Queensland budget – profligacy for everyone except the PS

Queensland Treasurer Tim Nicholls has just brought down his first budget, following the announcement by Premier Campbell Newman of massive public service job cuts justified by apocalyptic rhetoric. Yet apart from those job cuts, the budget (in combination with measures announced previously) doesn’t show much in the way of fiscal discipline. Among the most glaring examples

* An $80 handout to all households, with no targeting, nominally to offset water bills
* A previously announced freeze on electricity prices for households, paid for out of general revenue
* The replacement of the $7000 first home buyers grant with a $15 000 grant for buyers of new homes
* Handouts to tourism, racing and other sectors

Measures like this are par for the course for state budgets, but not what you’d expect from a government faced with a fiscal crisis, comparable to Greece or Spain.

The government has fiddled at the edges on revenue, but is doing nothing (or even adding to the distortionary concessions) on payroll tax and land tax.

In essence, the government is relying almost entirely on cuts to the public service, focused on the health sector. This is a high-risk strategy to put it mildly. It may well be that the health bureaucracy is bloated and inefficient, but that doesn’t mean that creating a new layer of regional management is going to improve things, especially when their first task is to implement arbitary cuts in the number of nurses and other employees. Campbell Newman says his promise that “frontline jobs are safe” now means “frontline services won’t be affected by job cuts” but this is just wishful thinking. There hasn’t been any analysis of how to improve efficiency, just an edict that numbers need to be cut.

In these circumstances, it’s virtually inevitable that waiting lists will blow out. And inevitably, when you have long waiting lists, people will die waiting. At that point, the question will be whether the government can hold its nerve and admit that it was lying about the frontline services, or whether we’ll see expensive panic measures to fix the problem.

18 thoughts on “Queensland budget – profligacy for everyone except the PS

  1. It seems that the PS has been sacrificised by the LNP to appease the gods. These are the same vengeful gods who took away QLDers slice of paradise by delivering both droughts and flooding rains, taking away the tourists and devaluing valuable waterfront property. Now that the ritual bloodletting has taken place things can get back to normal, just like they always were.

  2. If it looks like class war, sounds like class war and retrenches workers like class war, then it probably is class war.

  3. Dear John,

    We would like to invite you to join us for the third Kilkenomics festival of economics in Ireland between October 31st and November 4th.

    We’re unique – the only festival brave (and foolish) enough to put the best comedians and economists in the world on the same stage. The San Francisco Chronicle calls us “an utterly bizarre idea but the public love it”, while the Sunday Times says we’re “one of the oddest festivals anywhere; comedy with a pint and a point.”

    We’ve had some amazingly diverse contributors in the three years since we launched, including Jeffrey Sachs, Peter Schiff, Willi Hutton, Max Keiser, Megan Greene, Bill Black, Heiner Flassbeck and Andrea Catherwood, among many other great speakers. We’d love you to be part of the 2012 festival, which is already shaping up to be our best yet.

    Please let us know if you’re available to join us. At this stage, we can offer flights (hopefully from Europe), five-star accommodation, a modest per diem and the warmest welcome you can imagine to Kilkenny’s medieval city.

    We’re locking down our programme right now, so I’d love to hear from you as soon as you can.

    What Is Kilkenomics?

    As the global financial and economic crisis continues, there’s more and more jargon and frankly, bewildering commentary in the media every day.

    We know economics is central to our lives, but increasingly, we feel in the dark. We want to know what’s going on, why, who’s responsible and how it can all be sorted out. Kilkenomics is all about making the world of economics clear and accessible to all.

    Moderated by some of the brightest and funniest standup comedians, Kilkenomics – the first economics festival in Europe – gives economists, financial analysts, journalists and other leading thinkers the opportunity to discuss and explain important issues such as the property bubble, currency fluctuation, the European and US debt crises, taxation and natural resources and the environment – and many more.

    We think mixing comedians and economists gives the audience the best of both worlds. The comedians make topic accessible and give the average guy the “permission” to ask hard questions. We communicate to a wide audience, simplifying big issues and making them accessible to all.

    Previous programmes have featured innovative debates and discussions on the asset bubble, the great crash, the role of bankser and banks in the system, resource wars, government waste, employment, geo-politics, economic theories, recessions and jargon-busting.

    Some of our world-class experts have included: Heiner Flassbeck, George Anders, David McWilliams, Philippe Legrain, John Mauldin, Bill Black, Ha-Joon chang, Peter Antonioni, Constantin Gurdgiev, Pinchas Landau, Vikas Nath, John Lanchester, Martin Lousteau and many more.

    We’ve also booked the best in stand-up comedy, with the likes of David O’Doherty, Des Bishop, Karl Spain, Neil Delamare, Barry Murphy, Fred MacAulay, Colm O’Regan and Colin Murphy – among others – all bringing humour to hard sums.

    Want to know more?

    This is what the 2011 programme looked like: http://www.kilkenomics.com/about-kilkenomics/contributors/

    Don’t trust us? Ask the press!

