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The Age

Surgeon Stockdale's cure - cut more jobs

Author: TOM ORMONDE
Date: 06/04/1993
Words: 1902
          Publication: The Age
Page: 1
Victoria faces the danger of another economic downturn and industrial upheaval as unions fight State Government plans to cut spending by $731 million and eliminate a further 15,300 public-sector jobs over two years.

The Treasurer, Mr Stockdale, yesterday admitted that the cutbacks, which he announced earlier to Parliament, posed the risk of depressing the state economy. But he said the danger of acting less dramatically was ultimately greater.

``Of course there are risks in whatever you do," he said. ``The question for Victoria is: Is the risk lesser or greater than if we simply allowed Labor's policies to continue? The whole thrust of what I have put out today is to satisfy people that delay is worse." Mr Stockdale also admitted that the Government had not conducted a detailed study on the likely impact of the mini-budget austerity measures, the second set since the Government came to power last October, on the Victorian economy.

``We have done some sensitivity analysis ... but we have not attempted any major economic impact statement," he said. ``We are more concerned about getting on with the job than in examining the entrails of a chicken." According to senior Federal Government sources, the mini-budget could crush consumer and business confidence and destroy prospects for economic recovery in the state.

They claimed the Premier, Mr Kennett, and Mr Stockdale had apparently been ``spooked" by their fear of international credit-rating agencies and were being driven by the political cycle, rather than objective economic considerations. Victoria's problems were serious and needed action, but it was not necessary to concentrate the pain into two years, they said.

Unions representing teachers and health workers, along with community groups, have vowed campaigns of mass action and resistance to average spending cuts of about nine per cent across Government departments, the most severe austerity measures in Victoria's history.

The secretary of the Trades Hall Council, Mr John Halfpenny, said unions would seek urgent talks with the Government to obtain specific details of the mini-budget's impact. But he warned they would vigorously resist the cutbacks.

When public-sector unions meet tomorrow, they will be asked to back a 24-hour stoppage by teachers on 5 May. Unions outside the public sector could also join in, and Mr Halfpenny said the action could rival scenes late last year, when more than 100,000 workers marched on Parliament House.

As expected, the axe will fall most heavily on hospital and community services, which will have to absorb cuts of $380 million, or almost 12 per cent of the annual budget. Hospitals face ward closures, while job losses in these areas are expected to total almost 5000.

A smaller than predicted cut in the education budget, of about seven per cent, will still force the closure of dozens of state schools and the loss of thousands more jobs in the teaching profession and the Education Department.

Previously announced cuts in the state transport budget aim to reduce spending by $243 million annually by the end of the Government's current electoral term.

But the Police and Emergency Services has been spared significant cuts, fulfilling a Government election promise.

The Government is seeking Loan Council authority for $1.3 billion in borrowings to finance the 15,300 redundancies arising from the mini- budget measures. These are in addition to about 16,700 jobs that will have disappeared by the end of June under previous Kennett Government initiatives.

In the only significant new revenue raising initiative, the Government will take $166 million in special dividends from the Transport Accident Commission over two years. Previously announced revenue plans include big rises in water consumption prices and a doubling of the the bank accounts debit tax, yielding a combined $170 million a year.

The Government aims to complete its cuts and return its budget deficit on current account to surplus by the 1994-95 financial year, 12 months earlier than it previously expected. This will leave up to another year before the next state election.

The Opposition Leader, Mr Kennan, said families would be particularly hard hit by the mini-budget because services would be reduced and charges would rise.

Announcing the cuts yesterday, Mr Stockdale said Victoria's projected net public- sector debt would held to $26.6 billion in the year 2000, or about $23 billion lower than it would have been if the policies of the previous Labor Government had been continued.

He said had no alternative but to act now to repair the state's battered finances, a situation he blamed on the previous administration. ``The Government acknowledges that today's autumn statement does involve pain for virtually all Victorians," he said.

``We certainly get no comfort from inflicting that pain as part of the responsibility of rebuilding this state. But the job simply has to be done. There is no alternative other than to correct the failings of the Labor Party over the last decade.

