John Fahey's softly, softly budget
By Reihana Mohideen
SYDNEY — The NSW Liberal government's September 7 budget seems less harsh than the recent budget of the Goss Labor government in Queensland. The cutbacks to the public sector proposed in the Queensland budget are far more substantial than those in NSW.
But the economic rationale behind the budget is the same as that being pursued by both federal and state Labor governments nationally — cutting the deficit to "free savings" for use by big business. The NSW budget aims to trim the deficit from $997 million to $890 million in 1993-94 and then to $600 million by 1995-96.
The NSW budget is very much driven by the policies of the federal Labor government. This includes cutbacks in payments to the states, which have fallen by around 9% (as a percentage of the federal budget) in the last decade.
A central feature of Premier Fahey's budget is the increase in payments to the government by government trading enterprises of around $144 million, a 17% increase over last year. The Maritime Services Board will have to pay an extra 53.7% on last year's payment. The draining of funds undermines the viability of the public sector as a whole, leading to a situation where the more efficient enterprises become attractive pickings for privatisation.
Fahey threatened public servants that their claim for a 10% wage increase would lead to tax increases and job losses. The government has budgeted for a 3% increase. Trying to squeeze more efficiency out of the public sector through productivity increases and reduced expenditure has led to the subcontracting of the government cleaning services, for example, a move that could wipe out 1500 jobs over the next 12 months.
The difference between the Goss and Fahey budgets probably reflects the different points these governments are at in the political cycle. The NSW budget is more of an election budget. For the present, Fahey is happy to leave the real action to Canberra.