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Tasmania at the cross roads « Previous | |Next »
February 14, 2013

The Conversation has been running a series of articles on Tasmania in conjunction with the Griffith Review and the Inglis Clark Centre at the University of Tasmania. The articles are about the Tasmanian moment; or Tasmania at the crossroads. Tasmania confronts the future; or Tasmania at the tipping point. The theme is Tasmania sliding down the drain or Tasmania innovating and embracing change.

Rodney Croome in his article says:

Tasmania is a fractured and polarised society with a weak middle ground. It moves forward by the grinding of fault lines against each other. Unfortunately this sometimes produces great heat and instability, but it offers far more to the world as a result. Tasmania is neither entirely conservative nor predictably progressive. If it were, it could not have made its great and original contribution to the nation and the world.

Tasmania relies on Canberra for two-thirds of its funding, and it cannot continue to rely on federal GST distributions via the transfer from the richer mining states (Queensland and Western Australia), given the increasingly fractious and adversarial nature of Commonwealth-State relations. Tasmania must stand up for itself.

The after effects of the global financial crisis has seen the Commonwealth 's revenue decrease: Australia's budget position has deteriorated swiftly because commodity prices have crumpled while the dollar remains high. Treasury had been expecting the exchange rate to fall when commodity prices fell last year.

Richard Eccleston says that this has implications for the states:

when national governments come under financial stress it is normal, and indeed politically rational, to cut discretionary transfers to the states early and hard, effectively passing the political burden of cutting services and increasing taxes and charges to state politicians...the current state budget cuts prove that the rate of Commonwealth funding to the states over the next five years will be at historical lows..Given that Tasmania relies on Canberra for two-thirds of its funding, there is little wonder that this drought has been felt first and hardest in Tasmania.

The fact that all states are now dealing with this structural decline in revenue provides support to the thesis that Tasmania’s financial condition is symptomatic of a more fundamental problem, namely, the states do not have sufficient resources to meet their constitutionally defined obligations.

| Posted by Gary Sauer-Thompson at 6:48 PM | | Comments (4)


"The smaller who states, who also helped found the country, are being crowded out of a competitive piece of the economy by the resource rich states".
I'd add that to me it smacks of more Americanisation, as the resource tycoons are influenced by US conservatism and foreign funds look to buy into the top side of the Australian economy.
More situational goods and bads, management by decline, market rigging, bank gouging, dumbing down, eco-damage and one-sided dereg.
And watch it speed up, if the Tories get in.
Mark the Abbott-Bishop obstructionist opposition, so influenced by the US Tea party, temps perdu the Austerity recessions in Europe, the US and Cameron's Little Britain.

The states provide the services (health and education) but they have little income. That comes from the Commonwealth. The Commonwealth 's revenue has dropped by around 168 billion so that means less money given to the states.

The mining states are jacking up at carrying Tasmania. Federalism is under strain.

For every dollar Tasmanians contribute to the national tax kitty, they receive back $1.58 in benefits and services. WA receives $0.68c back.

WA is threatening to pull the plug on these kind of transfers.

Geez [some] people in our nation have become selfish and narrow-minded - and I'm not referring to those in Tasmania.