Pic of Ruth Forrest here

This week Tasmania has paid host to Federal politicians Tanya Plibersek, Peter Garrett and Joe Hockey.

Is an election looming?

And the visits raised the awkward question: Are we not capable of solving our own problems?

Coincidental with the visits was a superb opinion piece in The Mercury by Ruth Forrest the independent Member for Murchison in the Legislative Council.

You can read it below, or online at Mercury Here: Thinking for state’s future:

A SENSE of anticipation and renewed hope comes every year with the tabling of the Government’s Budget, a report on our current position and a plan for the next four years.

The budgetary process is a crucial part of the Government’s financial management system.

But for legislators it is a game of playing catch up, trying to understand what is happening as we seek to ensure legislation provides the best outcomes.

In the past year the Legislative Council sessional committees have tried to enhance the operations of the legislature by enquiring into specific Government matters, procedures and bills before us, including inquiring into health budget cuts.

We don’t necessarily need more politicians. We need better use of the processes we have and new ways of doing things. This is what the Legislative Council has been seeking to do.

This can be challenging, as evidenced by Premier Lara Giddings preventing the Head of Treasury attending a Legislative Council committee’s inquiry into the health cuts initiated in last year’s Budget, saying ample time would be available during estimates hearings for any questions.

During estimates hearings we were confronted with budgets for the Department of Health and Human Services and for each of the three Tasmanian Health Organisations without an adequate explanation of all the money flows.

Furthermore, flows of funding went in and out of national health funding pool, some back into DHHS and some direct to THOs, and the Mersey Hospital funding flowing to THO North-West—bypassing the pool.

Outcomes included in DHHS as the state’s share flows toward the new health arrangements were counted again as outputs in the THOs once the Federal Government’s share was added, and oral health for the whole state is funded via one THO.

It was a maze to behold. To suggest that it looked as if it was designed by a committee would be a droll understatement.

Much time was spent at estimates hearings trying to understand these money flows, let alone understanding how much was being spent.

The system of three THOs was instituted for political reasons—the majority of stakeholders hoped a single THO would eventuate.

If the maze confronting us at estimates was tabled when the three-THO model was mooted, I believe the outcome would certainly have been different.

Politicians and bureaucrats are doing a disservice to Tasmanians if they institute systems of such complexity that they are unable to be clearly understood and thus effectively monitored by Parliament.

A disservice is also evident with the increasing trend of providing forward estimates for the years beyond the next budgeted year that are little more than wishful thoughts. Forward estimates are not audited by the Auditor General; they are not even reviewed as occurs in some states.

The current system is still not sustainable, even though the Premier has acknowledged overspending since the global financial crisis.

Unsustainable cash deficits are likely to occur if the costs of superannuation for all current employees were paid from current revenue as well as benefits for past employees, unless the optimistic GST forecasts eventuate or spending on new capital and infrastructure is reduced.

Enthusiasm for the second round of reforms in last year’s Budget is waning after only one year, following the pattern of the reforms in the 2008-09 Budget.

The Opposition’s alternative plan is little different, despite strident criticisms of Government mismanagement.

It is also dependent on rosy GST forecasts they claim to mistrust.

If reduced GST receipts befall us, our future options are limited given the prevailing attitudes to increasing our own source revenue vary from reluctance to outright opposition.

The exigency of the electoral cycle means we have one year for possible reform crammed between three years where the focus is survival and hoping for a return of the good times.

With regard to the health budget, the Government says the only option was to cut elective surgery as this was the only flexible area where cuts could be made to meet the savings requirements.

Other areas may have led to a reduction in the future activity-based funding grants, further demonstrating the paradox of thrift as it applies to health. How much cutting can we do before the whole system needs to be reconfigured?

Furthermore, before such a restructure can be achieved it would also require the realignment of the expectations of Tasmanians.

Tasmania is less than one-tenth the size of each of New South Wales and Victoria, yet we replicate their structures.

Despite receiving 160 per cent of our per capita GST entitlement, which our Government expects to rise to 176 per cent by 2014-15, we are struggling to deliver the same level of cost-effective services.

