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Some people talk of Victoria having been jeffed, meaning ravaged, says Des Moore. The Reality is the state did well under the Kennett government, he argues.
Just recently James Lambert announced the addition of the verb to jeff to the Macquarie Dictionary of Slang he edits. He was apparently attempting to put Jeff Kennett in his place by defining to jeff as to ruin or destroy in a heartless and unfair manner. But was the period most directly influenced by Kennett Government policies (1992-93 to 1999-00) really one of destruction?
A common perception is that the States financial position was greatly strengthened but by slashing government spending without regard for social consequences. Yet while there was an initial reduction in spending from Labors unsustainably high, debt-financed levels, over the seven years both current and capital spending increased by 17 per cent in real terms.
Although Victoria was assessed by the Grants Commission as spending $674 million less in 1999-00 than needed to deliver services at the average level for the States, that was a mere 3.6 per cent lower. More importantly, the key sectors of government schools education, hospitals, and welfare were all providing services well above the States average and the below average areas involved lower spending mainly on regulatory and industry services, assistance to non-government schools and (reflecting improved financial management) debt charges.
The enormous public transport subsidies inherited by the Kennett Government were reduced to average levels, partly reflecting the privatization that will also provide further significant savings for taxpayers.
Minister Mary Delahunty recently asserted that last years increase in the proportion finishing government secondary schools showed the Bracks Governments serious and targeted reinvestment is starting to show dividends, while under the Kennett Government educational involvement dropped to the lowest in the country. Retention rates were consistently well above the Australian average under that Government.
It also had average class sizes in government schools around the States average of 14.8 in its past three years. And for its past five years spending a head on government schools was higher than needed to provide average service levels. Unsurprisingly, the Bracks Government has not foreshadowed a return to Labors average classes of 13 in 1992-93. The quality of education then was clearly lower than during the Kennett period, reflecting the greater importance of other influences on standards.
In reality, the vital financial strengthening by the Kennett Government did no more than move major public services to around the average level for the States (and mostly above levels under Labors Carr Government in NSW).
Victorian living standards grew at a faster rate than in other States. Under the previous Labor Government they had grown slower than the Australian average.
With Victorias privatizations the private sector now contributes the highest proportion of total capital spending amongst the States about 85 per cent and the idea that public infrastructure provides the key to development is a myth.
Private investment was, and remains, the driving determinant of employment, with our unemployment rate falling by more than in other States during the Kennett era.
The Kennett reforms meant a more appropriate role for government while maintaining good quality public services. All this argues for further privatizations and the minimization of the regulation of business activity.
Des Moore, a former Deputy Secretary, Commonwealth Treasury, is Director, Institute for Private Enterprise.