Anyway - interesting little story to remind those staunch Labor supporters out there that if the state governments (all Labor) are going to be dishonest when it comes to financial matters: how much worse will it be when they get the national chequebook? (without trotting out the old "interest rates" chestnut).
Simple fact: The Labor party does NOT know anything about financial management other than spend, spend, spend until there is nothing left and then putting the country into hock while they spend some more - far too much of it going on aid to other countries with their own corrupt governments who pass nothing on to the people. Think: Ferdinand & Imelda Marcos.
Then we need to get the Liberals back in to make all the hard decisions and bring the country back into the black.
That is the difference between a government who manages the economy and one that works to keep their mates in the cooshy jobs; pander to the unions and keeping up a pretense that they support the people while living the high life themselves at the cost of taxpayers. Think: Bob Gibbs: The Beattie government stooge and cretin who is responsible for 1,500 people losing their (minimum of) $1,000 (each) when he decided to sell off Queensland Raceway when the three other Receivers (Queensland Govt being the fourth) had received advice from the government's own advisor to allow the track to trade out of its financial problems. One thousand people times $1,000 (individual life memberships) plus five-hundred times $1,500 (family life memberships) were not honoured by the new owners.
Incidentally, Bob "Cretin" Gibbs is now in Los Angeles as a "Trade Commissioner" for Queensland (why, nobody knows - more jobs for the boys...). I recall his meal bill a few years ago being around $80,000 because he eats at restaurants for every meal and refuses to eat anywhere that isn't rated at 5-stars. Guess who pays for all this as well as his first-class travel bill? Hint: it's not him.
But I digress... I will be updating the Wiki page for Queensland Raceway though at some time in the future....
Premiers squander $50bn tax bonus
By Samantha Maiden
June 05, 2006 07:51am
Article from: The Australian
THE states have squandered a $50 billion windfall on higher wages for public servants instead of cutting taxes or investing in infrastructure.
A new analysis, prepared by the Institute of Public Affairs, has found that since the GST was introduced in 2000, revenue distributed to the states has increased by more than 9 per cent a year, delivering an extra $22 billion to state governments.
State tax revenue over the same period was $28 billion more than expected, with big increases in stamp duty from property sales contributing an extra $4.1 billion.
However, this unexpected revenue growth has been pumped into higher wages for bureaucrats and public servants rather than being invested in infrastructure and delivering a new reform agenda.
The states' wage Bill has been rising much faster than inflation for the past three years, with a big increase in the number of administrators, leading the report to question the states' commitment to improving frontline services. "The main focus of the states' spending spree has been public servant salaries," the report finds.
The report, published on the eve of the NSW and Queensland budgets, is highly critical of the states' waste of what it terms the "reform bonus".
At the same time, spending on health and education has increased, waiting lists for elective surgery have grown and public school enrolments have fallen.
The report, Opportunity squandered: how the states have wasted the reform bonus, by the IPA's Mike Nahan, found the states also secured the unexpected windfall without honouring an agreement to cut state taxes when the GST was introduced.
"The funds received in the form of higher-than-expected GST payments alone have been sufficient to have allowed all states to meet their tax-cutting commitments under the inter-governmental agreement," the report states.
"But so far, none has done so."
As NSW Premier Morris Iemma prepares his first budget, the IPA report has found his Government has failed to invest the proceeds of state taxes and GST windfalls on infrastructure upgrades.
The public service wage bill in NSW has increased by 8.9 per cent a year since July 2003, the report finds. "NSW, which has been the most aggressive on the tax front in terms of raising taxes and reluctance to meet its GST obligations to cut taxes, received a grant-tax windfall of $14.3 billion - equivalent to 10.5 per cent more revenue than forecast at the time the GST deal was agreed," the report finds.
"The current crisis affecting NSW - declining revenue, budget deficit, public sector lay-offs, could spread to other states, with Tasmania, South Australia and the ACT being the most likely to follow suit, given their heavy dependence on conveyancing fees to fund large increases in wages."
State public servants' remuneration has been rising much faster than inflation in all states and territories since 2003.
The ACT leads the way with an annual increase to the wage bill of 12.6 per cent, with Tasmania close behind at 11.3 per cent.
The report also notes the growth in the size of the state public sector workforce.
Overall, the ranks of state bureaucrats swelled by 11.7 per cent between November 1999 and November last year.
"The states would argue that this spending was justified as it was used to attract and retain the best frontline professionals," the report says.
"During this same period, however, the states increased their administrator or bureaucrat workforce by 44,000, or 30.5 per cent. Clearly, therefore, frontline staff have not been the state's sole focus."
Peter Costello said yesterday the IPA report underlined the risk that the states' lack of action was holding back economic progress.
"The GST has brought a massive revenue windfall to the states," the Treasurer told The Australian.
"This windfall could have gone to accelerating the abolition of agreed taxes, particularly stamp duties.
"Far from accelerating, the states have lagged on the abolition of agreed taxes, keeping the windfall and delaying the abolition of offsetting taxes."
The states have traditionally justified the failure to eliminate or reduce state taxes on the grounds they need to invest in infrastructure or reform services.
However, the report finds only Queensland and Victoria allocated a sizeable share of record GST and tax revenues to capital investment or debt reduction.
Tasmania spent the entire windfall and NSW increased recurrent spending by more than its windfall from the GST and booming state tax receipts.
"Since the introduction of the GST, the states and territories have experienced phenomenal, indeed record, growth in revenue - far in excess of the rate expected at the time the GST was introduced," the report finds.
"The net result was that the states received $70 billion or about 14 per cent more revenue than expected over the first five years of the decade."
According to the report, payroll and land tax - the state's broadest-based taxes - grew on average by 6.9 per cent and 17.4 per cent over five years.
However most of their revenue growth came from elsewhere. "Revenue from stamp duties on conveyances grew over the period by a massive 73.3 per cent or by $4.1 billion," the report states.
"Revenue from stamp duties on insurance grew by 63.7 per cent over the period, thanks primarily due to the inflation in insurance prices following the collapse of HIH, the imposition of the GST."
While the states had forecast a 3.2 per cent increase in revenue, the GST grant income had risen by 10.7 per cent.
The GST is expected to generate an extra $14 billion for the states over the next five years.
The GST has entrenched the commonwealth as the states' "paymaster", assuming direct responsibility for collecting 45 per cent of state revenue, according to the report.
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