SUPPLY BILL

Second Reading

Adjourned debate on second reading.

(Continued from 26 May 2010.)

Mr MARSHALL (Norwood) (16:05): Madam Deputy Speaker—

The DEPUTY SPEAKER: What excitement do you bring us, member for Norwood?

Mr MARSHALL: Madam Deputy Speaker, I bring you great excitement from the electorate of Norwood; and it is a very exciting electorate. The exciting information I have today is, of course, the Supply Bill 2010. It is a large tome, all of one page, albeit printed on both sides. It says, 'An Act for the appropriation of money from the Consolidated Account for the financial year ending on 30 June 2011'.

What one immediately thinks when one hears what it is all about is the appropriation of money for the financial year, which is actually beginning in just over a month. It is going to begin in just a month but we do not have the budget yet for this financial year. This money, the $5.22 billion that we are being asked to approve today in this chamber, will be the money that takes us through to when the budget is actually presented to this house. It is a funny situation when we are being asked to approve expenditure for something that we do not actually have a budget for.

I am only a new politician, but I do come out of the commercial sector and I can say it is most unorthodox to approve expenditure before you actually receive a budget, especially a large number like $5.22 billion. In fact, in the commercial sector you would never ask to spend $5.22 billion without a budget. You would never ask to spend $5.22 million without having a budget, but the Treasurer and, indeed, the government are asking us to approve the expenditure of $5.22 billion without giving us a budget stating what they are going to spend it on. It seems incredible, but it is true. I raised this with my colleagues. I said to the member for Hammond, 'Surely, this isn't the way that the government runs.' He said, 'Steven, you have got a lot to learn in here. This is what they have been doing for eight years.'

But I digress. Nevertheless, we are now being asked to approve this expenditure, but before we do there are a couple of observations that I would like to make on this expenditure. I would like to start with the revenue and expenditure of this government. We call it in the business world a profit and loss statement, but here we call it revenue and expenditure. I am new, just getting the hang of it, but I have a couple of observations. In simple terms, in the business world, we call it 'money in and money out', and it is the same principle, they tell me, in this place.

The first observation I would make regarding 'money in' is that we have had a lot of additional money, which was never budgeted for, arriving in our state. In fact, over the term of this government we have had, would you believe, $3.8 billion for the first seven years of this government. We do not have the eighth year's figures, of course; we are not going to get them until September. Anyway, for the first seven years we have had $3.8 billion worth of unbudgeted revenue, which was never budgeted for by this government; it just arrived.

It begs the question, where is this $3.8 billion? Most of this has come from non-guaranteed GST revenue—non-guaranteed, non-budgeted GST revenue. As you know, when we set up the GST system with the federal government, there was a guaranteed amount that was going to come from the federal government. Our state government, in addition to that, said, 'We are going to budget for this revenue. We have actually received a windfall amount in addition to this budgeted amount.'

The other area of unexpected revenue that we have had in South Australia is in the area of property taxes. Both of these items are outside the control of our Treasurer. GST revenue is not generated by the state government here in South Australia. The property values, which are the basis of our property taxes, are also not under the control of our Treasurer. But he would have us believe that he is a good treasurer—in fact, he would have us believe that he is a great treasurer. But he is not responsible for increasing GST revenue or increasing property values driving our property tax increases here in South Australia. In fact, the only thing which he is responsible for in terms of revenue and which he can take responsibility for is state taxes and charges.

In this particular area he is a leader, there is no doubt about it, because we are the highest taxed state in Australia. Under this government there has been a 66 per cent increase in state taxes and charges over the last eight years, taking us to being the highest taxed state in Australia. In that area he can say that he is indeed a leader.

So I will repeat: we have had $3.8 billion worth of unbudgeted revenue. Where has it gone? With all this extra cash flowing into South Australia, we should be sitting pretty. This is what you do in the business world: if you get unexpected revenue or unexpected profit, you can use it to pay down your debt or use it to spend on infrastructure that your company may need to take you into the future. Of course, the member for Hammond said that it is very similar here and that is what we can do: if we have unexpected revenue, we can use it to drive down our debt or spend it on important capital infrastructure, because that infrastructure is what drives our economy forward in the future.

