
Issue No 19		25 June 1999

Interview

Moore for the Battlers

Interview with Peter Lewis

NCOSS director Garry Moore gives the community sector's response to this week's State Budget


	Garry moore adresses the NCOSS-ASU post-budget rally this week

Now that the dust is settling, what is you evaluation of the first budget of the second Carr government?

Simply, we think the priorities are wrong in the current budget mix. Business and those better off get a better deal than lower income groups and people who are disadvantaged within the community. We do think there's some evidence that the government has listened in the past few weeks to various interests: union, community and other and probably did ignore some of the advice coming from Treasury and so we didn't see the huge slash and burn budget that some people were expecting.

What are some examples of them listening?

For example, the Area Assistance Scheme in the Department of Urban Affairs and Planning was slated for removal. That didn't happen. The number of job cuts in the Aging and Disability Department were expected to be far greater than the 37 that have gone. In Health certainly five weeks ago there was not going to be a $300 million increase, though of course most of the increase is in capital programs for hospitals and in fact the amount of money to run those hospitals just isn't there in terms of the recurrent budget. So there are some examples of things that were definitely on the cards that we clawed back in the past five weeks and to that extent the government is to be commended for having some sense.

The other general comment is that it's tragic that unemployment gets stuck at 6.75 per cent for the whole year. Michael Egan talked during the election campaign of it being down to four per cent within a year of the Olympics finishing and I think the chances of that happening are zero at the moment. So having simply given away a general payroll tax cut without targeting those tax cuts to firms which would providejobs in parts of Sydney and regional NSW where unemployment is 10 per cent or more, it continues to fail to deliver the benefits of economic growth to the most disadvantaged in the community.

Of course, the Labor Government would argue that by cutting business costs they're actually helping create jobs because there's more money to spend on labour. What's wrong with that argument?

The problem is that while that is true in general terms, unless you are much more interventionist with what you do with the tax system, industry policy and regional policy, you just don't get the benefits going to the groups in the community who are most in need. It's simply leaving it the market and hoping that the trickle down will trickle down far enough. It never does.

What's NCOSS's view of governments running budget surpluses?

We don't have a problem in principle with a budget surplus being run. the question is the size of the surplus and what we do with the other levers of the budget at the same time. For example this budget in fact cuts spending in real terms right across the budget; there is about a 6.6 per cent cut. With revenue going gangbusters with good economic conditions predicted for a few more years and a lot of the Olympics paid for on the construction side, we think there was no end justification not to increase spending. So to boast of a $214 million surplus we think was the wrong priority. It could have been $50 million or $100 million, and all the little cuts that have happened needn't have happened.

Let's imagine that Garry Moore through some quirk of fate became Treasurer of NSW. How would your budget have been different?

Firstly on the spending side, we would have looked at a boost to broadly 'human services'. It would have been focussed on regions of NSW where it is clear without even any detailed work, that services are simply not up to the state average or have been declining in recent times. We wouldn't have cut land tax rates, we would have kept those and we would have restructured land tax even further to make it more equitable so that the higher value properties would have paid more than the 1.75 per cent rate for property over $1.2 million. Given the Commonwealth has given NSW an extra $165 million for services and infrastructure, we would have spent that on services and infrastructure and not on payroll tax cuts. And, as I've mentioned, we would have cut payroll tax strategically.

We would have run a smaller surplus, we would have still run one, but it would be smaller. We would have looked at trying to make the beginnings of an attack on our reliance on gambling revenues. that would have meant broadening the base of stamp duty collections and conveyances for housing worth more than $1 million; because we have a philosophy that those better off in the community should be paying a little bit more. And we would have foreshadowed an approach to a social audit in NSW which, if we are ever going to get the right levels of services in the right places, government such has got to do. So although we do have some differences with the Labor Council of NSW on what would be in that total package, we think the idea of a social audit is important to start pursuing.

It seems like NCOSS comes out each year at budget time running the same arguments. Does it ever get frustrating?

Of course it does when you think that with a Labor Government at a state level with an economy which has had eight straight years of growth that more could be done. I've got to say in the life of the Carr Government there have been some good things that have happened. We acknowledge there have been some spending increases in important areas. The problem is that the levels of social need in our community and the complexity of it continues to rise and outstrips the pace of government spending.

