The Act Government seems to be facing a grim choice: reneging on election promises or job reductions in the public service or going into deficit.
Treasurer Ted Quinlan has asked all public service sections to make a 2 per cent efficiency gain. Any section that cannot would have to explain why. This marginally better than the salami slicing of the 1990s where every public service department took a cut, irrespective of the merits of their spending programs. But it is no substitute for looking harder at some areas of government funding to see if they can be cut out altogether so a greater concentration of effort can be made on the key areas of government activity that concern most Canberrans: health, education and police.
The question confronting Mr Quinlan is, what happens when a large number of public-service sections have “”good grounds” for not achieving a 2 per cent efficiency? Unfortunately, the large areas – education and health – are the easy targets for insisting on the efficiency dividend. And then Labor would be driven to giving with the left hand – an election promise of $27 million of education – and taking away with the right hand – a $7 million cut to education, or promising 20 new police officers before the election and taking away 16 officers through an efficiency drive. This much was pointed out by Deputy Opposition Leader Brendan Smyth.
Mr Quinlan says he is hoping to have a surplus Budget this year. That is an ominous statement. Merely “”hoping” for a surplus indicates that other things will take priority. And if the government – indeed any government – cannot get a surplus in its first year, the task of fiscal rectitude becomes almost hopeless in subsequent years as the election looms and survival becomes the No 1 priority. The pious hope in Year One of term express by Mr Quinlan to get into surplus by the end of the three-year term will be more difficult, if not impossible if he cannot get a surplus in the first year.
The priority must be a surplus. Running up debts in the short spells results in far greater agony in the longer term as precious resources needed for health, education and welfare get diverted to interest payments.
Mr Quinlan has argued that the previous government left the cupboard bare – as all new governments do. If that is the case, he would be more justified breaking some election promises or losing some public sector jobs by attrition than running up debt.