Parliamentary Committees

Economic and Finance Committee: Emergency Services Levy 2017-18

Adjourned debate on motion of Mr Odenwalder:

That the 95^th report of the committee, entitled Emergency Services Levy 2017-18, be noted.

(Continued from 5 July 2017.)

The SPEAKER: There are two minutes on the clock.

Mr PEDERICK (Hammond) (11:02): I rise to speak to the 95^th report of the Economic and Finance Committee in regard to the emergency services levy 2017-18. I note that this funding is used to raise fees for our emergency services.

An honourable member: You only have a minute and a half left.

Mr PEDERICK: Have I? I did not realise I had only that much left. I probably had a good go earlier.

The SPEAKER: Feel free to complain about the limitation for the next minute.

Mr PEDERICK: I would like to reiterate what happens when we have a major event: the people of South Australia are hit with a rather large bill every time and our emergency services levy just keeps going up. We do get services, but sometimes those services take forever. I note that the Rocklea and Tailem Bend stations, if they have not been started, will be soon. Rocklea especially has been a bone of contention for a long time in making sure that the Crown land report had come through. That was a blue internally in government.

I note that Coonalpyn has a new station, which is good to see, but I will say that that took 14 years—14 years from conception to that station opening in only the last month or so. It is a good facility, but it is ridiculous that these stations take so long. With regard to Rocklea, it was only due to the kind generosity of a farmer and a member of the CFS who stored the fire truck on his property, so there does need to be some improvement.

Mr WILLIAMS (MacKillop) (11:05): In the time that I have been in this place, I do not think I have seen the taxpayers of this state abused as much as they have been with regard to this particular levy in recent years. We had both the Premier and the Treasurer claim that they had to increase the levy because there were some cuts to funding to South Australia from the commonwealth, but that was an absolutely bogus claim and it certainly did not bear scrutiny.

Indeed, I recall that a couple of years ago the Treasurer was on the Bevan and Abraham program and again he was trying to make the claim that there were massive cuts to health and education funding from the commonwealth. The ABC at that stage still had their fact checker and Bevan and Abraham had run the Premier and the Treasurer's claims about this cut in funding from the commonwealth through the ABC's fact checker. The answer came back that there had been no cuts, because basically you cannot cut something that was never there. It reminded me of the time of Paul Keating's L-A-W tax cuts. They were there before the election, but as soon as he was re-elected (I think it was the 1993 election) they disappeared.

Certainly the Gonski funding and the health promises to the states of the Rudd-Gillard-Rudd period were a dog's breakfast, but we all know that the money was never budgeted for. It was never in the budget. The promises were way out beyond the forward estimates and yet we had the South Australian Labor government claim that they were facing these massive cuts and therefore had to raise additional revenue.

The reality was that they faced no cuts whatsoever. The money was never there; it was never factored into their budget because the so-called promises were way out beyond the forward estimates. Notwithstanding that, we have had this ruse ever since and an additional $90 million a year, I think, that has been extracted from the long-suffering taxpayers of South Australia again to cover the bungling of this government's management of the state's finances.

The South Australian Treasury has never had such mismanagement. Certainly it has been in difficult times previously, obviously with the collapse of the State Bank, SGIC and other Labor Party bungles at the time in the late 1980s, which cost the state billions of dollars. The budget was in turmoil. However, the problems that we are facing as a state now and that the government faces in the turmoil of its budget are of its own making. It is not something that was an unintended set of circumstances—although I believe that the Bannon government of the 1980s obviously made huge mistakes that led to those huge losses.

The mistakes that are being made at the moment are being made every day. The government, the Treasurer and the cabinet just get it wrong day after day. They make stupid decisions—for example, the price of electricity in South Australia. Notwithstanding that the Treasurer and the Minister for Energy told this house earlier this year (back in March, I think, in question time) that $7 billion had been invested in South Australia over the last little period on electricity generation, fundamentally on rooftop solar panels and wind farms, we still have the most expensive electricity and most unreliable electricity system probably in the world.

The emergency services levy imposed on people across the state and on my constituents is an outrage. When the measure was first brought in to replace funding from local councils, supplemented by a levy on insurance taken out in this state, it was brought in with the understanding—and the Labor Party argued for this at the time—that the government should supplement it, recognising that the government has a significant amount of the risk for emergency services, which creates the need for emergency services in South Australia.

The more recent move to do away with the rebate paid from the Consolidated Account ignores that fact, that the government is responsible for a significant amount of risk. It also ignores the fact that the government, by applying the rebate, is able to apply a considerable amount of equity because, after all, it is a property-based tax. The risk associated, for example, for fire and/or ambulance and police work really has no correlation with the value of a property. There is no correlation between the value of a property and the risk posed by that property or the ownership of that property. The rebate recognised that and enabled the levelling out of the impost on individuals.

Again, because it is a property-based tax, I believe that it has impacted on my constituents to a much greater extent than it has on the constituents of many other members of the house. A significant number of my constituents are farmers and, as such, have extensive property holdings and, as a consequence, are hit very heavily by this particular levy. I would define a levy as something that is raised to cover a recognisable cost. My analysis of this over recent years is that there is no correlation between where the levy is raised, the amount of money that is raised and where the levy is spent.

