By Alex Bainbridge
and Joshua Kelcey
HOBART — The Tasmanian Labor government of Jim Bacon brought down its first budget on November 5. Unusual in these days of economic rationalism, the largest funding increase was for education; spending on health was also significantly boosted. There were no increases in taxes or charges and no allocations for redundancies for state employees.
The Bacon government has maintained a populist image since its election on an anti-privatisation platform on August 29. The central issue in the state election was the Liberal government's proposed sale of the Hydro Electric Corporation.
The ALP responded with a "principled" opposition to any sale. Since then, Labor has tried to prevent any future government from selling the Hydro without two-thirds support in parliament.
The ALP presented a populist image during the election campaign, especially in policy areas of traditional concern for the left such as health and education, without really promising much.
Labor pledged to give priority to "resolving" the pay disputes of nurses and police. It announced a "target" of 5000 extra jobs and promised to decriminalise personal marijuana use.
However, Labor's budget is hardly a threat to the capitalist status quo. Spending increases are very modest. Education, for instance, received only a $32 million increase — a far cry from what is needed. Of 90 new teaching positions promised before the elections, there are enough funds for only an initial 17.
The overall aim, the government said, is "a balanced budget within two years" and a cut in the state debt. This is only an interim budget; another is due in six months.
The funding increases are dependent on extracting an extra $40 million a year from the Hydro. While the government claims this money will come from slowing the Hydro's debt repayments, there will be pressure to raise electricity prices, reduce service and make Hydro workers work harder.
The budget included funding for an extra 50 police and more subsidies for business. Labor is promising tax relief for businesses "that generate job growth".
Bacon Labor has not departed from the economic rationalist framework which has driven other state and federal Labor governments to bring in anti-worker/anti-environment policies. The last state Labor government in 1990 introduced such a horror budget.
Nor has Bacon broken with the Labor tradition of supporting capitalists. "Among the key points" of the budget, according to the Hobart Mercury, "was a commitment to provide $10 million for small- and medium-sized export businesses ... and the creation of a $1 million board to back innovative industry".
The government is considering privatising the TAB despite its denials during the election campaign.
"This is the wrong way to go", Democratic Socialists Senate candidate Ian Jamieson told Â鶹´«Ã½ Weekly.
"Capitalist governments have been trying for decades to subsidise business to counteract the failures of the market. The promise of an eventual trickle-down that will benefit ordinary people has been proven not to work, and anyone who puts it forward today is either naive or is lying.
"If Jim Bacon were truly representing ordinary workers, he would be carrying out policies such as reversing the Hydro pricing structure, which penalises small residential users and benefits big business."
Labor's support for big business is evident in its decision immediately after the election to give the go-ahead for 49,000 hectares of forest, previously preserved in a deal between the Greens and the former Liberal government, to be logged. The government also is supporting the development of a magnesite mine adjacent to the rainforests of the Tarkine National Park.
While Labor went to the election on a promise to "legislate for a nuclear-free Tasmania to prohibit any part of the nuclear cycle being carried out in Tasmania", it allowed the visit of the US nuclear ship Abraham Lincoln. Labor plans to rewrite its policy to allow nuclear ship visits to continue.
A big factor in Labor's progressive image is Premier Jim Bacon. Liberal leader Tony Rundle and Victorian premier Jeff Kennett red-baited Bacon's Builders' Labourers Federation and left background. This added to Bacon's appeal.
Kennett and Rundle have little cause for fear. Jim Bacon, like scores of former trade unionists and radicals turned Labor MPs across Australia, has made his peace with the system.