Friday, 26 May 2017

Budget pork

If it sounds too good to be true it probably is.

When a government announces in a Budget that it will spend extra on health next year, is that compared to

1.   what has been spent in the current year?; or

2.   what it intended to spend a year ago?

In the case of health the answer is 2.

In last year’s budget the Tasmanian Health Service THS spending was intended to be $1,368 million in 2016/17 and $1,362 million in 2017/18.

If one looks at the Policy and Parameter Statement in this year’s budget papers (Budget Paper 1 page 67) THS’s estimated outcome for 2016/17 shows an extra $106.7 million being spent (or estimated to be spent) for 2016/17. This suggests THS spending of $1,475 million for 2016/17.

Now looking at this year’s budget papers, intended spending by THS (Budget Paper 2 vol 2 page 109) for 2017/18 is $1,460 million.  That may be $98 million more than what was intended a year ago but it is less than what was actually spent in the current year 2016/17.

If the system is in crisis spending less is unlikely to fix the problem.

That’s what Building Tasmania’s Future means. The Mercury was quite correct in depicting the Treasurer in this morning’s edition as a snake oil salesman with a warning that the tonic being marketed may contain pork.

There’s an unreality about the budget. Let’s have a look at the overall Income Statement (Budget Paper 1 page 47), in particular the figures for employee expenses. To make it easy part of the relevant table is pasted below.

I’ve added the estimated outcome figures from page 191. It easy to see the increases in employee expenses are $29 million in 2017/18 then $30 million and $31 million in the next two years.

In % terms that’s a 1% increase in each of the next 3 years. Scarcely believable when the estimated outcome for the current year 2016/17 was $60 million above budget and the Treasurer had the place ticking over like a well oiled machine. Even less credible given wage increase are tracking at a rate higher than 1%, and employment in the health area is supposed to rise.

The coming election is sure to be a pork fest.

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