STATUTES AMENDMENT AND REPEAL (BUDGET 2012) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 31 May 2012.)

The Hon. I.F. EVANS (Davenport) (18:45): I indicate that I am the lead speaker on this particular bill. I understand from the government that we will be doing the second reading stage tonight and the committee stage at some other time, not necessarily tonight. The Statutes Amendment and Repeal (Budget 2012) Bill is the bill that sets out the legislative requirements for the government to undertake the reforms announced in the budget. As has been the tradition, the government will get its budget bill except for the legal provision which was opposed last year and which is in the budget in a modified form this year. For the same reasons as the Liberal Party in opposition put last year we do not see that particular measure as a budget measure as such.

I will just run through the budget bill. There are a number of different matters in the budget bill, and the first one I will deal with is the matter in relation to the Public Service long service leave retention entitlement. The way that I understand this is that, in the last budget, then treasurer Foley reduced the long service leave entitlements for the Public Service. Treasurer Snelling on assuming office agreed to consider a new entitlement in response to the public sector concerns about former treasurer Foley's decision—a decision, I might add, that was taken with the current Premier in the cabinet room, and I suspect that I am right in saying with the current Treasurer in the cabinet room.

In fact, I remember former treasurer Foley enlightening the parliament by saying that, of course, the Hon. Jay Weatherill, as the then minister for the public sector or the environment, had actually informed a lot of the decisions that were taken in the last Foley budget. I think that what then treasurer Foley was really saying was, 'Don't for a minute think that Jay Weatherill didn't support this particular measure. As the minister for the Public Service he was well aware of what entitlements they received, and he was well aware of the reasons why the government took the decision.'

However, the government has reintroduced what I think the Treasurer is calling a 'new measure', that is, a long service leave retention entitlement, the argument being that we need to retain those public servants who have not yet left the Public Service after 15 years of service, and the way the opposition understands that this will work is that it is phased in. With respect to the phasing in of the long service leave retention entitlement, the way that I understand it is that there is a two working-day entitlement for 2011-12. I could not see the cost of that anywhere, so in your—

The Hon. J.J. Snelling: In 2012-13 is when the budget impacts.

The Hon. I.F. EVANS: You might want to explain the reason why. Then there is a two working-day entitlement in 2012-13 at a cost of $20.3 million; a three working-day entitlement in 2013-14 at a cost of only $16.1 million (and I think I now understand what the Treasurer is about to tell me); a four working-day entitlement for the year 2014-15 at a total cost of $22.3 million; and a four working-day entitlement in 2015-16 of $23.6 million, and then it is ongoing at four days per year, so around the $23 million mark and growing.

Treasurer, if your answer is that the $20.3 million includes both 2011-12 and 2012-13, if it is possible to get a split on that, that would be appreciated—in the committee stage will do. My understanding is that this entitlement can be taken as one or more whole working days as distinct from calendar days. In other words, it will be taken on their normal working day. Most of the Public Service work is normally Monday to Friday. Some do work other days, so it is not necessarily a calendar day as in Saturday or Sunday or a public holiday. It is a working day for whatever that public servant normally works. That is the way I understood the briefing from the Treasurer's officers. We understand that this new entitlement has to be taken within five years from the end of the financial year in which it is accrued otherwise it lapses.

There is also the capacity for the public servant to cash out the leave at the rate of $180 a day accrued in the 2012-13 financial year, and then the $180 is then indexed by CPI. My understanding from the briefing is that it applies to 26,000 public servants. I am assuming that is in the 2011-12 year. The Treasurer might want to explain in which year it applies to the 26,000 public servants at the committee stage. The second reading speech refers to it applying to 26,000 public servants.

The other issue is that in the second reading speech it mentions that this particular leave cannot be claimed by people who already receive a retention allowance. On the first reading that would appear to mean that the government does not intend public servants who already receive a retention allowance to accrue this leave. There are some public servants receiving a retention allowance of 10, 20, 30 and 40 per cent of salary.

