Budget Response – Terry Martin

TERRY MARTIN

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

Terry Martin MLC

Independent Member for Elwick
2009/10 Budget Response Speech
Legislative Council, 17 June, 2009

Introduction

Madam President, I suspect that we in this chamber can agree on at least two things about the Budget presented last Thursday. The first is that, once again, the officers of the Department of Treasury and Finance have contributed enormously to the governance of this state.

Their efforts in preparing the information and commentary on offer in the Budget papers were herculean. At a time when leaked Budget information led to unwarranted accusations being directed at departmental officers, those officers continued their important task with total professionalism. I want to acknowledge those efforts and thank them for what is a sober – and sobering – assessment of the outlook for the Tasmanian economy.

The second likely point of agreement will be that the Tasmanian Government is indeed justified in suspending the existing fiscal strategy. The Global Financial Crisis, now better understood as a global economic crisis that is rapidly generating a series of related social crises, has moved the goalposts.

The former fiscal strategy is clearly no longer achievable until economic conditions return to some semblance of the 2002-08 period.

Notwithstanding the fine work of Treasury, Madam President, our efforts to predict the trajectories of the global, Australian and Tasmanian economies over the next few years will be a challenge. They will be far more speculative, contingent – even heroic – than they have been not just in recent memory but in living memory.

None of us, neither skilled economists nor concerned laypersons, can speak with real confidence about the next chapters in this troubling narrative of economic transformation.

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

How do we assess this Budget?

How, amidst all this uncertainty, do we form a judgement about a Budget such as that handed down on Thursday? How do we assess the proposals for the coming financial year without a measure of confidence about the shape of years to come?

Madam President, it is tempting in such a context to zoom down to a level of expenditure or revenue detail where we retain some level of familiarity, of comfort, of expertise. To leave the big-picture issues to the technocrats. To instead indulge in the retail-politics of commentary about particular interest groups or constituencies that we seek to represent.

In my case, Madam President, that would mean focusing my comments on a range of social justice, local government, planning, good governance and tourism issues impacted by this Budget.

Reminding Tasmanians that I care about these issues, that I know something of them, and that I will continue to offer my best advocacy efforts in the interests of Tasmanians affected by specific Budget measures.

And yes, Madam President, I will – later in my response – provide some specific observations about those issues, and others. I will indicate concerns I have and will foreshadow the sorts of questions that will require answers from the Government in coming weeks – especially but not exclusively in the Estimates deliberations.

However our responsibility as members of this House, Madam President, must go beyond the particular and the parochial. We have an obligation to assist the Tasmanian community to form a judgement of this Budget.

And of course to form a judgement of this Government – especially at this key stage of the electoral cycle. We have a responsibility to assess the Budget at numerous levels, and to report our assessments as frankly and as coherently as we are able.

What are those levels? Madam President, the Budget is the Tasmanian Government’s most important instrument. It is an instrument not just of economic policy but of social policy, of industry policy and of environmental policy.

It is also, when we examine the interplay of those levels, the clearest statement of the values of the government of the day. We have a vitally important role in revealing and scrutinising those values, not just the specific policy proposals advanced by the Government.

My argument, Madam President, is that when we sense that our economic roadmap is no longer reliable, that we can no longer be confident in our bearings on the shape and dimensions of the global and national economies, then we must anchor ourselves in other ways. In such times, we must re-focus on values, on the moral compass that each of us has at our disposal.

My critique of this Budget, Madam President, is thus framed in value terms. It is an assessment of the values revealed within the key elements of this Government’s proposed interim fiscal strategy.

A Budget lacking in core Labor values

My assessment, in summary, is that the values so revealed have little to do with a Labor Party that I once knew. A party that once proudly proclaimed itself a partner in a broader labour movement.

Instead, this is a Budget that displays a callousness towards those struggling to hold their place in the job market, and those who have already lost that struggle. It is a Budget that demonstrates a profound disrespect for the valuable work contributed by public sector employees.

It is a Budget that has failed to emphasise the importance of equity, especially as it applies across generations of citizens. And it is a Budget that displays a distinct absence of backbone in the face of tough decisions that must be made.

