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Issue No. 183 | 20 June 2003 |
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A Beautiful Set of Numbers?
History: Nest of Traitors Interview: A Nation of Hope Unions: National Focus Safety: The Shocking Truth Tribute: A Comrade Departed History: Working Bees Education: The Big Picture International: Static Labour Economics: Budget And Fudge It Technology: Google and Campaigning Review: Secretary With A Difference Poetry: The Minimale Satire: Howard Calls for Senate to be Replaced by Clap-O-Meter
Politics The Soapbox Media The Locker Room
 Questions for CubaIs Beazley's Popularity a Winner?Rank Marchers
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Editorial A Beautiful Set of Numbers?
Treasurer Michael Egan and his team carry the mantle of debt-activists in the finest tradition of the deficit hawkes who captured the ALP in the era that bears the same name. There is no doubt that Labor governments need to be good economic managers, better than the Tories, and the Carr-Egan Administration has been amongst the most successful in living memory. Buoyed by the Sydney 2000 Olympics, the tax windfall from the property boom and a conservative attitude to public spending, Treasurer Egan has a track record the envy of any Tory Treasurer. The Bart Simpson of state politics has a hard-earned record of delivering 'beautiful sets of numbers' that earn the approval of mainstream economic commentators year in, year out. More strength to him, we say. Our question is whether delivering surplus budgets is in and of itself sufficient to claim to have delivered a 'Labor budget' - which is the Egan mantra this time of year. Reducing deficits is important; money spent servicing a debt is money that can't be spent in the here and now. But as any home-owner will tell you, sometimes you need to borrow to be able to afford shelter and transport, while maintaining the sort of income required to feed the family, pay the school fees and meet the doctors bills. In 1997 Egan thought he had found his Shangri-la when he was convinced that selling off the power industry would wipe out the budget. As experience in other states has shown, privatisation would have seriously compromised the state's electricity supply, robbing future generations of secure, affordable electricity. The French keep telling him he could get a motza for water infrastructure as well, yet to date he has resisted that temptation. And let's not forget the state's rail tracks - the Commonwealth currently wants to seize them for an $850 million investment, a necessary first step to a national sell-off of another state asset. What these policy dilemmas show is that not even a government as fiscally conservative as Carr's believes the budget bottom line is everything. There was a time of course, where the size of the budget deficit was an important economic lever - to drive up economic activity by injecting funds in publicly useful projects. Think Snowy Hydro, think Harbour Bridge, think Olympics. Sometimes you spend your way back to economic life. So Egan's budget fetish is one way of managing the state's finances, but it is not necessarily the only Labor model. Part of Egan's conservatism is borne out of the financial debacles associated with a string of Labor Governments in other states in the early 90s. As an opposition leader at the time, Carr would have resolved firmly never to allow a disaster of the proportions of the Victorian Cain Government Pyramid Collapse to afflict NSW Labor. The question is, have Carr and Egan over-learned this lesson and taken Labor too far in the opposite direction? There have been moments of inspiration. Land tax for properties valued at over a million dollars was an inspired piece of Laborism that targeted tax on the manifest beneficiaries of the economic boom. But all too often the Egan budgets have been exercises in perspiration over inspiration; with the boffins steering the ship of state and the raw figures being the beginning, middle and end of the story. So what would a Labor budget really look like? It would show an increased investment in the public services where they are needed, both in physical and human capital. It would be investing in projects that will improve the quality of life for citizens - an integrated public transport, a well-resourced health system, teachers who received decent recognition for the fundamental contribution they make to our society. It would ensure that public funds are invested in public sector careers, rather than filling in the gaps with massive use of casuals and labour hire. It would adequately fund TAFE, encourage apprentices and divert government contracts to good corporate citizens. And it would build in indicators to ensure the money that is being spent is being fairly distributed amongst regions, with the main indicator being need. The problem with budgets is that they are raw set of numbers that in their crudest form deliver a rating based on a bottom line: the profit and loss statement. The state is not a corporation and we are not shareholders and we should view the Michael Egan's ninth budget as something more than a maths exam. The role of Treasurer is to be more than a security guard on the state coffers who says no to every request for money. It involves arguing the case for increased revenue, even taxation, in the interests of building a stronger community. That's the altogether tougher test that Egan faces if he wants to be regarded as a great Labor Treasurer. Peter Lewis Editor
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