GST Shares, Budget Strategy, NT Royal Cn

Turnbull’s Statement on WA’s Share of GST Revenue

In my Commentary on Tuesday I suggested that Turnbull’s announcement at the WA Liberal Party’s conference held last weekend that each State would now be guaranteed a minimum share of GST revenue was, once again, lacking in any serious analysis or any checking first even with senior ministers, let alone other states. It has subsequently emerged that the new arrangements, the calculation of which has not been stated, are first to be discussed with other states and that it is unclear when they might start (although WA Premier Barnett who has an election next March says he thought it would be this calendar year). The Australian also published an analysis on the assumption that the minimum share would likely be 75% and that WA (now receiving only 30%) might not receive any future benefit from any such arrangement. My letter to the Australian on the issue was published yesterday with four others (see GST Shares).

Turnbull’s Address to CEDA

It has been predicted in some quarters that Turnbull would give a major policy speech prior to the resumption of Parliament on 30 August. He gave what purported to be such an address yesterday (see Turnbull to CEDA) outlining what he described as the Coalition’s economic plan that “will ensure that Australia is more productive, more competitive, more innovative” and indicating that when Parliament resumes the government would introduce an Omnibus Bill that puts together all the Government’s savings measures that we understand from the election campaign the Labor Party is prepared to support”. Turnbull claimed that such savings amount to about $6.5 billion over the next four years, which compares with total estimated budget expenditure of $1,889 billion ie a miniscule reduction of 0.3%. The proposed savings cover a hotch-potch of items (see Budget Savings) and some dispute has already emerged as to whether Labor will accept them even though they had accepted them during the election campaign. The largest saving of about $1bn relates to the funding of the Australian Renewable Energy Agency and this seems to be particularly disputed by Labor. Of the $6.5 bn of savings items listed only about $6 bn require legislation to become effective.

Surprisingly, Turnbull gave no indication of whether he intended to seek further savings in spending or where such savings might even be considered. One would have expected that he would have at least indicated that, given  the estimated deficit of $84.6 bn over the next four years, the Coalition intended to seek further savings in future budgets. But while he indicated that “good budget management is a vital component of our economic plan” and “a strategy to get the budget back into balance” is needed, apart from the $6.5 bn “agreed” saving he did not  include any reference to possible areas in which the Coalition would also (even) consider reducing spending. Yet total spending is  projected to increase by 13% over the next four years and would still then constitute 25.2% of GDP (compared with 25.8% in the current year). Could an actual total reduction ever be considered by a Turnbull government?

Outside the budget, Turnbull’s address to CEDA is also disappointing and largely consists of a repetition of previously stated broad objectives without giving any real indication as to how these might be achieved and with the inclusion of some objectives which are questionable, such as an Australia which has high wages and a generous social welfare safety net. As Judith Sloan suggests in today’s Australian, “the most disappointing aspect of Turnbull’s speech is the reinforcement of the thinness of the government’s economic agenda” (see “Sloan on Budget”).  Her conclusion is spot on – “ the government needs to get real about economic management, not just spout slogans”.

Royal Commission on N Territory Treatment of Juvenile Delinquents

A major candidate for a reduction in budget allocations is the ABC, which appears to continue to distort the presentations on issues which it chooses to show on TV. Its new head seems to have made things worse and the only way it can be disciplined is to cut its funding.

The latest example of a serious distortion is its presentation in Four Corners  on the Northern Territory’s treatment of juvenile delinquents. In an article published in the Herald Sun on 16 August, former Premier of Victoria, Jeff Kennett, pointed out that although the footage shown was almost six years old, viewers were not told of this, leaving the impression the incidents shown were the fault of the present government (which faces an election early next year) not the Labor government then in office. Nor did it say that the officers involved in taking disciplinary action had been cleared in a court action or why they had taken the action. No mention was made either of the reforms made in the NT prison system since the time at which the incident occurred. Kennett asked whether if the ABC had made an accurate presentation there would have been a Royal Commission appointed.

In this article in today’s Herald Sun, Andrew Bolt takes up from the Kennett article and refers to a letter written to the NT corrections Minister who implemented reforms  by  the Four Corner’s reporter who produced the program.  That letter showed that the ABC knew that he had made extensive reforms and in fact acknowledged “Minister Elferink, this is a significant legacy. It is also your legacy”. Yet none of this was mentioned in the presentation. In fact the ABC presenter of the program, Sarah Ferguson, implied that the NT treatment of juvenile delinquents was similar to the torture inflicted on those at Iraq’s Abu Ghraib jail!

Bolt argues that Elferink was “tricked by the ABC” and that “Prime Minister Malcolm Turnbull was a fool to let the Four Corners report panic him into calling a royal commission only 10 hours later”.  An agile PM might now cancel the royal commission and reduce the ABC’s funding.