In short, Madam President, this is a Budget that is built on values that we cannot support. Tasmanians, in their search for a visual image that captures the essence of this Government and this Budget, will not immediately conjure up a picture of a moral compass.

A spinning poker-machine mechanism, perhaps. The sad image of a slowly rotating wheel on derailed railway rolling stock, maybe. A revolving door of ministers and minders, possibly.

But the symbol of a moral compass, Madam President, will not immediately come to mind.

Unemployment – no time for public sector redundancies

Let me go straight to my main concern about this Budget, Madam President. The candid assessment of Treasury is that the decline in economic activity in Tasmania over 2009-10 will see the loss of 5000 jobs.

This, on top of the 5,600 jobs already lost since Tasmanian employment peaked last September, and the further 2,900 jobs that in that same period shifted from the full-time column to the part-time column.# As a result, we will see the number of Tasmanian job-seekers grow to a level – some 19,000 – not seen since early 2003.#

The Tasmanian Government’s response to this crisis – a term, Madam President, that is often over-used but surely not on this occasion – is to add to the misery by shedding 800 public service positions.

No, not positions, Madam President, let me correct myself – people. It is the policy of this Government to respond to current and looming unemployment by adding a further 800 direct job losses to the mix.

Let us imagine a comparable scenario, Madam President. Let us imagine that a large Tasmanian private company announced that it would shut its doors, sacking 800 skilled, well-paid workers in the process.

A company like Nyrstar currently has about 500 workers, Madam President. An operation like the Rio Tinto aluminium smelter at Bell Bay currently has about 650 employees and contractors on site, so let us think in terms of one of those operations, but bigger.

How would we respond, Madam President, to news of such a closure, and how would we expect the government of the day to respond?

We would be horrified, I would suggest. We would immediately begin calculating the likely multiplier effect of such a job loss – the real loss of employment that would ripple out from such a catastrophe.

We would bemoan the loss of skills as sacked workers moved interstate – skills we know would be impossible to replace when the economy turned upward again.

We would point to the inevitable impact on families and communities and we would insist, Madam President, that the government acted to prevent the closure.

And, Madam President, the government of the day would indeed act. It would sit down with the employer and discuss a range of ways in which assistance could be provided.

That assistance would not be cheap, of course, but this would not deter the government, for it would have recognised that far fewer resources would be required to save 800 jobs than to create 800 jobs elsewhere, and accordingly the public cheque book would be opened. The Bell Bay smelter would not be allowed to close. The Risdon zinc works would not be allowed to close.

And yet here, as a matter of public policy, the Government has decided to deliberately contribute 800 jobs to the scrapheap. This is a remarkable decision for any government, let alone a Labor government.

In essence, the Government has said that public employees are different, that because there are short-term cost-savings involved, it matters less.

We don’t yet know, Madame President, who these 800 people will be. We are told that they will not be directly involved in service provision, and that a number of them will be in senior or middle management positions.

This is meant to reassure us, I gather. They are not real workers, the subtext says, but non-essential fat-cats. Pen-pushers perhaps, clogging up the system, adding unnecessary layers of bureaucracy.

I see these public servants differently, Madam President. I see them firstly as people – people with families, with responsibilities. I see them as skilled, committed servants of the public who have attained middle or senior management roles because of those skills, because of that commitment, and because of their experience in government, in working their way up the ranks.

I see them as occupying positions that, while not directly involved in the provision of core services, are essential to the support and management of those who do provide those services. I see them as bearers of corporate memory in their agencies.

They are investments, Madam President – investments that governments have made via various formal and informal professional development processes during their careers in the state service.

Investments that will provide dividends to our government and community, but only if we hold on to them. It is rarely prudent to divest sound long-term investments to cover short-term cash-flow difficulties, and divesting ourselves of 800 skilled managers would be a tragic error.

The mechanisms for culling public servants

Even if we could justify such a drastic reduction in our state service workforce, Madam President, we must be concerned about the way this Government proposes to achieve that target.

The Government has elected to use two mechanisms to distance itself from the human and organisational consequences of its policy settings. First, it is saying that the basis for the reduction will be voluntary redundancies. We are meant to breathe a sigh of relief that public servants will not be forced from their positions.