I did a story with Greg Kelton about that sometime ago. There was a relocation allowance, a retention allowance and an attraction allowance paid at the discretion of the chief executive, and some of those are quite substantial attractions—40 per cent of salary is quite a substantial allowance on top of salary. On the first reading of the second reading speech it would appear that those retention allowances, if people are receiving them, are unable to accrue this particular leave. That is not true.

In the briefing given by the Treasurer's staff and departmental officers, the position is that those people who are receiving attraction, retention and relocation allowances already will be able to receive this particular extra retention allowance on top of those allowances. The people who the Treasurer was referring to in his second reading contribution, according to his departmental officers and staff, where the police, who have negotiated a different leave arrangement, although similar, through the normal enterprise bargaining process. It is interesting that the Treasurer has gone down the path of reinstating or initiating this particular leave entitlement without going through an EB or productivity negotiation with the Public Service.

So, I asked what were the details of the police entitlement, because they had never been given to the house. I thank the Treasurer for his staff getting back to me with some responses at least, which I appreciate. For the sake of the record, in relation to the public sector skills and experience retention entitlement, an employee can only be entitled to one form of retention leave. This leave will not apply to SAPOL employees who benefit from retaining police knowledge and experience in an entitlement established under the South Australia Police Enterprise Agreement 2011.

Public sector employees will continue to be eligible for current salary retention bonuses, which is the point I made earlier. So, some people will get a 40 per cent bonus, and then this extra 40 per cent retention allowance, and then this extra retention entitlement on top of that again. The people who will not be able to double dip will be the police.

From 1 July 2014 (which is an interesting date—this was negotiated in 2011; it starts on 1 July 2014 after the next election) police service leave will be introduced to recognise and retain the knowledge and experience of long serving police officers at SAPOL. After 20 years police service, as distinct from 15 years service in the public sector bill before us, and every fifth year anniversary thereafter (that is, 25, 30, 35 and 40 years and so on), a person employed as a police officer or a community constable will, subject to guidelines issued from time to time by the police commissioner, be credited with four calendar weeks paid leave (that is, police service leave). That is a different form of leave.

This is police calendar weeks leave as distinct from working days leave. The two systems are set up differently. I am not sure what is the reason for that. At first blush at least, it seems a complication as to why you would not have both calendar days or both working days to make it easier for administration and comparison, but the government has not done that. So this will be credited with four calendar weeks paid leave, that is, the police services leave.

The transitional arrangements are that a person who, during the financial year 2014-15, has or attains 20 years or more police service, will be entitled to be credited with three calendar weeks police service leave on their police service anniversary, and thereafter on each fifth anniversary of their police service will be entitled to be credited with four weeks police service leave. A person who from 1 July 2015 attains 20 years of police service will be entitled to be credited with four weeks police service leave and thereafter on each fifth anniversary of their police service will be entitled to be credited with four weeks police service leave.

I am sure that is clear to the house. When you read it carefully and slowly, I think essentially it means that after the 20-year mark the Public Service gets four days extra leave in work days for every five years of service and the police get four extra calendar days for every five years of service. There is a small difference in the first five years between the public sector, between 15 and 20 years, and for the police it kicks in at 20 years. That is my reading, from the humble position of Her Majesty's opposition.

Payment during the leave will be at the person's ordinary time rate pro rata if service is less than full time during the preceding five years, or where there is a mix of full-time and part-time service during the preceding five years. The leave is to be taken at the rate and in the periods of no more than one week (seven calendar days) per year, commencing from the anniversary date on which the person is credited with the leave.

It is interesting that they are limiting it to one week a year. I am not sure whether that restriction has been placed on the new entitlements for the Public Service. I am not sure why one group would be treated differently from the other, but the Treasurer might want to explain that at some point. The leave can be taken in conjunction with all forms of paid leave, and the leave that is not taken up by the fifth anniversary will lapse. A payment in lieu at ordinary time rate, as distinct from $180 a day, will operate if the person ceases employment with SAPOL with an unused credit of police service leave standing to their credit.

