Economic and Finance Committee: Emergency Services Levy 2015-16

Adjourned debate on motion of Mr Odenwalder:

That the 87^th report of the committee, entitled Emergency Services Levy 2015-16, be noted.

(Continued from 17 June 2015.)

Mr DULUK (Davenport) (11:45): I rise to speak to the Economic and Finance Committee 87^th Report: Emergency Services Levy 2015-16. The increase to the emergency services levy, as outlined in this year's budget, is an absolute disgrace. South Australian households are again being slugged with an ESL increase for the second consecutive year, and the Treasurer is dipping into the South Australian householders and ripping money out of their pockets.

Last year, the ESL increased by about $150 for people with an average $400,000 home, and now in this year's budget the Treasurer has announced a further 9 per cent increase for most properties. Another 9 per cent—this is an increase of $23 per annum for the average property price of $426,400. That is an extra $23 at a time when many South Australians are already in financial stress: financial stress caused by increasing electricity bills, increasing gas bills, increasing water bills, increasing council rates and increasing land taxes. Property rates and charges alone increased by 17.3 per cent in the year ending March 2015.

Let us not forget our deepening jobs crisis. South Australia's unemployment rate is 7.6 per cent—the highest in the nation. To increase the ESL at this time will push many families to the brink, and it demonstrates just how out of touch this Labor government is with the people of South Australia.

Unfortunately, the Treasurer is out of touch. Last year, he removed a general remission on the ESL sending bills soaring and generating anger: anger from residents, from landowners, from the CFS, SES and other volunteer organisations. So, in response to community disappointment, disenchantment and anger in terms of ESL increases last year, he increased the 2015-16 emergency services levy again this year.

Mr Gardner: You're saying what?

Mr DULUK: Increased—not decreased, but increased in this budget. The Treasurer once again is not listening to the people of South Australia. South Australians needs help, not further taxes. They need a government that will reverse the increasing ESL and put dollars back into householders' pockets.

The massive increase in the ESL tax does not just hit homeowners; it is also levied on sporting clubs, community organisations, churches and independent schools. The ESL has spiralled out of control and is being treated as an endless bucket of money. In total, property owners will funnel $285.7 million into the Labor government through ESL bills in 2015-16—an increase of almost $20 million on the previous financial year, and those on this side of the house say 'Enough!'.

The Treasurer claimed last year that the ESL increase was necessary to compensate for federal budget cuts. This year he claims the increase is necessary to pay for the January Sampson Flat bushfire. What will be the reason next year? Indeed, there is no justification for another ESL hike given the Labor government is set to receive an additional $857 million in unbudgeted GST revenue from the federal government. There is no justification for another ESL hike to pay for the Sampson Flat bushfires. Successive governments have always funded unbudgeted catastrophic events from a general Treasury contingency fund, until now.

The emergency services levy was introduced by my predecessor for Davenport, the Hon. Iain Evans, and commenced on 1 July 1999. The ESL replaced the fire service levy introducing a fairer and broader levy that benefits fire services plus other emergency services agencies such as the SES, surf lifesaving, the State Rescue Helicopter, and many others. Mr Evans spoke in this chamber last year about his support for the ESL stating that he was glad he introduced it. I am also glad he introduced it, and I think most South Australians are in favour of ensuring our emergency services are appropriately funded. But Mr Evans also noted his astonishment that the government had cancelled all the remissions. He was shocked that the government would remove its contribution to the ESL, essentially doubling the cost of ESL for households.

This massive and unfair increase to the emergency services levy was a shock to many South Australians, especially to many CFS and SES volunteers. The Sturt CFS group, which is my local CFS group, and local SES units act as the fire service for a large part of my electorate and they play a crucial role in protecting many thousands of homes. It is important to ensure they are always well funded, respected and supported.

The announcement that the levy will increase again in 2015-16 adds further insult to injury. South Australians are not happy with the year-on-year increases to the ESL. They are not happy with a Treasurer who will not rule out further increases. It is time to put a brake on the Labor government's abuse of the ESL. The increase in the ESL is no more than a tax grab—a tax on the family home—needed to prop up this government's poor budget choices and spiralling debt levels. It is time for the government to support the opposition's policy and restore the remissions and put more dollars back into the households of South Australians.

Mr VAN HOLST PELLEKAAN (Stuart) (11:50): I commend the new member for Davenport for putting so many issues so succinctly and so accurately into his speech. As a member of the Economic and Finance Committee, of course I played quite a role in this, as did my colleagues on the committee. I would like to start by thanking all the chief officers who came to present to our committee. They are all very capable and highly regarded people and I appreciate the information they provided to us.

