On a completely different front - the Menzies Research Centre launched StateWatch yesterday, based on research by Henry Ergas.
The way the paper accompanying the launch, and the presentation, ran the claim was that the State Governments have received a "windfall" in GST revenue as this tax has grown at 7%p.a., that the States have been profligate in spending this as it has almost all been consumed in recurrent expenditure. The recurrent expenditure growth has been primarily consumed in paying higher wages. The higher wages haven't been matched by productivity improvements as we would expect in the private sector.
Which is all a bit strange really. Firstly 7% growth in the GST is not great really - it is a function of inflation and GDP growth.
More importantly, elsewhere the Government likes to claim credit for a 19% real wages growth since 1996. The State Governments as employers have to compete in the same labour market as anyone else and therefore have to follow this growth (unless the claim is the State Governments have led it, in which it is not a Federal Government achievement). So they had no choice where to spend it - the real claim is there hasn't been an improvement in productivity.
But even here we have extremely dodgy statistics. Firstly the measure for hospitals is hospital beds, whereas productivity improvement in hospitals is getting people through them faster...and this does continue to improve. I don't know how you can apply technology or work practices to teach more pupils with less teachers - and anyway reducing class sizes is what taxpayers want. Finally police forces are equally highly labour force driven.
So, nice try - but no cigar!