A report* released today By Professor Bill Mitchell and Dr Beth Cook from the Centre of Full Employment and Equity at the University of Newcastle indicates the measures announced by the Premier in the Mid-Year Financial Report will reduce economic activity and employment in Tasmania.
The report finds that ‘proposed expenditure cuts, including the reduction of 2300 FTE jobs in the public service will have adverse economic and social consequences.’ It predicts flow on job losses in the private sector of between 900 and 2500 jobs taking the total jobs lost across the State to as many as 4800.
It finds that ‘existing high levels of labour underutilization (in Tasmania) strongly suggest that the displacement of public sector workers will increase unemployment and possibly result in some affected workers becoming long-term unemployed.’
On services the report states that ‘Governments also contribute to economic and social development through a range of services including education, health, housing, transport and community services. The severity of the cuts announced in the 2010-11 Mid-Year Financial Report place these services at risk.’ It predicts ‘longer waiting times for clients and reduced client satisfaction.’
The strongest message in the report is that the timing of cuts at this stage of the economic cycle is all wrong and may prove counterproductive. It finds that ‘Sustainable budget strategies require a net operating balance over the economic cycle. The government has adopted a contractionary fiscal strategy that seeks to deliver a Net Operating Surplus on a four-year rolling basis by 2014-15. The government’s choice of a four-year period is a short time horizon that is not related to the length of the economic cycle.’
The report notes the Government is currently undertaking reviews into both taxation and services and indicates decisions on expenditure cuts should follow these reviews not precede them. ‘An efficient and effective approach to policy decisions on revenue and expenditure adjustments requires a holistic approach that takes into account a comprehensive assessment of the nature and quantum of services that will be provided to the people of Tasmania and the staffing and other resources necessary to deliver these. Therefore, major decisions on future fiscal policies should be deferred pending completion of these reviews.’
The report was commissioned by the Health and Community Services Union (HACSU) and the Community and Public Sector Union (CPSU). Public Sector unions believe the approach being taken by the Premier is based on cutting jobs and services and will only result in slowing the economy and worsening the fiscal outlook.
“This report shows Tasmanians there is a sound economic and social basis for finding an alternate solution to our financial situation rather than heading down the path put forward by Treasury, the TCCI and advocated by senior advisors like Richard Dowling,” said HACSU Acting Secretary Tim Jacobson “It’s time the Premier listened to alternate views that genuinely care about Tasmanian people and understand the difficulties that are facing.”
CPSU General Secretary Tom Lynch said “Labor should take heed of the message that was sent by the voters last weekend. People who would normally vote Labor are turning on Labor because it’s lost its way.”
Mr. Lynch said “This report is a roadmap to getting back on track and regaining trust. The report provides the Premier a better way forward and we strongly encourage her to take it.”
*Copies of the report will be available at the media conference or can be downloaded at:
www.abettertasmania.com
Professor William Mitchell and Dr. Beth Cook, who have undertaken this work, will hold a media conference at 12 noon today at the CPSU Office, 157 Collins Street.
• Download Report Summary: Statewide_039.2011_Economic_report_summary_-_Stand_Up_.pdf
• Download the full report: CofFEE_report_Final_Tasmania.pdf
