Rolling in gold and stupid to the core by Piers Akerman
NSW, the ACT and Queensland will go through the charade of introducing their state Budgets today, following the comedies presented by WA and Victoria last month.
They are better characterised as tragedies, for every state has demonstrated nothing but incompetence since the GST was introduced five years and 11 months ago, squandering the largesse extracted by the Federal Government and leaving only bloated bureaucracies as evidence the cash ever existed.
The value has not been exactly zero – it is one of those numbers that is so small that, while its exact magnitude cannot be determined, its presence is understood to have been established because where there was once something tangible there is now nothing.
If any individual handled their personal finances as the states have handled theirs, they'd be in gaol for fraud.
Consider this. When the GST was introduced on July 1, 2000, the states were forecasting a total revenue growth over the next five-year period of just 3.2 per cent per year. The revenue they were to receive from grants from the GST was expected to grow by 10.7 per cent but, because they were expected to wind back their own taxes in return for the GST stream, they did not expect to be net beneficiaries until 2007.
According to a study by the reputable think tank the Institute of Public Affairs, the reforms initiated by the Hawke-Keating governments and pursued by the Howard Government, combined with the current resources boom, have delivered revenues that have grown by an average annual rate of 8 per cent per year, 4.8 per cent greater than forecast.
ReplyDeleteThe study's author Dr Mike Nahan says the states have received a staggering $70 billion more than forecast – nearly 15 per cent more than predicted.
But the people haven't seen any benefits because the states have participated in a spending orgy which makes dole day at the local RSL look like a church picnic, and there is little to show because they splashed out on recurrent spending, principally on public service wages.
Dr Nahan's report says "through a combination of sloppy budgeting, failure to control public service wages, and a propensity to throw money at problems, they have, in aggregate, consumed their reform bonus without undertaking reform or investing in infrastructure".
The limits on spending the states loosely imposed upon themselves before they received the rivers of GST gold went out the window.
Tasmania spent 32 per cent more, the ACT blew 21.4 per cent more, Queensland punted 19 per cent more, the NT went over by 15 per cent, NSW by 14.8 per cent, Victoria 13.3 per cent, WA 12.6 per cent and SA 12 per cent.
People in NSW have long been aware the cash was not going on infrastructure – transport, health, education or security. That was all being funded, when it was funded at all, from new borrowings – as it will again be today – and through sleight of hand book keeping.
From data on salaries and employment levels on the public record, Dr Nahan identified the principal beneficiaries of the states' spending spree – public servants.
While the rest of the workforce relied on productivity increases for their higher incomes, the bureaucracy enjoyed an average wage growth over the three years to 2005/6 of 9.3 per cent and the state public sector workforce grew by 11.2 per cent over the same period.
As anyone who has had to deal with a government department in any state would well be aware, the frontline staff have not increased in number but the ranks of the administrators have swollen by some 30.5 percent.
Almost a third more bludgers at the senior end of the public service, who, when their turn comes to take the rap for their respective minister's latest stuff-up, will be placed on the inactive list on the same salary, or given a golden handshake for not spilling the beans on political incompetence.
Though the states are all receiving far greater revenues than they ever agreed to or could have dreamed of when they signed the initial Inter Governmental Agreement (IGA), each has blamed the Federal Government for its failure to provide adequate services or invest in infrastructure to meet future demands.
Sure, money has gone into hospitals and education and other services but, as the state governments have failed to demonstrate any management skills, there have been no measurable improvements and most Australians would agree they are getting less now than they did before the GST.
Despite the unprecedented level of unexpected revenue, every state has attempted to blame the Federal Government, the source of the new prosperity, for its problems.
The reality is there is barely a single politician in a state government cabinet who could get a job at a similar level in private enterprise – and it shows.
For the most part, they bring no expertise, no marketable skills, and survive only through the apathy of the population.
The Government has gone a considerable way to provide budgetary reform – the states have done nothing but whine for more cash to waste.
The Government – and more importantly the Australian people _should put an end to this abominable waste.
akermanp@daily telegraph.com.au