    Irish Independent: “Kilkenomics is a curious combination of comedy and economic punditry that works surprisingly well”

    The Australian: “Davos with jokes”

    UK Sunday Times – “one of the oddest festivals anywhere, comedy with a pint and a point”

    The Irish Times: “Never has economics been so central”

    San Francisco Chronicle: “an utterly bizarre idea but the public love it”

    BBC – “having a laugh despite the gloom”; “comedians give permission to the audience to feel comfortable”

    The Irish Times -“A little jewel where players manage to talk human without being patronising”

    BBC World Service “having a laugh despite the gloom”

    Bloomberg “Lenny Bruce meets John Maynard Keynes”

    The Guardian “wildly successful”

    The Sunday Tribune “Laugh? I nearly defaulted!”

  4. So many of the public service cuts have the character of short term savings for long term cost. For example, training for rural fire brigades has been axed – this was a measure introduced after a crew was killed fighting a fire north of Brisbane about 20 years ago. The layer of supervisors sitting over the child protection field officers has similarly been savaged, meaning that the raw graduates who populate the ranks of field officers will have little guidance in prioritising cases, with predictable and tragic results. The public works tradespeople who do hospital and school maintenance jobs have likewise been savaged, which will compound the paperwork and costs required to get jobs done, and also likely mean that jobs don’t get done and that bigger bucks will need to be spent later. Environmental and planning regulations affecting land development are targeted for repeal in the name of red tape reduction, again with eminently predictable negative outcomes that will be felt long after this regime has vanished from the page of time.

    This lot remind me of the Bourbon restoration – learned nothing and forgotten nothing.

  5. Newman missed the opportunity of granting a special funeral levy to anyone who dies in a hospital corridor.

    It’s clear that he doesn’t have the common touch.

  6. Kilkenomics sounds like a hoot and a nice play of classic against dark comedians (economists).

    Queensland government budget, on the other hand, sounds very much like tragic comedy, with much scratching and shaking of heads to come.

    “The revenge of the peanut farmers”. Scene 2, take 1.

  7. @Hal9000

    That’s right.

    The corrosion will take a few election cycles to manifest as disaster. The Murdoch media will cover for as long as they want to. When Rupert decides we need a change we’ll get yet another neo-con ALP government based on the suddenly discovered “Shock, Outrage, Fury!!!” Rupert does so well.

    What are lives when you have a world-wide ideological agenda to run?

  8. Kilenomics sounds like a lot of fun.

    Too bad arrangements for it seem on the late side given we’re already well into September.

    Comedy always been an under appreciated aspect. So many naturally talented straight men in the discipline. Their ability to keep a straight face while saying the things they do the unheralded achievement.

    If only I’d managed to master that art!

  9. The process cycle:

    1. Cut public servants and training
    2. Public service degrade
    3. The cost saving transfers to corporate welfare (laissez faire?)
    4. Public complaints about the poor quality of public service
    5. Budget deficit “problem”
    1. Cut public servants and trainings (to increase efficiency and saving?)
    2. Public service degrade

    – To be continued.

  10. One of the great things about privatisation/outsourcing (there are so many) is the deflection of blame and criticism. No longer governments fault, and by extention the fault of those politicians who are the current government. No. The buck no longer stops here.

  11. the only thing that mystifies me is that some-one with the business record of the “clem jones tunnel” actually got the job of premier.

    but that’s from way over here in the west.
    there is not a lot of relevant Australian news.*

    (*note to fin?)

  12. @Ikonoclast

    Class War has been interpreted, in the past, by latte sipping lefties as the process of the well-off sticking-it to the not-so-well-off.

    Now, class warfare refers to any vestige of suggestion that such a thing is going on, has gone on, or could possibly go on. Or to that on going battle of the undeserving poor ruthlessly exploiting the virtuous wealth creating rich.

    Those poor downtrodden rich.

    When will Atlas shrug?

  13. @Freelander
    It works to a point. The point is reached when a service the public simply expects to be provided stuffs up. Such as brownouts or water outages or inability of the health system to cope with an epidemic. At that point, an attempt by politicians to dodge responsibility will not be accepted. It’s the government’s job to make sure that sort of thing doesn’t happen, in the popular view. The same public is happy to accept arguments that taxes can be kept low and services not suffer, but then be appalled at the entirely predictable consequences.

    The amazing thing about the Bligh regime was that they were happy to jack up taxes that affect everybody, such as car rego, power and water charges, and public transport fares, but kept the taxes Prof Q nominates at concessional levels to benefit people who wouldn’t vote Labor in a fit. I suspect the solution to this riddle lies in the degradation of the branch membership structure of the party, in tandem with an influx of donations from businesses and rent-seekers keen to ensure the state protected their privileges but left their tax liabilities low.

  14. You could be right. After all, general sanitation, public housing and some other ‘ welfare’ measures were introduced because disease in the great unwashed was thought capable of jumping the species barrier into the “haves”.

    But to believe that you would have to believe in evolution (and you’d probably be a g+ddamned atheist) .

  15. I’ve often found it ironic that its precisely the knuckle-draggers who tend not to believe in evolution.

  16. Similarly it’s those who provide living proof that any “god” is certainly far too cruel to be worship-worthy who believe and worship!

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