SUPPLY BILL 2013

Second Reading

Adjourned debate on second reading.

(Continued from 30 April 2013.)

Mr GRIFFITHS (Goyder) (12:44): It is a pleasure to contribute on behalf of the opposition to the Supply Bill and, indeed, recognise the provision of funds that it makes available to carry forward until the budget has been formally adopted as part of this rather interesting process that occurs. A lot of words are said; there is no doubt about that. As a person who follows the numbers and has done so for the last seven years while in this place, and for some time before I came in, and who has a deep interest in numbers, I am interested in how the budget stacks up and the effort that goes into it.

I am respectful of the amount of time that departments put into that, the effort of ministers, the level of review that takes place, the level of debate about priorities and, indeed, the decisions that are eventually made and how that impacts on taxation policy and services. It is the full conclusive argument that comes forward.

While at this stage we are only talking about 22 per cent, or thereabouts, of what the total budget might be, they are very important dollars and they impact very seriously on what the future will be for the state. In that regard, it is a great pleasure to make some small contribution. I am going to try to recognise some things that are done well, some things that are not done quite so well, some frustrations, some issues that are raised in the community and some general issues too.

I have always come from a background where there is a need to live within means. As a humble person raised within a single-parent family, really responsible budgeting was needed in our household, and it has been something that I have tried to live my life by too, and in organisations that I have worked for. I do recognise, though, that there is a need to invest to make an economy grow and invest to give a chance for an economy to do well. When an economy does well, individuals do well as do businesses that exist in communities too. So the framework around which we operate is an absolute key for me.

That is why I understand that, in difficult times—and from early 2008 onwards, the state and the nation has faced a great challenge—what we do in terms of the levels of expenditure that have been estimated, where revenue has come from, monies that have been borrowed, the challenge that it represents to people paying bills, the difficulties for businesses and the cost of living pressures that people are under really all come into this complete mix. We try and make it right every year and there will be lots of debates about the appropriateness of that, but an enormous effort goes into it. When you look at the figures, though, you really have to be a little bit concerned in some ways.

There will be other members in this chamber who will focus really seriously on numbers and the dollars. I want to talk about the impact on people too, but there are some numbers and dollar figures that need to be emphasised and respected. The level of deficit in this financial year's budget is a great concern to anybody and I know when you look at what the initial projection was four years ago and what this year's case was going to be, the scenario is very different because of circumstances around that, but there is also a recognition of where expenditure control comes in. That, I think, comes down to a ministerial level of responsibility.

When we look at Public Service numbers, I know that there are a lot of figures that can be quoted about budget numbers that allow for increases and other excess numbers that have been brought into it in recognition of schoolteachers, doctors, nurses and police officers, and when you discount that out, you still come back to a number in the region of about 13,000 but they are still real people too. Those people rely on that employment opportunity, but the cost of employing those people is the responsibility of the taxpayer, so there has to be the balance between them.

I am a person who has believed quite seriously in the AAA credit rating, which the state has had the benefit of for a few years after some very challenging economic times, and the opportunity that that presents. It is a great chance to market a state when it enjoys a AAA credit rating. It shows a level of responsibility, a level of buoyancy, a level of belief in the society that the government in control is managing things very well and the AAA credit rating is there. No matter what the circumstances have been before, it relies upon disciplines to be in place, so the decision made to forgo to some degree the AAA credit rating and the subsequent decision by the rating agencies to take that away from South Australia has come at a cost.

There was an effort made to retain it—an effort that involved forward leasing of rotations of the South-East forests and also the betting opportunities that are provided through newsagencies—but it has still been lost. There is a difference in the figures regarding what the potential impact in financial cost will be as a result of additional loan repayments, but this overall impact also concerns me. Every dollar is important—I will never deny that—but it is the perception by which South Australia is judged that causes some great concerns.

When the economy is right, business takes chances and, when business takes chances, people benefit from that. Chances are gained through hard work, enterprise, skill and initiative, but the reward can be immense because people recognise that. It provides opportunities for the next generation of employment to come through and for some of our older workers who are struggling in industries to have a second chance when those chances might not have otherwise been there, but it has to be right.

There will be a lot of challenges over the next 10½ months in policy work certainly, from both of the major parties and every potential politician, to put forward their initiatives that will help the economy because that is the absolute key thing you have to try to do, no matter what level of representation you want to achieve in your life.

There is a lot of talk also about the desal plant. I was lucky enough to be part of a group of people who went to Western Australia to look at their desal plant—a desal plant costing $300-plus million and about $67 million for the interconnector pipe. I was excited by the opportunity it brought to South Australia, in a much smaller scale than what has been built.

When we announced our policy and asked whether it was appropriate to have a desal plant in place, I remember, Mr Deputy Speaker, the reply you gave, which I will not put on the record—but others probably have already reported that. It is important for the community to have that technological water solution, but the great debate will always be about its size. I am glad that it has rained in recent years. I wish that it had rained a lot earlier this year; it would have been much better than having to wait for the rain being presently forecast.

However, having that level of security through a guaranteed water supply will make an enormous difference, but it comes at a cost. The very significant increases in the cost of water in recent years is putting even more pressure upon ordinary South Australians, no matter what level their income, to pay their water bills. That in turn impacts cost of living pressures on them and what they can provide for their family and the communities in which they live, too.

