Economy
Cliched, populist drivel … and incomprehension. Temco woe
Image: J
On Monday Tasmanian Times writer John Lawrence concluded a forensic examination of state finances with this damning indictment: If anything the post GFC shake out has confirmed we need a less volatile revenue base. The Government can’t afford to borrow simply because there is no evidence it can service the increased borrowings. Tapping the GBE’s for more will be difficult because they’re already stretched particularly as a result of Government demands contained in the last Budget. The Government has just about exhausted its options. Our politicians and public policy leaders need to show a bit more initiative and an enhanced understanding of our situation. So far clichéd populist drivel is all we’re hearing. At this stage we’re treading water while the Premier tinkers and takes advantage of distractions in the forests while the Opposition waits for Government without the remotest idea of the task ahead. Their alternative Budget is now completely redundant. What are needed are significant structural changes to the Government sector, probably higher State taxes but at the very least a little more enterprise, understanding, expedition and a sense of purpose. Here
Here, courtesy of ABC Online, is further evidence of state leaders’ budgetary incomprehension …
• ABC Online: TOTE chief recalled to parliamentary inquiry
A State Parliamentary inquiry is to investigate allegations the state-owned betting agency TOTE Tasmania gave all of its profits away to big punters through rebates.
The agency’s outgoing chief, Craig Coleman, has rejected allegations made by the Tatts Group, which is buying the TOTE for $103 million.
But the committee’s chairman, the Greens MP, Kim Booth, says he is recalling Mr Coleman and Treasury officials.
“To have a look at the issues as to why TOTE only delivered a $1.3 million profit with nearly $1 Billion in turnover in 2011.
“If there’ve been issues there where the TOTE mismanagement has driven a collapse in its value, these are serious matters that need to be explored and we intend to do that,” he said.
Mr Booth is also calling the chief executive of the TOTE’s new owner, the Tatts Group, which claims the “massive” rebates to high-end punters savaged the agency’s profits.
Mr Coleman has confirmed it does pay incentives.
“Any suggestion that our profit result in 2010-11 was a result of rebates and commissions paid to large customers is simply incorrect,” he said.
The ABC understands Mr Coleman spent Wednesday consoling many of the 80 staff who will lose their jobs when the agency changes hands at the end of next month.
The Community and Public Sector Union fears there are no guarantees for the remaining 160 employees.
The Economic Development Minister David O’Byrne says the job cuts are unfortunate.
• ABC Online: Hospital chief describes ‘mad dash for cash’
The head of Tasmania’s northern health system has described bed closures because of hospital cuts as unacceptable and predicts there are more cuts to come.
The problems associated with the State Government’s cuts are being outlined at a legislative council inquiry in Launceston.
The head of northern regional health, John Kirwan, has detailed how many beds have closed at the Launceston General Hospital because of budget cuts.
Mr Kirwan told the inquiry that out of 318 beds at the hospital, only 236 were available and two of out of six operating theatres had closed.
He said the hospital was having major problems finding beds for patients and meeting budget demands.
• ABC Online: Contractors cut in Temco shutdown
At least 400 jobs are under a cloud after BHP Billiton announced its manganese smelter in George Town in Tasmania’s north will temporarily shutdown.
The company will close the Temco smelter for three months while it decides its future.
BHP has blamed the high Australian dollar and weak global markets for the closure.
The smelter’s four furnaces will be closed, but dispatch operations will continue.
The 300 permanent workers will be re-directed to other roles while some may be asked to take leave.
Contractors will be reduced to critical roles but the company’s Greg Hannan says a decision on how many of the 100 contractors will go has not been made.
“The contracting partners have probably other activities for their employees.”
“We haven’t been through with our partners yet on what support we need so that’s something we’ll be looking at over the next few weeks,” he said.
Tasmania’s Economic Development Minister, David O’Byrne, says the announcement will cause concern and uncertainty for workers.
• UNCERTAINTY FOR TEMCO WORKERS
Kim Booth MP
Greens Member for Bass
The Tasmanian Greens today expressed serious concern for the future of the BHP Billiton Temco facility at Georgetown, following news that production had been suspended due to a downturn in demand.
Greens Member for Bass, Kim Booth MP, said the announcement would cause significant uncertainty for workers, their families and the broader community.
“This will cause a lot of distress for the hundreds of workers and their families whose livelihood depends on this company,” Mr Booth said.
“Fortunately Temco has highly skilled and committed workforce, and it’s to the company’s credit that the workers will continue to receive full pay during the suspension period.”
“This is just another manufacturer in Tasmania finding it tough to compete with cheap offshore labour, compounded by the high Australian dollar and falling demand.”
“It’s another wake up call to Tasmania that we need to build an economy based on differentiated products instead of relying on bulk commodities that can be produced elsewhere in the world for a far cheaper price.”
• GST CUT A LUCKY ESCAPE FOR TASMANIA
Future Cuts Could Be Worse Without Tax Reform
Tim Morris MP
Greens Treasury Spokesperson
The Tasmanian Greens said that the State was lucky to have escaped with a relatively small reduction in funding in the latest GST carve-up, but that the longer-term threat to revenues remains.
Greens Treasury spokesperson Tim Morris MP said the State must maintain fiscal discipline to manage the likelihood of further reductions in GST receipts.
“The unpredictability of GST revenue is the biggest threat to maintaining Tasmania’s Budget, and we should consider ourselves lucky that we got away with a relatively small reduction this time around,” Mr Morris said.
“With the Federal Treasurer threatening to further reduce Tasmania’s GST receipts if there’s no state-based tax reform, Labor and Liberal need to start taking this issue seriously.”
“There’s an urgent need for the State Treasurer to outline her plan for dealing with Tasmania’s inefficient and unfair state tax system or Tasmania risks more even dramatic cuts to GST in future budgets.”
“With the Steve Bracks-led GST review also due to report soon, the recommendations from that process could have a serious impact on Tasmania’s future revenue.”
Mr Morris said that the figures also highlighted the unreliability of Treasury forecasts.
“Before the global financial crisis, Treasury was making predictions about continued growth in GST receipts over the forward estimates which in hindsight turned out to be unrealistic.”
“It was only ever a Treasury fantasy that Tasmania’s GST receipts would going to keep increasing, and today’s numbers have confirmed that,” Mr Morris said.