The way I understand it, the police cannot cash it out the way the Public Service can cash it out at $180. I think the police actually have to take it by way of leave in one week blocks; that is the way I interpret that. If I misinterpret that, I am sure the Treasurer will come back and correct it in committee. That is the first issue in this particular bill: the public sector skills and experience retention of entitlement.

The second issue is the changes to the first home owner grants. The house might remember that then treasurer Foley, in his last budget, changed the first home owner grants to take it off existing homes, increase the amount, from memory, on new homes and it was then meant to be phased out in, from memory, 2012-13. So this Treasurer has simply said, 'Well, in the last year, 2012-13, the grant was going to be only $4,000; we'll make the grant $8,000 but still stop it in 2012-13.

So, the phase-out date is still the same; they have just listed an amount for the last four years in the course. This was the grant the Treasurer said had an impact of actually making it more expensive for people to get into the market. Now of course he is extending the scheme and increasing the payment under the scheme, even though his view is that it actually makes it more expensive to get people into the market.

I have no doubt the Treasurer is doing it because the housing market is as flat as a tack; it is a line. The housing market has, I think, from memory, the worst number of approvals for something like 10 or 11 years in the new housing market; it has been very flat for a while. I can only assume the Treasurer is hoping that this incentive will kick in and assist the housing industry in trying to get more houses purchased.

The third issue broadly set out in the bill is stamp duty on apartments in the city, which is another complicated scheme. Essentially, what the Treasurer is doing is picking up an idea floated by the Leader of the Opposition, Isobel Redmond, in June last year at, from memory, an Urban Development Institute (UDI) lunch, where she suggested a number of measures that could be looked at to attract people into the city, including possible stamp duty relief.

In this particular section of the bill, there is stamp duty relief. Essentially, as I understand it, a stamp duty concession will apply to all apartments in the Adelaide City Council area and in the North Adelaide area for a four-year period. The concession provides full stamp duty concession, capped at the stamp duty at a value of $500,000 for two years and then a partial concession for the next two years. Again, this phases out, this is not ongoing.

This is a bit like the payroll tax rebate election promise: it was promised before the election and cancelled straight after. Exactly the same thing is happening with this: it has been promised and after the election it is going to stop. This is actually quite complicated when you look at it, or it appears complicated when you read the second reading speech, which says:

For eligible off-the-plan apartment purchase contracts with a market value of $500,000 or less entered into from 1 July 2014 to 30 June 2016, stamp duty will be payable only on the deemed unimproved value of the apartment...and the value of any construction already undertaken and not the full market value of the apartment.

The way I understand that is that if the department is half built some poor soul has to go around and estimate whether the apartment is half built and therefore the value of the work done is $100,000 or $125,000, because it actually states:

...will be payable on the deemed unimproved value of the apartment and the value of any construction already undertaken and not the full market value of the apartment.

That is going to be an interesting job for someone. Private building certifiers, I dare say, are going to make some money out of assessing how much construction activity has actually been undertaken on the site and what is its value. It goes on to state:

Purchasers of eligible apartments where no construction has commenced will therefore pay a level of duty broadly in line with duty paid by the purchasers of house and land packages. This concession will save eligible purchasers of [one-off] apartments up to $15,500.

The Bill sets the deemed unimproved value of an apartment at 35 per cent of the market value of the apartment at [the time of the] contract signing, and the value of construction will reflect the nature of works already performed—

which is exactly my point, that someone has to make an assessment of the value of work performed. It continues:

The bill provides for 6 stages of construction of a multi-storey residential development or substantial refurbishment and the Commissioner of State Taxation will liaise with industry representatives to provide appropriate information about those stages in a Gazettal notice...

I am not quite sure what that means, 'The Bill sets the deemed unimproved value of an apartment at 35 per cent of the market value,' and, 'The bill provides for 6 stages of construction.' I think what it is saying is that they are going to set six levels at which the value can be assessed. Foundations might be one, walls up being another, second fix being another, bathrooms in being another, and they are the six stages that are assessed for the value of work done. I think that is what it means, but in the committee stage we will seek clarification from the Treasurer. The second reading continues:

Where a contract is entered into from 1 July 2014 to 30 June 2016 to purchase an off-the-plan apartment with a market value greater than $500,000, the purchaser will be entitled to a stamp duty concession of $15,500 (adjusted for the construction works completed prior to the date the contract is signed). In effect, a purchaser of an eligible apartment with a market value over $500,000 will receive the same concession in dollar terms as a purchaser of a $500,000 apartment at the same stage of construction of the building.

