Economy

Labor’s deals: The Real Cost?

By Editor

Posted on February 28, 2005

I have recently had an extended stay in Tasmania and was impressed with its natural beauty and physical isolation, although it also appears isolated from many ideas and developments in other parts of the world.
My work in the intelligence sector keeps me associated professionally with organizations that focus on fiscal probity and formal means of assuring that democratic systems report accurately back to the people so that they may make informed judgements at election time. In intelligence we also study how such systems fail and what brings about their collapse – lack of probity produces corruption because opaque processes allow anyone involved to siphon money off with a low probability of being caught.

I must say that I was very surprised with the way that the Tasmanian Labour government, appears to be supporting the private sector by transferring major amounts of public assets into private hands. (Most labour governments are organised to support labour over capital whereas your government seems to support capital over everything else. Is this a strategy to make the Liberal (capital) party irrelevant I wonder?)

During my stay I was repeatedly confronted with diverse views on your forestry and other practices. The government appeared to side with the private sector and argue for untrammelled logging of public forests against public views that argued to retain and protect more forest for future generations.

With my professional background it didn’t take much effort to realise that the parties arguing for continued conversion of forest to plantation had something to gain from the practices – probably money. In complex cases it is useful to build a more complete picture of what is happening rather than the fragmented nature of news stories and press releases. What appears to be happening is a massive transfer of wealth from the public purse to the private sector.

Costs imposed on the public purse

I listed the various costs that were being imposed on the public purse that were benefiting the private sector. To keep a long story short, my list included:

* Items sold below market value: timber, buildings, poker licences and tourist resorts;

* Direct transfers of public assets to private sector: public forest converted to plantations, transfers of public land to private hands;

* Losses created by methods used: burning valuable timbers, converting timber quality woods to low value woodchips, water table losses;

* Downstream costs created for communities: air and water quality, tourism losses;

* Costs shifted to other budgets: cost of health care for people poisoned with chemicals in water supply.

Government reporting on many of these factors appeared very limited, with few actual figures available for public inspection.

Of course, the large dollar numbers are beyond the scope of many people so look at it like this: There are around 500,000 Tasmanians, so if the government spends $500,000 that’s $1 for every Tasmanian.

The value of poker licenses and the Coles Bay giveaway

Some costs have been documented in bits and pieces and the likely totals are very scary for a small State like Tasmania. The value of poker licenses and the Coles Bay giveaway to the Federal Hotels group has been valued at over $130 million – which is equivalent to $260 transferred from every Tasmanian person into private sector pockets.

Transfers of land (reported transfer of around 100,000ha to private sector) is probably worth at least $200 million ($400 per person).

Losses created by methods used converting timber quality hardwoods to smoke and chips are probably over $200 million ($400 per person) by now.

Water table losses could easily run into multiple billions of dollars over time according to papers lodged with the Environmental Defender’s Office but I’ll leave those aside for now.

Downstream costs for communities, air and water quality losses coupled with tourism losses could easily exceed $100 million ($200 per person).

Costs shifted to other budgets, is often a big “sleeper” item, depending on the health impacts of poisons in water, could run between $50 million and $500 ($100 – $1,000 per person).

Even with these conservative estimates, the current methods of government in Tasmania could be costing from $2,000 to $6,000 for every Tasmanian. That’s money that could have been given to the taxpayers, or invested in public health and dentistry.

This leads to the obvious question: Do individual Tasmanians understand how much they are personally contributing to these asset transfers and costs and are they happy with the situation? If they know and they’re happy then fair enough. But if they don’t know how can anyone say the public is comfortable with the situation.

It is amazing to see similar methods to those in Chechnya, Uzbekistan

These are large cost penalties to create for people, for a small economy and population such as yours, the cumulative costs appear both punitive and damaging.

It is disquieting to note that your government isn’t reporting these costs, neither do they appear open to criticism on the way they are operating. While we are used to that kind of opacity in government affairs in various Eastern countries (Chechnya, Uzbekistan etc) it is amazing to see similar methods in use in the “developed” West.

Remember, every government action can be costed in terms of what individual Tasmanians are giving up in order to pay that cost. The recently reported $100 million overpayment for one of your ferries is an example that (if true) has cost every Tasmanian $200 each, or around $1,000 for a family of 5 persons. By the way, has anyone checked who got the commission on that sale? Commissions are usually lump sum payments and if they were (say) 10%, then that would be $10 million commission paid out on the overpayment alone!

The big picture remains the same, massive transfers from the taxpayers’ pockets to the private sector

Whenever big sums of money are involved, it pays any government to protect itself by adhering to rigid standards of probity. Failure to do so opens up the suspicion of corruption and bias supported by secrecy.

It also means that people like me are forced to use estimates like these to reach conclusions. The answer is accurate reporting. Anyone can argue the details, the big picture appears to remain the same, massive transfers from the taxpayers’ pockets to the private sector along with even more massive wastes of resources.

Let me close by saying that I loved Tasmania and I hope that it can be kept in good condition with a growing economy. Perhaps in a few years I can return to its shores.

Yours truly,
Adele Sainte-Marie
Canada