No government relishes making the kind of decisions contained in the 2011-12 State Budget, Premier Lara Giddings writes.
AS politicians, we want to make decisions that are popular and to increase funding to areas such as health, education and police.
But there are times when leadership requires populism to be set aside and tough decisions to be made in the future interest of the state.
This is the situation we are facing in the wake of the global financial crisis, with the loss of $1.7 billion in GST and state taxation revenue over the next four years.
The decisions we made in the 2011-12 Budget were not taken lightly and I recognise that they have caused concern and anger in the community, which has given rise to this weekend’s rally.
The public have every right to have their voice heard and as a government, it is important that we attend this weekend’s event to reiterate and explain the extremely challenging Budget situation.
We have tried to minimise the impact on key services for the most vulnerable in our community. One of the few new spending commitments outlined in the Budget was $4 million to give action to the recommendations in the Social Inclusion Commissioner’s interim Cost of Living Strategy.
It may also surprise many to learn that both health and education will in fact receive more funding in this Budget than last year, only the growth over the next few years will be slower than in the past. The 2011-12 budget for Acute Health Services has still increased by 7.9 per cent over the 2010-11 budget.
So, despite the need to achieve efficiencies and savings, our hospital system and indeed most of the core government services will still be better resourced than they were a few years ago.
It has been argued that government waste is to blame for the Budget crisis we now face, but much of the increase in expenditure in recent years has been in health and education.
Since 2005-06, the Budget for Acute Health Services has increased by 67 per cent compared with growth in the government total revenues of 35.3 per cent.
This “waste”, as described by the Liberal Opposition and the Community and Public Sector Union, has actually supported a significant increase in the health workforce. Since 2007-08, the number of doctors in public health has increased by 196.8 FTEs or 35.3 per cent while nurses have increased by 587.7 FTEs or 20.6 per cent.
Together, health and education comprise more than 50 per cent of our total expenses. While in the past the Government has quarantined front-line services in these agencies, the magnitude of the task means that no area can be exempted from the need to find efficiencies.
The action the Government is taking is necessary to ensure that the services needed for the future can be funded on a sustainable basis.
If the Government did not take action to address the Budget position now, within four years the state would be facing net debt of $4 billion and an annual interest bill of $300 million. To put that in perspective, that is the equivalent of the entire budget of the Launceston General Hospital wasted on interest repayments to lenders.
The public should be wary of those promising quick and easy solutions to the task of returning to a sustainable Budget position.
The suggestion that we simply borrow more money at this point in time to pay for recurrent services like health is perhaps the most dangerous. The Budget is already in deficit and if we borrowed more, we could not even afford to pay the interest on that debt.
That is akin to a household maxing out the credit card to pay for groceries, and then having to take out a loan to pay the interest.
It is simply not possible to achieve the Budget Savings Strategies announced in the 2011-12 Budget without making the hard decisions the Government has taken.
It is not about priorities, as the Liberals keep on saying. It is about realities. The reality is that the Liberal Opposition’s Alternative Budget adopted the vast majority of our savings task, including $100.2 million from the Department of Health and Human Services. However, the Liberals are yet to detail how they would achieve those savings, seemingly without upsetting anyone in the community.
The Opposition’s only solution has been to abolish the State Architect, the Tasmania Together Board and pare back the fox-eradication program for a grand total saving of about $2 million. It costs $5 million a day to run our hospitals so the Liberals’ much touted alternative strategy would keep the system running for less than half a day.
If there were easier ways to tackle this problem, the Government would be doing them.
The Government didn’t cause the $1.7 billion revenue loss but it has a responsibility to get the Budget back on to a sustainable footing so we can continue to fund the services the community needs into the future.
The alternative is to avoid these decisions and face more drastic action in coming years.