Again, I will have to tease that out in the committee stage.

The off-the-plan stamp duty concession replaces the existing inner city rebate administrative scheme which provides a $1,500 rebate on the purchase of new apartments in the city centre. The Treasurer might want to bring back, in the committee stage, how many people have availed themselves of the $1,500 rebate for new apartments that currently exists each year for the last full financial year. That sets out the stamp duties measure, and it does create some issues.

I think the member for Adelaide commented this afternoon that units on the old Channel 7 site at Gilberton are outside the scheme, and the government's own Clipsal site at Bowden is outside the scheme, so the government is spending bucketloads of money trying to set up a development site for inner city living and apartments at Bowden and they have exempted their own development from this particular benefit, so that may create some issues for forward sales of those developments. Someone spoke to me about some apartments at Robe and there are other developments on the coast that are now outside this scheme. This will make it harder for those apartments to achieve sales assuming that people are going to be attracted to the city as a result of this stamp duty concession on apartments.

The next issue outlined in the second reading explanation is that there is no stamp duty on the renewable energy certificates—read carbon rights. I understand that this is a national agreement (not that I distrust government when they say it is a national agreement) but I did take the opportunity to ring a couple of other governments of my colour to check, and there seems to be national agreement that no state will charge stamp duty on carbon rights. I am not quite sure why the states are dudding themselves out of a revenue stream given the state of our budget but that is the national agreement; so be it.

The other issue is that RESI is to be dissolved. This bill amends the Electricity Corporations Act 1994 and the Electricity Corporations (Restructuring and Disposal) Act 1999 to allow RESI Corporation to be dissolved. ETSA Corporation was established under the Electricity Corporations Act in 1994 and changed its name to RESI. RESI's principal activity is the litigation of a number of matters initiated by former employees of ETSA or contractors who worked at ETSA sites. The plaintiffs' claims are usually for compensation for breach of duty of care going back as far as the early 1950s, I assume in relation to things like asbestosis and those kinds of matters. The litigation process is complex and is funded from RESI's own resources that were originally allocated when it was established in 2000 and supplements, when required, through the budgetary process.

Due to the falling number of asbestos claims and the reduction in volume in the remainder of RESI's operations, including placement requests from employees returning to the public sector from the private sector, it has become inefficient to continue to run RESI as a separate entity. SAFA and an administrative unit of the Public Service that is primarily responsible for assisting the Treasurer in the performance of his ministerial functions and responsibilities are to undertake the residual activities of RESI following dissolution. RESI will stop its operations at the earliest opportunity but in order to be in a position to transfer assets and liabilities in appropriate time and to manage reporting requirements, the start and operation of the various provisions will be controlled by one or more proclamations until financial statements and reporting has been completed by the RESI board so as to ensure that RESI has zero balances when it is dissolved.

I asked the Treasurer's officers and staff how many cases are live in RESI, in other words, how many live claims are they still litigating? I am advised by the Treasurer's officers that, as at May 2012, 12 cases are live, but have been fully provided for financially. At the time of the windup, which is expected to be around 30 September to allow for the legislation proclamation and closing balances audit, RESI's capital surplus of $3.5 to $4 million will be returned to government—a cash grab by the government, a bonus to the government there of $3.5 to $4 million. RESI's assets at the end of May were $7.5 million in cash deposits with SAFA. RESI, I understand, has a 0.5 FTE which is the CEO.

The next issue brings me great joy and there are not many things in this budget that bring the shadow treasurer much joy. This one does. The taxpayer will be pleased to hear that SAAMC (South Australian Asset Management Corporation) will be wound up.

Mr Griffiths: Bad bank.

