Another Commission of Audit
This week Barry O’Farrell committed himself to a commission of audit into the state’s finances to report within six months.
This is a reflection of former Liberal Premier Nick Greiner’s influence on O’Farrell. Elected in March 1988, Greiner established an Audit Commission which reported promptly in August. It comprised Liberal-inclined business figures and a former head of Treasury. It presented alarming material about trends in state debt and revenues and was designed to provide a justification for Greiner breaking election promises not to increase taxes and charges beyond the CPI.
It will be interesting to see who serves on this commission. Interesting, too, to see its recommendations given the openness of the state’s finances these days and the big privatisations of the last 20 years. Then there is the record of my government in eliminating general government debt.
After being lectured by Financial Review editorials and Tom Dusevic of The Australian on how I had been too intent on winding back debt – had gone too far in the direction of fiscal conservatism – I will watch with interest as commentators re-think, shift gears and suddenly discover “a debt crisis”, and one caused by Labor’s fiscal profligacy.
They will forget the commentary of the last few years when they all agreed borrowing should have been much bigger.
One recommendation is absolutely certain: sell power generation. O’Farrell will get the same recommendation from his promised judicial inquiry into all aspects of power privatisation. And business is urging the same course.
And he will have an upper house majority to give effect to it by year’s end.
He will have no obligation to offer the workforce in the power plants the generous concessions offered by Morris Iemma to overcome union resistance to the sell-off. There are lessons in this that I will forbear from offering the union movement until a less sensitive moment.
Incidentally, the Greiner Commission of Audit failed at shielding the government from responsibility for increased taxes and charges. In 1991 public resentment came within one seat of seeing the Greiner government defeated in a campaign fought on taxes and charges and allegations of his government’s waste exemplified by the Eastern Creek raceway and lavish spending on consultants. The audit commission had not helped in Parramatta or Penrith, the Hunter or Bathurst which Labor reclaimed in a reaction against the Greiner program.
It was, incidentally, the Carr – and not the Greiner – government that became the first in the state’s history to retire and not add to debt.