It's also frustrating that while you start to see inside state governments a better approach to collaboration, it is still so embryonic. There's so much more that can be done to get government departments together to look at better linkage of services, to have a better relationship between the government sector and the non-government sector, so that you can do more in places like Liverpool and Fairfield and towns west of the Divide which have been ravaged by structural change. So there's some failure to actually look at what we would consider sensible social policy reform.

Do you think the annual fiscal cycle is an impediment to more long term thinking?

It is, when there's so much weight placed on one year's Treasury process. We have fixed four year terms in NSW so in a sense you have a horizon which is guaranteed. it might not be long enough to effect fundamental change, but four years isn't bad. We produce budgets with supposed four year estimated but these always seem to change every year. So if we have the time length and we have the potential for the planning tools and if we can get the agenda right in the first year, we should be able to overcome this problem.

How would you replace the annual budget? A budget every four years?

We're talking about taking seriously the estimates over four years. Reviewing it every year, but not trying to place the focus on doing the whole damn lot every 12 months. Sure, economic cycles change, but they don't change that quickly and you can still at budget time make some changes if you need to in the event of some external event. It's just throwing all your eggs into the same grab bag each year. It would be better to have medium term forecasts, stick to an agenda, review it every year but not turn it upside down each year. Therefore,. the opportunities for long-term planning don't get realised because the budgetary cycle determines

the ups and downs in between.

The social audit being promoting by the union movement is a step in the direction of setting a more long term agenda. You've said that you support the concept but you have differences over some of the specifics. What are they?

To properly do a social audit you've got to have some credible ,measures of social need on a locational basis. you've got to be sure that all the departments adopt a common approach to this , so they don't each use a different set of statistics. But the next crucial step, which is where these things always fall down, is that you've actually got to work out what is an acceptable minimum basket of services that a community needs. it's not simply a matter of saying that it looks like the eastern suburbs of Sydney has more health services per capita, so we'll just rip it out of there and send it to Blacktown or Dubbo. We're not arguing that there should be redistributing but you've got to do it on the basis of knowing where the inequities are and saying this is the minimum level that everyone must have. Then you do the redistribution. The difficulty politically is that government freak out and say there's not enough resources in the total cake, but if we are going to be genuine about this we have to take all of the steps. because if we simply say we'll rob Peter to pay Paul the thing will fall down.

Doesn't the same argument apply if you were to decide you needed to raise taxes to provide services and therefore cut employment?

The question is what sort of taxes to you look at raising? Not all taxes have negative employment impacts. That's why a tax like land tax if appropriately levied, is a progressive tax on speculative capital gain, it doesn't have an impact on the construction industry, particularly in a boom market. You should be looking at these sorts of levers to raise revenue. The question about taxation is picking the taxes which are efficient, which are equitable and which don't have negative job impacts and then making a commitment to actually spend that money on services. That's the next big question. When Carr and Egan introduced the land tax and the bed tax in 1997 - both of which were NCOSS proposals - the unfortunate thing was that they didn't spend that money on increased services for homeless people; which would have been more sensible and saleable to the public. not that we're for hypothecated taxes, but if we're going to levy rich people who are making a motza out of Sydney's property market, we should refocus to the people being turned away from refuges.

Finally, what role do you see unions taking in working co-operatively with the community sector over the life of the Carr government

We have a lot to offer each other in trying to work out a joint vision. Both sectors are interested in jobs and services - perhaps unions more the former and NCOSS more the latter. So we should be building an agenda. the second thing is that we can work on issues together that come under that agenda to promote new initiatives or try and stop regressive policies. My own view is that if we have a two term Labor Government, we're talking eight years, so there is an opportunity - notwithstanding that we might get an economic downturn in a few years time - to make that agenda out that far and to work together particularly in the interests of low-income people who increasingly are people without work or with little work in the restructured labor market.

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  Issue 19 contents

Interview: Moore for the Battlers
NCOSS director Garry Moore gives the community sector's response to this week's State Budget

Unions: AWU's Bush Blitz
"This is AWU Country". That's the slogan for the Australian Workers Union as it launches its campaign to address the specific needs of workers throughout regional and rural Australia.

Indigenous: Nowhere to Run, Nowhere to Hide
A United Nations committee slams Australia on indigenous native title rights.

International: Unions Post-War Stand
The world labour group demands KFOR track war-crimes authors and says social dimension central to Balkan reconstruction.

History: How Swede It Was
Swedish seafarers play an important role in South Australia's maritime history.

Review: If He Had Only Listened To Me ...
If Michael Thompson had listened to me the current debate raging in the nation�s opinion pages about his book may not have been as hysterical.

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