I am not at all reassured by this measure, Madam President. We know what will happen if this decision is implemented. We know that those with the highest skill levels – the highest employability characteristics elsewhere in the labour market – will be most likely to consider redundancy packages.

They will do so not because they are not committed to public service but because they are confronted by a Government that has no such commitment.

They will recognise that if they don’t take the opportunity to move on, they will be left to shoulder a heavier workload as their colleagues move on. The result will be a lower calibre state service, not just a smaller one.

The second mechanism chosen by the Government is to wash its collective hands of the decisions about just where cuts should be made. Departmental secretaries will be expected to make these decisions.

The ground rules are as yet fuzzy, but we understand that essentially they boil down to two: make sure some senior officers are included in the cull and ensure that direct service personnel are quarantined. “It’s your choice, just get it right” seems to be the message.

Of course what the Government is really saying to its departmental heads is that they have already failed in their duty as managers. If departmental heads were genuinely aware of staff who were not capable of contributing to the important work of their agencies, they should have used existing performance management processes to move or remove them.

What will happen, Madam President, if a departmental head, in the spirit of the proud Westminster tradition of providing frank and fearless advice to government, tells his or her minister that sorry, my agency has no fat to trim? Tells the minister that any further cuts will impact directly on service provision or on some other key element of the government’s own policy agenda.

Or tells the minister that the only officers expressing interest in accepting voluntary redundancies are the very ones that must be retained if the agency is to function properly?

I would very much like to believe, Madam President, that this courageous departmental head would earn the thanks of the relevant minister, and the gratitude of the parliament.

My fear, however, is that some of our current crop of ministers would instead find that they did after all have the gumption to nominate at least one dismissal – a Senior Executive Service member at that.

If the Government genuinely believe that we can lose 800 senior officers without a significant impact on the outputs and outcomes of government, they need to explain where they believe the cuts should occur.

They should table the advice they have received to date – the advice that this decision was based on. In the process, they should explain why, after eleven years in office, it has taken them so long to identify these cost-cutting opportunities.

Few of us will hold our breaths waiting for such explanations, Madam President.

Perhaps, Madam President, this is a policy that is deliberately designed to fail. Perhaps the intent is to look tough, to look like prudent fiscal conservatives to appease the TCCI, knowing that only a fraction of the targeted 800 redundancies will actually occur.

Perhaps it is the Treasurer’s expectation that next June he – or his successor as Treasurer, perhaps – will explain that “we tried, but fell short of our target, with a consequentially larger deficit as the outcome”. While I would much prefer this outcome to the shedding of 800 skilled public servants, it would be a remarkably callous trick to play on our state service.

The importance of debt and cross-generational equity

My argument, Madam President is that not only will we undermine the capacity of our state service by such measures, not only will these be false savings given the cost of replacement and upskilling that will be borne in coming years as the economy recovers, but that there is simply no need.

Our economy is such that we can carry additional debt to address short-term revenue shortfalls, and that indeed we should carry additional debt.

Mixed messages emerge from this Budget. First, we are told that the Tasmanian economy is currently travelling better than other jurisdictions and that while it may lag behind other states in emerging from the recession it will nevertheless do so in a few short years.

Then, Madam President, we are told that the Net Operating Deficit for 09-10 will be essentially the same as in 08-09 – growing from $102m to $117m only. That Net Operating Deficit is then expected to moderate each year until 2012-13 when a surplus will re-emerge.

We are also encouraged to see this Budget as having a major focus on infrastructure, and it is impossible to disagree. A series of important infrastructure investments are commenced or continued in this Budget.

That infrastructure will contribute to economic growth and social progress for decades to come. It will benefit not just this generation of tax payers but future generations. It is appropriate, therefore, that some measure of the cost of these developments be spread across those generations.

To do otherwise would be to ignore the importance of cross-generational equity. Labor governments used to value equity, Madam President, and should re-learn such values.

No other state government, in the budgets brought down to date at least, has elected to cut public service numbers. Some, like Western Australia, have chosen to apply temporary caps on numbers, but only Tasmania, the state we are told is fairing best in this economic downturn, sees the benefit of deliberately making skilled workers unemployed.

