ID :
188847
Wed, 06/15/2011 - 16:50
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Shortlink :
http://m.oananews.org//node/188847
The shortlink copeid
Judgment day for Giddings
(AAP) - Tasmanian Premier and Treasurer Lara Giddings' tough talk of major public sector reform will be put to the test when she delivers her first budget on Thursday.
Since becoming premier in January, Ms Giddings has not shied away from the massive financial problems facing the state, which stem from ever-increasing government spending and a drop in GST revenue.
The government says around $1.5 billion in state and federal taxes has been stripped from the budget over the forward estimates period.
Ms Giddings has already unveiled plans to cut the equivalent of 2,300 public sector jobs from the state's wages bill, and has flagged legislative changes to streamline the redundancy process.
But she is yet to indicate which departments will feel the pinch.
Economist Saul Eslake of the Grattan Institute said the budget would indicate whether the government was serious about making cuts.
"It sort of has to be a razor approach, otherwise it has failed its key task," he told AAP.
"Tasmania needs to confront a reality which has always been there ... and that is Tasmania spends far more per capita delivering public services.
Mr Eslake said the Tasmanian government needed to reform its spending, especially with the federal government's review of the GST carve-up.
"The crunch has come because the bouyant revenue that it got for the first seven years of its life is no longer there," he said.
"The GST for the first seven years delivered the state more than it expected, and that allowed the government to coast.
"Now, instead of GST revenues growing by more than seven per cent, it's likely to only be 3.5 per cent, and the Tasmanian share of that is under threat from the Gillard government's review.
Mr Eslake said he was worried the cuts, when delivered, would amount to little more than window dressing.
"The solutions that she's proposed thus far ... are basically just deferring capital expenditure and stopping highly paid public servants from purchasing European cars," he said.
"They're not going to cut it. She needs to be much more strategic and surgical."
Making the premier's task more difficult is the need to appease Labor's minority government partner the Greens, who promised not to sack workers ahead of the last state election.
It remains to be seen whether the two Greens members of cabinet will take any ownership of the budget.
The state's unions have vehemently opposed the cuts since they were first suggested in February.
The Community and Public Sector Union (CPSU) and the Health and Community Services Union (HACSU) will even hold protests in Hobart while the budget is being handed down.
CPSU Tasmanian secretary Tom Lynch said he had no qualms in taking on a Labor government
"We represent workers, and that's the only consideration we have," he said.
"Our members were given promises at the last election by Labor and the Greens and the premier has clearly walked away from them."
The Liberals have found themselves in an awkward marriage of convenience with the unions, having opposed cuts to frontline services.
The government pounced on suggestions the Liberals were not going to deliver an alternative budget, but shadow treasury spokesman Peter Gutwein said he would reply in full next Monday.
His day of judgement will have to wait until then.
Since becoming premier in January, Ms Giddings has not shied away from the massive financial problems facing the state, which stem from ever-increasing government spending and a drop in GST revenue.
The government says around $1.5 billion in state and federal taxes has been stripped from the budget over the forward estimates period.
Ms Giddings has already unveiled plans to cut the equivalent of 2,300 public sector jobs from the state's wages bill, and has flagged legislative changes to streamline the redundancy process.
But she is yet to indicate which departments will feel the pinch.
Economist Saul Eslake of the Grattan Institute said the budget would indicate whether the government was serious about making cuts.
"It sort of has to be a razor approach, otherwise it has failed its key task," he told AAP.
"Tasmania needs to confront a reality which has always been there ... and that is Tasmania spends far more per capita delivering public services.
Mr Eslake said the Tasmanian government needed to reform its spending, especially with the federal government's review of the GST carve-up.
"The crunch has come because the bouyant revenue that it got for the first seven years of its life is no longer there," he said.
"The GST for the first seven years delivered the state more than it expected, and that allowed the government to coast.
"Now, instead of GST revenues growing by more than seven per cent, it's likely to only be 3.5 per cent, and the Tasmanian share of that is under threat from the Gillard government's review.
Mr Eslake said he was worried the cuts, when delivered, would amount to little more than window dressing.
"The solutions that she's proposed thus far ... are basically just deferring capital expenditure and stopping highly paid public servants from purchasing European cars," he said.
"They're not going to cut it. She needs to be much more strategic and surgical."
Making the premier's task more difficult is the need to appease Labor's minority government partner the Greens, who promised not to sack workers ahead of the last state election.
It remains to be seen whether the two Greens members of cabinet will take any ownership of the budget.
The state's unions have vehemently opposed the cuts since they were first suggested in February.
The Community and Public Sector Union (CPSU) and the Health and Community Services Union (HACSU) will even hold protests in Hobart while the budget is being handed down.
CPSU Tasmanian secretary Tom Lynch said he had no qualms in taking on a Labor government
"We represent workers, and that's the only consideration we have," he said.
"Our members were given promises at the last election by Labor and the Greens and the premier has clearly walked away from them."
The Liberals have found themselves in an awkward marriage of convenience with the unions, having opposed cuts to frontline services.
The government pounced on suggestions the Liberals were not going to deliver an alternative budget, but shadow treasury spokesman Peter Gutwein said he would reply in full next Monday.
His day of judgement will have to wait until then.
