Economic and Finance Committee: Emergency Services Levy 2014-15

Adjourned debate on motion of Mr Odenwalder:

That the 85^th report of the committee, entitled Emergency Services Levy 2014-15, be noted.

(Continued from 2 July 2014.)

Mr WILLIAMS (MacKillop) (16:17): It is with great pleasure that I address the matter of the final report on the emergency services levy 2014-15 from the Economic and Finance Committee to the house. In doing so, I foreshadow that it is my intention to move an amendment to the motion that this report be noted. I wish to move an amendment that this house reports back to the Economic and Finance Committee for that committee to have further consideration of the implications of the budget. The reason I want to do that is that each year the Treasurer is obliged, under the legislation—

The DEPUTY SPEAKER: Before we continue, member for MacKillop, I am advised that you need to provide that to us in writing here at the table.

Mr WILLIAMS: I foreshadowed it—

The DEPUTY SPEAKER: I am just repeating the advice.

Mr WILLIAMS: I will do that. I foreshadowed that I was doing that, Deputy Speaker, and I will make sure I have it with the Clerk at the time that I move it. The reason I foreshadow that I want to take that action is that, under the legislation, the Treasurer each year is to brief the Economic and Finance Committee on his proposal for the emergency services levy and the raising of funds under that act. The Economic and Finance Committee is then charged with reporting back to the house its analysis of his proposal and its looking into the matter within some 21 days, I think it is, in the legislation.

The Treasurer sent a brief note, I understand, to the committee on 6 June, and the committee held a public hearing on 12 June and reported to the house on the 29^th. Funnily, when the report was tabled in the house and the motion was moved that the report be noted, the government member, who is the presiding member of the committee, merely did that—moved that the report be noted and made no further comment. That is probably the first time in my experience in this place when a committee report has been brought to the house's attention in that manner, when there has been no comment by the chairman of the committee. The reason, obviously, was that later that same day the Treasurer brought down his budget.

In the briefing that was given to the committee back on 6 June, where normally there is some information about the remissions, the committee's total information was that the remissions would be revealed in the budget. Obviously, if the committee sought to ask any questions on that matter the answer was always going to be, 'You will have to wait until the budget is brought down for that information to be revealed.' The information, which was pertinent to the inquiry of the committee, was not revealed until after the final report was tabled in the house. As a consequence, I now move:

That the word 'noted' be deleted and replaced with the words 'referred back to the Economic and Finance Committee for further consideration in light of the 2014-15 state budget.'

One of the reasons the committee looks into matters is that it saves the house a lot of time and effort. Instead of each individual member having to do the relevant research, bother the people from RevenueSA on a one-to-one basis to get some understanding of their analysis of the work that is done to come up with the figures of where the levy rate will be set, the committee does that on behalf of the house. However, under the circumstances I have described, one of the most important parts of the work the committee would have otherwise done on behalf of the house was not done because they simply were not given the information that the remissions were to be removed.

I want to remind the house of the difference between a levy and a tax: a levy is an amount of money raised to cover the cost specific to the levy. This is the emergency services levy and it is specifically designed to raise an amount of money to cover the cost of operating our emergency services. If any member wishes to go through the report of the Economic and Finance Committee—and I urge them to do that, and I urge them to also go through previous reports—they will see that quite a bit of work is done by RevenueSA to set a range of rates.

Once the levy is set, there are not just remissions but there is also a range of rates under which the levy is applied in different parts of the state. At the time this legislation came through the parliament way back in the late 1990s, that was specifically designed such that the amount raised from various industries and various sectors of the state—geographically and as per the land use—reflected the risk and, indeed, reflected the cost attributable to the land which was being levied.

That work was done specifically because this is a levy and not a tax. A levy is not about redistributing the wealth of the state amongst various people or sectors within the state; it is specifically about raising the money to cover the cost of the service. What I have found, with some analysis I have done on the scant information that has been available to me, is that certainly in regional South Australia the amount collected by the levy is going from $21.2 million last year (net of the remissions) up to $38.8 million this year—a $17.6 million increase in the collection.

The interesting part is that in those same areas—zones 2 and 3, as referred to in the report—$38.8 million is being collected but only $25.6 million is actually being expended on the services, according to the information in the report that was tabled by the chair of that committee. I think there are a significant number of questions that need be asked by the committee of the officers from Revenue SA about how they did the modelling to come up with the figures that are being used to collect this year's levy.

