Two senior executives in the financial services industry are invited by the Treasury to provide some confidential technical advice on policy-related matters. They are booked on flights to Canberra and are put up at a hotel close to the offices in Parkes.

They are ushered into a meeting room to be told that no Treasury official would be attending the meeting in person, including the head of the division who would chair the meeting. It was to be conducted entirely by Zoom.

What does this story tell us? Apart from the obvious discourtesy, it typifies the massive deterioration in the professional standards of our bureaucrats. It is also illustrative of the completely unjustified arrogance of some Treasury officials and the disdain they feel towards the commercial world.

It’s easy to focus on the weaknesses of our political leaders when explaining our dismal economic and budgetary performance. What is often overlooked is the bungling bureaucrats who offer up advice to the political leaders – from the superficial to the highly misleading, from the disingenuous to the downright wrong.

Now you might say that public servants are only doing the bidding of their political masters and so we shouldn’t blame them.  But that is to misunderstand the process.

There are many policy areas where suggestions for change – I really don’t like the term reform – first come from the bureaucracy. There are also technical areas we can’t really expect our politicians to fully understand.

Let’s run through some absolute clangers of bureaucratic advice from Treasury. Take the case of the excise tax on tobacco products.  Some genius – it could have been more than one – decided that massively ratcheting up the rate of excise on cigarettes would both deter smoking as well as generate massive amounts of revenue.

The public health mafia were fully on board. After all, there’s not a ‘sin’ tax they don’t love, the higher the rate the better.  They are still out there pushing for a sugar tax. So, the Treasury officials would have felt a warm glow from this source of approval.

Figures were provided on the likely revenue flow, even though there were some clear warnings that high excise rates would create an incentive for the importation of illegal tobacco products. Professor Sinclair Davidson of RMIT University was one such person warning of this likelihood, but he was quickly dismissed as some libertarian nut job. (It’s OK. Sinclair is my friend. He won’t mind me writing that.)

So, what happened? In this financial year, Treasury is now anticipating $8 billion in total tobacco excise revenue; it had been expecting $17 billion. The estimated value of illicit tobacco has soared, with a figure of $6 billion quoted for 2022-23. That figure would be much higher today.

The cost of enforcement to combat illicit tobacco has also increased dramatically, with the 2025 federal budget allocating an additional $156 million over two years. This is in addition to the costs imposed on state governments.

Criminal gangs have infiltrated the industry, and gang warfare frequently breaks out, often involving arson of outlets selling illegal tobacco. Having let this cat out of the bag, it won’t be easy to reduce the sale of illegal tobacco, particularly if the excise on the legal product stays at its current rate.

With the price gap between a legal pack of cigarettes and a contraband one of around $35, most smokers will logically buy the cheaper ones. There is even a suggestion that the rate of smoking among the population, including younger people, is now rising.

Great work, bureaucrats.  You really did a great job there.

Take another example – the fringe benefit tax exemption for the lease of electric vehicles. The Treasury has been deep green for some time, committed to net zero and all that. This stretches back to the time when Ken Henry was Treasury Secretary.

The policy was first introduced in 2022 and applied to both fully electric vehicles and plug-in hybrids. Treasury estimated that the exemption would cost just over $200 million over four years.

On the face of it, this sum looked manageable even if the policy was slanted to those on higher incomes with permanent jobs who could access a novated lease from their employers. Encouraging the uptake of EVs to help the environment and reduce emissions would have been part of the official advice.

As it turned out, the policy has ended up costing $3.35 billion to date or nearly 17 times the original estimate. Were no changes introduced, it was estimated that it would cost another $6.75 billion for three more years, even though hybrids were removed as an eligible purchase.

But here’s the bit I really love. In response to some modest changes that will not take effect until next year, there will be a ‘saving’ of some $1.7 billion over the forward estimates. Jimbo counts this figure in his list of imaginary budget savings.

So, the process works like this. Bureaucrats dream up an entirely exploitable scheme to encourage the take-up of EVs.  B1, the Climate Change and Energy Minister, is over the moon. Jimbo goes along with it because it’s not going to cost a lot of money.

It’s ends up a total bonfire of wasted taxpayer money directed to high-income earners many of whom would have leased EVs in any case.

It’s a similar story with the home battery scheme fiasco which was designed to encourage households to purchase battery backups for their solar generated electricity.  But a glitch in the scheme’s design – it was slanted to very large installations instead of suitably sized ones – meant that a scheme that was estimated to cost $2.3 billion over four years was suddenly expected to cost $14 billion.

You might think I’m making up these figures, but sadly I am not. The degree of subsidy and the design features of the scheme meant that it proved very popular among high-income households. Who was the genius or group of brainiacs who failed to see this coming?

At the end of last year, some changes were made to the scheme, and the cost is now estimated to be around $7.2 billion.  And, yes, the difference between that figure and $14 billion is counted as savings.  Again, you might think I am making this all up; I am not.

Will there be any consequences for these bungling bureaucrats giving out bodgie and costly advice? No way. They have probably all been promoted, even though they rarely attend the office because working from home is their God-given right and they are going to take it.

The days of Treasury officials providing frank and fearless advice to the political leaders of the day are long gone. John Stone was one of the last professional bureaucrats and he left the public service eons ago. Ted Evans wasn’t too bad, although he got talked into introducing the ridiculous wellbeing framework. It’s been downhill ever since.