NATURAL RESOURCES COMMITTEE: LEVY PROPOSALS 2011-12

The Hon. S.W. KEY (Ashford) (11:40): I move:

That the 50^th to 56^th reports of the committee relating to the Natural Resources Management Board levy proposals 2011-12 for Kangaroo Island, South-East, Eyre Peninsula, Northern and Yorke, Arid Lands, Murray-Darling Basin, and Adelaide and Mount Lofty Ranges, be noted.

One of the Natural Resources Committee's statutory obligations is to consider and make recommendations on any levy proposed by a Natural Resources Management Board where the increase exceeds the annual CPI rise.

Of the seven proposed increases in division 1 land-based levies for 2011-12, all were higher than the CPI rate which, for the current financial year, is 2.6 per cent. All bar one of the division 2 water levy proposals were also higher than CPI. Considering that these levies presented a challenge for the committee, and, while we were sympathetic to the desire of natural resource management boards to increase their funding bases, members believed that, in principle, above CPI increases should be the exception rather than the norm.

In this instance, the committee has determined not to object to the levies, while also suggesting that arrangements around the setting and collection of levies should be reviewed as part of the board's budget planning process for 2012-13. Some reflections on the individual board proposals follow.

The Adelaide and Mount Lofty Ranges Natural Resources Management region continued its equalisation process begun in 2009-10 to bring all division 1 levies to parity by 2012-13. Prior to 2009-10, levies ranged from about $17 to $47 dependent on the local government area. The committee supports the equalisation concept. Once the equalisation process is completed, the committee will expect future increases to be limited to CPI.

The committee accepted the South-East NRM board's argument that it needed to increase its division 2 levy to offset reductions in water allocations which are under review. In the case of the Arid Lands NRM region, the Natural Resources Committee objected to the proposed 900 per cent increase in its division 2 levy back in 2009, suggesting a more moderate increase and also an increased division 1 levy in order to spread the impact. The levy proposal was consistent with those suggestions.

In the case of the Murray-Darling Basin region, the NRM Board receives considerable funding from the Australian government for water projects. The board is concerned that this funding may decline or cease once a new Murray-Darling Basin plan has been adopted. Consequently, it has sought to increase its levies to offset the risk.

A number of other factors were raised by boards in their appearances before the committee as part of their justifications for above CPI increases. First, staff wages will increase by 2.5 per cent under enterprise bargaining arrangements in the coming year. Maintaining wages, salaries and staffing is important, and these are a significant proportion of the board's budget.

Secondly, commonwealth funding is uncertain beyond 2013. The Caring for our Country program provides 23 per cent of total funding for all the South Australian boards. It is the second biggest source after the regional NRM levy, which contributes 40 per cent on average.

Thirdly, NRM boards have differing chances of attracting additional funding. Some boards (for example, the Arid Lands board) have been successful in negotiating generous grants from mining and pastoral companies, while other boards have only very limited opportunities to target private sector funds due to the size or their location.

On another matter, members recently heard from the Presiding Member of the Northern and Yorke NRM Board, the Hon. Caroline Schaefer, who was also a former member of our committee. Members heard that the requirement for the boards to review their business plans and levies annually is onerous and resource intensive. The quote I am about to give is long, but members of the committee believe that it is an accurate reflection of the experiences of the majority of NRM boards. I will now quote from Ms Schaefer's evidence to the committee:

I spent some six years on your committee, and one of the issues that always bemused us was the amount of time that it seemed to take for an NRM board to achieve anything. Now that I am wearing a different hat, I thought it may be opportune for me to tell some of the frustrations that I, my board and, I suspect, public servants, feel in terms of the maze of checks and balances that are in place, I think, to the exclusion of efficiency.

As an example today, I will run through the process that is required by legislation for us to bring this business plan to you. The business plan is a revolving plan of the three years, but is renewed annually, as this is the requirement. In order to review it annually, the board meets a minimum of two, probably three times, when they discuss what its priorities will be. So, when we start looking at our plan for 2012-13 in about July or August of this year, we will have two or three board meetings. We will set priorities. We will send the draft to DENR. DENR will then see that our priorities are not at odds with the priorities of the government of the day, and they will send it back to us.

