Carr makes early start on austerity

June 21, 1995

Carr makes early start on austerity

By Chris Spindler

The June 8 NSW economic statement heads NSW down the path taken by most other state governments. Whether Labor or Liberal, state governments are restructuring economies to suit the needs of big business at the expense of jobs and the wages, conditions and services of ordinary people.

The new Carr Labor government aims to save some $600 million by next year balance the state budget. Cuts to the public sector will axe thousands of jobs, although the government is unwilling to say exactly how many.

As well, the corporatisation of government services will undoubtedly mean higher charges for electricity and water. Competition in gas supply will put downward pressure on wages and conditions of employees.

Contract labour is to be used in a vast array of government services, such as information technology, cutting the number of people currently employed in the area. Transport prices are to rise.

Life-threatening cuts to the health sector seem set to continue with the introduction of the case mix system, in which hospitals compete with one another by attempting to offer services at a lower than average cost.

The statement includes even more direct aid for big business. Company payroll tax will be reduced from 7% to 5%. This represents a saving to big business of up to $600 million — doubling the amount of money ordinary people will be expected to make up if the state government is to achieve its aim of a balanced budget.

If the state government were to increase company tax by a mere 2%, this could wipe out the state deficit without sacrificing thousands of jobs. A further increase in company tax could enable vital social projects such as health care and public transport to be expanded rather than cut.

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