Image: J
The government will reveal its plan to combat massive revenue falls in today’s state budget.
Lara Giddings has foreshadowed another tough budget.
Her first budget last year made $1.4 billion in spending cuts over the four years to 2015.
The public sector union’s expecting more pain today.
However, the government’s revealed it will spend $48 million to reduce power bills and increase concessions.
It is likely to be one of only a few budget sweeteners.
The budget update in February forecast a $250 million dollar deficit this financial year.
Since then, G-S-T revenue has fallen a further $114 million.
• Four school terms
The way has been cleared for Tasmanian public schools to switch to four terms next year.
It follows a ruling from the Industrial Commission, which says it does not have the jurisdiction to decide the number or length of school terms.
The Education Minister Nick McKim says he’ll now press ahead with making the necessary changes and there’ll be no reduction in teachers’ leave entitlements.
“There will be no reduction in teachers entitlements from the move to a four term year next year, and on the basis of improving educational outcomes for Tasmanian students I can confirm that we will be in a four term year in 2013.”
Chris Lane from the Tasmanian branch of the Australian Education Union says the Commission will make its own ruling on leave entitlements at a later date.
• Keep up-to-date with the range of breaking stories and opinions on Budget Day by using the Tasmanian Times’ NEWS Dropdown (top nav bar). NEWS gives you the Australian and World Google news-wrap. Breaking News in the Dropdown the latest in your area’s browser. And use the Dropdown to keep abreast of the daily breaking stories from around the world …
• And, Watch the Pollies deliver the Budget here
• Challen tells of state cash drain
BY BARRY PRISMALL
17 May, 2012 07:00 AM
FORMER state Treasury head Don Challen has questioned the running down of cash reserves normally set aside for public sector pensions to instead fill state budget shortfalls.
Mr Challen also told a private breakfast function of business leaders that governments across Australia had blown huge revenue gains between 2000 and 2004 on bloated bureaucracies.
He said the Tasmanian government fiscal strategy did not include a specific target for funding its $5.3 billion unfunded superannuation liabilities. In the past it has done so.
“In recent years, the Tasmanian government has been running large cash deficits,” Mr Challen said.
“For instance, the February estimate of the cash deficit for the current year 2011-12 is $233 million.
“Consequently, financial assets accumulated in the past with the aim of ultimately funding the superannuation liability have been seriously eroded in the past few years.
“For this reason, we have to conclude that there is a failure to meet the target of achieving zero superannuation liabilities at some specific point in the future.”
…
In key points in his speech:
The forward estimates for the state government’s capital investment program, while above sustainable levels this year, will be well below what is sustainable in the next few years unless more funds are committed to capital works.
Governments across Australia between 2000 and 2004 enjoyed enormous revenue gains from the GST and other sources, but spent the money on generous wage rises and public sector jobs, rather than saving it to pay debt and superannuation liabilities.
Barry Prismall, The Examiner here
• Tasmanian Times’ forensic finance analyst John Lawrence warned of the parlous state of Tasmanian finances in this critique, State of the State: What your mother didn’t tell you, graph by graph; an article based on his address to The Tasmanian Branch of the Economic Society of Australia, in Challen’s former HQ, the Treasury building. And in earlier analyses, here. He particularly highighted the problem of unfunded superannuation … and for a pithy take on the state of the state, how about Jarvis Cocker’s report this time last year: Not the GFC: 12 years of Labor neglect, Stupid