We will then be obliged to hold a minimum of three public consultations, but they have to be advertised first. By this stage you are getting to around about Christmas. Blind Freddy knows that, in the country, people are reaping, then they go to the beach. So, you have to have that advertising in prior to that, because you must have public consultations before the end of February.

We send a request that we can advertise these publications for this amount of time. DENR in fact chooses what size advertisements will be put in. This year we are treated to about a quarter page in the local press, and a thumping big one in Saturday's Advertiser which we as a board paid for when, frankly, a public notice in the local press would have covered the same people.

The advertising is done. We then have three public consultations. This time they were in Clare, Maitland and Orroroo. We can have to disseminate what we learnt from these public consultations, plus take written submissions from anyone who chooses. We have a cut-out of date, some time in February...There are almost always, I am assured, a couple of late submissions, notoriously from government departments, but that's beside the point.

We then have to have a couple of board meetings to assess what those submissions have said to prioritise them, to draw up a final draft, which then goes to Adelaide, through DENR. If they believe it is compliant, it then comes back to us, then it comes to you and, at the same time, it comes to the minister. The minister, if you have no objections, usually provides our draft plan and it becomes our business plan.

So, our business plan which is, in fact, really any that levy (which is very little change from previous years), is taken from August to May to become a working document for us to use. I do not necessarily have any answers to that but, as I see it, if that was some sort of business out there, with two or three layers of that process cut out, it would be more efficient. It ties up a huge amount of resources within the board which, in spite of public perception of NRM boards, is neither over-staffed nor over-financed. It takes a huge amount of time of board members, and I don't believe it could possibly be the most efficient process.

I have to say that our committee unanimously concurs with the Hon. Caroline Schaefer that, based on her description, the process of any review of the levies appears to be onerous and inefficient. In the interest of addressing some of these points, we have sought a meeting with the minister to discuss the process and ways in which this can be improved.

I would really like to commend the members of our committee: Mr Geoff Brock MP; Mrs Robyn Geraghty MP; Mr Lee Odenwalder MP; Mr Don Pegler MP; Mr Dan van Holst Pellekaan MP; Hon. Robert Brokenshire MLC; Hon. John Dawkins MLC; and the Hon. Russell Wortley MLC. Finally, I would like to thank the committee staff for their assistance. I commend these reports to the house.

The Hon. R.B. SUCH (Fisher) (11:49): I will be very brief.

Mr Pengilly: Good!

The SPEAKER: Order!

The Hon. R.B. SUCH: I think there is an echo in here somewhere, Madam Speaker. It sort of comes from Kangaroo Island way. I notice that the NRM Committee is looking at the levy proposals. It used to be done by the so-called powerful Economic and Finance Committee. The point I make is I think is a good thing that we have scrutiny over agencies and semi-government agencies—whether you want to call them—quangos or whatever.

The irony is that we do not apply the same scrutiny to government departments that spend millions and millions of dollars. People say, 'You've got estimates,' but estimates is not really a forum where you can apply the same rigour, the same intensity, that you can in a committee and as used to happen with the Economic and Finance Committee when it came to NRM levy proposals.

I think the concept is good, and every agency, large or small, should be held to account for expenditure of taxpayers' money. I make the point that this is good but that we do not apply the blowtorch equally to other larger government agencies that spend many more times the amount of money than these boards do. I challenge anyone to show me that the estimates committee does that job. I do not believe it does, so what we have are millions of dollars in government agencies that are not really subject to any detailed scrutiny.

You will see in a few weeks when agencies front up that some of them spending $600 million or $700 million will only get supposedly scrutinised for a few minutes. It is farcical. This is a good process, I believe, but I have never understood why the NRM boards are put through the hoop and others just are put through some little minor consideration.

Mr VAN HOLST PELLEKAAN (Stuart) (11:51): As a member of this Natural Resources Committee, I am keen just to say a few words. It was interesting to hear the contribution from the member for Fisher. I think there should actually be the opportunity for slightly more scrutiny of the natural resources management boards when it comes to approving their levies. As our chair has suggested, we have approved all the levy increases that were put to us, but I think it is very fair to say that the committee approved them with some concern.