The Hon. I.F. EVANS: This is the 'bad bank' as the member for Goyder quite rightly points out. The State Bank Act of South Australia 1983 will be repealed. It is about 20 years since the State Bank disaster hit this particular state. The State Bank cost this state dearly in lost economic growth, lost opportunity and confidence. Many of the head offices flooded to the east, never to come back; and many of our young people flooded to the east never to come back. The State Bank cost this state a lot not just in immediate dollar terms but in economic growth and opportunity terms. This was the entity set up to handle all the ongoing litigation issues and commitments that were entered into by the then State Bank board on behalf of the government through that genius, as the former premier called him, Tim Marcus Clarke. I would not suggest that of Mr Clarke.

The government had liabilities to do with financing cherry pickers, aeroplanes, forests in New Zealand, South African goat farms, insurance liability and hurricane insurance in America. They took on bizarre liabilities and risks which the state paid for for generations, and it was the bad bank's job to wind up all those matters; and it is only here, 20 years later, that that particular entity is now finally being wound up.

SAAMC has now met, according to the government, all the objectives under the act. Dissolution will close down the operation of SAAMC, with any contingencies in either assets or liabilities being transferred to the Treasurer or another state entity, if appropriate. I would be interested to know what the final dividend is in the final winding up. Treasurer, can you give us an indication of what is the likely position and are we going to get much money out of winding up SAAMC?

In fairness, I think your staff have given it to me, now that I re-read the brief. The government advised that it will receive a dividend of $20.2 million and a $700,000 return of capital on 30 June. Within this bill, SAAMC delivers $20 million back; RESI delivers a couple of million back, so there are benefits to the taxpayer or to the budget there. By the time of finalising the windup on 30 September, there could be some further distributions pending finalisation of some liquidations. If these liquidations are not finalised by then, corporate services will replace SAAMC as the creditor. SAAMC's assets at the end of May were $24.3 million in cash deposits with SAFA. SAAMC shares a CEO with RESI—0.5 full-time equivalent—and has a part-time senior accountant.

The next issue is the commercial activities on specified roads and this is an interesting issue. The bill amends the Highways Act 1926—one of the member for Goyder's favourite acts. The bill amends the Highways Act 1926 and the Local Government 1999 to allow for commercial activities on specified roads. The Highways Act 1926 gives the Commissioner of Highways general powers, subject to the approval of the Minister for Transport and Infrastructure, to purchase or acquire land for roadworks or obtain land for any purpose under the act associated with roadworks.

When roadworks are finished, the land acquired by the commissioner becomes a public road and the ownership of the road transfers from the commissioner to the relevant council. Although the commissioner is permitted to generate income from the land that has been acquired for the purposes of section 20 of the act until the land is required for roadworks—for example, rental income from existing properties on the land—it does not have the ability to put in place opportunities of a longer-term nature because the land that is no longer required for roadworks must be disposed of, usually by sale.

The amendments will vest certain existing and future roads in the Commissioner of Highways, rather than allowing them to vest in the relevant council. Upon the completion of the roadworks, this will allow the commissioner, subject to the approval of the minister, to retain land that is no longer required for roadwork, for the purposes devoted to the roads or transport needs. This will give the commissioner similar powers to that which the council already has. The revenue from any commercial activities will be paid into the Highways Fund and it is intended that it be used to fund additional road maintenance. Other states already have such powers—apparently New South Wales and Victoria.

The reason I find this interesting is that—and the Treasurer can correct me in the committee stage if I am wrong—my understanding of what this allows the government to do is to go to someone and say, 'We want to acquire your property, and not only do we want to acquire your property for a road, we want to acquire your property so that we can put commercial activities next to the road.' So, in other words, 'We want to put a BP service station or a supermarket or some residential development—a TOD—next to the road.'

It is interesting that the government would want to acquire the land to do that and not allow private enterprise to do it. I will be asking questions about, when the government notify future acquisition holders that their land is going to be taken away for road and commercial activities, whether they have to nominate the commercial activity so that the person having their property acquired can have the proper value assessed.