``If we were to continue to adopt the policies of Labor, to ignore the facts and refuse to face up to the need for remedial action, then the increases in taxation and reductions in services to the Victorian community would only have to be all that much more severe in just a few short years." Victoria faces the danger of another economic downturn and industrial upheaval as unions fight State Government plans to cut spending by $731 million and eliminate a further 15,300 public-sector jobs over two years.

The Treasurer, Mr Stockdale, yesterday admitted that the cutbacks, which he announced earlier to Parliament, posed the risk of depressing the state economy. But he said the danger of acting less dramatically was ultimately greater.

``Of course there are risks in whatever you do," he said. ``The question for Victoria is, is the risk lesser or greater than if we simply allowed Labor's policies to continue? The whole thrust of what I have put out today is to satisfy people that delay is worse." Mr Stockdale also admitted that the Government had not conducted a detailed study on the likely impact of the mini-budget austerity measures, the second set since the Government came to power last October, on the Victorian economy.

``We have done some sensitivity analysis ... but we have not attempted any major economic impact statement," he said. ``We are more concerned about getting on with the job than in examining the entrails of a chicken." According to senior Federal Government sources, the mini-budget could crush consumer and business confidence and destroy prospects for economic recovery in the state.

They claimed the Premier, Mr Kennett, and Mr Stockdale had apparently been ``spooked" by their fear of international credit-rating agencies and were being driven by the political cycle, rather than objective economic considerations. Victoria's problems were serious and needed action, but it was not necessary to concentrate the pain into two years, they said.

Unions representing teachers and health workers, along with community groups, have vowed campaigns of mass action and resistance to average spending cuts of about nine per cent across Government departments, the most severe austerity measures in Victoria's history.

The secretary of the Trades Hall Council, Mr John Halfpenny, said unions would seek urgent talks with the Government to obtain specific details of the mini-budget's impact. But he warned they would vigorously resist the cutbacks.

When public-sector unions meet tomorrow, they will be asked to back a 24-hour stoppage by teachers on 5 May. Unions outside the public sector could also join in, and Mr Halfpenny said the action could rival scenes late last year, when more than 100,000 workers marched on Parliament House.

As expected, the axe will fall most heavily on hospital and community services, which will have to absorb cuts of $380 million, or almost 12 per cent of the annual budget. Hospitals face ward closures, while job losses in these areas are expected to total almost 5000.

A smaller than predicted cut in the education budget, of about seven per cent, will still force the closure of dozens of state schools and the loss of thousands more jobs in the teaching profession and the Education Department.

Previously announced cuts in the state transport budget aim to reduce spending by $243 million annually by the end of the Government's current electoral term.

But the Police and Emergency Services has been spared significant cuts, fulfilling a Government election promise.

The Government is seeking Loan Council authority for $1.3 billion in borrowings to finance the 15,300 redundancies arising from the mini- budget measures. These are in addition to about 16,700 jobs that will have disappeared by the end of June under previous Kennett Government initiatives.

In the only significant new revenue raising initiative, the Government will take $166 million in special dividends from the Transport Accident Commission over two years. Previously announced revenue plans include big rises in water consumption prices and a doubling of the the bank accounts debit tax, yielding a combined $170 million a year.

The Government aims to complete its cuts and return its budget deficit on current account to surplus by the 1994-95 financial year, 12 months earlier than it previously expected. This will leave up to another year before the next state election.

The Opposition Leader, Mr Kennan, said families would be particularly hard hit by the mini-budget because services would be reduced and charges would rise.

Announcing the cuts yesterday, Mr Stockdale said Victoria's projected net public-sector debt would held to $26.6 billion in the year 2000, or about $23 billion lower than it would have been if the policies of the previous Labor Government had been continued.

He said had no alternative but to act now to repair the state's battered finances, a situation he blamed on the previous administration. ``The Government acknowledges that today's autumn statement does involve pain for virtually all Victorians," he said.

``If we were to continue to adopt the policies of Labor, to ignore the facts and refuse to face up to the need for remedial action, then the increases in taxation and reductions in services to the Victorian community would only have to be all that much more severe in just a few short years."

 
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