Instead of driving down our state's debt, we have increasing debt. When I look at the projections for our debt in the forward estimates, it shows that we will peak under this government (because we have it for another four years, now) at $6.829 billion. We have not had that level of debt in South Australia since the financial year 1998-99. That was 12 years ago. We have all this extra money coming in but our debt is going back to levels that we have not seen in this state since 1998-99 when we were, of course, trying to recover from the State Bank crisis.

When we get to this $6.829 billion worth of state debt, which is mentioned in the forward estimates—not in the budget, because we have not got the budget—it shows us we will be paying $711 million per year in interest repayments on our debt. Does anyone think that is an acceptable level? It is almost $2 million per day. What could we be doing as a state with $2 million per day? I think we could be doing a lot.

With this $3.8 billion worth of money you would think to yourself, 'It is good to have that extra revenue because we can spend it on a whole pile of projects that have been neglected for a period of time.' We could, for example, rebuild the Magill Training Centre, but that is not on the agenda. We could be investing in a whole pile of projects for our environment—

Mr Gardner: Britannia roundabout.

Mr MARSHALL: Britannia roundabout—a very good one. Are we doing that? The answer is: no. In fact, under this government we have had a lot of announcements—we have not had a lot of deliverables but we have had a lot of announcements—and I would like to run through a couple of them here today.

The first one, one of my favourites, is the Mount Bold reservoir expansion. Today we heard in the house about the importance of water. In fact, we are setting up a new group to look at this very important area—I think it is going to be called the Goyder Institute. The Goyder Institute will be set up because water security is such a crucial area. In fact, the government made a similar announcement several years ago about the importance of water and said it was going to double the size of the Mount Bold reservoir. Did it do it?

An honourable member: No.

Mr MARSHALL: No, it certainly did not. That was going to cost $850 million of our $3.8 billion, but it did not go ahead.

The next item that I would like to deal with is the prisons project. Everyone in this house has acknowledged that our prison infrastructure in South Australia is completely out of date. The government decided it would go ahead with the $500 million prisons PPP—and I am going to have a lot to say in this house about PPPs going forward, but not today because I am already running out of time. Did this important project, with multiple ministerial announcements about the importance of corrections and corrections infrastructure in South Australia, go ahead? No; this one did not go ahead either. What about the tramline extension to Semaphore, West Lakes and Port Adelaide? This was reported in a ministerial statement at $336 million. Did that project go ahead? No; that one got pulled. They love making announcements. Are members sort of seeing a bit of a theme developing here? Lots of announcements, not many deliverables.

I could go on because I have got a whole page of them here. I can show it to anyone later if they wish.

Mr Pederick: Keep going.

Mr MARSHALL: I will just mention one because I am being encouraged.

The DEPUTY SPEAKER: Hang on, member for Norwood. I know that you are new and, in many ways, I am new, too, but I would encourage you for the future not to respond to too many interjections, because life is a highway and there are some speed bumps along the way.

Mr MARSHALL: Life is a highway and I want to drive it all night long—sage words from the chair.

The DEPUTY SPEAKER: I do not think I said that. I only said the first line of the song. Do not engage in debate with me. Carry on.

Mr Pederick: The Deputy Speaker is always right.

Mr MARSHALL: Indeed, and I will try to refrain. The member for Hammond has been encouraging me to give just one more—

The DEPUTY SPEAKER: No, don't blame other people; just carry on.

Mr MARSHALL: I will carry on with one final note, the Britannia roundabout, which is adjacent to my electorate. The government, leading up to the 2006 election, announced that it would be spending $8.8 million on that intersection. How much did it actually spend? Zero. That is a real litany, isn't it? It is a litany of budget blowouts, delays and, quite frankly, incompetence on the capital account. Let's take a look at expenditure. As we were saying before: money in, money out. We have talked about money in. We have had a lot of it. Money out is called expenditure, both in the commercial world and, of course, in here.

Let's talk about how the Treasurer has gone in that area, because that is something over which the government has complete control. It does not have complete control over revenue, and I accept that, but it does have complete control over its expenditure. Let's have a look at the report card on state government expenditure over the life of this government. Let's go back to the year 2002-03. The expenditure in that year was $184 million over the budget; in 2003-04 the expenditure over the budget was $467 million; in 2004-05 the expenditure over budget was $487 million; and in 2005-06 the expenditure over budget was $370 million. These are all very large numbers.