For instance, if Iain Evans's property is acquired for a road and only a road, it has one value. If Iain Evans's property is being acquired for a road, three pubs, a TOD and a supermarket, then it has a totally different value. As the government is acquiring someone's private asset against their will—otherwise it would not be an acquisition: it would be a sale—they are entitled to full and fair compensation. My understanding is there is an appeal mechanism to the Supreme Court so that, if there is some dispute, then the Supreme Court can establish the full and fair value.

So, that is into the future for future acquisitions, but the problem comes I suspect, with existing land that has already been acquired for a purpose. What about existing land that has already been acquired for a purpose? The person has been paid out on the basis that their land was acquired at a value because it was going to be acquired for a road and now the government wants to put a supermarket or a pub or a TOD on that land, which totally revalues the land.

The person who has their land taken off them at a lower value, is now not getting full and fair valuation. So, I want the government to explain to me if they intend to go back and deal with people who have had their, in some cases, land held in their families for generations taken off them at a low value because it is going to be a road, only to have the government now reclassify the land so that the government can gain income.

Let us make no mistake about it. It is about the government making the income, not the private citizen. What this intends to do is allow the government to put up those beautiful road signs that you see in the American movies: all those trashy road signs. That is what this is going to do; it is going to allow McDonald's and Hungry Jack's, all those big advertisers, the Motor Accident Commission and others, to put up advertising billboards down all the freeways and highways. That is exactly what this is for; that is what the budget paper says, to put up advertising so that they can get an income stream from that. That is one area.

It goes on to say that they can put up buildings, pubs, supermarkets, residential apartments, the works. The reason this becomes of great interest is that my understanding is that the government spent about $30 million on land down with the Superway project, and I will be asking the Treasurer in the committee stage about what the intention is for that particular land. I am sure the person it was acquired from—I understand it was acquired; purchase is a different issue—will be interested to know that their land was acquired for one purpose but may well be used for a totally different purpose. I am not sure exactly what the government's answer will be to that particular question.

Another issue raised in the bill is that of the payroll tax exemption for apprentices and trainees. This was the great promise before the election: the government was going to go out and cuddle all the apprentices and trainees, offer a rebate for their employers of up to $1,440 a year for each year of the apprenticeship and traineeship. Now, of course, straight after the election their budget is in trouble and they are cancelling it. My understanding is that there is going to be a grants scheme available to registered training organisations—read group training organisations generally—for those apprentices that they finish.

I do not think it applies to trainees, or it may apply to trainees but only in selected priority areas. What they will do is that, if you finish the apprenticeship you will get a payment based on completion. This scheme disadvantages the single indentured apprentice, or the employer offering a single indentured apprenticeship, not through a group training scheme. I have spoken to the Housing Industry and others in the building industry, and they say that the problem with this scheme is that someone not going through a group training scheme is totally cut off. One thing I will be asking the Treasurer is to explain exactly what happens in those circumstances, and what happens to the single indentured apprentice. We are not supportive of the cut to the payroll tax exemption rebate if it does that.

The next one is the new tax that the Treasurer said they are not having, which is the animal health cost recovery—read biosecurity—levy. We could not see anywhere in the budget where it actually identified the figures, but we asked for those figures and now understand that the animal health biosecurity fee, which is different to the property identification code (PIC) fee, is a new levy. They are expecting to collect, from the animal health biosecurity fee, $740,000 in 2012-13, $1.72 million in 2013-14, and $3.14 million in 2014-15. PIRSA has been consulting about this for a number of years, and no-one can explain to me how this levy will be collected. The government's brief to me is:

PIRSA is seeking advice from stakeholders on the design of any mechanisms to charge and collect funds through the Animal Health Cost Recovery Reference Group. There needs to be a program in place which directs from industry's perspective where the effort should be focused and the level of service required. The exact services covered are being refined—

so we do not even know what the levy is for as yet—

under this engagement with stakeholders. The group is looking at the current program and the biosecurity risks to the industry.