Surely, Madam President, we learned two important lessons from the long haul back from the huge public debt bequeathed by Robin Gray. We learned not to allow debt of such magnitude.

But we also learned that with prudent management and discipline we can manage our budgets in such a way as to retire significant amounts of accumulated debt.

Three or four years of increased debt is warranted if it means we can avoid the human and human-capital waste of 800 redundancies. It is manageable if we recognise that those debts will require a disciplined approach when revenue streams improve.

Public housing – a public-sector debt success story

We tend to forget, Madam President, that so much of what is important in this state was built on public sector debt – debt that was incurred by forward-looking governments and carefully managed by their successors.

If not for public sector debt, for example, we would not have a public housing sector in this state to cushion us against the worst of housing shortages and the cruel fluctuations of private rents.

Successive Tasmanian Labor governments borrowed, firstly from their Loan Council allocations and later under the Commonwealth-State Housing Agreement provisions, and built many thousands of dwellings for families on low or moderate incomes.

From 1956, Tasmanian governments also borrowed CSHA funds to stimulate private home ownership through building societies and the then Agriculture Bank.

We should remember the scale of this enterprise, Madam President. Tasmanian governments built well over 30,000 dwellings for rental purposes – some 16% of all dwelling construction since the era of post-war reconstruction.

The thousands of homes constructed privately using CSHA debt-financing are in addition to this public housing effort, Madam President.

We should also remember the broader impacts of this courageous initiative – the growth and sustenance of a skilled building industry, with over 500 apprentices being trained by the Housing Department alone.

The social impacts of this visionary borrowing are almost incalculable. Thousands of families were able to raise children in secure, affordable homes, two thirds of which were later purchased by those families, commencing a process of wealth accumulation that is so difficult to imagine in current economic climes.

The people of Goodwood and Chigwell and so many other communities have much to thank for the vision of post-war Labor governments in this state and for the preparedness of those governments to skilfully utilise debt.

There is an irony in all this, Madam President, in that recent debates about the sustainability of our current public housing system have focused on the existence of residual debts owed to the Commonwealth as a result of those decades of borrowing.

Housing advocates such as TasCOSS, Anglicare and Shelter have called for the removal of this remaining debt obligation from the books of Housing Tasmania so that it can devote its scarce funds to much-needed construction and maintenance work. Sadly, these debates have, in a sense, given debt a bad name.

I support this proposed reassignment of the remaining debt, Madam President. I do so not just because I want to see Housing Tasmania building more dwellings but because there is an important principle involved here.

The benefits of the decades of borrowings extend to more than the current generation of public housing tenants. We have all benefited from the economic growth and social stability resulting from that era of construction.

And it follows that the large proportion of any remaining debt should be absorbed into the general state debt burden and funded by taxpayers generally, not just from the rents of our low-income tenants.

This same principle should apply to the much-needed upgrading of our public housing stock, especially the important energy retrofitting work that will address the costly inefficiencies of many dwellings.

These initiatives will also benefit generations to come, and are consequentially appropriate for a debt-financing approach where the broader Tasmanian community shares in the obligation to amortise that debt.

In summary, Madam President, I am arguing that a higher proportion of the important infrastructure projects proposed in this Budget should be debt-financed, consistent with cross-generational equity considerations.

I am arguing that this will provide capacity elsewhere in the Budget to retain our valued public sector workforce intact. This will permit a different sort of equity consideration – one where the interests of public employees are treated with the same respect and care as those of private sector employees.

Long-term unemployment – the key social inclusion test

Madam President, even if my argument convinces the Honourable Treasurer and his colleagues and they abandon their efforts to contribute to Tasmanian unemployment, we still face an extraordinarily difficult two or three years.

Moreover, we do so before the social fabric of the Tasmanian community has had time to fully recover from the long period of high unemployment through the 90s and beyond.

While employment levels in Tasmania improved beyond the expectations of most commentators, we should never ignore the reality of persistent patterns of long-term unemployment in this state.