In 2006-07 the expenditure over budget was $374 million; in 2007-08 the expenditure over budget was $304 million; and then in 2008-09 the expenditure over budget was, indeed, $556 million in one year.

Mr Gardner: How much?

Mr MARSHALL: It was $556 million in one year. In fact, in those seven years I have just spoken about (we do not have the eighth year at the moment) we have $2.742 billion worth of expenditure over and above what the government had budgeted for—$2.742 billion worth of expenditure over and above what it was going to spend money on. Those numbers were taken, of course, from the Auditor-General's annual report dated 30 June 2009. What happened when all this expenditure was completely out of control? The Treasurer, quite rightly I think, said, 'Enough is enough. This over-expenditure is too much.' So, what did he do? He said, 'I'm going to set up the Sustainable Budget Commission.'

My understanding is that this was announced in the last budget period, which was May or June last year. That commission was charged with the responsibility of seeing how we could reduce expenditure—not just bring the expenditure in line with the budget but actually reduce the expenditure, reduce the budgets. Okay; $750 million. This group was announced last May. Has it reported yet, because it has been a year? Has it reported yet? No. We just had an election so it will have to report after the election. We are still waiting on that. In fact, we are going to be waiting until 16 September for the state budget.

We will be very interested to see its report calling for $750 million worth of cuts. What about just delivering the budget as it actually stands? It is one thing to announce a whole pile of cuts in the next budget, but it would just be great if we could actually spend our money in line with the budgets that have actually been set by the government.

We have a government that prides itself on its AAA credit rating. In fact, the Treasurer again referred to the AAA credit rating in the house today, and indeed it is great that we do retain this AAA credit rating—there is no doubt about that—but it is not because of his prudent economic management. In reality, we have a government so drunk with arrogance that it believes the lie that it is a sound economic manager.

Far from being the state's best treasurer, this Treasurer has benefited from multiple free kicks, from windfall gains of revenue over the period of his tenancy, and I put him down as the luckiest state treasurer that we have had. How has he spent this windfall? On unbridled spending and failed infrastructure delivery.

We regret the delay in the release of our state's budget for 2010-11. As I said, it is most unorthodox for any organisation to release a budget three months into the next financial year, but that is what we are going to have in South Australia. We look forward with anticipation to its final presentation.

Mr VENNING (Schubert) (16:21): I congratulate you on attaining your position; I do not think I have done that before. I want to say at the outset that I support the bill, as we all do, because it is necessary for the first few months of the 2010-11 financial year as it ensures that the government departments and agencies will receive funding to cover their costs until this year's budget is passed through the parliament later in the year.

As we heard in question time today, we did question why the budget is so far away. If the English government can bring it on a couple of months, why can't we in South Australia? This is much later than normal. The budget will not be handed down until 16 September, which is really inordinately late.

To hand the budget down so late is a disgrace and demonstrates again that this government is arrogant and out of touch. What is it trying to hide? We can probably make an educated guess: the fact that the state's finances are in trouble. Under this government and the leadership of the Premier and Treasurer, we are paying $1 million (soon to reach $2 million) in interest per day paying their debt. It sounds like the State Bank; we have been there before. It is the debt that is funding their out-of-control everyday expenses and the cost blowouts.

The 2009-10 revenues have increased by $606 million since the 2009-10 budget, but this made little difference because, for the same period, the Rann government increased its spending by $476 million. Despite the financial downturn as a result of the global financial crisis, which the Treasurer repeatedly referred to at the time as having a major impact, revenues actually increased by $1.5 billion from the 2008-09 financial year to 2009-10 due to bailouts from the Rudd Labor government. Spending for this period again increased by $1.5 billion. The Rann Labor government does not have an expenses problem: it has a spending problem, going $2.9 billion over budget since 2002-03.

