Latest news with #publicSpending
ABC News
11 hours ago
- Business
- ABC News
Tasmania's election campaign should be fought on the budget, business leader and economist say
When Labor declared it had tabled a motion of no-confidence in Premier Jeremy Rockliff, it listed three main reasons. They were the potential privatisation of public assets, the failure to deliver the new Spirit of Tasmania ferries on time, and the state of the Liberal government's budget. On that budget, here are a few quick figures: Now, with Tasmania in an election campaign, business leaders and economists are hoping to hear the major parties' plans for repairing the balance sheet. The Tasmanian Chamber of Commerce and Industry's Michael Bailey says as the election is largely about the budget, the campaign should be fought on it. "Tasmania has a spending problem at the moment. "We need to make sure that we can get our spending back under control." That partially refers to the fact the state has a history of spending more than it budgets for, particularly in health. Here's how the Liberals and Labor have been treating the issue of spending and budget repair: Elections are often a big-spending affair. The Liberals have previously been accused of pork barrelling (slang for bribing the electorate for their votes), but they say they are simply listening to community concerns. Labor also promised a whole heap of community grants last election. The main difference is the relevant department would eventually assess them to decide if they were worthy of spending money on. There are also a whole heap of other policies, such as the stamp duty exemption for first home buyers, that will cost taxpayers money. And those spending promises really add up. Economist Saul Eslake says Treasury data shows the 2018 and 2021 elections each added $1.4 billion of spending to the budget without any mention of how to pay for the promises. Last year's was even more expensive. "[The levy is] about the only election commitment that hasn't been met since the election. "Labor would've spent an additional $2 billion over five years if they had won. "So, to hope that that wouldn't be repeated in the election campaign would be a bit like Samuel Johnson's definition of second marriage — a triumph of hope over experience." At the moment, 40 per cent of Tasmania's money comes from the carve up of GST. Around a third is own-source revenue. Mr Eslake has put forward several options to raise more money, including collecting more payroll tax from businesses, raising car registration fees, adding a duty on the purchase of expensive new motor vehicles — "with appropriate concessions for pensioners and other low-income earners". He also suggested switching stamp duty to a land tax and increasing mining royalties. He says Tasmania collects about $40-50 million a year less than it would if its scheme was equivalent to those of other states. Money could also be found by asking the salmon industry to pay royalties for the use of Tasmanian waters. "That wouldn't solve Tasmania's problems, of course, but it would make a useful contribution to reducing the deficit over time." All of these ideas have been rejected by the major parties. Mr Rockliff also pointed out that legislative changes in 2023 meant the salmon industry now pays for its own regulation. "The salmon companies cost government. They return that to government, so it's cost neutral and that's been a significant reform under our government," he said. Another way to raise revenue, selling off state-owned companies and government business enterprises has been ruled out by both major parties already. As have any new taxes. Growing the economy is also a big part of how both major parties plan to get the state out of debt. As part of that, the Liberals have been waging a war on red tape, and if some of Labor's new policies are anything to go by, they're planning to do the same. When asked about increasing revenue, Labor leader Dean Winter talked about growing the economy by unlocking $25 billion in renewable energy developments. Premier Jeremy Rockliff on the other hand said investments in key services such as health, education and community safety would help increase revenue. The TCCI's Michael Bailey is less worried about the revenue side of things. "You don't give someone with a spending problem more money," he says. Mr Bailey wants the parties to find efficiencies in the public service, arguing that it's grown by 30 per cent since the COVID pandemic. "We know that we're borrowing to pay for those wages," he said. "They do wonderful work, but it's simply too big for what Tasmania can afford right now, so we would argue that that's the first thing that should be looked at." Both major parties have revealed their plans to find some savings, and they include the creation of new units. The Liberals' plan, which was announced in March, is called the Efficiency and Productivity Unit (EPU); Labor has the Review and Evaluation Unit (REU). Two names and slightly different descriptions for two things that will do very similar things — examine the effectiveness and value for money of government programs to try and identify savings. The Liberals are assuming they will be able to cut spending to the point where in three years' time overall government expenses will be less than they are this year. They hope to find savings through: Labor's plans to "save the budget more than half a billion dollars", while not outlined in an alternative budget, were part of leader Dean Winter's budget reply speech. They hope to do this by: This list is far from extensive, however, none of the policies have been costed by treasury. If the party that wins government does not right the ship, Mr Eslake estimates Tasmania is heading to a debt of $16 billion by 2035 with repayments to hit $750 million a year. "We've gone from in the middle of the past decade, being a net creditor, that is having more money in the bank than the government owes by way of debt, to now having debt and other liabilities," Mr Eslake said.