The labour market will continue to be a precarious environment for those Tasmanians without post-compulsory education qualifications. Notwithstanding the efforts of this Government, those low levels of educational attainment – the drivers of so many dimensions of human despair – are not going to change rapidly.

As TasCOSS CEO Tom Muller reminded us all this past week, the most important social inclusion test for governments is how they address the issue of long-term unemployment and the immense human costs that result.

We were unwise to bask in the warmth of recent employment growth, neglecting these deep-seated structural issues. That warmth has now all but ebbed away, and we have an obligation to urgently examine ways that we can minimise the social exclusion impacts of unemployment, especially in households that have no employed member and in readily-identifiable job-poor communities.

While the Government is to be congratulated on not increasing the direct taxation burden on these low-income households, we must recognise that electricity costs and water/sewerage costs will increase faster than will the benefits available to Newstart recipients. These will be very tough times for those unable to retain full-time work.

What else could a Tasmanian Government do if it was genuinely concerned about the seemingly inevitable growth in unemployment over the next two years?

Perhaps we should look to the initiative announced by the Victorian Premier on Saturday. Premier Brumby unveiled a support package for retrenched workers that will guarantee those workers a training place, waiving applicable training fees for those eligible.

Tasmania, with its historically lower levels of educational attainment and job-ready skills, surely needs an initiative of this kind even more than our Victorian counterparts.

There will be those, Madam President, who will respond – more in reflex than in reflection – that surely labour market programs such as this are the responsibility of the Australian Government, not struggling state governments.

There are two important counter-arguments, however. First, the Budget handed down by the Treasurer on Thursday is already significantly underwritten by injections of Australian Government funding, especially in the crucial infrastructure work proposed.

We can hardly claim to be neglected by our federal colleagues. Second, there is too little time to embark on a protracted jurisdictional argument about such responsibilities – our job-seekers will need our help to upgrade or redirect their skills within an alarmingly short time period.

We must act now to anticipate the job losses and ensure that Tasmanians are not left languishing, waiting for some eventual economic upturn.

If there is a dominant theme in my comments today, Madam President, it is that in times of difficulty, preserving what we have should be our first priority. It is about ensuring that we do not allow valued structures and institutions to be undermined by this economic setback.

It is not efficiency, but madness, to allow valuable services and programs and agencies and skills to disappear when we know – absolutely know – that we will soon need to re-create them. That is what we are doing with the Department of Environment, Parks, Heritage and the Arts.

That appears to be what we have already done with our rail system. That is what we are about to do with 800 of our best and brightest public servants.

Lost opportunities at the local level – Chance on Main

And at a more local level, that is what we are allowing to happen with important services. Allow me to indulge the particular and parochial on this occasion, Madam President, and explain that we are about to lose an exciting and innovative service for young Tasmanians – Chance on Main at Moonah – because its funding is about to cease.

Chance on Main is an early intervention, prevention and restorative program for the 10-19 year age group in Glenorchy, with a particular focus on crime prevention.

The program provides hands-on activities – building and refurbishing furniture, creating music, fixing bicycles, learning computer skills and more – as part of a process of challenging young people to address violent or aggressive behaviours, to re-engage with schooling or study and to make positive contributions to the community.

It works, Madam President. It succeeds in giving expression to the principle of early intervention – the idea that if we spend more time building children, we need to spend less time repairing adults.

It fulfils needs identified by a range of Tasmanian Government agencies across a broad spectrum of issues: correctional justice; education; alcohol and drug support; parenting and many more.

Despite this cross-cutting approach, spanning and dissolving many of the conventional silo walls that bedevil our service systems, the funding is about to run dry. Everybody wants the program to continue, but nobody is prepared to pay for it.

Just ten months ago, ABS trend labour force figures for Tasmania listed only 10,000 unemployed persons. The Budget papers we are now considering make it abundantly clear that within a year that figure is likely to have doubled to 20,000.

The young people who currently benefit from Chance on Main already struggle to attain even a marginal attachment to the labour market. They are about to have twice as many competitors for every job vacancy in this state, with the prospect of no Chance on Main to assist them.

Madam President, not only does Glenorchy need a Chance on Main – every major urban centre in Tasmania needs such programs. This is the time when a Tasmanian Government with recognisably Labor values would acknowledge that future generations will benefit from the outcomes of these programs.