Which services do we need to prioritise and where should we start?

First and foremost the provision of infrastructure services should be rolled into a mega department, managing all the state’s land buildings and infrastructure assets that closely liaise with Government businesses with infrastructure assets.

The trend to transferring assets into Government businesses may well streamline management procedures and give the entities a better chance to run their affairs in the manner of a private company.

The shareholder minister via the enhanced infrastructure agency needs to be actively involved in strategic planning with an active agency liaison role extended to include local government, infrastructure and planning.

All land-use functions, planning, land titles, licenses and fees need to be a part of the agency.

If local government is to be reformed, the State Government needs to lead by example and get its own house in order.

If the catchcry “open for business” is to be more than a cliche, we must have a properly funded and integrated procedure for infrastructure development.

The Pilbara is “open for business”, but inadequate hospital, education and other social arrangements means it is unattractive to a lot of people.

The second priority should be the provision of health and education services that are superior to mainland equivalents.

This reflection of a progressive state will do more to attract people, ideas and capital than a pick-the-winner approach, especially when viewed alongside our advantages of cheaper housing, less commuting and a friendlier, more relaxed environment.

We need robust and enduring processes that straddle election cycles.

The appointment of an independent reform commissioner—through the tripartisan support of Parliament—is the next step.

This commissioner would report to Parliament via a series of inquiries established where there is tripartisan agreement to abide where possible with any recommendations, taking into account the nature of government as essentially a service deliverer needing easy and accessible monitoring by Parliament.

Too often reviews are conducted by insiders for the benefit of insiders who, while blessed with experience, may lack objectivity and freedom from conflicts of interest.

Streamlining infrastructure as I have suggested would have broad support, with reluctance more likely to be found amongst insiders.

We have witnessed the failure of the tax reform process because of a lack of support by the partisan players. The forestry reform process is a constant reminder of how not to do things.

We can achieve the necessary reforms and realign the community interests with their expectations and the ability of the system to deliver in a sustainable way.

We largely agree on most economic and social objectives.

We just need more resolve.

First published in Mercury, June 07, 2012 12.01am: here

• Grattan Institute: Game-changing reforms for Australia’s economy

“If Australian governments are serious about growth, they need to reform the tax mix and increase workforce participation for women and older Australians,’ Grattan Institute Chief Executive Officer John Daley said today.

“Together those three things can grow GDP by $70 billion within the decade. Nothing else is big enough to change the game.”

Launching Grattan’s new report, Game Changers: Economic Reform Priorities for Australia, Mr Daley said that in terms of the sheer scale of the economic benefits over the next decade, no other reform opportunity compared to tax reform and raising participation rates for women and older Australians.

Grattan Institute analysed a wide range of policy areas to identify the reforms that would produce the biggest returns over a ten-year time frame, and that most policy specialists would support as both desirable and achievable.

“Some issues — like industrial relations reform, innovation and infrastructure investment — get a lot of attention. But our research shows that compared to the game-changers, the growth potential of reform in those areas is either unknown or surprisingly small,” Mr Daley said.

“Governments can’t do everything at once, and they shouldn’t try,” Mr Daley said.

“When governments take on too many reforms at once, they tend to succeed with small reforms, but mishandle the big ones. Prioritisation is essential. Governments need to concentrate their effort on reforms that can make the biggest difference.”

Grattan’s report focuses on economic policy. “Of course social reforms that impact on equity and the environment are important,” Mr Daley said. “But the only way we can reduce poverty and pay for all the programs and services that improve peoples’ lives is by growing the economy.”

Australia faces a series of economic challenges in the coming years, Mr Daley said, and structural reform is not optional. “History shows that Australians are willing to have mature conversations about a better future for themselves and their children,” he said. “Right now we need to have a conversation about reforms that can have the biggest impact on Australian prosperity in the future.”

“On our analysis, unless an Australian government is talking about one of these big three reforms, it is not serious about lifting economic growth over the next decade.”