Despite the Rann Labor government having more revenue at its disposal than any other South Australian government in history, eight years after it was elected to power, it has built nothing, saved nothing and provided nothing for the future. A lot of projects are happening. Cost blowouts are the norm with this government. Look at what has happened with the government's much heralded stadium proposal. It was all smiles for the camera when the announcement was made prior to the election and the Premier and Treasurer were strolling across Adelaide Oval but already, before it has even started, the government's contribution has increased from $450 million to $535 million.

Members interjecting:

The member for Light has just shouted out—and he is now walking out—about not building anything. I was on the Public Works Committee for four years.

The DEPUTY SPEAKER: Point of order, member for Schubert, you are a very competent member, and you should know better than anyone else that we do not reflect on the presence or otherwise of people in this chamber.

An honourable member: Shame!

Mr VENNING: Well, he has now left. What about the new Royal Adelaide Hospital? I remind the house that I spent four years on the Public Works Committee from 2002 to 2006 and there was almost a total lack of any major public work—almost nothing. That is the period we are now paying for—a hiatus period of total inaction.

The Minister for Industry and Trade was on that committee and he would remember that very little came across the desk. That is why we are paying for this now and that is why I am making these comments. There are projects in the making but for all those years with all that money we have very little to show for it.

What about the new Royal Adelaide Hospital on the rail yards? This is projected to cost $1.7 billion but, based on the Rann Labor government's track record, this will certainly blow out and be a huge cost—another State Bank loss disaster. We heard today a figure of $2.1 billion. Was that a deliberate leak? Can it be right? The Treasurer went into great detail talking about the tender process and how secretive it is, but how did that figure come out, if it is correct? We await that with great interest.

Under the Rann Labor government, South Australia has become the highest taxed state in the nation. In a bid to fund the government's out of control expenses and cost blowouts, what do they do? They increase taxes, of course. We heard it again today, with compulsory third party premiums going up.

Following our announcement to lower taxes if we were elected, the Rann government realised that we were onto something and we welcomed the fact that they copied our policy. At least some South Australians will now get some relief—but not for very long. We heard today about the huge increased cost to motorists—a 7 per cent increase is at least twice the CPI rate.

According to the Institute of Public Affairs, South Australia's business land tax liability is 69 per cent above the national average and a massive 536 per cent above the land tax liability in Western Australia. The Rann Labor government must rein in their out of control spending or we will continue to lose business and our brightest and best people interstate.

What did the Rann Labor government do to try to get their spending under control? They commissioned a razor gang to find $750 million in savings. Where will the savings come from? Well, it was revealed last week that many of them will come from Primary Industries and Resources SA (PIRSA). Has the Rann government not taken enough from this area already? Will PIRSA continue to be a soft target for this government?

Under the current budget and over the next four years the Rann Labor government is set to cut $10 million from research and development here in South Australia. It has already axed 106 jobs. Jobs had been cut before I came into this place and it will be tragic to see another 106 jobs go from an already stripped department. If cuts continue to be made there will be nothing left to cut at all.

Farmers in this state rely on unbiased, non-commercial advice on agricultural research, whether it be in the dairy, horticultural, dryland farming, irrigated farming or wine industries. Where will they go for advice when PIRSA is eventually wound down to nothing and is not there, when they have not got the workers and researchers in the field and SARDI is a skeleton of its former self?

This is what is happening, Madam Deputy Speaker. The minister would not talk on radio last week about the rumours going around that PIRSA's budget could be cut by as much as 60 per cent, on top of the cuts already made over the eight years of this government. The figure of 60 per cent is being circulated. Because some departments cannot take a 60 per cent cut but PIRSA can take a cut, I bet it is more like 80 per cent—because it is easy. Some other departments cannot take a 60 per cent cut so they are a soft target.

Flaxley Research Centre was closed, with Victoria now being given the primary responsibility for research into the dairy industry. What sector of primary industries research will be next? Will we lose the wine research centre from Nuriootpa? Will it go—because it is being stripped out? I know where it would go. It would go to the Yarra Valley in Victoria, because they already try to call Melbourne the wine capital of Australia. That is quite wrong. We let that one go too, but technically that is correct.

