Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Tasmania criticised for increasing taxation and not making sufficient cutbacks in the Budget

PAUL MURPHY: Well, joining us now, is one of the fiercest critics of the Tasmanian Government over the years, the former Treasury economist, Des Moore, from the Institute of Public Affairs, and he's talking to our economics correspondent, Peter Martin.

PETER MARTIN: Des Moore, you've been calling for Tasmania to change its ways for years. Are you happy tonight?

DES MOORE: Well, I think I would give the Tasmanian Government an `E' for effort, Peter, in bringing recurrent spending down to a 2.5 per cent increase if you take out the $100 million provision for redundancy payments. But there's quite a lot of qualifications that need to be made, and there's a lot more talk than action in the budget speech, I'm afraid.

PETER MARTIN: Would you be calling for even higher tax increases?

DES MOORE: No, I certainly wouldn't. There's been a massive 23 per cent increase in taxes over the past two years, and this leaves Tasmania, probably leaves Tasmania as the highest taxed State, which is the opposite to what they need.

PETER MARTIN: What other option is there to pay off their debt, the highest in Australia per capita?

DES MOORE: They've got to cut current spending by much more than they're doing. And the progress is .. I know that the Premier talks about a three-year program, but the progress is far too slow. This 2.5 per cent increase is coming after a massive 14.9 per cent increase in recurrent spending last year which involved a blow-out compared with the budget estimates.

PETER MARTIN: The Premier, though, has at least made the point that it's possible for a State to go bankrupt. Have you heard of any State Premier making that sort of analysis admission before, and is it something that you would commend to other States and thank Tasmania for?

DES MOORE: I'm fully onside, Peter, with the Premier in identifying that Tasmania has an overspending problem and has a major debt problem, and I give him full marks for doing that, particularly by comparison with the Victorian Government which has not nearly acknowledged its problems to the same extent. But it's one thing to say that and it's another thing to take the necessary action to deal with it, and I think Tasmania has still got a long way to go to bring its debt problem under control, and I would be surprised if Moody's made any change in its debt rating, notwithstanding this budget.

PETER MARTIN: Des Moore, thank you very much.