BEFORE WE START CUTTING GOVERNMENT SERVICES, LET’S HAVE A LOOK AT TAXPAYER HANDOUTS FOR PRIVATE PROFITS, WRITES KRISTIE JOHNSTON
In this budget emergency the government is cutting public service jobs, affecting essential services. Departments are being told to find “efficiencies” that too often mean fewer people doing more work with less support.
Yet while everyday Tasmanians are told to tighten their belts further, one area of public spending left curiously untouched is corporate welfare.
If we’re serious about budget
repair, it’s time we applied the same scrutiny to the millions of dollars in public funds spent propping up private profits.
Corporate welfare is not just about big grants to big business – though there’s plenty of that in Tasmania. It’s also about pork-barrelling, skewed priorities, and in the worst cases, the quiet capture of government by powerful corporate interests – or not-so-quiet in the case of the deal Premier Jeremy Rockliff signed with the AFL to deliver a stadium.
We saw it in the pork barrelling at the last state election, when the government committed more than $1bn in election promises, many of them corporate giveaways: up to $12m for a privately owned “chocolate experience” at Cadbury. And this year we hear the government’s announcement it will put $10m in equity in a struggling tungsten mine on King Island, which the government estimates will support about 95 “direct jobs” – that’s about $100,000 per job!
This budget continues the trend. While frontline services are being cut there’s no scrutiny of the hundreds of millions funnelled into industry assistance, often with little transparency, few conditions, and no requirement to demonstrate return on investment.
This is not just about bad economics. It’s about the health of our democracy. When governments routinely prioritise corporate interests over public needs, they stop working for the people. The salmon industry, gambling sector, racing clubs, the AFL – they all have powerful lobbying arms and deep pockets. Their influence distorts priorities, leading to public investment decisions that make little sense outside the political donation cycle or media photo-op.
Yes, sometimes public support for industry is warranted.
But we need a clear-eyed conversation about how those decisions are made, what the public expects in return, and how we measure success. If government money is being used to “support jobs”, how much are we paying for each job? Are the jobs decent? Are they secure? And what conditions are attached?
At a minimum, companies that take public funds should meet basic social and environmental standards. There’s also a strong argument for meeting minimum labour standards around wages and conditions, and diversity and inclusion targets.
Any public grant, tax concession, or discounted access to public resources should come with targets – and public reporting on whether those targets are met or miss the mark, and future access to support should be restricted or denied. And all such deals should come with sunset clauses.
The same principles should apply beyond direct financial grants, to include effective grants of land and waterways – think forestry and salmon farming.
Even the contributions of public research institutions like IMAS or CSIRO – which provide support to private industries such as salmon farming – should be transparent (IMAS has been involved in research into salmon diseases).
And input pricing must be fair and justifiable too: Tasmanian electricity contracts for the state’s three smelters should not be locked in below market rates, without scrutiny and clear benefit to Tasmanians.
Government and business alike need to stop hiding their cosy deals behind claims of “commercial-in-confidence”. If taxpayers are footing the bill they deserve to know why certain decisions have been made, and how much they cost in terms of revenue forgone, or money spent.
If we’re going to take a microscope and scalpel to the public service and social spending, it’s time we did the same for corporate welfare. It’s a conversation that’s long overdue – and there’s no better time to start than now.
Kristie Johnston is the independent member for Clark