment and prioritisation process purportedly driven by Infrastructure Australia. But as Wayne Swan said during the campaign, the Coalition outdid itself in promises directed at particular electorates, many of which appeared not on the website of the Liberal party itself, but only through press releases by Members and candidates. Any tally of those would probably add to the billion dollars a day cost of the opposition’s promises, particularly since no attempt whatsoever was made to identify how they would be funded.

Update: Bob Katter’s demands.

The business lobby’s response has been typically over the top and no doubt we’re going to hear the cute phrase about golden gooses from a bunch of geese over and over again.

The claim, typical of business rhetoric in a globalised world, that operations will be moved offshore is particularly egregious in this context. The resources are in the ground. What they mean, what they can only mean, is capital, and in any case the threat is almost certainly an empty one.

It should not be forgotten, aside from all the analysis about an ageing population, that women in particular, and many younger workers in general, are very inadequately served by super, and have little other opportunity to accumulate wealth because they’re not in secure full time work. This sort of reform, to the degree that it addresses these sorts of persistent inequalities, can only be a good thing. Kudos to Wayne Swan.

Elsewhere: Guy Beres.

Update: [by Kim] New post on the media coverage of the Resources Super Profits Tax.

Peter Martin has a series of posts on the issue that should fill the intervening hours if you just can’t wait. Aside from the foreshadowing of a change to the way miners are taxed, the big orchestrated leak so far relates to changes to superannuation, with the taxation regime to be altered in a more progressive direction and the levy to be increased to 12% from its present 9.

Post links to anything interesting review-related you find, and I’m sure one of the LP crew will update this post as appropriate!

Oh, and Western Austraila, go ahead, secede. I dare you…

The report’s emphasis changed a fair deal along the way, a topic treated of by Martin in another post.

If you’ve been wondering why Kevin Rudd’s focus has recently been on the country a few decades hence, Henry provides the answers. The report frames its recommendations around the theme of an ageing and growing population. When the government responds, we’re likely to see further development of a point of contrast they want to hammer home in an election year; the claim that Rudd Labor has long term plans for Australia’s future while the Opposition plays base politics around the headline of the day. Much will also be made of proposals to raise more revenue from resources, something a nationalist and populist Coalition will have trouble countering, if they’re inclined to do so.

Make of that what you will.

KERRY O’BRIEN…Does that suggest to you, when you think of all of the associated problems about trying to plan for that, in terms of urban … he talks about Sydney with a population of seven million, Melbourne a population of seven million, Brisbane four million. Is this going to be a time for national leader to come well and truly to the fore across the whole spectrum of problems thrown up by that?

KEVIN RUDD: Well first of all Kerry, let me just say: I actually believe in a big Australia. I make no apology for that. I actually think it’s good news that our population is growing.

Contrast that with many countries in Europe where in fact it’s heading in the reverse direction. I think it’s good for us, it’s good for our national security long term, it’s good in terms of what we can sustain as a nation.

Secondly, on the specific national leadership questions that you point to, I agree with you 110 per cent. Why do you think that we are now, for the first time in this country’s history taking national leadership for the roll-out of national infrastructure, and new national broadband network. For the first time the Australian Government investing directly in urban rail projects across Australia, for the first time the Australian Government taking a direct engagement with the planning of our cities, and also with, for example, the housing approval processes and land supply arrangements of the states and territories and local government. Why? National leadership is necessary to plan for the future of our population, a challenge which has left languished before.

An explicit population policy is something that Australian governments have ducked for decades. The Rudd government has been little different, taking the opportunity to duck the recommendation for such from the 2020 summit. If I had to guess, it’s because, like Rudd, they are collectively in favour of a “big Australia” but aren’t prepared to say so publicly for fear of voter backlash, and the immigration program is quietly delivering what they want anyway. At least Rudd and Henry have put their views out there for consideration.

