Crispin Hull

It is very much a bottom-line-up Budget. The Chief Minister and Treasurer, Kate Carnell, has set some very firm targets, or bottom lines. They are not overall bottom lines within which the Government can rob Peter to pay Paul. Rather they are detailed prescriptions of spending limits within each of the 123 sub-programs. Moreover, with the on-set of accrual accounting next year where every cost has to be annualised and accounted for, there can be no fudging between capital and recurrent spending and no fudging with hidden costs like superannuation, future maintenance, accommodation and the like. Also, there can be no fudging figures by allowing for inflation on only one side of the ledger.

In some respects Mrs Carnell has viewed the ACT as being in the position of Victoria, Western Australia and South Australia 10 to 15 years ago … facing a financial cliff and walking rapidly towards it. She is determined that the ACT will not squander its inheritance at self-government. The Budget papers yesterday fairly convincingly showed that without action that was precisely what was going to happen.
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The World Bank’s assessment that Australia is the world’s “”wealthiest” is certainly thought-provoking. Usually, Australia rates about 20th. The difference has arisen because the bank has counted natural resources, such as land, water, minerals and timber, whereas other surveys count income only.

In view of Australia’s high unemployment; the high number on social welfare and the number in at least notional poverty, does this indicate that Australia is not managing its wealth very well?

The bank’s assessment shows how limited some economic measures are. What does “”wealth” mean? Is it of much joy to most Australians that there are lots of unexploited resources on and in the land if they do not translate into not only higher income but an overall more fulfilling life. Further, do the unexploited resources add much to overall wealth if translating them to income necessitates widespread environmental damage that could ultimately lower the quality of life.
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It is unfortunate that the closest jail to the Act is Goulburn Jail … the toughest NSW has to offer. People sentenced to jail in the ACT often go to Goulburn because it is close and families can visit them more easily. However, most of the prisoners from the ACT who go to Goulburn are not sentenced for the most serious or most violent offences. The result is low-security prisoners in a maximum-security, violent jail. The results are to very satisfactory as events last weekend showed when a man doing a six-month non-parole period was bashed … his jaw broken, stitches above his eye and bruising. He is apparently too scared to identify his attackers, so the cycle of violence is likely to continue unpunished.

At present the ACT has at maximum weekend detention. It does not have facility for a full-time jail. However, if bashing like last weekend’s continue, the option becomes more palatable, despite other drawbacks such as a greater propensity to use a jail if it is there … though this temptation will be reduced now that the ACT has a weekend jail as an alternative..
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The Opposition is slowly adding detail to its industrial relations policy. Despite John Howard’s long-standing belief in radical reform, it is becoming more like a me-too policy with each detail. On Thursday the Opposition spokesman on industrial relations, Peter Reith, announced the Opposition would have a “”no disadvantage” test when awards are converted to enterprise awards, just like the Government. However, it appears that though the name is the same, they mean different things. The Government’s “”no-disadvantage” means the overall package for each worker will be at least as good after the first enterprise-bargain award as before it. The Opposition’s “”no disadvantage” means that a set of basic conditions will be set down which cannot be “”bargained” away … such as basic pay, holidays and parental leave.

The Opposition is picking a path between much needed-economic reform and not frightening the large number of voters who are subject to awards. The label “”no disadvantage” is at least superficially attractive to voters, but a more accurate description would be “”safety net”.

The Government is equally guilty of mis-labelling. It is nonsense to call the present system enterprise bargaining. The process almost always involves union officials who do not work at the enterprise negotiating the bargain. These officials are usually looking at the effect the bargain might have on other members outside the enterprise. Coupled with the no-disadvantage rule, little has changed. Many new enterprise bargains carry all the stiflingly detailed clauses about allowances, hours, special rates and the like that made the previous system so cumbersome.
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The Secretary of the Department of Veterans’ Affairs, Allan Hawke, is right to say that improving women’s roles in the workplace is an economic issue more than a question of “”political correctness”. He argued that organisations, both public and private sector, benefit is their workers are able to meet their potential.

