The
large revenue write downs foreshadowed by Treasurer Gutwein ahead of this
year’s May State budget pre-empts the question is this just bad luck or a case
of those who ignore the lessons of history getting clobbered.
The
metaphor ‘black hole’ has once again been summoned to describe estimated
reductions in State government revenue of $560 million over the next four
years.
It’s
familiar territory. We’ve been there before. At the time of the 2009/10 budget
in May 2009 the financial world was in turmoil. The revenue write-downs were
more than $2 billion over the ensuing four years. GST reductions comprised
one-half and State revenue one-quarter. Policy changes were made, which still
left an estimated $292 million cash in the tin at the end of the forward
estimates.
