The Opposition’s fossilised response the ACT Budget got only half the story.
Kate Carnell called it the Jurrasic Park Budget _ a simile that is destined for clichedom over its next 160 million uses. She was comparing the ACT Government to another extinct lifeform _ Stalinism. While other governments were adapting and privatising the unfit ACT Government was batting on with State ownership of property and the means of production and exchange, she said.
Carnell could have used the Jurrasic Park analogy to better effect. Quite recently palaeontologists grovelling in the Badlands of Wyoming discovered an unknown attribute of dinosaurs: they were social animals which lived in groups and nurtured their young after hatching.
In other words, they looked after their own. The ALP has evolved from Stalinism and blind ideology, but it still carries some maladaptive baggage _ looking after your mates before anything else. It used to be an important survival trait in the days of the Industrial Revolution. If you did not stick together, the capitalists exploited you. Now it is not important for survival, but the trait lingers in a newer form.
Ms Carnell referred to looking after mates, but she restricted it to “”union mates”. There is a grain of truth in it when you look at the Transport Workers Union, but it manifestly does not apply across the board _ ask the teachers’ union or the Public Sector Union, for example.
No; the ACT’s Budget problem does not come from looking after the broad mass of union mates. Rather it comes from an inability to surrender control of a whole lot of unnecessary regulatory, statutory and monopoly boards and organisations. And it will not get rid of them because it enjoys the power of appointment to them, and in doing so does what the palaeontologists have discovered about dinosaurs _ they look after their own.
The essential trouble with this is not that the Labor Party members or people with Labor associations who are appointed to statutory monopolies run the monopolies badly; indeed many work with great dedication. It is just that no-one (Labor associate or not) can produce as good a result in a monopoly environment as in a competitive one.
In a monopoly environment organisations are prone to make silly pricing decisions; are shackled by vote-catching political directions; waste money on things not countenanced in a competitive environment; treat their captive clients with contempt; and pass the losses back to the taxpayer.
In the same week as the Budget we had a classic example with the tabling of the annual report of the Milk Authority.
Why does the ACT Government get itself involved in milk sales? It is 1950s thinking: after the ravages of depression and war, the welfare state supplied essential milk to the masses at a fixed price. There is hardly any need for this in 1993.
Yet the ACT Government has granted the ACT Milk Authority power to regulate the control, supply, distribution and price of milk in the ACT. In other words, it has a monopoly.
Given the monopoly, why is it necessary for the authority to spend $587,834 on promotion? Why did it give $109,000 of that in sponsorship to the Raiders? A sponsor’s box is a nice place to watch a game of football while the masses watch from the hill outside. A sponsor’s box is a nice place to invite people of critical importance in the marketing of milk in a monopoly environment as milk faces the fierce competition from grape juice (great on muesli) and ginger beer.
The milk authority gave a good return to the Government last year; that is what you would expect from an organisation that has a statutory monopoly over an essential item. That still does not give it an excuse to spend $587,834 on promotion _ 1.8 cents a litre to promote a product that is not permitted to have any competition.
You are supposed to think of milk every time you think of the Raiders. Now you might think of the Raiders and that sponsorship box every time you pour some milk.
You might also think of how many teachers’ jobs can be provided with $587,834 _ more than 10 of the 80 lined up for the chop.
We have seen how Telecom behaves better with competition and how the Commonwealth Bank performs better with privatisation. But the ACT Government does not want to forsake its appointment powers by doing the same thing with its marketplace statutory authorities.
If it did bite the bullet, the ACT as a whole would be in a better position to provide better education and health care.
Instead, the Budget provides for a 2 per cent cut across the board which means both the most efficient and least efficient get cut. That is easier (and more equitable!) than commercialising or privatising a statutory body with the attendant loss of one or two people well-connected in party circles.
The Government had at least got its current account into some order with a $12.8 million surplus, even though it looks like throwing the territory into hock for $200 million over the next three years on its capital account, including $34 million this Budget.
There is nothing wrong with borrowing for income-producing capital. However, because the ACT is lumbered with so many commercial activities under ministerial umbrellas there is no suggestion the ACT will be doing this. Our buses lose money, not make it. And there is no accounting to show how and when the capital expenditure will give us the return _ so unless there are further savings on the current account in the next two Budgets we can expect to pay between $10 million and $20 million in extra interest payments in 1996-97 and more salami-slicing cuts to health and education.
We will never make a good omelette with unbreakable fossilised eggs.