If we ever lose the Wine Research Centre from Nuriootpa in the Barossa I will be particularly angry, if I am not already. The Primary Industries Ministerial Council is overseeing the national restructure of primary industries research, development and extension, so with this restructure and South Australia's PIRSA budget being absolutely stripped it is only a matter of time before we lose even more of our research facilities. The library at Roseworthy agricultural campus has closed—it has gone. We know that there are many more research offices in Streaky Bay, Jamestown and Keith earmarked for closure. The Loxton Research Centre has been left decimated by budget cuts.

Has the minister of agriculture ever visited one of the research centres in our state and had a talk with the scientists and researchers undertaking such good work? Did he ever visit the agricultural library located at the Roseworthy campus? We are taking away the opportunities for our young graduates to pursue a career in agriculture. Why would a young agricultural graduate want a job with PIRSA with all these funding and job cuts and many projects only being funded for two or three years? Some of those projects are 10 year projects. What do you think you could do in two or three years? You would not even start! Who will invest money in projects like that? It will not happen. This does not offer them a career path.

So what is happening? We are seeing a huge drop-off in the number of people offering themselves for a career in this area. So they will take up opportunities in the private sector and that is what is happening. This is where we get this beautiful commercial advice from. Sometimes it is okay. I look at commercial advice, but it is great to put it against primary industries advice, and you can usually make a decision between the two.

I cannot understand the attitude the Rann Labor government has towards the agricultural industry. It is not only state Labor; federal Labor has the same attitude, with absolutely nothing in the budget for farmers. Farmers are getting increasingly angry that governments ignore them. I am surprised that treasurer Foley does not have more sympathy for our primary industries because when I first met citizen Kevin Foley many years ago he was a staffer and a consultant with the then minister for primary industries, Lynn Arnold. I was also a consultant advising him from the advisory board of agriculture before I came here. That is when I met him, and other people who shall remain nameless, and he began his career there. So, he would have a good background in primary industries, but you would not pick that now.

The primary producing sector has been doing it tough for many years: dryland farming because of the drought—and thank goodness we had good rain the other day; grape growers as a result of oversupply; dairy farmers because of low milk prices and deregulation; and high fodder prices during the drought. And now, South Australian farmers, in spite of the rain we have just had, are having to cope with their seed being eaten by mice and, on top of that, being hit with a locust plague.

This is a time when existing farmers need support—morale is low. We need to be growing our rural sector, not reducing it, to ensure our food security for the future. I say to you, Madam, a person with an open mind, what is most important? This country is flat out digging out all these resources—coal, iron ore, uranium, gold—but you cannot eat any of them. If you are going to continue to import more food, as we are from China—more and more every day—what will happen? We will not produce it ourselves and one day we will have a problem with supply and we will be short of food. Do not expect farmers to crank up overnight and grow food again. The most important thing for a country is to be able to feed itself, and we should always be totally self-sufficient with food because we cannot eat coal. It worries me that we do this. Food security is a big subject for another day. This is all linked to this whole area.

PIRSA and the old department of primary industries and agriculture has a fantastic record over many years—before I came to this place, and I was not young when I got here. I was an experienced farmer before I got here. Farmers rely on non-commercial, independent advice from scientific researchers. The department can be very proud of its record over the years—people like Mr Reg French, who did all the scientific research on root diseases. Most of our researchers were not looking under the ground for problems. Albert Rovira was another excellent scientist employed by the government. The work they did meant that we were able to increase our production and profitability by probably 60 to 70 per cent in five years.

These guys are folklore legend in agriculture in South Australia—government employees. I do not think the private sector could have put in the money that was invested in these people to do this work. So, we really do rely on this work. Research and development underpins our future. The South Australian Farmers Federation, sadly, is very silent; not totally, because we do see the president, Peter White, making some comment, but they are nowhere near reacting enough to this serious situation.

The government thinks that it can get away with this because there is little opposition out there. Well, I am just saying to people that it is time we cranked up. People like you, Madam, would understand. Just check out how much food is not being grown in Australia right now—and you are going to accept that; you are going to put up with that. It is not going to worry me so much because I am on the wrong side of 50, but these people on the other side of 50: it is your future, your children's future and your grandchildren's future. If you are going to rely on China, Chile and other countries for your food and everything else, well, you do it with an open mind. Think about it.

