BEAMING broadly, Treasurer Michael Costa delivered his first state Budget yesterday – dedicated in the main to addressing the formidable problems the Carr-Iemma Government faces in the run-up to the state election on March 24, 2007.
The greatest hurdle to that objective, as identified by the Budget's spending priorities, is the massive neglect of state infrastructure over the past 11 years, a disaster largely created by Costa's predecessor Michael Egan's obsession with surpluses.
There was no mention of the woeful legacy Labor's former treasurer has handed the state and the names Bob Carr and Egan were not mentioned (nor were the Cross City Tunnel or the Snowy Mountains).
It's as if Iemma and Costa miraculously emerged on the government benches untainted by any association with past Labor administrations and untouched by the scandalous failures of their own.
Yet the record shows Iemma was minister for public works and services, minister for sport and recreation and minister for health during Carr's reign, and Costa held down the portfolios of police, transport, roads, economic reform, ports, waterways and finance.
Between them, there is barely a senior Cabinet post they haven't held – and it would not be modesty that prevents them flaunting their records.
ReplyDeleteWhat these long-time Labor ministers are attempting to do is convince the public that all that is old is now new and that what's gone before happened without their involvement.
To that end, they don't just want to bury the past decade, they want to pretend it never existed. Thus, the problems which everyone in NSW is aware exist with hospitals, schools, roads, police, power, water and everything else the state is responsible for are addressed as though they are challenges for future generations.
While it is prudent to budget for the ageing population, as Federal Treasurer Peter Costello has been saying, it is also necessary to acknowledge the problems of the present.
The Carr-Iemma Government cannot recognise past problems without accepting responsibility and admitting the new team is the old team with some rebadging.
The figures don't dissemble and the magnitude of the problem that exists is conceded by the whopping $41.3 billion commitment to remedial spending on infrastructure over the next four years, a massive 45 per cent more than the amount allocated over the last four years.
Costa has allocated $9.9 billion to be spent in 2006-07, an admission there are problems which the State Government has neglected since first elected in 1995.
Unfortunately, this level of expenditure, necessary as it is to pay for the overdue patches for the state's frayed and stretched infrastructure, also forces the Carr-Iemma Government into debt – with a deficit of $696 million – which in turn necessitates the suspension of the state's Fiscal Responsibility Act, passed just last year and designed to maintain general government net debt at or below its June 30, 2005, level of 0.8 per cent of general state productivity.
The Fiscal Responsibility Act might have been the Egan Golden Rule, but it was too short-lived to earn a catchy sobriquet.
Costa has however boldly given his name to what he calls the Costa Golden Rule, a pledge to deliver a budget result which will average 2 to 3 per cent as a share of total state revenue over the course of the property cycle.
Lacking the resource exports of Western Australia and Queensland which are underpinning the nation's current economic boom, Costa is staking NSW's economic future on a property sector recovery hedged by some long overdue savings to be extracted from the public sector (public service unions willing) and a punt on the share market.
He says he will shrink the public sector over the next two or three years, with up to 5000 workers becoming redundant.
Senior executive staff will be able to remain on the unattached list for a period of four weeks before being moved on.
Echoing the Federal Government's industrial relations reforms, the State Government will also reduce sick leave and overtime payments and begin managing leave to the extent of considering a shutdown of non-frontline services for a two-week period over Christmas.
Addressing the abundant neglect evidenced from policing through transport, education, health and so on, will give the Government's political operators opportunities to claim credit for doing something in almost every city, town and suburb – and the candidates will be out there doing just that.
But they won't be able to blame past Coalition state governments for the mess and given the floods of GST revenues NSW has received it is impossible for Iemma and Costa to plausibly claim they have been shortchanged – even if they are not exactly delighted with the distribution formula.
The problem for Costa and his leader is they were integral to creating the problems they now claim to have the answers for.
For them to expect the public to believe they have the capability and competency to clean up the mess is a huge ask indeed.
akermanp@dailytelegraph.com.au