Budget bungling

So adept are they at kicking own goals, it hardly seems fair to draw attention to any further stuff-ups by the Fabian fiasco in The Failed State that goes by the name of the Kenneally Government. Of course, it’s just as unfair to brandish her name since her predecessors (and there have been rather a few, eh?) conspired to tarnish the Labor brand in such a way that the North Korean administration appears a model of sanity and efficiency by comparison.

But enough of damning faint praise.

We are beholden to Lisa Murray in The Australian Financial Review who has shed some light on the socialist approach to financial management. Not a pretty picture so be prepared for discomfort if you are, by residential misfortune, a shareholder in the New South Welshian jurisdiction. Superficially there’s a pretty picture with Kenneally and Co reporting a surplus (wonder of wonders!) of $994 million for 2009-10. Just a year earlier, this lot were predicting almost exactly the same number as a deficit. But, no, their economic and management skills have not miraculously turned around in that time. Indeed, their slide down the slippery slope of fiscal imprudence continues not only unabated but perhaps gathering speed.

This is attested by the fact that the water-into-wine trick of deficit into surplus was produced by a federal stimulus gift of $3.2 billion. Which still leaves another $1.2 billion that appears to have simply disappeared into the mist. Albeit some of the gorillas inhabiting that space are those who belong to that rather generic genus known as consultants. Spending on these ubiquitous creatures soared from a still substantial $90 million or so back in 08-09 to a concerning $207 million this past year. Lots of snouts, lots of troughs.

Of greater concern, though, is superannuation. Unfunded liabilities have now leapt to nearly $35 billion and some very pointed questions should surely be asked about how this problem is to be addressed.

Indicative of the slapdash approach to management of funds is that no less than seven of 24 state agencies produced accounts which contained errors of more than $20 million. But what’s a few score million here or there when state net debt is approaching $10 billion?

The position is so parlous that it makes you wonder why anyone would want to put their hand up to sort out the mess. Clearly, altruism is not yet dead.