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Friday, December 09, 2005

Lennon urged to splurge

The Mercury: Lennon urged to splurge [10dec05]

PROMINENT economist Saul Eslake has urged the Tasmanian Government to boost its spending agenda, especially on education.

Mr Eslake claims the government has at least $620 million of extra revenue coming its way over the next four years through increased GST payments and state tax revenue.

The ANZ Bank's chief economist praised the Tasmanian Labor Government for eradicating its debt, but said that enough was enough.

"It's wrong for the State Government to run up surpluses; there is simply no need for it," Mr Eslake said.

He recommends the Lennon Government _ or any alternative government elected at next year's poll -- sink a minimum $400 million of its extra income into much-needed public programs.






He nominated infrastructure, housing, and public dental health as priorities, singling out education as particularly important.

"If you committed the entire $155 million a year or $620 million over four years that might be overdoing it," Mr Eslake said yesterday, after addressing the Tasmanian Economic Forum.

"But no one could accuse the Government or the Opposition of being irresponsible if they announced spending initiatives and revenue reduction measures, that is tax cuts, of say $100 to $130 million a year."

Mr Eslake estimates the Lennon Government can responsibly make new election promises totalling $400 to $520 million, to be spent over four years, and still be fiscally conservative.

Figures supplied by the office of federal Treasurer Peter Costello to The Mercury this week back up Mr Eslake's calculation of a $400-$520 million election warchest to spend before 2009.

They show that between this financial year and 2008-09, the Federal Government's promised GST refund payments to Tasmania will grow from $1.5 billion to $1.632 billion a year.

"It's not often that a financial markets economist publicly advocates increased government spending, but in this particular instance I'm happy to do so," Mr Eslake said.

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