EMERGENCY SERVICES FUNDING (PROTECTION OF FUNDS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 8 May 2008. Page 3253.)

Mr KOUTSANTONIS (West Torrens) (10:45): The government opposes this amendment, surprisingly. The proposed bill is intended to prevent the government from funding compensation payments out of the emergency services fund if the CFS or other agencies covered by the fund are sued for negligence—for example, to prevent the fund's being used to meet the cost of any successful claim following the Wangary bushfires. This misunderstands the current arrangements, as agencies are only required to meet the first $10,000 of any successful claim with the remainder met through insurance arrangements with SAICORP. Large compensation payments are thus already met by the government through SAICORP.

The proposed amendment (as drafted) also appears to prevent payment of workers compensation claims and payments in lieu of lost or damaged property to emergency services volunteers and paid staff. This is probably an unintended consequence by the drafters. If this amendment were passed it would be necessary to reduce the expenditure target for the fund and provide appropriation to the agencies to meet these specific costs.

As the amendment relates to where expenses are paid from, not changes in expenditure, there would be no budget impact. It is appropriate and standard for agencies and businesses to meet insurance excess payments and workers compensation costs. The government cannot support this amendment.

Dr McFETRIDGE (Morphett) (10:46): I would like to congratulate the member for West Torrens on his first speech as a minister in waiting. This is a fairly simple bill, and I have listened carefully to what the minister in waiting has had to say. I certainly hope that there are no unintended consequences that would affect workers compensation payments for members of the emergency services, particularly the CFS and the SES.

We must all remember that the vast majority of our emergency services are made up of volunteers. The paid professionals do an absolutely fantastic job. I cannot understand why the government is not negotiating with the UFU at the moment and is refusing to meet with it. But that is another issue. However, we need to make sure that any funding that is made available for the emergency services is not somehow diverted to pay off a liability that should be funded from another source. The funding that is there should be put into resourcing the front-line of the emergency services: the SES, the CFS, Surf Life Saving SA and St John Ambulance. There is a range of organisations that need to be well and truly funded.

I cannot understand the current position of the City of Holdfast Bay—which was promoted by the former Labor candidate for Morphett, Tim Looker—of removing funding from Surf Life Saving SA in the City of Holdfast Bay; some $32,000 a year. It should be putting more money into this. The benefits to that community are incalculable in terms of time and hours. I think it is atrocious that the council should even consider cutting the funding.

I heard what the member for West Torrens said; that perhaps the bill needs to be re-examined. I was a member of the CFS for many years and then I had to stand aside because of business pressures. I recently rejoined the Kangarilla CFS, where I started many years ago, because it needs heavy truck drivers, and I am happy to help when I can. These services need the resources and the funding. One hears stories about these services not being able to get personal protection equipment or courses in breathing apparatus training, and that is an atrocious position to be in.

The government fails to fund these organisations—whether it be the CFS, the SES or Surf Life Saving SA—at its peril, because without them what would the people of South Australia do? Think of the billions of dollars that these organisations save in terms of property, never mind the incalculable worth to the community of the lives that they save as well as the prevention of bushfires and accidents, and flood assistance. They are without measure. The role they play is absolutely amazing.

I wish to emphasise that, if there are unintended consequences with respect to this bill, we had better get them sorted out. I do not want the volunteers, in particular, and also the paid staff to miss out in any way, shape or form in funding for their front-line services. This is absolutely crucial to South Australia in 2008, as has been the case for the many years of this state's existence. I urge the house to consider this bill and, if there are amendments that need to be made, let us discuss them so we can be 100 per cent certain that this bill is doing what it is designed to do, and make sure that emergency services funding will be available for the emergency services.

Mr RAU (Enfield) (10:50): I am not really in a position to understand why this is sufficiently important to bring forward as a bill. I respect the member for Davenport and his many thoughts about many matters—and he has raised a number of important issues here, particularly in the last 12 months or so, which I think needed to be ventilated. However, I have difficulty in understanding this one, from this point of view. If we are all going to be frank about the emergency services levy, it is a tax—just like stamp duty is a tax and payroll tax is a tax. It is a tax like any other tax, and it raises money for the state government to discharge its various responsibilities.

Historically, largely for reasons of presentation, it was described and designed as a hypothecated tax for a particular purpose. But that may have suited the political climate of the day. It may have been a day of, 'When is a tax not a tax? When it is a hypothecated levy'—the old Clayton's tax thing. Whatever it was, it was a presentational fuzz that was put over this thing at the time to make what is essentially a tax arguably look like something else. Well, it is not; it is a tax.

The former government introduced the tax because it wanted to raise more money. They made it more palatable, perhaps to their own constituents, by saying, 'This additional money will be going directly into a purpose which you, by and large, will find to be meritorious.' Fine. However, why should any government of the day, whether Labor or Liberal (it does not matter) have the particular source of tax from which money is rolling into the Treasury, limited as to the expenditure of that money?

We could have said, for example, in relation to the Emergency Services Levy, 'You cannot spend it on trucks. You can spend it on anything else.' We could have said, 'Pick another tax. Payroll tax can be used on anything, except for hospitals, because we think there should be a special hospitals tax.' It just does not add up. When the money rolls in and turns up in the Treasury it loses its identity. In that sense money is like water dropping into a bucket. It might be that one drop of water comes from this particular bottle and another drop comes from the tap but, by the time it gets into the bucket, it is all water and it is all in the bucket. When it is used, it comes out of the bucket.