At present that does not appear to be happening, and there is passive acceptance of this state of affairs. Despite many initiatives in the Federal Public Service to enable women to achieve their full potential in the upper echelons it has not happened. Instead, women dominate the numbers at the lower levels and are scare in the upper levels. This has three adverse effects. Many women feel under-valued and that it is fruitless striving for higher positions. Many men get put under immense pressure juggling demands of a long working day and demands to be at home with spouse and children. The organisation does not get the best out of its workers and suffers accordingly.
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Last week Canberra lawyer Alan Stretton raised again the question of what is to happen as Canberra’s 99-year residential leases come to the end of their term. The first residential leases were auctioned in 1924, meaning they are due for renewal in 2023. Many leases were auctioned in the 1930s, meaning they have only 30 years to run. As Mr Stretton and others have pointed out, the issue is not so much renewal on expiry, but whether lenders are willing to accept mortgages on leases that will expire before the borrower would be expected to pay off the loan.

The ACT Government has a policy that all residential leases in the territory will be renewed without cost. The former Government had a similar policy, though it would charge a small administrative fee. The question is whether a lending institution would accept those promises as sufficient security. There is also the question of whether these governments have the right to give away the revenue opportunities of future governments. It is probably politically impossible now for either party to renege on those promises.
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For many years Canberrans have been presented with the fact that our health system, particularly Woden Valley Hospital, has been spending more than the national average to deliver services. The dollar amounts have been presented by the Commonwealth Grants Commission. The answer to the question of “”how much” has been well known. The answer to the question “”why so much” has been more elusive.

To its credit the Carnell Government embarked on that process and the result came this week in the report of the Booz, Allen and Hamilton report. The Government did this after promising before the election that it would do something about health. It promised to identify efficiencies, create the savings and plough the money back into health in two major ways … the non-hospital part of health and in reducing waiting lists. In short, it promised to redirect some of the spending under the Budget heading “”Health” from wastage to real health.
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A difference of opinion has developed over what is to be done about individual police officers in NSW exposed as corrupt. Royal Commissioner James Wood argues that demanding dismissal rather than allowing resignation will act as a deterrent against officers giving evidence to the commission, especially confessions of corruption … the more so if they lose financially. Police Minister Paul Whelan, with the support of Police Commissioner Tony Lauer, wants dismissals, saying there is a moral difference. Mr Whelan has argued that corrupt officers must be punished and seen to be punished with the loss of reputation that comes with dismissal. And Premier Bob Carr, in an attempt to resolve the issue, suggests that corrupt police should lose the government-contributed part of their superannuation.

Mr Whelan’s view appears out of context. He is looking at it from the perspective of individual morality. That perspective is fine if one were dealing with a generally clean police force and isolated incidents of corruption. But where there is widespread corruption, where it is the rule rather than the exception, the moral climate is slightly different. This is not to condone corruption, nor to excuse it, but to accept that for people in that environment the moral offence is slightly less than in an environment where officers fly in the face of an expressed and universally accepted proscription.
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There will be some unnecessary wringing of hands about this week’s figures that house prices are static or falling. The hand wringing is unnecessary. Lending institutions do not foreclose on existing mortgages provided the repayments are being met, even if the amount owing is a greater percentage of the market value of the asset than would be accepted at an at-scratch mortgage.

It may be in some cases that people are in homes whose market value is less than the mortgage. But once again, there will be no foreclosure provided the payments are being met. In short, no-one is being thrown into the gutter by the reduction in values of houses.

In fact reducing house prices present a considerable benefit and opportunity to many other Australians. Provided interest rates are stable, wages do not go down and employment rates go up, houses will be more affordable. More families will be able to move out of rental and accommodation into their own homes.
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The Carnell Government’s proposal to bring down a three year has merit, but it has risks. It will give business, community groups and government agencies a greater degree of certainty for planning. Some community groups, of course, have already been promised three-year funding. Business will take some comfort in the knowledge that no new imposts will be sprung upon them. The three-year plan will also be a demonstration that the Government is determined to get into genuine fiscal surplus by the end of the three years. The Government will be tested by the benchmark it sets itself, provided, of course, that it does not engage in figure massaging which has been a hallmark of Governments throughout Australia in the past decade.

The lack of government financing standards will result in a fair amount of political dispute about the underlying deficit and level of borrowing, but it appears the ACT has been chewing through reserves at an unsustainable rate and borrowing for recurrent spending.

The three-year proposal will help provide a better framework for the ACT to compete against other states to attract desirable business.
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