I would also like to note that the report that the committee has put forward is almost exactly the same as the report that was provided by the government department to the committee. While I agree with everything that is in the report, I think it is a bit unfortunate that there is so little difference between those two reports, because there was actually a great deal of information that was gained by the chief officers, their support staff and SAFECOM representatives coming to present to the committee and answer our questions. I encourage anybody who is interested in this issue to read the transcript of that inquiry, because it was quite informative.

I, like all members of this house, appreciate the very good work that all the emergency services workers out there, both professionals and volunteers, do for us, but none of us are happy with the increase in the emergency services levy. Last year the government increased the ESL by removing the remissions, and that was essentially just a transfer of money straight from the taxpayer to Treasury. The emergency services sector did not get any extra funding whatsoever, it was just purely removing the remissions, charging the public more money and that additional money going straight to Treasury, because the government has got itself in all sorts of bother trying to balance the books.

We are told that the reason for the second increase in the emergency services levy, which is an increased charge to the taxpayer which will go on to the emergency services sector, is that the Sampson Flat bushfire effort, which of course was necessary and of course was valiantly fought as efficiently as possible, requires approximately a $10 million shortfall to be recovered. We were also told that there is a budget of approximately $800,000 set aside in the emergency services sector for such events, yet we have had a significant bushfire every year for the last five years, and in some years we have had more than one significant bushfire.

So I suggest that the money set aside needs to be significantly greater, since it seems that the average amount of money required is about $10 million per year—it certainly was at Sampson Flat and it certainly was at Bangor. If that is the reason for the increase in the emergency services levy then we will have to expect more of them, because unfortunately we have to expect more disasters of this type that the emergency services sector has to pursue.

It was also interesting to find out during the questioning of witnesses that the rate on the dollar has gone up in the emergency services charge because property values have not increased as much as they were expected to. I can understand that the government, in this sector, needs to target a certain total amount of money that it needs to gain from the taxpayer to provide the service. but I would certainly hope that, when we get into flusher economic times and property values increase quicker than expected, the government will remember this and then reduce the rate on the dollar and not just sneakily accept windfall gains, as they have over many years in the past 12 years with regard to stamp duties on properties, for example.

When properties were increasing in value very significantly, without changing the rate on stamp duty, the stamp duty dollar take to the government increased very significantly. So, if the government is saying that at the moment they have increased the rate on the dollar because property values are not increasing at the predicted rate, I certainly hope that, when they do increase greater than the predicted rate, the government will decrease the rate on the dollar.

One of the most instructive pieces of information which came out of the hearing with witnesses was that in the past year the government has spent approximately $550,000 of taxpayer money to fund the failed attempt by the Minister for Emergency Services to restructure the emergency services sector. The minister and the government were told loud and clear by the overwhelming majority of people within the emergency services sector—whether they be volunteers, all the way through to senior leaders—that what the minister was trying to do was not going to work, was going to be ineffective and inefficient and would waste money.

I suppose better late than never, the minister did, after approximately a year, decide that he would abandon his effort to restructure the sector in the way that he wanted to, but along the way he spent over half a million dollars. We are told that this is just the money that he spent in the past year, and that there will actually be more money added to that total in the current year. We are also told that, unfortunately, some of that money is going to be spent because of the review of the review.

The minister established a review to restructure the emergency services sector. He abandoned that, having spent, we are told, approximately $550,000, but now there is going to be more money spent by the minister and the government in reviewing the failed review. It is so incredibly frustrating because the minister was told, loud and clear, not to even embark upon this process. He was told loud and clear that, yes, of course there is room for efficiency improvements, and that, yes, of course there is a willingness across the sector to try to look for better ways—more effective and potentially cost-saving ways—of doing what they do, but that combining the services under one overall leadership model was not going to be the solution. They were right; they were absolutely right.

To be spending however many multiple hundreds of thousands of dollars it is going to end up being, only to end up agreeing with what the emergency services participants at all levels told the minister up-front, is a terrible shame, particularly when we are told that another reason for having to increase the emergency services levy is that it is necessary to train new volunteers and that it costs approximately $1,500 per volunteer to train new volunteers.

So, $550,000 plus whatever else is still to come would go an enormous way to training new volunteers and could have in fact led to the emergency services levy not having to be increased nearly as steeply as it has been. There was a lot of important information that was provided honestly by witnesses which is not included in this report, and I encourage anybody who is interested to go and read the transcript of the committee hearing.

In conclusion, I would just like to put on the record my very personal thanks to all the volunteers and full-time and part-time professionals who contribute to keeping us safe through the emergency services sector. I would also like to thank Mr David Place for his tremendous work as the head of SAFECOM over the last several years. I wish him very well in his move to heading up the SA Ambulance Service, which is where he came from before going to SAFECOM, and I wish Mr Malcolm Jackman all the very best as the new head of SAFECOM and his move away from Defence SA.

Debate adjourned on motion of Mr Gardner.