Daily Mail
15 hours ago
- Business
- Daily Mail
Back to school...now MSPs to be taught 'fiscal literacy' in bid to improve decisions
For those getting into politics, one would think it a basic requirement. But calls have been made to teach new MSPs about 'fiscal literacy' in a bid to improve decisions around tax and public spending. The Scottish Parliament's finance committee has released a new report which demands greater transparency from SNP ministers about budgets. It also calls for action to improve the ability of MSPs to make decisions and scrutinise them. It comes amid concerns about the damaging impact of the SNP's tax policies on the economy. The report, published today (FRI), highlighted that some witnesses told the committee that 'fiscal literacy' should be encouraged amongst all MSPs so that there can be a more 'mature' approach. It said: 'The committee agrees with witnesses that enhancing the fiscal literacy of all MSPs would help to support more effective scrutiny of budgetary matters and potentially encourage a more mature wider debate around the spending and tax decisions taken by Government. 'We therefore intend to write to the Scottish Parliamentary Corporate Body to ask that a comprehensive fiscal literacy training programme be put in place through the induction of new MSPs elected at the 2026 Scottish Parliament elections, and through continuous development for all members throughout the five-year cycle.' The committee also concluded that improvements are required in the strategic financial planning by the Scottish Government, and that significant, long-term fiscal pressures in Scotland can no longer be avoided. Finance committee convenor Kenneth Gibson said: 'We believe the Scottish budget process, and its building blocks, remain fit-for-purpose. However, the way in which it has operated in practice this session has been far from ideal, and improvements are now needed. 'Our recommendations in this report are therefore intended to ensure that the objectives of the budget process - including improved transparency and awareness, responsiveness to emerging fiscal and policy challenges, greater influence and better outcomes - can now be fully met. 'Our view remains that improvements are also required in the Scottish Government's strategic, financial planning. This should be supported by an improved quality of data and key documentation published by the government, within the timescales expected by Parliament.' Scottish Conservative finance spokesman Craig Hoy said: 'This damning report from the committee needs to be an urgent wake-up call for SNP ministers.'
The Independent
30-05-2025
- Business
- The Independent
Can Reeves calm Labour's troubled waters with her spending review?
The term 'fiscal event' hardly does justice to the significance of the government's comprehensive spending review, due to be published on Wednesday 11 June by the chancellor, Rachel Reeves. It's been in preparation more or less since Labour took office last July. It matters at least as much as any Budget because it sets out broad public spending plans for each area of government. These cover planned investment and current spending in areas such as wages, but exclude cyclical items such as unemployment benefits. So they are a strong statement of the Labour government's priorities. All the signs are that it's been a difficult process, and the leaks and the spinning have already begun. What's the trouble? Trying to balance the books (in reality borrowing huge but manageable sums) is the answer to that. In an environment of great global uncertainty, alongside sluggish UK growth thanks to Brexit, and in a country with an ageing population, Reeves's task is an unenviable one. In addition, she will have to balance the pressing political demands of colleagues with her determination to stick to her 'fiscal rules'. Specifically? At the moment, backbenchers in the red wall seats in the North and the Midlands that Labour regained from the Tories at the general election are pressuring the Treasury to pour billions into much-needed investment in infrastructure, to make the most of the industrial potential of these neglected areas. This would also, of course, have a helpful electoral benefit for those MPs who are facing a challenge from Reform UK. Reeves has hinted that she could adjust her rules on investment spending to facilitate tens of billions to be devoted to levelling up the regions. Sounds familiar? Yes, indeed. Although Labour chooses not to use the loaded slogan 'levelling up' about 'left behind' communities, it is very much what Boris Johnson promised in 2019 and, for good and bad reasons, wasn't delivered as expected in the last parliament. Before that, George Osborne, Tory chancellor from 2010 to 2016, talked ambitiously about devolution, the ' Northern Powerhouse ', and the 'Midlands Engine'. There was even a red wall caucus of Tory MPs, named the Northern Research Group (NRG), who lobbied hard for successive Tory administrations to live up to their promises (most of the NRG members have since lost their seats). The ultimate symbol of Tory failure was the cancellation