Wednesday 31 October 2012

Oz: the Anorexic Country.

Last year, shortly after winning the state elections, Barry O'Farrell, NSW Premier, announced a AUD4.5bn "black hole".

Although O'Farrell (Liberal Party) had promised not to touch the state public service, public finances were in such a catastrophic state that radical austerity was desperately needed. In conservative-speak: there was much fat to trim.

O'Farrell wasn't alone. According to a Crikey analysis (July), "38,000 public service job cuts have been announced at the federal and state levels over the past few years. A further 24,000 positions are on the line (the federal Coalition says it will cull 12,000 positions, while the Queensland government has hinted at a possible further 12,000-20,000 job losses)".

For NSW, the "2012-13 budget set a 1.2% per annum reduction in labour costs across the public service, which unions say equates to 10,000 jobs", 5,000 of which are "voluntary" redundancies. And that without counting cuts in health (AUD3 bn over four years), plus education cuts. Thank goodness the Liberal Party guys are such brilliant economic managers, always ready to take "courageous" decisions (ask shadow federal treasurer Joe Hockey).


Do you believe in miracles? Well, they do happen. And the one delivering the miracle was no one other than the NSW Auditor-General, Peter Achterstraat:
"An expected deficit of $337 million [announced by state treasurer Mike Baird] in the middle of June became a surplus of $680 million by the end of June."
And how did this miracle happen?
"There were 37 errors of over $20 million each in accounts the Auditor-General's office identified and corrected.
" 'I would say that a $1 million error is unfortunate, a $10 million error is undesirable but a $100 million error is totally unacceptable,' he said.
"This is not acceptable for an entity the size of NSW that manages billions of dollars of assets and public funds.
"There is a lack of effective financial management capability in this state and it must improve."

In the meantime, in what conservative think-tankers and spin-masters will argue is an entirely unrelated development, this is how unemployment (trend, seasonally adjusted, according to the ABS's latest release 6202.0 - Labour Force, Australia, Sep 2012):

Thanks for nothing, Barry, Mike, Tony, Joe, Julia, and Wayne. Keep trimming the fat.

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