Tassie is in serious trouble – when Julie Novak and I wrote a report for the Tasmanian Chamber of Commerce and Industry a few years ago saying so, and setting out an agenda for reform, all we got was abuse. One of the few voices who supported us was Greg Barnes writing in the Hobart Mercury. Here he is writing in The Drum.
Giddings’ first challenge is to rescue a sinking budget which has a $200 million black hole. This can only be done by slashing the size of government. Tasmania has more public servants per head of population than any other state – one for every 16 citizens as against one for every 21 in Victoria for example. The public sector has increased by almost 34 per cent in the past 10 years and one financial analyst has calculated recently that the state sector wages bill has risen from $1.32 billion in 2003-04 to $2.23 billion in the current financial year.
Then there is the unfunded public sector superannuation liability – heading to $4.78 billion by the time of the next election in 2014.
Not only that, but the state’s iconic energy company the publicly owned Hydro Tasmania is an economic basket case and the Tasmanian forest industry, long a source of revenue for government in this part of the world, is being transformed from a large scale industrial enterprise into one that is smaller and more specialised. Meanwhile the number of Tasmanians receiving some form of welfare remains stubbornly high at close to 40 per cent, a figure that has changed little even in the recent economic boom times.
So what then is the ‘hope’? Two things. Tasmania is now on the bones of its arse. That tends to concentrate the mind. A few years ago when Julie and I got roundly abused there were many excuses to be made, and they were made, well and articulately and many people in many fora. Now there is no excuse. The second things is the quality of economic advice the new Premier will be getting.
Giddings’s key adviser is Richard Dowling, a young economist who while he worked at the Tasmanian Chamber of Commerce and Industry, robustly advocated policies such as reducing the size of government, privatization, higher migration and lower taxes.
She will know what needs to be done. Whether she can do it is another question. There is a deep sense of entitlement in Tasmanian elites and until now a deep sense of denial.