I can tell the house that, on figures I have worked out, rural and regional South Australia has been paying a lot more than its fair share, even under the previous arrangement, but now that has got right out of kilter. Regional and rural South Australia is paying way above. As I have just pointed out to the house, I think 52 per cent more is being collected from zones 2 and 3 under this levy proposal than is being expended in zones 2 and 3 on costs attributable to fixed property.

It is my contention that the Economic and Finance Committee should look again at this matter, take further evidence from Revenue SA and report further to the house, because I think a significant imbalance has occurred with the removal of the remissions. I do not know whether that was deliberate or otherwise—I do not know—but it is something that can only be ascertained by this report being referred back to the committee for some further work. I seek the support of my colleagues in the house for my amendment to the motion to note the report such that the Economic and Finance Committee is able to fulfil its obligation to the house to have a fulsome inquiry into this matter and inform the house fully of what is happening with the emergency services levy for the current financial year.

Mr WHETSTONE (Chaffey) (16:27): I, too, rise to speak about the ESL increases. We have to acknowledge that it is not a rise in ESL fees; it is the removal of the rebate. This has hit every person in South Australia, particularly the asset-rich farmer. Any person who is a landowner, no matter how wealthy or asset-rich they are, is bearing the burden of this increased ESL. It is a land tax and nothing more. It is a wealth tax and nothing more.

This government often preach to us that they are looking after the people who can least afford it. Well, let me tell you, Deputy Speaker, the people of regional South Australia have been through some pretty torrid times. The farming sector, agriculture, food producers—the economic drivers in this state—have been hit once again and they have been hit unjustly because in many cases they are the volunteers within emergency services. They are the hardworking rural sector of food producers and farmers, and they are now getting a double whack across the back of the head, not with a slap but with a bat. It is with a big stick and it is going to hurt every person.

It is not just about the people of regional South Australia who I keep on saying have been hit the hardest, it is about what it portrays about South Australia. To come to South Australia to do business it puts on another expense, another layer of regulation or another layer of tax. I have had many people come to my electorate office about ESL increases and I have a register showing that more than 150 people have concerns. Many of them came to the office with a forecast increase, knowing what the removal of the subsidy would be, and explaining to me what it was going to mean.

As I said, it has been a huge hit on households and business owners and it is at a time that they can least afford it. What the people of South Australia are now being forced to pay, as I said, essentially, is a land tax. It is another tax. I think the Premier and his government obviously did not listen to what the majority of South Australians want before they went to the state election, and that is no new taxes and no new levies. We are seeing vast amounts of increases and removal of subsidies, and it is hurting every South Australian.

Again, the ESL rise has added to the challenges of being in business and part of an SME here in South Australia. The government, again, seems to forget the contribution that these businesses make to South Australia's economy. Again, I go back to the agriculture, food and wine industries. They make an important contribution to South Australia's economy. They generate about $15.5 billion in annual revenue, 11 per cent of gross state product; and wine currently contributes about $1.7 billion in revenue to the state's economy. However, these agricultural industries (people on the land) have received ESL bills rising by more than 500 per cent.

I have heard of cases where these rises have been between 800 and 900 per cent. What sort of message is that sending to people who are contemplating expanding their businesses here in South Australia or, in some cases, people coming to South Australia to set up businesses? I know that a Loxton farmer's bill went from $200 a year to more than $1,000 year. Again, it is nothing more than a land tax.

The ESL bill of one of the major businesses in my electorate—Deputy Speaker, wait for this—has gone from $240,631 and is up by $57,589. Did you get that?

The DEPUTY SPEAKER: I am probably the only one in the chamber actually listening to you, so there is no need to ask me.

Mr Knoll: 57½ thousand. I know.

Mr WHETSTONE: A $57½ thousand increase—the member for Schubert is always listening—for one business here in South Australia. What is that telling you? Why would they be slapped across the face and continue to do business here? They are looking elsewhere to do business. Again, in 2014-15, rural South Australians will pay $22.9 million towards the levy but emergency services in the area will receive a paltry $9.4 million in direct funding. In regional South Australia, we are paying $13.5 million more than we receive in services.

