NSW Labor's big business budget


By James Smith

SYDNEY — There is a perception amongst some that Bob Carr's NSW Labor government is a working people's government. The government's fifth budget, announced on June 22, reveals where its allegiance really lies.

Treasurer Michael Egan delivered a handout to big business of $2.6 billion over four years by slashing payroll tax from 6.85% to 6% by July 2002. Big business also wins from the government's reduction in land tax from 1.85% to 1.75%.

The government plans to fund the $2.6 billion handout by slashing another 1400 jobs from the state public service. This is on top of the 1000 positions cut last year. NSW Public Service Association president Maurie O'Sullivan said the latest cut will mean that some services will disappear.

A freeze on public sector recruitment is expected to cut a further 2000 jobs, and another 500 will be cut from government businesses such as Pacific Power, Sydney Water and the State Rail Authority.

Labor also plans to erode public sector salaries, despite them already lagging behind those in the private sector by an average of 4.5%. A June 26 Sydney Morning Herald article titled "The carnival is over for big public service pay rises" attacked the 10-14% pay rises in the NSW public sector over the last four years, but failed to mention that those rises were paid for by staff through reduced working conditions and significant productivity increases.

Many NSW government agencies now face funding freezes or reductions. Some areas will also suffer big staff cuts; the Health Department, for example, will lose the equivalent of 1000 full-time workers.

Of particular concern is the continued under-funding of community health, mental health and other non-acute health services.

The Ethnic Affairs Commission has taken a 5% funding cut, chiefly to interpreter services, which are already insufficient to meet demand.

NSW Council of Social Service director Gary Moore criticised Egan for "squirrelling away" $325 million for tax cuts while neglecting the funding needs of 6000 community organisations. "Why is there no funding ... to help 'non-profits' meet major increases in rental costs, large rises in insurance premiums, big costs with essential computer hardware and software upgrades and ... a significant wage increase due later this year?", he asked.

According to a survey by the Australian Services Union, more than half of all community and welfare workers have to turn away people in need because of lack of resources.

According to Moore, "As the top end of Sydney's residential property market continues its dizzy success, land tax rates should be maintained, to pay for programs to better tackle homelessness. Overall government spending in this budget has been cut in real terms whilst key statistics show social need rising and inequality in NSW growing."

Moore says the Department of Community Services overspent its budget by $50 million in 1998-99 attempting to meet greater demand for its services, yet it will get $30 million less for 1999-2000. The budget also cuts $5.2 million from recurrent funding to the Department of Juvenile Justice while increasing by three the number of juvenile detention centres.

While health and community services remain under-resourced, the government plans to build two new jails at a cost of $114 million. The cost of running the jails will be met by scaling back rehabilitation services. Critical post-release services, provided mainly by the non-profit sector, will get a measly $1.1 million per year.

Around $80 million is to be spent in 1999-2000 on employing 200 more police, yet just weeks after the much hyped NSW Drug Summit, only $5 million more per year has been allocated for drug rehabilitation.

While the budget cuts funding to essential public services, a $44 million blow-out in the cost of the Olympic Games will be covered by taxpayers. The budget puts the taxpayer-funded cost of the games at $1.694 billion, up from the $1.65 billion estimated last year.