The Bill creates a framework to enable cost recovery of the animal health program, dependent on the outcomes from the Animal Health Cost Recovery Reference Group. The Bill will establish a Livestock Health Programs Fund. The Fund may be applied by the Minister in payment of expenses incurred in programs for purposes including:

certifying or demonstrating the disease free status of livestock for the purposes of markets outside the State;

detection, reporting and investigation of diseases that may affect livestock;

maintaining laboratory diagnostic capability in relation to diseases that may affect livestock and subsidising the cost of laboratory tests;

consulting with livestock advisory groups, veterinary surgeons and other public sector agencies and interested persons in relation to detecting, controlling or eradicating diseases that may affect livestock;

From that line, it appears to me that the government is bringing on a levy to pay public servants to consult with public servants about the purpose of the levy. It clearly states, 'consult with other public sector agencies', so that is clearly part of the intent. The last dot point states:

providing information and training in relation to detecting, controlling or eradicating diseases that may affect livestock to persons in the livestock industry, veterinary surgeons, employees in the administrative unit and other interested persons;

participating in national bodies and programs relating to detecting, controlling or eradicating diseases that may affect livestock;

otherwise ensuring that the administrative unit has the capacity to respond quickly and appropriately to any outbreak or suspected outbreak of a disease that may affect livestock and to coordinate the response with other agencies or instrumentalities of this State, the Commonwealth or another State or a Territory of the Commonwealth.

So, that is the animal health cost recovery, or biosecurity, levy. The reason I raise concerns about this levy is that no-one can tell me how it is going to be collected and how it is going to be charged. For instance, let us take six different livestock holders: someone with beef cattle, someone with dairy cattle, someone with horses, someone with goats, someone with alpacas and someone with chooks. All of those livestock are different, they all have different diseases, different needs and different management techniques. Currently, there is no bill that goes to all of those people at the same time, so there is no invoicing mechanism already.

Unlike council rates, which the natural resources management levy, the River Murray levy and the emergency services levy all have an invoice arrangement with, there is currently no uniform invoicing arrangement or charging mechanism across the livestock industry. After two years of consulting on this particular matter, no-one can explain to the opposition how this matter is going to be charged. Is it going to be per head of population? Are 10 chooks going to be charged the same as 10 cows or 10 horses? Is it by the level of disease? For instance, is the mad cow disease, which is a very serious disease, going to have a different levy to a disease in hens?

No-one can explain to me how this is going to work. I specifically asked, in the briefing, for someone to explain to me how this was going to work. It seems extraordinary that the government would introduce legislation into the house as part of the budget bill when no-one can explain the mechanisms of how it is going to charged, when it is going to be charged, who is going to be charged and what it is going to be charged for.

This is nothing more than cost recovery by the government. I know my colleagues are waiting for me to say that we will be opposing this levy, and indeed we are. If the government proceeds with the levy one of the first things we will do in government is review the levy, because at that point it will be less than two years old. There is half a chance this levy may not even get off the ground if the government cannot work out how it is going to charge it and how they are going to collect it, because the collection costs become an issue, as we knew in the early days of the emergency services levy.

I am assuming that the figures given to me are net of collection costs, and I will be asking the Treasurer more about that in the long-awaited committee stage on this bill, which will be at some point in the future. I am assuming it will not be tomorrow, but after estimates, which will be interesting.

The Hon. J.J. Snelling: Probably, if it is not tomorrow.

The Hon. I.F. EVANS: Sorry?

The Hon. J.J. Snelling: If it is not tomorrow, it will be after estimates.

The Hon. I.F. EVANS: Yes, I am assuming it will be after estimates. I will have to seek advice from the Clerk as to whether we can ask questions in the estimates committee about a bill that is before the house. That is an interesting constitutional question for all those people out there who are interested in the state's constitution.

The other issue covered by the bill is the one-off water rebate. This is the rebate given to households because of the extraordinary increase in water prices due to the bungling of the desalination plant construction by this government. Water prices have gone up around 249 per cent under this government prior to the rebate.

The rebate, of course, is a one-off rebate, whereas the water prices go up every year. Again, I guess it is a cost of about $45 million in relation to the water rebate. Even though it is a one-off, the cost of living in South Australia is so high that any measure to reduce the cost of living—and this one in particular—would be supported by the opposition.

