Tasmanian Times

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Economy

STATE: Lies trump truth in the GST carve-up

Anyone listening recently to the Treasurer, Peter Gutwein, is likely to believe Tasmania lost heavily in the latest round of GST allocations.

The new assessments, he said, would cost the state $84 million this year. But don’t worry! The government’s cost slashing is coming to the budget’s rescue and the return to surplus is safe!

But anyone actually reading the Commonwealth Grants Commission’s documents will see a quite different story. Yes, the state will get 3.8 per cent of the national GST pool in the coming financial year, compared with 3.9 per cent at the moment. What Mr Gutwein fails to mention is that there is much more money in that pool, so our slightly lower share will actually deliver a rise of $50 million dollars in the new financial year.

The Grants Commission’s explanation couldn’t be clearer.

‘While Tasmania’s increased fiscal capacity will see its GST share fall from 3.9 per cent to 3.8 per cent,’ they said, ‘its GST entitlement will rise by $50 million or 2.2%, due to growth in the pool.’

So rather than being $84 million worse off, we will in fact be better off by $50 million. The difference between Mr Gutwein’s story and the Grants Commission’s is $134 million.

We need a bit of context here. Overall, the state will receive $2.299 billion dollars in GST, or more than a third of the state budget. In 2015-16 we got $2.249 billion. Even a decline of $84 million would not have been anything like as serious as the Treasurer would like us to believe.

Nor is it true to say, as Mr Gutwein has, that the decrease in our GST relativity, down by 0.1 per cent, is because of the government’s success in creating a newly vibrant, prosperous economy.

The state’s economic output has been growing ‒ from an appallingly low base ‒ but that, according to the Grants Commission, is not the reason. Keeping public sector salary rises to below the rate of inflation, and the neglect of government schools, is behind most of the change.

‘There was a decline in Tasmania’s service delivery costs due to a fall in its relative wages costs and a decline in the number of government school enrolments,’ the Commission said. Because Tasmanian public service wages have fallen compared with other states, we will get $31 million less in GST next year. And falling government school enrolments will cost us $17 million.

It suits the state government to downplay the amount its gets from the GST. Since being elected, they have stripped money out of services ‒ health and education particularly ‒ to reduce government spending so they can claim to have returned the state to an operating surplus before the next election.

But this hasty return to eliminate a comparatively tiny general government net debt ‒ it does nothing for the debts held by state government enterprises ‒ has come at a cost.

This is the reason the capacities of our hospitals are falling so far behind those of other states. It’s the reason why thousands of Tasmanians cannot get the health care they need. And it’s the reason why our public-sector doctors and nurses are carrying such impossible workloads.

In the financial year that’s just about to end, Tasmania was given an extra $266 million specifically to deal with the extra health needs of the nation’s oldest, sickest, poorest population.

None of that money has gone anywhere near health. We know this because, if this money was spent on health, the state government’s per capita contribution to health funding would be well above the national average.

But according to the only accurate figures available ‒ from the Australian Institute of Health and Welfare ‒ the government actually spends less than other states. This has gone on for many years, and over the past decade at least $1.4 billion has been lost to the health system. There is, in other words, no excuse for the penury in which our hospitals find themselves.

That sleight-of-hand has continued under both Labor and the Liberals. But it has become much worse since the election because last year the Grants Commission became so much more generous in its assessments of Tasmania’s health funding needs.

That increased generosity has given us almost $100 million a year more than we would have got under the old system. Because none of it goes into health, the rip-off has become much more serious.

On top of the GST ripoff comes the budget slashing of two governments: the 2011 cuts under Labor and two years of public sector slash-and-burn under the Liberals.

In the coming financial year, Tasmania’s GST allocation for health will be reduced by $15 million. $266 million will become $251 million. That’s still a lot of money but it will have no effect at all on our hospitals.

Mr Gutwein will again grab the lot for his cunning plan about the surplus.