Many regional South Australians are asset rich and as a result are being hit hard by this rise. The people of South Australia did not vote for this and it should have been made clear before the election; but, of course, one thing that this current state government is good at is deceit and dirty tricks. Again, from the $384 million worth of additional revenue from the ESL rise, there is only $8 million worth of new emergency services programs in the budget. Taxpayers are already making up $311 million worth of unbudgeted expenditure last financial year.

I think something that needs to be highlighted is that volunteer firefighters are some of the hardest hit by these levy rises because they all pay the levy as well as volunteering their time. In fact, farm fire units are probably the hardest hit. Besides volunteering their own time, they have their own equipment, fuel, running and maintenance costs, as well as being part of an emergency service group.

It is something that I am getting the message about at my electorate office. My staff are inundated with people coming in concerned about the increase in their bill, but firefighters are concerned about the message that it is sending. These volunteers are giving up their time, and in many cases they use their own money for their firefighting equipment on the back of their utes to help when there are fires in their area. They are just wondering where to next? Why should we bother? It really is a disincentive for these volunteers who do a magnificent job.

Export businesses face another cost in their bid to remain globally competitive, particularly the SMEs which are critical to our exports. We continually hear the Premier go on about his seven platforms of priority in the economy. That went out the window and now we have got the 10 commandments of how we are going to resurrect the South Australian economy. I sometimes wonder just exactly what the Premier's priorities are. I can certainly tell you he has priorities and his priorities are not where the economy is doing its best.

Sport and recreation organisations have been slapped with huge ESL rises due to being asset rich. For example, the Cruising Yacht Club of South Australia, based at North Haven, had its ESL jump from $4,200 to $18,530. That is an increase of around 340 per cent. That is unjust and it really does make you wonder how some of these businesses will continue because people are going to go elsewhere where it is cheaper. The Cruising Yacht Club will have to pick up that increase and to do that they are going to have to hit their residents even harder, so not only are those residents being hit at home but they are being hit down at the marina.

Some of the schools' ESL bills have gone up as much as 500 per cent. The independent schools association said it would be difficult to absorb so, again, the consumer is going to have to pick up their bill at home as well as when their kids go to school. They are going to have increased bills when their kids are at school.

Much of South Australia's future growth will come from regional South Australia, yet the regions have been hit hardest by this ESL rise. This is one of the sad land taxes that has been put onto South Australians. It is an unfair and unjust increase. It is an unfair and unjust increase in land tax that is going to impact on every household, every business and every consumer here in this state because all of those increased costs are going to be passed on and South Australia will be a poorer state for it.

Mr GARDNER (Morialta) (16:37): I am pleased to have the opportunity to speak about the emergency services levy this afternoon, but I am saddened by the necessity of such a contribution. The fact that this state government has put an unprecedented burden on the families of South Australia in this year's budget by removing the remissions on the emergency services levy is an unmitigated disgrace. It is a burden on every family.

For rural communities and regional communities it is a great big farming tax because, of course, some of the most extraordinary burdens are put on the asset rich but cash-flow poor families in rural and regional South Australia. I can tell you, as a member whose electorate is on the metropolitan fringe going into the hills, there are a great many everyday South Australians in my community who have been hit hard and who cannot afford the rises of several hundred dollars in their emergency services levy on their homes and on their cars.

This is a government that came to office with not one skerrick of suggestion that part of their key policy platform going forward would be the effective imposition of a land tax on the family home, yet that is what they have done. That is what they have done with their changes to the emergency services levy in this budget. I can tell members opposite, particularly the Treasurer, hundreds of people in my community have written to me in the last few weeks, especially as their bills have been coming in, asking for action and asking for the state government to revisit this plan.

The reason why there is a budget crisis and the reason why the Treasurer has had extraordinary difficulty managing his budget is because of 12 years of Labor's mismanagement of their budget. While there were years of rivers of gold through the GST providing hundreds of millions of dollars extra to the budget per year, each and every one of those years through 2002 to 2007, what did the government do? They spent it. They spent it all and more. This is a government that spent billions of dollars above its budget when the years were good and when the years were harder their response has been to cry poor, to blame everyone but themselves, and to whack hundreds of dollars of imposts onto everyday South Australian families, to almost every South Australian family, through this massive increase in the emergency services levy.

I am utterly appalled by it. I urge the government to accept the amendment that has been put forward to send this to the Economic and Finance Committee again for further action on this matter, and I once again state on behalf of my community, my deep disappointment at the way in which they have managed this matter.

Debate adjourned on motion of Hon. T.R. Kenyon.