Monday, January 07, 2008

Cold, Heartless ALP Cut Vital Spending

Natural Disaster Floods, originally uploaded by ddbsweasel.

Keeping any spending on their mates to record levels, the ALP are seeking ways to save $15 billion from other spending initiatives.

Cuts to programs like the Workplace Authority ($285 million) which helps protect workers from employer excess.

Or Digital Australia, which was set up to smooth the transition from analog to digital tv. No profit there for the ALP.

Or the business oriented 'Innovation Ambassador' program which sought to encourage small business, always a threat to the big business beholden ALP.

Or sporting facilities in marginal electorates, research programs into new technology, from silicon chips to cloud seeding.

None of the individual programs of the former government were excessive, but the ALP are confident they can cut $15 billion. The cost to Australians will be substantially higher.

1 comment:

Anonymous said...

Rudd to axe Howard's spending commitments
By David Uren
BUREAUCRATS have been ordered to begin sifting through 225 individual spending commitments made by the Howard Government since last May to identify those that can be axed.

The Rudd Government is aiming to make savings of several billion dollars before the May budget, and expects the overturning of commitments made by the Coalition to make a substantial contribution to his target.

"The former government made many spending decisions at the last minute before the election campaign and we will obviously be scrutinising these decisions very closely," Finance Minister Lindsay Tanner told The Australian.

The Department of Finance has sent a request to all public service departments asking them to identify opportunities for "budget reversal".

Some are obvious, such as the $285million provided to establish the Workplace Authority. Digital Australia, an organisation established to co-ordinate the shift from analog to digital television, will also be scrapped.

However, most of the vulnerable projects are small, such as the "Innovation Ambassador" program, under which the former government proposed paying for people to spread the word about entrepreneurialism among small businesses and young Australians.

Other commitments that could be axed include several sporting facilities in marginal electorates, a program to fund the design of an Australian semi-conductor chip, a $10million contribution to a private company developing cloud seeding technology, and $12.5million to support nuclear power research.

The Howard Government embarked on a slew of projects, which individually were modest in cost but when combined add a total of $15 billion to budget costs over the next four years.

There were 175 separate spending proposals between last year's May budget and the mid-year budget update, which was ruled off on October 10, four days before the federal election was called.

Over the following seven days, a further 50 spending initiatives were announced, ahead of the government entering the caretaker period, with the writs for the election being issued on October 17.

Labor is finding that its efforts to cut spending are being frustrated by the fact that most public service spending involves contracts with outside parties or with established expectations of entitlements. These are difficult to reverse.

The commitments made by the Coalition ahead of the election may have funding allocated, but they are not yet set in stone and can be undone. Labor views them as glorified election promises.

Two days before the federal election, Kevin Rudd gave an indication of Labor's thinking on possible savings when he said that the Howard government had not "systematically applied the meat axe to its own administrative bloating for the better part of a decade".

Labor is now putting its beliefs into practice, convinced there are large savings to be made by making individual public service agencies more efficient.

Mr Tanner says the previous government gave public service agencies too much autonomy to spend money as they pleased.

"The highly decentralised model run by the former government has allowed financial inefficiency to flourish," he said.

In some areas, agencies have been claiming more money in their budgets than they have actually been spending, while others are sitting on financial reserves that would be better managed centrally.

"We are strongly committed to re-establishing central discipline in order to ensure that taxpayers get value for money," Mr Tanner said.

He has already announced that the Government will stop individual departments from buying their own supplies and will instead wield the combined buying power of the entire public service to strike a better deal.

The only area of the public sector where this now takes place is in motor vehicle leasing, where costs were cut by about a third.

The Howard government liked to treat individual government agencies as though they were private business entities responsible for their own finances, with the government's role as a shareholder.

An example of the inefficiency this generated was uncovered by Labor during a parliamentary committee inquiry, with the Department of Veterans Affairs paying more than $100,000 to an investment bank to accept a term deposit of $6million.

At the end of the election campaign, Labor estimated that its spending promises would leave the budget with a surplus in 2008-09 of $12.7billion, or 1.07per cent of GDP.

Treasurer Wayne Swan and Mr Tanner would like to add at least $2billion to this, and probably more; however, the final size of its savings will depend on how much political damage the Government is prepared to wear.