A true Labor Government would understand that because those benefits will be evident for decades to come, the payment for such programs can and should be spread over that time period. Like key infrastructure projects, early investment in our young people is worth borrowing for. The interest payments are negligible compared to the benefits.

The initial funding for Chance on Main was from the Australian Government, but a very strong argument can be made for the Tasmanian Government to enthusiastically accept an ongoing responsibility for this program – and for any comparable initiative that contributes to the more effective functioning of so many Tasmanian Government agencies and services.

Tourism

Madam President, I now turn to another sector where existing structures and existing initiatives are in danger of being lost because the Tasmanian Government has failed to understand how to respond to the current economic downturn. I refer to our tourism industry.

Honourable members will be all too familiar with the story of Winston Churchill’s pep-talk to his War Cabinet colleagues. It is reported that Churchill reminded those present that the Chinese pictogram for our word “crisis” was composed of two distinct elements, one signifying “threat” and the other “opportunity”.

In the business world, some companies are responding to the global financial crisis by cutting back their operations and cutting back their marketing efforts in an attempt to minimise the impact of the downturn.

Others, however, are recognising that the retreat of competing firms offers an opportunity to increase promotional efforts to take market share and to position the enterprise for rapid growth when economic conditions improve.

The Tasmanian Government, Madam President, has chosen to retreat in terms of Tasmania’s crucially important tourism industry. It has waved the white flag by cutting the funds available for tourism promotion.

Our competitors, the other state and territory governments, have maintained or boosted their promotional efforts. The outcome, Madam President, will be a predictable but entirely avoidable decline in Tasmanian visitor numbers, in industry revenue and in employment.

The Tourism Industry Council of Tasmania estimates that the impact of this Budget is to slash $10 million from promotional efforts over the next three years. By contrast, South Australia is reported to have allocated an additional $12 million over the next four years.

I understand that Western Australia is also spending an additional $2.9 million each year and that the Northern Territory has committed an additional $9.3 million over two years. These jurisdictions are our direct competitors for the core tourist markets of Victoria, NSW and Queensland.

While our Government saw “threat”, Madam President, these competing governments saw “opportunity”.

Yes, Madam President, we are aware of the hasty explanation offered by the Honourable Treasurer and by his colleague the Minister for Tourism.

They claim that the reduced tourism budget is no more than the natural and beneficial outcome of the sale of Tasmania’s Temptations – that the reduction reflects the fact that the Government no longer needs to subsidise this loss-making operation.

This response, however, fails to acknowledge that Tasmania’s Temptations was an important component of Tasmania’s overall marketing strategy.

This is why the Tourism Industry Council urged the Government to transfer the projected saving of $2.7 million annually to other promotional initiatives, calling for a total of $6 million additional investment in destination marketing.

Madam President, even if Tasmania managed to maintain its current market share, the global decline in tourism would mean a significant loss of revenue.

To endanger our market share by failing to match the marketing efforts of our major competitors would be a death sentence for many of the tourism operators who have worked so hard to build the industry.

It should not be necessary to remind the Government of the significance of the tourism industry. However, on the basis that repetition is still an important element of the learning process, Madam President, allow me to issue that reminder.

Last calendar year, 900,000 visitors spent $2.2 billion in our state, sustaining some 25,000 jobs#. Tourism represents 6.1% of our total employment, not including the oft-forgotten impacts on related industry sectors such as retail and transport.

This is a large industry, Madam President, and even small percentage impacts will result in the loss of significant numbers of jobs.

In Conclusion

Madam President, while I have indicated my considerable concerns about this Budget, it is appropriate that I acknowledge its strengths. In these difficult times, the continued emphasis on core health, human services and education initiatives is welcome indeed.

So too is the Government’s decision to avoid significant increases in taxes, fees and charges as a means of addressing projected revenue shortfalls. Nonetheless, this is ultimately not a responsible Budget, and is unrecognisable as a Labor Budget.

No Budget that deliberately targets its public sector employees can expect my support and I urge the Honourable Treasurer and his colleagues to remedy this major flaw.

Terry Martin