The Guardian May 12, 1999

A smoke and mirrors budget

by Anna Pha

After six and a half years of cuts and closures, Treasurer Alan Stockdale's 
"goodbye austerity" budget promises Victorians a "social dividend" of 
increased spending on health, education and social welfare as well as tax 
cuts. But is it really "goodbye austerity"?

Stockdale points to a budget surplus and a state debt that has almost been 
wiped out. Victorians have paid and continue to pay a high price for these 
rosy statistics.

During its two terms of office, the Kennett Government has closed 370 
schools, sacked 9,000 teachers, sacked 28,000 public service employees, 
closed hospitals, slashed staffing in the health system and privatised many 
important public assets (raising $32 billion).

Victoria has the lowest level of social expenditure of any State in 
Australia and the budget fails to rectify that situation or address the 
social and economic problems facing the people created by the Government's 

There is $199 million for school capital works and computer support but no 
additional money where it is most urgently needed, in schools, for smaller 
classes, specialist assistance and welfare coordinators.

The budget provides for an increase of 0.02 per cent in the wages bill for 
education  meaning any pay rise for teachers would have to be funded by 
further sackings and larger classes.

Likewise, in the health sector, any wage rise would result in fewer nurses 
and longer waiting lists for hospital beds.

The promised additional health funding is largely earmarked for capital 
works, but without the necessary resources for the additional staff to run 

There will be considerable pressure on staff to accept lower wages  most 
likely through individual contracts or the contracting out of their work.

The annual "productivity dividend" (obliging government departments to 
reduce spending by 1.5% per annum) remains in place, despite the budget 

This is likely to result in the loss of another 300 full-time equivalent 
jobs in the government sector.

The additional funds required for public housing are not there. "In 
Victoria the legacy for our children will probably be no debt. But our 
children will also be left with NO service infrastructure", said Karen 
Batt, Branch Secretary of the State Public Services Federation Group of the 

The one area where the Government does make an attempt to restore some of 
its former cuts is in "law and order", with a promised increase of 400 in 
the police force.

There will be 300 more prison places, more freeways, lots more bricks and 
technology but not the resources for staff to provide urgently needed 
services or begin to repair the damage and reverse the austerity measures.

The tax cuts are to payroll tax which will benefit medium to large 
businesses. Household expenses will remain as high as ever. No tax 
reductions there.

The fundamental policies of the Kennett Government are not being changed. 
Austerity remains the order of the day for the working people of Victoria.

The concentration on capital expenditure (as against staffing and service 
provision) suggests the Government is putting public assets in good order 
for the next round of privatisation.

All the talk about a "social dividend" and "goodbye austerity" is to 
hoodwink the electorate that all the pain was worthwhile and that Kennett 
really has their interests at heart.

But nothing could be further from the truth. If re-elected, the Kennett 
Government will continue with its austerity measures, its pursuit of "small 
government", and privatisation program (water, education, health services, 

Kennett, proudly serving his capitalist cronies, will do his best for 
Victoria Inc.

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