The government is hiding behind this Sustainable Budget Commission (SBC). On 19 September the Treasurer will just axe resources from Primary Industries and Resources SA yet again. In my whole time here, in my nearly 20 years in a month's time (on 23 June I will have been here 20 years), I have seen all governments—

The DEPUTY SPEAKER: Congratulations.

Mr VENNING: Thank you; I haven't made it yet. You take my breath away.

The DEPUTY SPEAKER: Well, congratulations in advance, anyway.

Mr VENNING: Thank you. I have seen this department's budget, and every budget I have been here for, and it has never been increased. It gets the chop every time, and now what we have is a department that is a shadow of its former self. It is a disgrace. We will pay for this, and we will pay dearly. If we want to reverse this trend, you cannot put your hands on scientists and researchers overnight because they are not there. They have been enticed elsewhere. I bet you the Victorians are not cutting back like we are on this research area, because it is very important.

Industry right across the board has to demonstrate to government, to everybody, that it needs independent research, independent development, independent biosecurity, independent advisory services and independent compliance services. I think it is an absolute disgrace that this is happening as we sit here and very little has been said or thought about it.

Our industry is still very competitive in the international market and it is still the envy of most countries in the world. We grow the best food, we provide it economically, and it is the best food environmentally because we do not pollute it. But, it is getting tougher and tougher to stay viable in this climate, because other countries are bringing in food—and under crazy labelling laws they get away with murder. People are buying what they think are Australian vegetables and fruit in our supermarkets, and they are not at all. It is getting tougher and tougher.

I want to pay huge accolades and give thanks to all those researchers who, over all those years, have done so much. A lot of these people have now left the department—and they are leaving in droves, taking packages. One is Mr Rob Lewis, who headed SARDI. I do not know what is happening there, but he has been a wonderful supporter and leader in this area and of the South Australian Rural Development Institute. He has had a fantastic record there. I understand that apparently he is leaving; I heard that from somebody yesterday. If that is true, that is sad, indeed. He is not the only one.

Over the years, our own personal farm adviser has been Mr Alan Mayfield. Guess where he got his training? The ex department of agriculture. He has a fabulous brain when it comes to science and agriculture. Yes, we do pay this guy reasonably well, but he would have been a lot better left in the department where he could assist everybody, irrespective of whether or not you could pay for it. When you have to pay fee-for-service, it is all right for those who can pay for it, but what about those who cannot afford to pay? With the department of agriculture, everybody got the service.

Over the years, we have had a fantastic structure with our agricultural bureaus, our advisory board of agriculture. Can I say this: one of the better ministers I ever worked with was Frank Blevins. Remember Frank from the left? He was a good minister. He did not know a lot, but he had bloody good advisers and he listened to them, and we got results.

The SPEAKER: And he came from Whyalla as well.

Mr VENNING: And he came from Whyalla. The next best minister was John Olsen. John Olsen was the same. He was minister for primary industries for a short while, and he had good advisers and took advice. All I can say is that there have been some fantastic people in that department over the years; a lot of them are still around but some have gone on. There were so many of them.

Ms Chapman: Terry Groom.

Mr VENNING: Terry Groom was another good minister; if only he had stayed as minister, we would have had the department of agriculture moved outside of Adelaide. It should not be in the city. Fancy having the department of agriculture at the black stump. What is that costing? Is that cost effective? I do not believe it is. The Treasurer has just walked in. He could save a lot of money; move it out of there and put it out at least in the suburbs or the regions. In 1993 Terry Groom was going to move it to Clare. If you had won the election in 1993, that is where it would be today.

I just want to say that I will stick by the department of agriculture (now PIRSA) to the end, and I will be a strong advocate. I make a plea to this government: it is very wrong that it should target an institution like PIRSA, because it is an easy target. People will just resign and leave; all these wonderful young people who are coming on, who are in the system, will not stay. They will go. Please have some common sense and support our primary industries. After all, the second biggest industry in the state is our food industry—at the moment, cereal grains mainly—and what is the government doing to support it? It is going to strip out the independent advisory body that we have relied on for so many years. Do not do it.

Debate adjourned on motion of Mr Sibbons.

[Sitting extended beyond 17:00 on motion of the Hon. J.R. Rau]