The last issue is one that we will not be supporting as part of the budget bill, and we will be seeking to take it out of the budget bill as we did last time, and that is the amendments to the Summary Procedures Act. We are still consulting on this with the Law Society and the Lawyers Alliance.

My understanding of this particular provision is that the Statutes Amendment and Repeal (Budget 2012) Bill proposes to amend the Summary Procedures Act 1921 so that costs will not be awarded against any party to proceedings for an indictable offence unless the court is satisfied that the party has unreasonably obstructed the proceedings, or if proceedings are delayed through the neglect or incompetence of a legal practitioner, or a prosecutor who is not a legal practitioner. The amendment brings the Magistrates Court into line with the superior courts where there are no costs awarded on an indictable offence.

In the Statutes Amendment (Budget 2011) Bill, the government sought to amend the Summary Procedure Act 1921 to establish a presumption that costs would not be awarded against police in a summary prosecution, even though the prosecution had been unsuccessful. That measure was opposed by the Liberal Party and successfully removed in the Legislative Council. The bill reduces the court's discretion to award costs against the police. The changes were proposed by the 2010-11 Sustainable Budget Commission Report. The estimated savings were $1.6 million, the same as last year.

The Law Society has been consulted, and its initial answer to the opposition is that the proposed amendment on costs in the summary jurisdiction is a significant one with potentially great ramifications, and one they strongly oppose. The principal concern of the Law Society appears to be that the measure undermines SAPOL's accountability and the incentive of police to maintain quality prosecution services. The fact that the police are subject to cost orders appears to be the major factor in ensuring that only the more meritorious matters go to trial. If the police are to be immune from a cost order, the fear is that a greater number of unworthy matters will be charged and proceeded with.

The effect of section 188A is that costs will not be awarded in summary proceedings relating to an indictable offence. The width of the phrase 'relating to' suggests that the court will not be able to award costs in proceedings where summary offences are joined with at least one indictable offence. Police may be fiscally encouraged to keep, or even add, an indictable count, whereas otherwise they may have withdrawn it in negotiations with defence to narrow the issues at trial.

The other potential impacts of the bill include: costs previously awarded against police to clients of the Legal Services Commission will not be awarded and the commission will need to carry a portion of those costs. Given that the Legal Services Commission is publicly funded and may have increased costs, the net impact on the budget is likely to be well under $1.6 million. The ban on police costs is also likely to simultaneously increase demand for legal aid.

In fairness to the government, the answer with regard to the impact on the Legal Services Commission from the Treasurer's staff and officers was that the Legal Services Commission has not raised any issues relating to the amendment. I just ask the Treasurer to confirm that they were actually consulted on the bill. The other potential impacts include: less incentive to finalise a case where costs can be used as a threat (e.g. will not seek costs if cooperation is achieved). If costs are expected to be borne by the defendant, it may remove this bargaining tool. In addition, there may be an increase in civil actions against SAPOL from lawyers seeking costs. The 2011 bill and the 2012 bill were both SA Police initiatives and neither was subject to consultation with stakeholders.

As we argued in 2011, this measure is not a budget measure and should have been presented in a normal bill. Coincidentally, the parliament is still considering the Statutes Amendment (Court Efficiency Reforms) Bill 2011 which proposes increasing the number of cases being dealt with in the Magistrates Court (and the number of cases affected by this proposal). That bill is already amending the Summary Procedures Act and this proposal should have been dealt with in that bill. This proposal is a change of criminal procedure impacting on legal costs awards and the opposition is of the view it is not a general budget measure and undermines the justice processes. For the same reason as last year, we will be moving in the upper house to take it out.

As for the rest of the bill, as is tradition, the government gets its budget bill. With those few comments, that completes my second reading contribution.

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (19:36): I thank the member for Davenport for his support. Rather than attempting to answer every question he has raised in the second reading contribution, I will come back to him during the committee stage and answer his questions in detail. With that, I commend the second reading of the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Progress reported; committee to sit again.

At 19:39 the house adjourned until Thursday 14 June 2012 at 10:30.