Economy
Giddings wields PS axe
The Tasmanian Government has announced major cuts to jobs in the public sector to cover a massive drop in state revenue.
The Government’s mid-year financial report reveals the state has lost $200 million in GST revenue this financial year and a total of $800 million since the global financial crisis took hold three years ago.
The new head of Treasury, Martin Wallace, says the situation is not a crisis but is unsustainable and will see the state return to debt levels of the 1990’s if no action is taken.
The Premier and Treasurer Lara Giddings has announced immediate savings including cuts to Ministerial Offices, IT projects, renewable energy loans and breaking election promises such as a medical helicopter service.
Ms Giddings has also announced 2,300 public sector jobs will go by 2015 reducing wage costs by three per cent.
The Premier says this does not necessarily mean redundancies but cutting back jobs as staff turns over in departments.
Unions Tasmania boss Kevin Harkins says he’s concerned the Premier hasn’t ruled out sacking public servants as part of the cutbacks.
David Killick, Mercury:
Giddings to cut public sector
THE State Government will shrink the public sector and axe several major projects to get Tasmania’s balance sheet back in the black.
Releasing the Mid Year Financial Report, Premier and Treasurer Lara Giddings today warned Tasmanians to expect three tough state Budgets in a row before the surplus was restored.
Ms Giddings said that savings required will be the equivalent of 2300 jobs and she can’t rule out forced redundancies in the public service or cuts to frontline services.
And the Government will axe the promised helicopter aeromedical retrieval service to save $30 million and cancel the proposed Cosgrove sports high school to save $18 million.
Major points of the mid year financial report:
* Public sector to shrink by 3 per cent a year for three years
* Cost cuts equivalent to 2300 full time jobs.
* Frontline jobs could go, redundancies not ruled out.
* $420 million in savings sought.
* $18m Cosgrove specialist sports school axed.
* $30m helicopter emergency medial service cancelled.
* Cuts to events attraction program, renewable energy loan fund
* $4m in information technology projects cancelled.
* Ministerial and parliamentary budget cuts worth $2.5 million.
But Ms Giddings promised the redevelopment of the Royal Hobart Hospital would proceed as planned.
Under today’s plan, Government business enterprises will no longer get state government handouts, saving $97 million over the forward estimates.
Ms Giddings said the global financial crisis had cost the state around $800 million in lost revenues and drastic action was …
MID YEAR FINANCIAL REPORT CONFIRMS ECONOMIC DIFFICULTIES
History Repeats Itself
Nick McKim MP
Greens Leader
The Tasmanian Greens said that today’s confirmation that the state is facing tough times ahead is a case of history repeating itself, where minority governments have to tackle the poor economic legacy left by majority government mismanagement.
Greens Leader Nick McKim MP also said that the Greens stand by their election policy of not supporting forced redundancies in the public sector, however we are prepared to sit down with the Premier, and public sector unions, to work through strategies to improve public sector productivity.
“Sadly, the Mid Year Financial Report indicates that history is repeating itself,” Mr McKim said.
“Tasmania’s recent history proves that again and again the Greens have been called upon to make the tough decisions to put the state back onto a sound economic footing, only to see that hard work squandered by subsequent majority governments.”
“The Liberal Gray majority government plunged the state to the brink of bankruptcy from which it took the tough budget decisions of the Labor-Green Accord to turn around.”
“The subsequent Liberal Groom majority government squandered many of the advances gained through that successful debt-reduction strategy, which was only turned around when the Greens stepped up to the plate during the Rundle minority period.”
“That hard work by the community has again been squandered by years of Labor majority government.”
Matthew Denholm, The Australian: THE jobs of nearly one in 10 Tasmanian public servants are under threat after new Premier Lara Giddings announced $430 million in cuts to the state’s budget.
Just three weeks after becoming Premier, a sombre Ms Giddings, who is also Treasurer, warned that the cuts, over four years, were vital if the island was to avoid sliding back into the disastrous economic malaise of the 1990s.
And she warned of more pain to come in the June budget, describing the immediate cuts as merely “day one” of a new austerity drive that she blamed on the global financial crisis.
“This is not a crisis . . . this will become a crisis if action is not taken now,” she said, blaming an $800m drop in revenue on the global downturn.
“There is now no more hay left in the barn. We are living beyond our means and spending must be cut in line with our reduced income so we do not go back into net debt.
“If we do not take decisive action …
FINANCIAL DIFFICULTIES REQUIRE POLITICAL RESPONSIBILITY
Public Sector Alternative Challenge to the Liberals
Nick McKim MP
Greens Leader
The Tasmanian Greens today said that the current power-sharing Parliament provides a positive opportunity for all parties to work in a mature and responsible way to put the state’s financial situation back on track, despite the tough decisions that will need to be made.
Greens Leader Nick McKim MP challenged the Liberal Party to work constructively with all stakeholders, including the Greens, Labor and unions, to develop workable public sector productivity strategies rather than play politics.
“The simple fact is that, as we have said consistently, a power-sharing Parliament means that no one political party can expect to always get its own way. Therefore the responsible and mature process is to negotiate common ground in the interests of the Tasmanian community,” Mr McKim said.
“The Greens position remains that we do not support forced public sector redundancies, however as five votes out of twenty, we are upfront that while we will go into bat in accordance with our policy we are not in a position to guarantee complete success on our own. I will not insult the intelligence of the Tasmanian people to try and pretend otherwise.”
“We have a window of opportunity now, before the State Budget is finalised, to find cost-saving mechanisms which could prevent or reduce job losses, and if the Liberals are serious they should come to the table.”
“Recent history shows that it takes minority governments to work together and often make hard calls to fix up the mess majority governments have made.”
“The Labor-Green Accord debt reduction strategy achieved this, the Rundle-Green minority period also faced up to similar challenges, and after years of Labor mismanagement, the Greens are prepared to front up again.”
“We Greens are prepared to sit down with the Premier, public sector unions, and other stakeholders to work through strategies to improve public sector productivity. Are the Liberals prepared to commit to the same?”