State Budget 2018-19: TAFE SA to receive multimillion-dollar bailout and compo for students, major health savings needed
TREASURER Rob Lucas has flagged a TAFE “bailout” package totalling tens of millions of dollars in next week’s State Budget, including $2 million in compo for students — and warned major health savings must also be found.
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TREASURER Rob Lucas has flagged a TAFE “bailout” package totalling tens of millions of dollars in next week’s State Budget, and warned major health savings must also be found.
Mr Lucas on Monday revealed taxpayers would fund $2 million in compensation for 87 TAFE aircraft maintenance students who had their licences revoked after a “damning audit”.
However, he warned that was the “tip of the iceberg” for TAFE’s failures as the institution was both blowing out its costs and failing to meet revenue forecasts from enrolments.
The TAFE compensation comes as part of a total $12 million in payouts for government failures that also includes the Oakden aged-care debacle and chemotherapy dosing bungle.
Mr Lucas said the Budget, to be handed down next Tuesday, would record a significant deficit in the 2017-18 financial year that was attributable to the “mess” left by his predecessors.
“The total cost to taxpayers of some of these scandals and debacles overseen by the former Labor government are close to $12 million,” Mr Lucas said of the compensation payments.
“In particular, the TAFE SA scandal is the clearest, and one of the worst examples.
“There will be a very significant additional contribution required from the taxpayer to allow TAFE to continue to operate, and to compete in the vocational training market.
“There is a financial mess, there is a scandal in relation to this that is just the tip of the iceberg.
“Many tens of millions of dollars are going to have to go into bailing out TAFE in the forward estimates.”
Labor accused Mr Lucas of trying to “catastrophise the state’s finances”, saying he inherited a Budget that was in balance and has scored a windfall GST bonus since the election.
Mr Lucas said next year’s negotiations on a new TAFE collective bargaining agreement would be critical, and the organisation must accept new work practices to become more efficient.
Mr Lucas said the health and child protection budgets had also blown out significantly, and his decision to pay out TAFE compensation was made following Crown Law advice.
The Government is facing a State Parliament inquiry over its decision to award a $2.57 million payout to Henry Keogh, after he was found to have been wrongly convicted of murder.
Attorney-General Vickie Chapman has refused to reveal legal advice on that decision.
Mr Lucas said the latest compensation payments were necessary as it was clear TAFE SA “had stuffed up” and “taxpayers were exposed” to a liability that must be resolved.
Former Treasurer Tom Koutsantonis’ final Budget update, delivered in December last year, predicted the books to remain in surplus over the four-year forward estimates.
Mr Koutsantonis returned the Budget to surplus in 2016, putting it back in black for the first time since the global financial crisis, in part due to Motor Accident Commission asset sales.
Mr Lucas said Labor’s books assumed major savings would be achieved, including in health, to deliver future surpluses and Labor lacked the ability to deliver them.
He said the Government would not make a full $446 million health cut baked into Labor’s final Budget forecasts, and would seek to offset it with savings from other departments.
“We will have to do that,” Mr Lucas said. “There will be a reorientation. But it will still leave … a significant savings task for health.”
Opposition treasury spokesman Stephen Mullighan said Mr Lucas was left a “Budget that was in surplus” and “strong and growing economy”, as well as receiving a windfall GST gain.
“It’s alarming, I think, to hear that over the last few months the Liberals have managed to create a deficit position in the State Budget,” Mr Mullighan said.
“This Government is intent on cutting, and cutting savagely, into the public sector.
“That will create job losses. It will also mean a reduction in the availability and quality of services.”
Mr Mullighan admitted there had been “challenges” at TAFE since before the state election, which would have impacted its ability to attract students and meet enrolment forecasts.