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6 Comments

6 Comments

  1. phill Parsons

    April 15, 2016 at 11:22 am

    #5 makes a correct image for the Emperors clothes. He came fully robed with the hopes and ideals of many only to cast them off one betrayal of his principles at a time.

    He tries hard to recover his modesty but wrapping oneself in the rags of Abbott’s disgraced policies thus exposing himself further to retain the loyalty of the right of the Lieberals.

    As for Gutwein, isn’t he salting money away for election handouts and sweeteners for mates. Glad he too is exposed for Hockey lies.

  2. William Boeder

    April 10, 2016 at 7:14 pm

    An interesting objectivity would be to source how much of Tasmania’s revenues have been siphoned off to the Macquarie Bank as well as KPMG.
    When one considers the material benefits against the across the board pillaging, (Hobart Airport sale funded by Tasmania’s Retirement Benefits Scheme) and of the incompetency of judgement between both parties over the past 15 years, there will be many hundreds of millions of dollars that will have been pissed up the wall.
    Paul Lennon (in my view) was one of the prime culprits.

    It is a substantial statement that I now offer to the Tasmanian Liberal government, that their very survival relies above all else upon an expanding textbook of deceptions and lies.
    For 2 years I have sought from Malcolm Turnbull to rein in the Australia’s tax cheats should the Federal government seek higher revenues.
    Never a reply by the way.
    After the Panama Papers scandal, tis as though somebody has pulled the Prime Ministers pants down whilst he was up on the podium appealing to the Australian people that Treasury needs extra funding by the Aussie taxpayer.

  3. Hans Willink

    April 10, 2016 at 4:47 pm

    Just a question

    ‘While Tasmania’s increased fiscal capacity will see its GST share fall from 3.9 per cent to 3.8 per cent,’ they said, ‘its GST entitlement will rise by $50 million or 2.2%, due to growth in the pool.’

    Does this figure take into account inflation over the period of about 1.7%? If it doesn’t, then I guess we’re talking about a much smaller rise of about half a percent.

    Not that this changes the overall argument.

  4. Tim Upston

    April 10, 2016 at 2:28 pm

    The real tragedy of this government was summed up this week in one segment of ABC news film which, while covering a story on the Royal Hobart Hospital, revealed the Minister Mr Ferguson putting the pressure on a hospital employee to work overtime as it would help the government’s figures when it came to elective surgery. The employee did not look overjoyed but agreed to do it. Maybe the Liberals think bullying is the way to fix the problem they began by ripping money out of the health system. Why not? It seems to have worked when it comes to forestry … maybe they could fine those RHH employees who refuse to work overtime?

  5. Karl Stevens

    April 10, 2016 at 2:24 pm

    I’m sure Peter Gutwein is proud of this bit of spin that makes him appear heroic in the eyes of the general public.
    We have probably reached the point where the word ‘lies’ doesn’t apply to accountancy methods.
    Assets, liabilities, debts and surpluses are just mobile elements in the creative process of coming out on top.
    Bear in mind that Gutwein was a financial planner and a Tae Kwon Do blackbelt before entering politics? He has buckled-down under the velvet dictatorship of the UTAS Young Liberal Lawyers Hodgman, Goodwin and Groom. Overthrowing that bunch of air heads wouldn’t be difficult for a Gutwein I recon. But what’s the point? If people wake-up to the lies they have been told it will be Hodgman who gets crucified and Gutwein will be heroically forced into the top job.
    This week Goodwin and Hodgman are enjoying a ‘Seven Banquets in Seven Days’ tour of China while Groom has been rostered-on to keeping the lights on.
    Hodgman’s China itinerary is at the bottom of this page:
    http://www.premier.tas.gov.au/releases/strengthening_trade_partnerships

  6. john hayward

    April 10, 2016 at 12:48 pm

    If the Liberal Party is ever to fulfil its dream of restoring a wealth distribution ratio similar to that in King John’s day, it will have to keep pushing its eternal refrain that we are living beyond our means.

    Some of Tassie’s traditional subsidies, blunders, and and rackets are very pricey. Somebody has to pay for them.

    John Hayward

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