Most
of the post budget responses have sadly failed to come to grips with the
budgetary problems confronting this State.
Maybe
the following graph will highlight the situation.
The
first Liberal budget is similar in approach to Lara Giddings’ first budget . Cash on hand at that stage was almost $1 billion, but the outlook wasn’t
great.
A
cash deficit of over $300 million was predicted for 2011 budget with cash surpluses
thereafter. This is shown by the red line.
However
during Ms Giddings tenure, cash continued to run down to $362 million (excluding
any temporary borrowings) by 30th June 2014. This is shown by the green line.
Enter
Mr Hodgman.
The
recent budget even if all measures are successfully implemented on time, will continue
the cash drain until there won’t be anything left in four years time. See blue
line.
With
scarcely any cash in the final year of the forward estimates, the government
hasn’t provided for any interest payable. It will be a masterful cash flow
management achievement to run a $5 billion budget without a cash buffer or a
line of credit. No more internal borrowings or money shuffles will be possible if there's no cash.
The
cash run down is despite:
· Special
dividends from MAIB of $100 million and Hydro Tasmania of $75 million which
assist the government cash flow by simply increasing the debt of government
businesses.
· Cash savings
of at least $50 million per annum by not having to fund superannuation for the
7,500 existing employees who are members of the defined benefits fund.
· Based
on past experiences there are negligible chances of achieving forward estimates,
forever framed using heroic assumptions.
This
is a plan that won’t work. To say that more work needs to be done is a chronic understatement
that gives the plan credit which it doesn’t deserve, and lulls people into
thinking that a bit of tweaking is all that is required.
We
have an unsustainable system that all plans from all parties over the past 5
years have failed to address.
Listening
to legislators debate the budget leaves little doubt that the State government is
almost beyond salvation.
I doubt that the liberals came up with this 'plan'. It's likely based on narrow and self-serving information out of the bureaucracies, mainly treasury presumably. At the federal level we can see the fatheaded idea of 'what are the rules for creating employment' producing daft methods like forcing all dole recipients to apply for 40 jobs per month. (140,000 vacancies vs 800,000 unemployed ABS).
ReplyDeleteBlind Freddy could see that education is critical in today's world - but not our public services nor the politicians who are briefed by them.
How can we foster gobally competitive entrepreneurs when they are under-educated and weighed down with regulations, tax restrictions and high costs?
Can our governments even understand that their requirements are productivity destroying?
Sigh