Jenny Long, Sydney
After weeks of softening up for a promised horrific cut in public spending in NSW, the minibudget announced by Treasurer Michael Egan on April 6 was promoted by him as a "tough but fair" response to the Labor state government's financial situation.
However, the minibudget's headline item of populist changes to stamp duty and land tax, which increased tax payments for residential property investors and reduce stamp duty for first home buyers, was accompanied by a threat to cut a further 3000 public service jobs.
These cuts are on top of existing funding and job cuts already being implemented throughout the 300,000-strong public sector, including 1100 jobs in the department of education and training and at TAFEs.
They also include the jobs to be cut in creating the super department of commerce and the privatisation of revenue raising sections of this department.
Headline items on new spending announced by Egan in health, education and transport were cynically crafted to avoid mention of increased private sector involvement, parallel service cutbacks, and in some cases were renouncements of previous initiatives.
NSW Council of Social Service (NCOSS) director Garry Moore told Green Left Weekly the minibudget was a "huge disappointment". He said it was "shameful" that "not one cent of the additional funds raised" from the property tax changes would go to public housing.
Moore noted that the government has been reaping a windfall for the past five years in stamp duty as housing prices have skyrocketed, helped along by low interest rates, the federal government's first home buyers' grant, and capital gains in investment properties outstripping superannuation fund and other investment earnings. But at the same time, housing affordability for low- and middle-income earners is getting further out of reach and people have to wait at least 10 years to get into public housing.
Much more far-reaching changes were needed to property taxes at both state and federal level, Moore said, to redirect funds to providing affordable housing through the public and private sectors, and to other community service needs.
NCOSS wants the NSW land tax (scaled progressively) to apply to principal place of residence and stamp duty to be abolished completely, with tax exemptions for investment in lower and moderate income housing.
Before the mini-budget, the NSW Labor Council's Workers Online website described the government's discovery of a budget crisis on the eve of public sector wage talks as "too cute", with "saturation TV adverts" adding to the $376 million that Premier Bob Carr said the federal grants commission had stolen from NSW.
Workers Online posed the obvious questions, still not answered by the government, including the big one: Where has all the money from stamp duty and land tax gone, and what will be the impact of the mini-budget on the government's pay offer to teachers, nurses and public servants?
Public Service Association (PSA) assistant general secretary Steve Turner told journalists the mini-budget was a "relief", with only 500 definite job cuts and the voluntary redundancy policy retained, compared to the thousands of immediate job cuts and forced redundancies previously threatened.
For this, Turner received a pasting from members and delegates in affected departments, particularly those affected by the amalgamation into a new Department of Primary Industries, which will combine the agriculture, fisheries, mineral resources and state forests departments.
Delegates from the Department of Agriculture — still reeling from a savaging in last year's budget — told the union's April 13 central council meeting that voluntary redundancies were no answer for public sector employees working in regional centres — where jobs, particularly in the public sector, were few.
Egan announced a range of other public sector cuts, including the abolition of the Department for the Status of Women, which will become an "office" in the premier's department, and will lose $2.5 million this year and $4 million next year (from a total budget of $5 million).
The PSA condemned this change and will ask the premier for the funding to be retained specifically for women's programs. The PSA women's council plans a letter-writing campaign to state MPs asking them to vote against the changes.
After months of highly embarrassing headlines in the corporate media over failures in the health and public education systems, Egan promised to quarantine these areas from $81 million in public service "administrative" cuts. However, programs targeted at assisting skilled migrants into the job market and mature workers to retrain and remain in the job market were both axed. A number of area health services have been amalgamated with job cuts expected.
A spending increase of $2.5 billion was promised to improve the reliability of commuter train services and to buy new rail carriages, but the Casino-Murwillumbah rail service in northern NSW will be axed and replaced with buses. Rail maintenance will be outsourced, with unspecified job losses.
This outsourcing is part of a deal that involves a public-private partnership for the $1.5 billion in new train carriages which may only be leased by the government.
According to the NSW Teachers Federation, Egan's promised extra $365 million for education was simply a reannouncement of previous initiatives for capital works and the hiring of extra teachers to reduce class sizes.
From Green Left Weekly, April 21, 2004.
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