Certainly, on my own behalf, I should say that I am not comfortable with the process that is set up by legislation to go through and address the increases that were put to us. I think the time frame is far too short from when the reports are received to when the decision has to be made, and that is not a fault of the NRM boards in any way. They are fitting into the legislation the same way the committee is, but the time frame is too short, and the opportunity for the Natural Resources Committee to scrutinise the information is quite short.

I am also very concerned with what I see as a reversal of the original intention with regard to increases in excess of CPI. It was certainly established that increases in excess of CPI would be the exception, that they would be addressed by the Natural Resources Committee and that there could be a thorough interrogation or discussion with the board, looking at the reports to see whether or not that was justified. Then the committee could determine whether it wanted to approve it. That all makes sense.

What has actually happened, though, is that now we are really in a situation where all the levy increase requests are in excess of CPI, and it is the exception to try to hold them back. The system has been turned inside out, and I think that is inappropriate. This issue has been discussed within our committee, and I am sure that we will as a group address that together. I think it is very important that we do.

I think it is worth saying also that these NRM boards are in a very difficult situation. They are trying to do work for which, at one level, it could be said there would never ever be enough funding to do all the jobs that would be on their plate, so it is quite natural that they would always be seeking as much funding as they can possibly get. It is quite natural that they are hungry to do a good job and that they would always seek increases above CPI, so that is how the system has been turned inside out.

There have been issues addressed in this chamber in regard to overzealous and officious pursuit by NRM officers. I think that will probably be mentioned in speeches by members following me. I would have to say though, in fairness, I do not see that and I do not have complaints of that coming to me with regard to the NRM boards that operate within my electorate. If anything, it is a bit the opposite. People come to me and say, 'Look, we've got these problems, we've got these issues that need to be addressed. Why aren't the NRM boards doing it?' Again, that comes back to funding. The NRM boards are really stuck with regard to how much work they can do with the budget that they have. I am not making any excuses for them; they do as much work as they can. The member for Ashford, our chair, has given an extensive quote from the Hon. Caroline Schaefer, who both was on our committee and also is now a presiding member, highlighting some of the problems that the NRM boards have to work with.

The reality is, they would never ever have enough money to address all the natural resources and environmental issues that they would like to address and the community would like them to address. Nonetheless, if there is a process in place that is meant to set how their funding increases are provided, we need to stick with that process, and if it is not working, as I believe it is not at the moment, that process needs to be addressed.

Finally, I would like to pay tribute to the member for Ashford, who, in my opinion, is a very effective, very diligent, very fair committee chair. I appreciate her work on behalf of our committee.

Mr PEDERICK (Hammond) (11:56): I rise to speak to the report on the Murray-Darling Basin, the report of the Natural Resources Committee relating to the Natural Resources Management Board levy proposals. I note a former interest of my family in natural resources management. My wife did have a senior position. She was on the Integrated Natural Resources Management Board in the Murray-Darling Basin and worked there for several years.

Over that time I believe staff have quadrupled, and I stand corrected if someone wants to correct me, but since those early days staff have quadrupled in relation to the work of the board. So you have to question how much money is raised out of these levies that goes to those wages? How much work of the board does actually hit the ground? This is what bothers me with natural resources management. Now we have the Department of Environment and Natural Resources moving in with them it is becoming a pseudo government department; it is essentially becoming a government department. Are we having landholders funding activities that should be funded by government?

It is outrageous that in the Murray-Darling Basin proposal there is a proposal for a 38 per cent increase for division 1 levies and a 10 per cent increase for division 2. With the division 1 levy, it goes from $1,448,500 to $1,993,500, up by 38 per cent, and then we see the division 2 levy go from $5,779,250 to $6,350,822, a rise of 10 per cent. Once again, we see landholders, good people, good operators, people involved in agriculture, being hit up with more levies to a state government. These are people already reeling under 50 and 60 per cent increases in costs. I seek leave to continue my remarks.

Leave granted; debate adjourned.