As an adjunct to water costs pressures, in terms of agricultural production, in the community in which I live on Yorke Peninsula there is an intensive animal-keeping opportunity. I have had contact from people who have expressed great concern about their ability to continue to do that because of the water costs. I am not suggesting any form of radical concessions for agricultural production, but there has to be a balance there so that, when there is an associated economic activity, with an important service and an important set of infrastructure, you look at the fees that are applied on that in order to ensure that it gives that associated industry a chance to be successful.

No matter what side of the chamber you sit, you probably have been approached about the cost of living. I constantly have people coming to me about the cost of electricity, their water costs, their council rates, their vehicle registration issues and what it is costing them for insurance on their property and the cost of education. It is the collective of that that causes a lot of concern for all individual members of parliament. We try to get it right. There are those on your side of the chamber, Mr Deputy Speaker, who have dealt with this intimately for years, and I respect that. They must feel the pressure in exactly the same way we do. The issue that is facing our state and our nation is trying to get it right.

Electricity costs are getting a bit scary. It is rather interesting that policy work which has encouraged people to take up photovoltaic cells has resulted in an uptake far in excess of what was originally intended. There was great dilemma when that debate was happening about what the appropriate level of the feed-in tariff was going to be and about what the social impact would be upon people, many of whom cannot afford photovoltaic cells.

My understanding is that about 15 per cent of electricity consumers have the PV cells and that the 85 per cent who do not—and indeed the other 15 per cent—are paying more in electricity charges to compensate for the feed-in tariff, which does not come, as some people seem to think, from a magical bucket of government funds but comes from the fees that everybody pays, and that is creating pressures.

No matter how conservative you are in your business or in your home, the electricity issues are causing a lot of worry. There are members who will stand up and say that they are aware of people who are using candles, instead of turning on the lights, because they feel as though they cannot afford to pay for that, so they are looking at every opportunity to keep their costs as low as possible. That is a pressure we all feel, no matter whether you are in charge of the Treasury or part of an opposition that would love to have the opportunity to be in charge of the Treasury. To get that right will be the key issue the election next year will be fought on. It will be what people pay, it will be the appropriateness of what they pay and it will be what they feel is the value they get for what they pay. All of us will be announcing many things over the next 10½ months to get that right.

I have looked at some of the responses to the Mid-Year Budget Review in anticipation of what is going to come in about five weeks' time when the Treasurer and the Premier present the budget to South Australians. It is interesting when you look at the deficit periods that have existed in recent years, other than the one surplus, which was in the 2009-10 financial year. I looked at the finances very closely in that financial year and there were some exceptional circumstances that created an opportunity for a surplus to be recorded. Most of that was as a result of money transfers from the federal government to the state government.

Indeed, I remember a telephone call not long before the 2010 election, when the very strong belief in increased GST revenue to the state made an enormous difference to the financial projections put out by both parties during the 2010 election campaign. It has shown what the challenge is. Deficits and surpluses are measured by the ability to create a strong environment to bring about a revenue opportunity through transactions and, indeed, the ability to manage expenses. That is where my great concern has always been in the seven years that I have been here, that is, management of expenditure control being in place. That is why I have referred briefly in the past to the Public Service numbers, and that is where it comes from.

I do not criticise the people who have been given the employment opportunities for that. They have taken what is legally available to them. My concern has always been about the level of unbudgeted number of public increases that, I think, has been total ministerial responsibility, because it is those people, through the controls they have in their organisations and departments, who have said yes to positions being created when it should have been obvious to every person that there was no money to pay for those positions.

Then you have these situations in mid-year budget reviews. I vividly remember one about 3½ years ago when, within six months of a budget coming down, there was a mid-year budget review and over the next 3½ years on the wages liability South Australians were going to be up for another $500 million from what was budgeted for only six months before that. I wonder how you can control things at that level and expect the finances to add up at the end of the financial year and expect the forward capacity of the state to pay for things such as infrastructure when the controls are not there. It bothers the life out of me.

I have looked for a long time at state taxation, too. The Commonwealth Grants Commission has provided us with some very interesting details which refer to a lot of the increases across payroll tax, conveyance duties, land tax, property taxation, gambling taxes, insurance taxes and motor vehicle taxes. It is interesting that from 2001-02 through to the 2012-13 mid-year financial review that there has been an 85 per cent change in taxation revenues. In that time, CPI has been evident, there is no doubt about that, of about 36 per cent, so it is that difference where it is purely the government's decision to put in place taxation that it wants, and it is that decision which has created a lot of the challenge associated with business success and financial return to people and the ability of people to live with the cost of living pressures.

Taxation is the absolute key to me. From a state taxation policy point of view, it represents about 25 to 30 per cent of the total budget of this state, but it is the absolute driver of it, and that is the bit that has to be right. It has to reflect the ability of the community to pay, but the value attached to the services that are provided are weighed against the ability to ensure that an economy is strong. It has to be a strong one because, without that, we do not get the chances.

We know that the baby boomer generation bubble is going to create a lot of challenges for us. There was a Training and Skills Commission report probably about five or six years ago that referred to 200,000 jobs being lost as a result of retirement but also an opportunity to create another 100,000 jobs on top of that through the success of the economy. I seek leave to continue my remarks.

Leave granted; debate adjourned.

[Sitting suspended from 13:00 to 14:00]