of the HS2 rail project, launched with so much hope by David Cameron but miserably dismembered by Rishi Sunak at the 2023 Conservative Party conference. In Manchester. In a former railway station. Now, exactly the same dynamic is operating within the Starmer administration. There are some big personalities involved? Yes: Angela Rayner, deputy leader and deputy prime minister, for one. Powerful as her office makes her, she also has an excellent case for expanding the 'affordable homes fund', because of the importance Labour placed on the housing crisis and its target of 1.5 million new homes to be built during its first parliament. This was always a tough one – so much so that it's been reported that Rayner threatened to quit in exasperation and Tony Blair had to persuade her out of it (a story she denies). She is also surely right to get some adequate funding into local authorities before many more fall into chaotic bankruptcy, which would look like carelessness if not incompetence on the part of Rayner. Other ministers putting up a fight are Yvette Cooper at the Home Office, Ed Miliband (Energy), and Steve Reed (Environment). Liz Kendall (Work and Pensions) and Reeves will also need to persuade their backbench colleagues to back whatever welfare reforms they eventually settle on – ideally, restoring the pensioners' winter fuel payment, lifting the two-child cap on child benefit, and ameliorating planned cuts to disability benefits. Defence and Health are the only areas likely to escape demands for 'efficiency savings'. What can Labour backbenchers do? The spending review is an odd beast, because unlike, say, a finance bill, it's not legislation and doesn't necessarily have to be voted on; and for that matter, a government doesn't have to stick to it (even if it wants to). It's just a 'plan', a statement of intent, and a series of signals about priorities. But some sort of backbench rebellion seems inevitable, even among the usually loyal 2024 intake, even if only by proxy. At a minimum, they will certainly expect some signs of the imminent restoration of the pensioners' winter fuel payment – the cutting of which was hated by the voters and would have saved little money – and on progress to end child poverty. Will there be resignations? There's talk of Rayner being pushed to the limits of her patience, again, and her resignation would be cataclysmic. However, in most cases of a politician wrestling with their conscience, their conscience usually loses. Rayner would not be thanked for abandoning the administration less than a year into its life. Even worse, as the party is already suffering in the polls, she would thereby be hastening the onset of the ultimate catastrophe – a Farage-led government. She would attract at least as much scorn and blame for that as she would gain respect for standing up for working people, or whatever. She might, as others have in the past, improve her chances of winning the leadership in due course by making a tactical move to the back benches now, but she's said she's not interested in the top job, and her treachery would probably cost her dear in any case. Having come this far, she'll most likely stick with it. Others, maybe some more junior ministers with an eye on the long game, might decide to leave office 'on principle'. But this would not affect the outcome of the spending review, which is ultimately going to be more cuts.
Times
21-05-2025
- Business
- Times
Tom Hunter's rescue plan for Scotland: lower taxes and follow Singapore
One of Scotland's richest men has demanded lower taxes to reverse the 'managed decline' of the country. Sir Tom Hunter, Scotland's first homegrown billionaire, said he was 'deeply worried' by the future prospects of his homeland in areas such as education, health and the economy. In a new paper he suggests Scotland should look to Singapore as a blueprint which would improve its economic fortunes. Hunter argued that lower taxes along with a bespoke immigration system would attract more talented people and help grow the overall tax revenue the government collects. That in turn would allow for greater public spending to help overhaul public services. 'The current state of our nation does not reflect our potential,' Hunter said. 'I have never heard so much
Times
21-05-2025
- Politics
- Times
What Angela Rayner's leaked tax raid memo tells us about Labour
Since entering government Angela Rayner has been remarkably quiet. Where many had expected her to be one of the most forthright characters, especially given her schooling in the trade unions, she has largely kept her head down. Behind the scenes, however, there have been reports of discontent. At a cabinet meeting earlier this year she was one of several ministers who raised their concerns about the scale of welfare cuts and public spending restraint. There were also claims that at one point she was so frustrated with the government's target of building 1.5 million homes by the end of this parliament — a target she is responsible for delivering — that she considered quitting. Until now she has been scrupulously on message. However, the leak
