Govt Sharpens Knives

Illawarra Mercury

Tuesday November 11, 2008

By BRETT COX

THE Illawarra is bracing for bad news today with Premier Nathan Rees' mini-budget expected to slash billions of dollars from state expenses.

Minister for the Illawarra David Campbell has admitted some people won't be happy with the cuts, which have been brought about "by a unique economic situation".

"There have been some very tough decisions made," he said. "I have no doubt there will be some disappointed people, but I hope there is understanding that this has to be done."

Illawarra community leaders have warned that, with all past government commitments now up for grabs, the region's economy could take a battering from any poorly considered cost-saving measures.

The Government is expected to formally announce two changes - already revealed by the Mercury - that could affect 700 Illawarra jobs, namely the imminent closure of the Keelong Juvenile Justice Centre and privatisation of superannuation administration business Pillar.

With the combined Wollongong, Shellharbour and Kiama unemployment rate at 5.7 per cent and the NSW rate at its highest level in eight years, unions say the region cannot afford any subsequent job losses.

"Businesses like Pillar were set up in regional areas doing it tough, to help reduce unemployment," South Coast Labour Council secretary Arthur Rorris said. "The Government will say the jobs will be protected ... but these promises are often hollow and short term."

There is Opposition speculation that the Government will take advantage of the resources boom by introducing a 10 per cent royalty rate on coal worth more than $100 a tonne.

Opposition ports and waterways spokesman Duncan Gay believes coal mining industries at Port Kembla will suffer if new charges and royalties are introduced.

"These royalty charges may create more economic stress for the local communities," he said.

Mr Rees has promised the payroll tax reductions from this year's budget will remain, but land tax is expected to rise for property valued at more than $1.8 million.

Illawarra Business Chamber president Les Dion feared the extra costs would be passed on to renters and said any tax increases, or any cuts in infrastructure funding, could also cost jobs.

"We understand this Government needs to tighten its belt," he said. "But they need to understand many of these projects we have been advocating are important in terms of creating employment."

The Government has already flagged cost-saving measures to the school travel scheme, the abolition of the $50 back-to-school allowance, cuts to funding for three Illawarra disadvantaged schools, public sector job losses and the watering down of its pledge to reinstate 24-hour mobile mental health teams in the Illawarra.

Plans for an acute respiratory ward at Wollongong Hospital have also reportedly been scrapped, while Mr Rees has indicated projects like the WIN Stadium western grandstand and Maldon-Dombarton rail link are unlikely to receive state money in the near future.

NSW Police Association concerns that the new $17 million Oak Flats police station could be a victim of the cuts seem to have been allayed by a Government source.

"There will be no frontline police cuts or changes to election promises," the source said.

But union spokesman Detective Senior Constable Gary Chetcuti still believes the Government's mid-2010 target completion date is doubtful.

The Department of Environment and Climate Change says half of the $962,000 funding for improved water quality in Lake Illawarra promised in August has been spent, but won't "rule anything in or out" in regard to the rest.

Today's mini-budget is also expected to reveal the funding future of the $800 million Princes Hwy upgrade between Gerringong and Bomaderry.

Mr Campbell said the Opposition's decision not to approve the sell-off of electricity assets, and the economic downturn, meant changes in Government policy announced today were needed to better prepare for the future.

WHAT TO LOOK FOR

? Gerringong to Bomaderry Princes Hwy upgrade: Kiama MP Matt Brown says forward estimates expected today.

? New Oak Flats police station: Expected to survive, but doubts on 2010 target date.

? Payroll tax: Premier Rees says cuts from this year's budget will remain.

? Coal royalties and land tax: Possible increases.

? Pillar superannuation administration business: Expected to be sold off by the Government.

? Keelong Juvenile Justice Centre, Unanderra: To be closed in early 2009.

? Lake Illawarra water quality funding: Half the $962,000 is yet to be received.

? Port Kembla $600 million expansion: Announced in July.

? Oak Flats court complex: An idea flagged by the Attorney-General in September. No money expected yet.

? Bulli Pass overpass: Delays since first announced in 2006. Mini-budget may give an idea of timetable.

© 2008 Illawarra Mercury

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