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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Australia Day woes « Previous | |Next »
January 28, 2013

Chris Kenny's Australia Day column in The Australian states the now standard conservative/neo-liberal criticism of South Australia. Once the Festival State, South Australia has become a mendicant state, reliant on federal largesse, and it risks becoming a state of stagnation. Fiscal discipline is lacking.

CampbellPAustralia Day.jpg Pat Campbell

Kenny's core argument is that South Australia is living beyond its means:

From 2002, the early years of the Rann Labor government consolidated that work, but a decade on, those achievements have been undone. The credit rating has been downgraded, and with state debt topping out at $14bn, net debt will overshoot the government's planned limit of 50 per cent of revenue.In short, the state banked on the proceeds of a new mining boom before it happened. It increased expenditure on public sector jobs and a lavish infrastructure plan (major new hospital, sports stadium, freeways, railways) based on the expected proceeds of the $20bn expansion of the Olympic Dam copper, uranium and goldmine. With that project now scrapped, the state is stuck with the spending and a billion-dollar budget deficit.

Another example is that it SA has continued to increase the size of the public sector despite most other states heading in the other direction and that it was the highest taxing state for business.

It is one long list of negatives. Even though the government boasts of having more wind-generated power than any other state Kenny says that a study last year by the Energy Users Association found the state has the nation's highest electricity costs. Kenny implies that this is due to renewable energy, even though the wholesale price of electricity has decreased and the utilities refuse to lower the retail price.

His conclusion is that SA's drift is likely to continue. His solution repeats the Business SA line ---embrace a low-cost/low-wage competitive option. This would involve removing the life tenure and reducing the number of bureaucrats because the public sector and the political influence of public sector unions as a handbrake on economic reform. However, the Weatherall Labor government doesn't have the courage to do what is necessary. Instead it lives on the hope for another resources boom.

| Posted by Gary Sauer-Thompson at 6:55 AM | | Comments (4)
Comments

Comments

I wouldn't believe anything, anything at all, that Chris Kenny said or wrote.

Kenny just strung all the negatives he could find together. He did realize that the fractures within the Redmond Liberal Party means that they are in no position to undertake the economic reforms of Business SA. that must be a big disappointment.

Thanks for the antidote BEFORE am bitten,should make recovery just a little easier.
Kenny is the worst.

Christopher Pearson in The Australian says that building the dual-carriage Southern Expressway - at a time of falling GST revenue, is an example of South Australia living beyond its means.

So was the hundreds of millions spent, on a whim, on trams within the square mile of the city.


According to Pearson the infrastructure promises that were necessary to secure the last election for the ALP have led to a budget blowout and a looming billion-dollar deficit. No mention that the above infrastructure may have been necessary.