March 2014


It is amazing that Tasmania's media allows the Liberal Party, in this State election campaign, to get away with fiscal fraud.  The media has accepted that the Liberal Party will find $500 million in savings and that they will be able to fund around $300 million in populist goodies. 

Why is the media accepting this fiscal lie?

And a fiscal lie it most definitely is because the expenditure outlined by the Liberals fails to take account of cost blow outs, running costs and the consequential and indirect cost to the economy and budget.

Take the $33 million of taxpayer funds to be spent on 're-establishing an international shipping link to Tasmania.  There is not a hope in hell that $33 million will see out this fantasy.  Subsidies for shipping companies or any other form of transport get bigger as time goes on because they become powerful rent seekers who threaten to walk away unless they get what they want from government.

Ditto the tourism industry which, like the car industry of yesterday, continually has its hand out for funds.  The Liberals $16 million to reach a goal of 1.5 visitors by 2020 will be double that within 3 years.  That is what the history of tourism spending in this State shows to be the case.

And let's not forget the new red tape layer, called the Department of State Growth and an Office of the Coordinator-General, based in Launceston.  This is an empire designed to grow like topsy because it will claim credit for every job created or business opened.  If only we had a bigger budget Minister, we could do so much more, will be its annual budget plea.  And which Liberal minister will say no?

The major fiscal lie is in the promise to put additional police and front line health workers on the payroll.  This will cost the state dearly.  It will be boosting numbers in the public sector for no purpose other than it is politically opportune to do so.  It will mean no efficiency gains, make work schemes and a bloated public sector.  In the meantime doctors' rorts in the public health system go unchecked.

The filling of the prison system with those who are convicted of offences that require mandatory jail terms has proven an expensive disaster in Victoria and it will here.  It costs around $120 a day to house a prisoner.  And then there is the social cost of a prisoner losing his or her job, families needing support and increased recidivism which also costs in dollar terms.

One would not mind if Mr Hodgman were going to sell government assets.  But the Liberals expect you to believe they can spend like drunken sailors, impose new layers of red tape, increase the public sector, blow the prison budget and hand out largess to businesses without raising taxes!  In fact, reducing taxes.

This is the stuff of Alice in Wonderland.  Yet the Liberal Party is getting away with it?  Why isn't the media critiquing Will Hodgman and his Magic Pudding club as it peddles fiscal fraud during this last week of the election campaign?

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