Page 2128 - Week 06 - Thursday, 26 June 2008
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Mr Stanhope: Talking about you?
MR MULCAHY: Yes. This blow-out of advisory staff for the Chief Minister has made a mockery of the department’s 2007-08 budget objective to develop and improve the arrangements for strategic human resources. In its human resources budgeting, the government budgeted for an additional 22 full-time equivalent staff in CMD. In response to a question at the estimates committee on 27 June 2007, the acting chief executive of the department denied that there was any intention to further increase staff beyond the budgeted level. She stated:
Given that the budget footprint remains the same, I think we would be pretty much on the same path unless staff get cheaper.
This result, of course, was not as strategic as planned and was not on the same path as the acting chief executive stated. Instead of the budgeted increase of 22 full-time equivalent staff, the department ended up with an additional 42 full-time equivalent staff, an increase of over one-third in the number of FTEs in only a single year. Despite this flow-in of staff, in the current budget the government has budgeted for a further increase of another nine per cent in staffing levels.
I noted in my earlier speech on the budget that I was not particularly enthusiastic about some of the new expenditure, and one of the areas that do continue to give me great concern is the initiatives of the Chief Minister’s Department to provide corporate welfare under initiatives to support business innovation and to facilitate business investment. My views on this subject are at odds with the government, which has chosen to spend over $4 million on these initiatives over the next four years.
My hostility to corporate welfare is also starkly at odds with the opposition, who seem to have embraced the concept, advocating large amounts of government spending to prop up ACT business—a pattern which got them into trouble once before. I do not think anyone could accuse me of being anti business. However, I do not believe that it is either appropriate or economically valuable to subsidise ACT businesses with corporate welfare initiatives. Private enterprise thrives precisely when it is left alone by government, and corporate welfare initiatives tend to attract the worst kind of businesses with the least efficiency. In my experience, and I am basing this even on working for the Premier of Victoria some many years ago, businesses that rely on government privileges in order to survive and grow are often grossly inefficient.
One of the big problems that could occur with this kind of approach is that we could end up in the ACT with economically unviable businesses that can only survive through ongoing taxpayer support. Rhodium is such an example; although, of course, it was not a private business, it shows the pitfalls of having businesses that are reliant on government support. This can become entrenched and it can become very difficult to get rid of these systems of corporate welfare since that can lead to business failures.
In addition to its corporate welfare initiatives, the government has allocated new expenditures of more than $6 million for festivals, including new expenditure initiatives for the Family and Community Fun Day, the Centenary of Canberra, an ACT festival fund, multicultural festival enhancement, international mountain bike
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