Friday, March 05, 2010

Financially green behind the ears

With the latest state polls revealing a surge in Green support, it is appropriate to subject their election promises to analysis befitting of the major parties.

Since November last year, the Tasmanian Greens have announced a multitude of spending promises totalling almost $460 million.

The latest mid-year financial report released by the State Treasury projects a cumulative fiscal deficit of $242 million over four years.

For a State Government living beyond its means, the only feasible courses of repairing the Budget while maintaining business competitiveness are to reduce spending and sell assets.

Yet the Greens' spending promises, at almost double the four-year cumulative deficit, and lack of detail on offsetting Budget savings represents an attempt to defy financial gravity that would only worsen the budgetary outlook.

Many of the policies also appear hastily cobbled together, judging by the spelling errors in media releases such as the healthy school lunches policy (no, "nutricius" is not the name of a long-forgotten Roman emperor, either).

Smarting from the disastrous 2004 federal election campaign, Greens Leader Nick McKim has tried to paint the current suite of Tasmanian Green policies as a benign mix designed to deliver hope and opportunity to the Apple Isle.

However, the syrupy, feel-good political spin of delivering a new future for Tasmania overshadows the real damage likely to be caused by the implementation of Green policies, particularly on the economic front.

Positioning the state public sector as a catalysing agent to oversee the development of clean, green and clever industries would entail a significant, most likely unaffordable, expansion of government control over the economy.

Its plan for net zero greenhouse gas emissions as soon as is feasible, with a minimum of a 40 per cent reduction on the state's 1990 emissions levels in 10 years, implies a bevy of future regulations, levies and charges that would devastate Tasmania's existing industry bases.

In so doing, it would accelerate the migration of the state's most precious resource -- young people -- to job centres on the mainland.

Similarly, the Greens intend on the one hand to reverse energy demand growth through demand management practices (read: price hikes), while on the other subsidise renewable energies that presently lack the capacity to provide sufficient base load power.

The intent to pick energy winners includes a solar panel installation scheme for 10,000 homes and businesses that have all the markings of the failed Rudd-Garrett insulation batts subsidy.

To add to the energy policy confusion, the party's policy platform stresses the need to lower electricity and other utility bills for ordinary Tasmanians.

The Tasmanian Greens have also announced a hotchpotch of regulations that will raise business costs, in turn impairing economic growth and innovation in the long run.

For example, a proposal to introduce minimum energy performance standards for buildings will significantly increase home construction costs and therefore reduce housing affordability.

Proposed changes to occupational health and safety laws, including an industrial manslaughter criminal code, would take Tasmania down the disastrous and costly New South Wales approach in this area.

Meanwhile, a policy plan to convert farmers into price-setters is likely to violate existing intergovernmental agreements to promote open and competitive markets.

Many of the policies already announced by McKim and the Greens would merely expand a State Government bureaucracy already afflicted by lax cost controls.

The Greens plan to encourage the growth of small businesses by appointing a small business commissioner functionary, create new regulatory units within the EPA, and permanently appoint seven full-time equivalent public servants to cart food about primary and secondary schools.

An escalation of the climate change bureaucracy is firmly within the Greens' sights, with plans for a new ministry overseeing all legislation.

The Greens want their new climate change department to word all relevant legislation in a way that prepares citizens for the impact of climate change.  In other words, scare ordinary Tasmanians into climate change belief by a liberal use of flowery language such as "catastrophic", "dangerous", "runaway" and the like.

The next state government may also have to placate Green demands to enshrine bureaucratic pay parity with mainland public services.  Such a policy would dramatically escalate public sector employee costs, at the expense of taxpayers working in the private sector.

Tasmanians may also have to contend with a post-modern Treasury and finance policy, as the Greens seek to move away from a reliance on crude numerical growth indicators of economic success.

While enshrining Bhutan-style gross national happiness measures might give some a warm inner glow, they would remain a poor substitute for meaningful indicators such as gross state product, investment, employment and exports where Tasmania needs to improve.

A number of Green policies verge on exotic, if not downright bizarre.  These include public sector cheesemaking training centres, support for the craft industry, protection of skylines and hillsides, and creating a progressive traffic fine system encouraging low income earners to transgress on the states roads.

McKim has attempted to portray his party as a centrist and sensible outfit.  However, an assessment of their policies suggests the potential for great economic, social and fiscal damage if implemented.

With the state election date fast approaching, it is incumbent upon Tasmanians to choose carefully at the ballot box.


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