Faced with a financial test partly of its own making, the Barnett government may deliver tough medicine now in the hope of a quick fix.
The state government is preparing for the possibility of more union protest rallies at Parliament House as it moves to implement cost-cutting measures designed to rein in the budget and improve its chances of regaining the AAA credit rating.
The protests will produce evocative pictures on the evening television bulletins, which will support the view that the government is being mean and penny pinching.
That normally would play against any political leadership.
In this case, however, given the current financial circumstances, the results could be beneficial from a financial sector point of view, without any more significant loss in votes.
The issues that will cause most reaction are the decision to cut 500 jobs in the Education Department, the threat of tighter staffing arrangements in public hospitals, and the anticipated legislation designed to allow the sacking of public servants. Already there have been some protest meetings, but expect more.
In dealing with these issues, Premier Colin Barnett and Treasurer Troy Buswell will have one eye on support for their government and the other eye on the reaction of the credit ratings agencies. At stake is a certain amount of prestige, and the money lost to taxpayers in order to service increasing state debt.
The message in the recent Standard & Poor’s assessment and a reduction in the credit rating was clear.
“While we believe that Western Australia could display further budgetary flexibility, we consider that political considerations are currently inhibiting this flexibility,” the report said.
“In our view, WA has the potential for further budgetary flexibility through either expenditure or revenue measures, or through asset sales.”
What stung Mr Barnett was the agency’s view that his government had only “limited political will” to take the hard decisions to curb spending and the growth in state debt, and maintain healthy surpluses.
The government has already flagged that some developments could be delayed, such as the building of the controversial Roe Highway stage eight, and the light rail and airport rail extension. The Ellenbrook railway line is deep on the backburner.
Protests by health and education workers are inevitable. Their unions are very efficient in turning out the numbers. And the proposal for two extra floors on the new children’s hospital – strongly backed by the Australian Medical Association – is viewed on as having the potential to be another financial black hole.
Promised legislation to remove permanency of tenure for government workers also has the potential to mobilise more protest meetings and possible industrial action. The premier defends the move by saying that WA is the only state without such powers, and it’s time the state fell into line.
No government enjoys strong opposition to its decisions. In this case however the ratings agencies require that, after years of relative affluence (disregarding the steep increases in power and water charges), it’s time some hard medicine was prescribed. And with public servants rallying against the removal of their right to permanency, the government would be banking on there being little sympathy for the protestors from private sector workers. After all, job insecurity is something they live with all the time.
So it’s a pain now, vote later approach. If the state’s finances start looking better by 2015, it might just pay off with the ratings agencies, and electorally as well.
Local Labor goes AWOL
The composition of federal Labor’s new cabinet team provides a stark reflection of just how little clout WA Labor now has in the party’s national arena.
Don’t think for one minute the Labor line up was selected on merit. If it had been there is no way that Senator Don Farrell from South Australia would have been awarded responsibility for the ANZAC Centenary planning, as well as veterans’ affairs. His term in the Senate ends on June 30 next year.
He is simply a factional heavy who had significant roles in the Gillard-Rudd leadership changes. How Perth MP Alannah MacTiernan could have been overlooked, given her achievements in WA, plus the fact she is in Canberra for the next three years, can only be explained on factional grounds.
As it is, Brand MP Gary Gray is WA Labor’s only fully-fledged player in the party’s top team, being given responsibility for resources, Northern Australia, and special minister of state. The only other WA member in the frame is Fremantle's Melissa Parke, who will assist the opposiyion’s health spopkesperson.
Compare that puny representation with the WA team in the first Hawke cabinet in 1983. In the line up were Kim Beazley, John Dawkins and Peter Walsh, joined later by Peter Cook, George Gear and Wendy Fatin. Even in the Rudd-Gillard ministries, Stephen Smith, Chris Evans and Mr Gray all had senior roles.
The ball is in WA Labor’s court. Quality candidates, and policies reflecting the aspirations of local voters, are essential ingredients for any Labor comeback.