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April 2004   
F E A T U R E S

Interview: Terror Australis
The Howard Government has just discovered the nation's ports are a terrorist target. The International Transport Federation's Dean Summers has been warning them for years.

Unions: Graeme Beard's Second Dig
Hidden in the Australian Workers Union Sydney office is a mild-mannered industrial officer who once strutted the international cricket stage, writes Jim Marr.

Industrial: The Hell of Troy
On the basis of a couple of hours in the witness box, Building Industry Royal Commissioner Terence Cole described Troy Stratti as "credible". Six men who, together, have known the company director for the best part of 50 years beg to differ.

Organising: Miners Strike Gold
Traditional unions are rediscovering the power of grassroots organising. Paddy Gorman reports from the coal face.

Economics: The Accepted Wisdom
Evan Jones argues that economic policy making has been narrowed and rendered mechanistic and antiseptic.

History: Vicious Old Lady
Despite its Liberal leanings, the Sydney Morning Herald has never been shy of bashing unions, writes Neale Towart.

International: Out of Sight, Out of Mind
Thailand must end its crackdown on Burmese fleeing rights abuses in their military-ruled homeland, according to a Human Rights Watch report.

Review: War Unfogged
Want to go to war but not sure where to start? Look no further than Errol Morris' latest doco-drama for the definitive 11-step lesson plan, writes Tara de Boehmler.

Poetry: TAFE
A TAFE student struggling under the weight of fees shares his wordly wisdom

C O L U M N S

Postcard
A Voice for Peace
Palestinian trade union leader calls on militants to lay down their arms while the ICFTU protests harassment of Palestinian union leader.

The Soapbox
The Double Standard Bearers
Nicholas Way argues that when it comes to collective action, the Howard Government has different views depending on whether you are a unionist or a small business.

The Locker Room
The Fine Print
While the result mightn’t be everything, it does make the back of the newspaper more interesting, as Phil Doyle reports.

Politics
The Westie Wing
Ian West crunches the numbers in Macquarie Street and finds virtue in deficit.

E D I T O R I A L

Something Smells
There is something just a little too cute about the NSW government’s discovery of a budget crisis on the eve of public sector wage talks.

N E W S

 Gong Points Death Bone at Iemma

 Strip – Howard’s Order to Shoppies

 Workers Victory - We’re Legal!

 Compo Family Exiled to Peru

 Patrick Faces Million Dollar Fines

 Water Quality in Budget Back-Wash

 Feds Dodge Death

 Hard Men Melt Away

 Three Cheers for 36-Hour Week

 Dili Death "Down to Dollars"

 Builder Pleads Guilty

 Maternity Plan: Hard Labor?

 Life – Cambodia’s Grand Raffle

 Thumbs Up for Union Code

 Activists What’s On!

L E T T E R S
 War And Peace
 Getting Away With Murder
 Terrorism
WHAT YOU CAN DO
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Politics

The Westie Wing


Ian West crunches the numbers in Macquarie Street and finds virtue in deficit.

******

For the first time in nine years, the Carr-Refshauge Labor Government looks set to deliver a deficit budget this year. After a good run of eight balanced budgets in a row, the New South Wales Budget balance sheet will be in the red.

This provides an opportunity for the State Government. Now that Michael Egan can't announce a budget surplus this year, he has a chance to explain why this is the case and to show that it is not in fact the end of the world to deliver a deficit.

It is true that many of the reasons are linked to Federal Government funding. The $376 million dollars in GST revenue that has been cut from NSW's share represents a direct cut to the Budget. When you consider that last year's State Budget surplus was a modest $43 million, it shows how much is being lost.

But it's not something for Treasurer Egan to slash his wrists over, as he said he felt like doing when he heard about the cut in Federal funding.

Instead Egan has moved on and has prepared a mini-Budget to outline which Departments will have to find savings over the next year. An upfront approach is best when there's a bitter pill to swallow.

Part of the explanation of why the Budget will be in deficit has to be that it was unavoidable because of the nature of the fiscal cycle. Once that is accepted, then it seems the spirited arguments against deficit budgeting become a bit hollow.

It's proper for a Labor government to say that it is not prepared to sacrifice essential services just so that a Budget surplus is achieved. Michael Egan is saying this about "frontline services"- health, education, transport and policing- but we should not be stopping there.

It's all about mindset. Governments currently underwrite liabilities and losses of private companies when it's necessary. Now it's time to expand the underwriting of public expenditures.

There has to be a bit of vision and verve in the fiscal approach. It has to be accepted that firstly, surplus budgets are not always achievable and secondly, they are not the be-all and end-all. All treasurers know that they are locked in a long-term cycle of finances, which can be tinkered with but not turned around completely.

We're at a point where we have come full circle. Economic rationalism has gone so far that it is now imperative to buy back the farm or at least set up a new one.

When the farm was sold off, the proceeds were quickly plundered to balance the books and a bit further down the track, the private sector refuses to offer adequate services where effective public services existed.

Now is the time to make bold decisions on infrastructure and not be scared of debt.

It may seem like the worst time to consider ideas that are usually labelled "radical". The saying goes that from crisis comes opportunity.

Cost savings over the medium term could be achieved if the Government re-entered areas like the insurance market with an insurer of its own to offer cover in the many areas where the private insurers are inadequate.

It wasn't so long ago that we had cost-effective services like the Government Insurance Office, set up by a Labor government in the 1920s, before Nick Greiner sold it off in 1992.

With a bit of imagination like this, it would matter even less that the Budget is in deficit because a realistic long-term plan would be in place to deliver the infrastructure and social justice programs that a Labor government should provide.

In the long run it's not only electorally popular, it's also economically responsible.

For more information on the Budget process, go to http://www.ianwestmlc.com.au/westieminster.html.

I am interested to hear feedback and ideas--you can contact my office on (02) 9230 2052 or email me at [email protected]


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