Personally, I think both “camps”, such as they exist, have severely flawed arguments. Most flabbergasting of all, it seems Rudd still identifies with an echo of “populate or perish”. But, beyond that, the economic case for immigration is, as I understand it, rather more ambiguous than its boosters would have us believe, with much of the economic benefits from migration ending up with migrants themselves, with economic gains to the broader population fairly limited. On the other hand, the environmental issues surrounding migration often ignore the fact that an increased Australian population will probably in large part result in a change to net agricultural exports, rather than changing agricultural land use all that much.

Oh, and one last thing. Henry’s concerns about four overcrowded cities and endless pressure on the urban fringe assume that population growth will continue to concentrate almost exclusively in Sydney, Melbourne, south-east Queensland, and Perth. But why is this set in stone?

Glenn Milne’s latest intervention, talking up a line from Liberal MP Scott Morrison, has to be one of the lamest ever political attack lines. [For those who don't want to wade through a farrago of fallacies expounded at excessive length, his core point is echoed by Sinclair Davidson at Catallaxy, though without attribution to Milne. Rendered in short form, the basic logical fallacy is starkly evident.]

So, there’s going to be an “emissions financial crisis” and the Reserve Bank wasn’t consulted by the Government before climate change legislation was prepared? A non sequitur built on speculative and incoherent fantasy does not make for an effective political attack. ‘OMG! Governor didn’t read legislation! Rudd FAIL!’…

The political syntax of this claim, of course, is that Rudd and co successfully berated the Liberals for ‘ignoring 20 (or whatever it was) successive Reserve Bank warnings’ in the lead up to the 2007 election. Now, we have the Liberals, and their echo chamber, arguing that the Reserve Bank should have been given a chance to warn. Somehow a hypothetical and unlikely warning was pre-empted by the Government deliberately choosing not to do what it doesn’t have to do. Try to make any sense of that.

What would be far more interesting to examine would be the politics of invoking the Reserve Bank (and for that matter, Treasury and its ubiquitous Secretary, Dr Ken Henry). There are significant questions about the independence of Treasury – or perhaps around the degree to which it is closely intermeshed with Rudd, Swan and Tanner’s agenda. And it’s clear that both Ken Henry and Glenn Stevens’ presumed authority is used by the Government regularly to legitimate its economic management credentials.

The Libs have occasionally made attacks in similar form as the essential structure of the Milne claim (leaving aside for the moment, that it rests on non-events) – that the Government has ignored advice. Of course, such attacks are irreconcilable with claims that the Government’s policies – when effectively ticked off by Henry and Stevens – are wildly irresponsible.

None of this makes a lot of sense. The Opposition, and its buddies in the right wing media and academic commentariat, might be better served by exploring the real issues around how economic policy is made, and defended through the aura of institutions which are perceived as independent. Don’t hold your breath, though.

Update: Sinclair Davidson responds.

The latest issue of the Centre for Policy Development‘s online mag, Insight, is out, and ‘Taxation for Our Times’ focuses on the Henry Review. I make no claims to any expertise in the technical aspects of taxation policy, but I was chuffed to be asked to write something from the point of view of cultural and political sociology. I think it is important that major aspects of our governance – and our relation as citizens to each other and to the state – are scrutinised in a frame that transcends some of the immediate implications and interests at stake. You can read my piece – ‘Death and Taxes’ – here, and I’d encourage you to have a look at the other articles too!

There’s a desire to avoid the mess that happened last year when they split in the Senate, and according to Laura Tingle, they’re searching for a “legacy issue” they can campaign on. Apparently, they realise they can’t say anything good about the Howard government on IR or Climate Change, so “economic management” it is. Possibly Tip’s reappearance is supposed to make us all nostalgic. Or something. But make no mistake – while “tax cuts” might be a rallying cry that will unite all the fractured parts of the Coalition and perhaps their fractured constituencies (and see Possum’s recent interesting post on this) – it’s got very little to do with the public good.

Elsewhere: Evidence from Ken Henry to the Senate Committee suggests a stimulus package of the size Turnbull half-heartedly advocates is a recipe for recession.