April 20, 2011
IT'S time to stop blaming everyone else, writes PETER HUNT
Victoria has a new government, but the politics of spin remains unchanged.
It's obvious Premier Ted Baillieu and his Treasurer Kim Wells are grossly exaggerating the impact of federal cuts to Victoria's GST revenue and the black holes left by their predecessors.
Mr Wells released an economic and financial statement last week, which he says shows Victoria faces a $5 billion hole in its finances that "makes the task of preparing this year's budget particularly challenging".
So, what's the reason for the shortfall?
Mr Baillieu blames Prime Minister Julia Gillard and Federal Labor for short-changing Victoria by $2.5 billion in GST revenue and deferring another $500 million in Regional Rail Link contributions.
He also blames his Labor predecessors for a $2 billion blowout in the capital cost of a range of projects.
It's no surprise to see a new Coalition Government do its best to smear the reputation of its Labor predecessors and attack an incompetent Federal Labor Government.
But we also know politicians and their advisers are experts at distorting the truth by telling us half the story.
So, let's get rid of the spin in the budget debate and fill in the gaps.
•HALF-TRUTH: "This $5 billion impact on Victoria's finances makes the task of preparing this year's budget particularly challenging." - Ted Baillieu, April 14, 2011.
•THE OTHER HALF: The $5 billion shortfall makes up less than 2.5 per cent of Victoria's budget revenue over the next four years.
•HALF-TRUTH: "Julia Gillard and Federal Labor are short-changing Victoria by $2.5 billion in GST revenue because of a flawed system." - Ted Baillieu, March 31, 2011.
•THE OTHER HALF: The Commonwealth Grants Commission's 2011 Update states: "When combined with the growth in GST available, its (Victoria's) assessed GST will rise by $280 million or 2.6 per cent" in 2011-12.
Victoria's share of GST revenue has fallen from 23.4 per cent to 22.5 per cent of the national pool.
Instead of gaining 23.4 per cent of the $50 billion (equal to $11.7 billion) GST pool in 2011-12, Victoria will gain 22.5 per cent of the pool (equal to $11.26 billion).
But this is still $280 million more than the $10.98 billion Victoria received this financial year.
Mr Baillieu and his Treasurer are basing their calculation on what Victoria would have gained if its share of GST revenue had remained at 23.4 per cent of a national pool, which is expected to grow from $46.95 billion this financial year to $50 billion in 2011-12.
So, in theory, Victoria would have gained an extra $440 million if its share had remained at 23.4 per cent. The $2.5 billion GST shortfall Mr Wells talks about is a forward estimate on what this shortfall would add up to over four years.
Whichever way you look at it, that $440 million shortfall adds up to less than 1 per cent of the $47 billion in budget revenue the Victorian Government expects to rake in for 2011-12
Read on ...
http://www.weeklytimesnow.com.au/article/2011/04/20/321361_opinion-news.html