Page 1180 - Week 04 - Thursday, 21 March 1991
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In education, the Minister recently announced that savings in 1990-91 had been revised following the Government's consideration of the Hudson report. Delays due to protests, industrial bans and pickets have also impacted on the savings expected this year. Other economies will be sought that do not impact on the delivery of education and, as the Minister has stated, there will be no unforeseen overexpenditure in this area. There are many other budgetary activities within which revisions may be necessary. For example, higher fuel prices are affecting a number of programs and the unfavourable fire season this year is expected to result in an additional $1m being required for bushfire prevention and control. Again, these are unexpected and unforeseeable matters that have to be adjusted.
Most restructuring initiatives of the 1990-91 budget are proceeding to plan, but implementation setbacks in some areas will cut expected savings in 1990-91. The budget includes provisions for national wage case and other award related salary and wage increases, including $5m for any net impact of structural efficiency principle outcomes. During the financial year, budgetary allocations to programs are adjusted by transfers from this specific provision as award determinations progress.
The main impacts on this provision have been the lower than expected national wage case increases due to the wage-tax trade-off and expenditure resulting from the outcome of the SEP negotiations. The allowance of $5m made in the 1990-91 budget was predicated on the expectation that SEP would only marginally affect overall costs, with increases being generally offset by savings measures. This has occurred in some areas; for example, in nurses' penalty rates, where reductions will impact over several years rather than entirely in this budgetary year. However, the same cannot be said for many other groups, such as teachers. As well, there are classifications where negotiations or offsets are yet to be finalised.
In summary, the total breadth and magnitude of increases, before offsets, is now well above expectations. The total increase in wages and salaries in a full year could be as high as $20m. This is a very worrying position and will require a review of relative underlying assumptions and future budgetary effects. Treasury is still assessing net expenditure impacts after allowing for offsets due to increased productivity. I stress that any supplementation will be determined only after a full examination of immediate and longer-term offsets and will certainly not be automatic.
Mr Speaker, turning to capital expenditure, delays in site finalisation have affected a number of major construction projects, including the extension of the Eastern Parkway across Dairy Flat. Expenditure will consequently be lower than anticipated when we prepared the budget. Notwithstanding the complexity of the hospital
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