The Liberal Alternative Budget summary

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John Barker – John Barker & Associates

This is a constructive alternative budget, which the Liberals hope will lead them to a stable majority Government in 2014.

It provides a significant change of emphasis from one more recently tied to social reform to one of economic stimulation.

If elected to Government, the Liberals will face the challenges presented to all newly elected governments of making the hard decisions required to deliver its plan, and particularly to bring expenditure under control and sustain it.

One potential hurdle is the possibility of a deteriorating financial position contained in the State’s mid-year financial accounts, which the Government has indicated will be released in February 2014 – one month from the election. These accounts can be released much earlier.

I suspect therefore that the Government expects an improved position, possibly as a result of placing the proceeds of the sale of Aurora’s database into consolidated revenue, rather than retiring a debt.

We can expect that the Liberals will release further policy initiatives closer to the 2014 election.

At a glance:

  • Government last week announced a dire economic position and outlook including a record deficit of $425m and a projected deficit for 2013/14 of $267 million.
  • The Liberals Alternative Budget delivered today is a very positive document offering to stimulate economic growth through encouraging investment, creating jobs, cutting red and green tape and providing a significant confidence boost for business.
  • The alternative budget identifies $506 million in savings – $155 million of that from reducing public sector employment by 500 positions over two years. This is a major challenge, which few Governments have succeeded in and sustained.
  • It is rare indeed for an Opposition, 10 months out from an election to identify reductions in State service as a key policy. We can expect the Government to make much of this, but it must be done.
  • $280 million of the savings will then be reinvested to reinvigorate the economy.
  • Frontline public services will also be improved, such as the investment of $76 million in elective surgery by re-opening 40 closed hospital beds and engaging 110 new health professionals to staff them.

In addition it will:

  • Lower deficits in 2013/14 and 2014/15, provide a surplus in 2015/16 and a greater surplus in 2016/17.
  • Provide $33 million over three years to re-establish an international shipping link, which will significantly benefit Tasmanian exporters.
  • Establish a statewide planning scheme.
  • Waive water and sewerage developer charges for all new developments for two years, enabling investment and creating jobs.
  • Provide an extra $16 million for tourism marketing over four years.
  • Introduce a local benefits test for businesses competing with large mainland entities for Government tenders and disaggregate Government tenders, which will assist smaller businesses.
  • Slash red and green tape by 20 per cent.
  • Increase the payroll tax threshold to $1.25 million, matching Government.
  • Create a new Department of State Growth, merging the Department of Economic Development, Tourism and Arts with the Department of Infrastructure, Energy and Resources.
  • Establish an Office of the Coordinator General, a very positive initiative to act as a single part of contact with businesses interested in investments and provide a “can do” environment.
  • A population growth target of 650,000 by 2050.
  • Extend high schools to Year 12, retaining Colleges and Tas TAFE – this will result in a maximum of 2000 extra students completing Years 11 and 12 in each of the first four years of the plan.
  • Match the Government’s funding for the Gonski education reforms.
  • Grow the agriculture industry tenfold by 2050.
  • Provide $9 million in additional funding for the community sector.
  • Establish a Serious and Organised Crime Squad.

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