Monday, 21 April 2014

Privatisation: Broader issues

Privatising public assets is back on the agenda with Treasurer Hockey reigniting the discussion with his offer to State governments of a bonus if they sell remaining public assets and spend proceeds on new much needed infrastructure.

The Mercury ran an opinion piece on April 7th from one of its resident op ed writers Hodgman has to sell off assets  urging Will Hodgman to sell assets and  ditch the leftist, big government view of the world as a necessary precondition to reviving Tasmania.

The privatisation debate has been around for a while but nothing new was presented on this occasion.

The economic blogosphere is full of bloggers trying to come to grips with the causes of the GFC. At the heart of this discussion are the matters of money, debt, and the role of government and hence is of particular relevance to the issue of privatisation.

Thursday, 10 April 2014

Reality bites: Part 2

Two days ago Minister Harriss announced the way forward for the Tasmanian forest industry by creating a new class of reserve for 400,000 hectares of native forest destined for World Heritage protection designed to allow selective logging of special species whilst continuing to receive funds to compensate for the extra costs of reserve management.

Support for the Minister’s proposal has, so far, been a little underwhelming even from the main industry body FIAT.

The Mercury found a pocket of support:

Wednesday, 9 April 2014

Reality bites

It was only a matter of time before the incoming State government started backing down on its forest policy promises such as ripping up the forests agreement and ceasing funding Forestry Tasmania (FT).

The emotive term ‘ripping up the TGA’ suggests the Tasmanian Forests Agreement Act will be repealed. This is, and always has been, unlikely.

Even the latest announcement of changes to the classification of 400,000 hectares doesn’t imply the Act is being repealed or ripped up.

Sunday, 23 March 2014

Entitlements and ransoms

Reports about the end of the age of entitlement are greatly exaggerated.

Describing the handout as government assistance to upgrade vital public infrastructure masks the reality that it’s a bailout of a private company brought to its knees by the rapacious behaviour of the airport manager Macquarie Bank.

SPC Ardmona asked for $25 million from the Australian government for factory upgrading in addition to $25 million from the Victorian government and $90 million from its own coffers. The financial strength of SPC’s parent Coca Cola Amatil was a factor in the Australian government’s refusal to accede to SPC’s request.

The assistance offered the Hobart Airport will comprise the bulk of the funds required for the airport upgrade and overlooks the ability of managers to raise funds elsewhere, not to mention turning a blind eye to events which necessitated the bail out.

Monday, 17 March 2014

Winning was easy

Winning was easy.

Henceforth it gets a whole lot harder, addressing the issues conveniently overlooked by all parties during the election campaign, not just looming problems with Hydro Tasmania, Forestry Tasmania and TT Line but the overwhelmingly crucial matter of government budgetary sustainability without a fallback position on the horizon.

Thursday, 6 March 2014

Tripartite consensus at last?

The most compelling thing about the Liberals’ fiscal strategy just released is that it may signify the dawn of a new era of consensus.

Wednesday, 19 February 2014

Mid year prognosis

The Premier’s Mid Year update revealed an unsustainable budget position. No policy prescriptions were offered. Likewise Mr Hodgman’s plan, offers no solutions. The government plans to spend more in 2013/14 as a % of operating revenue than it did in 2012/13. The forward estimates reveal cash deficits in the future. The government hasn’t detailed how future deficits will be funded. The government is unlikely to meet any of its key performance indicators (KPIs) over the next 4 years. Nor has it announced any policy changes to help satisfy KPIs in the future. Mr Hodgman’s plan offers no comfort as 97.5% of outlays are the same as those of the government. He has refused to issue his revised costings following the Premier’s update. Both parties intend to spend an unacceptably low amount on infrastructure. Even with the most important election in a generation the Libs are yet to publicly announce their KPIs, their fiscal strategies, as required. Electors are being presented with alternative plans, neither of which will lead the government onto a sustainable pathway.