For reasons of form and administration (call it anything you like) I can understand, from a political point of view, why it is worth raising this issue; I understand that. However, from a point of view of sound administration, from the point of view of the government of the day—whoever it might be—having the option to allocate funds as it sees fit from the government's total revenue sources, why should a particular exclusion be imposed upon this one source of funds?

If it is presently within the scope of these monies to be expended in the way that is proposed—and I am not sure whether it is or is not—then I do not see any good reason why this government or any future government should be hamstrung in the way in which they allocate those funds. For that reason, unless I have completely missed the point of it (which is quite possible, because I do not see and understand all things) I do not think there is any valid point, other than a political point in the sense that the opposition will be able to say, 'Here you are, emergency services constituency: we are defending you, we are saving money for you. We are defending these hypothecated funds. We established the tax; we are hanging on to it. '

An honourable member interjecting:

Mr RAU: However, let us be realistic about it; it is a tax. That is it: it is a tax.

An honourable member interjecting:

Mr RAU: Your government introduced the tax.

Members interjecting:

Mr RAU: I am not complaining about the fact that you introduced the tax—that is history. However, let us all be grown-up about this. It is a tax; you put it in. It is just like stamp duty. It is just like payroll tax and anything else, except that to make it more palatable at the time that it was introduced, you wrapped it in Christmas wrapping and described it as an hypothecated tax directed towards emergency services. That, no doubt, chimed very well in your electorates—and that is fine. Some of you probably even held seats that you might not have, because of this. That is fine. That is all history.

However, for goodness sake, let us be realistic about this: if the government of the day (and it might be your government in 20 or 30 years—who knows?) wants to spend that money in satisfying a legitimate compensation claim, then so what? If the money does not come out of there, it is going to come out of another pot and, as I said before, you have to think of the money coming into the state Treasury as water being tipped into a bucket.

There is a tap at the bottom of the bucket, which is the government expenditure, and there is a series of pitchers of water being tipped in at the top, which are the tax receipts. By the time the water gets into the bucket its identity and source is completely lost. It comes out the other end as government expenditure. As I said, it may be that I am completely missing the point but I cannot see why this or any future government should be limited in this way.

The Hon. I.F. EVANS (Davenport) (10:57): The member for Enfield suggests that unless he has missed the point, there is no point. I am here to advise the member for Enfield that he has missed the point, and there is a point. He mentioned that taxation is all about water tipping into a bucket. The water debate will tell the member for Enfield that there are all different types of classes of water: there is high-security water, there is low-security water, there is temporary water—such it is with taxation.

Look at one of your great heroes, the Hon. Don Dunstan, who said, 'We are going to have a lottery and we are going to hypothecated into it a hospitals fund.' The member for Enfield's party did not say then, 'Tut, tut, tut, this is all window dressing and why would a government restrict its taxation expenditure?' Your own government has said that it was going to take speeding fine revenue and allocate it just to roads. The member for Enfield nods—hopefully, he is not asleep. So his own government does it. As the drafter of the Emergency Services Levy bill, the reason I hypothecated it, was so that future governments could not raid it, so that it could not introduce a levy that raised $100 million and only spent $50 million on emergency services and $50 million on something else. I did that quite specifically.

I say to the house that if there is a liability claim against the fund of $10 million, $20 million or $30 million, that was never the intention of the fund. The intention of the fund was the day-to-day operations of those agencies. Those claims should come out of other taxation revenue. The member for West Torrens raises some matters about workers compensation and I am happy to amend those. That was never the intention, may I say, and I am happy to amend those in the committee stage. We can do that another day. I am happy to work with the government to amend them.

He then mentioned the $10,000 policy in SAICORP. I have asked the Treasurer to check, and I do appreciate the Treasurer's informal discussions in recent days about this bill. I asked the Treasurer to check whether the $10,000 policy—that is, the agency covers the first $10,000 of a claim and SAICORP covers the balance—is simply a matter of cabinet policy and whether that can be changed by cabinet at any time. If it can be changed by cabinet at any time then I say that the bill stands, because it may well be $10,000 today but it could be $10 million tomorrow if the cabinet so decides. It is not necessarily like an insurance policy you buy from AMP; I think you will find this is simply a matter of government policy that says the agencies will cover the first $10,000 or $100,000 or whatever the figure is, of the claim.

Another example for the member for Enfield about his government hypothecating funds is the victims of crime levy that is raised from speeding fines. You cannot spend that on anything other than victims of crime. Another hypothecated one that his government introduced is the River Murray levy. The government said that it would not spend that on administration. So for the member for Enfield to suggest that I am somehow introducing a new concept in taxation is, I think, a fallacy. He may well be criticising his own side for its ongoing consistency in adopting hypothecation of taxation, because that is what has happened on both sides of politics. We have hypothecated certain taxes because from time to time we want to control that little thing called cabinet.

I accept that I do not have the numbers for this measure today and that I will lose the measure; however, I will come back to the government and seek to work through the issues that it has raised, because at this stage I am still not convinced that the principle from which I argue is not the correct one. I thank those members who have supported me in this.

Second reading negatived.