In the first iteration of the ESL, and for many years up until the government removed the rebate, there was a strong correlation between the amount of money spent in each of the four zones the state is divided up into and the amount of money collected in each of those four zones, so it was easy to argue that there was a strong adaption of the user-pays principle. However, in the last few years, that correlation has certainly broken down with regard to that zone, which is basically the agriculture area of South Australia, the regions excluding the major towns outside greater metropolitan Adelaide.

There has been a significant increase in the revenue raised in those areas. I am working from memory here, but it is an increase of 50 per cent in the revenue raised in those areas. I think it went from something like $22 million or $24 million to almost $40 million. I cannot remember the exact figures because I do not have my notes in front of me, but it was a significant increase in revenues raised out of basically the settled areas of South Australia outside greater metropolitan Adelaide and excluding the major towns, yet there has been no increase in the expenditure in those areas, notwithstanding the information supplied in this report we are discussing suggests that there has been.

Some of my colleagues on the Economic and Finance Committee asked specific questions on this, and it seems that what has happened is that a lot of the management fees have been loaded up onto that particular region. In my opinion, there has been a deliberate fiddling of books to try to square the ledger to suggest that there has been a significant increase in money spent in those regional areas. I can assure the house that is not the case.

I represent a large part of rural South Australia, and my constituents are very grateful for the emergency services response we are able to achieve in those areas, but there has been no increase in the amount of money spent in those areas in the last few years, notwithstanding this huge increase in the revenue.

I sincerely hope that there will be a change of government early next year. The Liberal Party has already indicated that we will reinstate the $90 million rebate that will provide much-needed relief to my constituents and those of a number of my colleagues on this side of the house. All I can say is, 'Bring on March next year.'

Dr McFETRIDGE (Morphett) (11:15): The emergency services levy is a very topical issue for all South Australians, and again we are seeing the report from the committee about the raising of the levy in more ways than one and also about the split in the spend on the levy. I am always keen to see that, of the $302 million that will be spent on emergency services in 2017-18, the ESL will fund $291.5 million. Some extras will be taken from the cash balances and some minor revenues interest and that sort of thing, but the $302 million for emergency services in South Australia really does not reflect the unmet need for service delivery out there.

As we all know, the delivery of emergency services is a core responsibility of government, just as keeping the lights on, putting out fires and keeping people safe are other core responsibilities of this government. The Country Fire Service is getting $87.5 million this year, but we know that you cannot put a value on the work and effort put in by all those dedicated volunteers. The need to support them by spending money in those areas is so important.

That is why I was particularly alarmed on Monday night when I was at the annual general meeting of the Meadows CFS—and I put on the record that I am a life member of the CFS and currently enrolled with the Meadows CFS. Members were asked if they wanted to spend $8,000 of their hard-raised funds—from the chook raffles, working down at the local Meadows hall, working down at the Meadows fete and at the Easter fair and fundraising to buy a few things—to buy the new dark blue day uniform that the CFS has been making a lot of news about.

For it to turn out, to my surprise, that volunteers were going to have to pay for this out of all the hard work they had done to raise this money was just atrocious. There are so many brigades out there still waiting for second sets of their personal protective equipment, their second set of yellows. If their breathing apparatus qualifies, they still get a second set of the structural fire PPE, but they do not have the bushfire stuff and the normal PPE they would wear most of the time.

Under the PPE, you have your jeans, shirt and civvy clothing on. The new day uniform outfit is dark blue pants and shirts with logos on them. It is very smart and professional. I thought it was going to be given to every CFS member because that would be a very small token of gratitude from the taxpayers of South Australia—not from the government, but from the taxpayers of South Australia. But, no, it turns out that the CFS volunteers are actually going to have to buy this uniform, which is just another disgrace.

There are so many ongoing issues where the CFS are being hamstrung by the lack of funding, and to say, 'Do you want to put up the ESL?' is just a cop-out. Emergency service provision in South Australia is a core service of government. I still find it a real issue that $22.3 million of the ESL is going to South Australian police this year. When we look at what that money is being spent on, it is metropolitan regional operations and emergency major event services. I suppose preventing emergencies is a genuine issue, and it is all part of managing emergencies if you can prevent those emergencies happening in the first place.

But the police taking money out of the ESL is not what I think it was intended for. It certainly was not intended to prop up attendance at floods, bushfires and rescue activities. To me, that should be standard SAPOL funding. That is what they are there for. They are the lead agency. It should come out of the police budget and not out of the ESL.

We see that the SA Ambulance Service picks up a smaller amount. I understand that is mainly for communications. I can live with that because I personally think that the Ambulance Service should come back under SAFECOM. It should be under the emergency services and not under the health department. Shark beach patrols get $400,000 and the state rescue helicopter gets $700,000. They are good spends. There is $1 million for other things, and I know the Julian Burton Burns Trust used to pick up a fair bit of money. I saw in the paper the other day that was being wound up, so I wonder what this money is being spent on.

Again, I personally think that money should not come out of the ESL, but it should come out of the health budget because you are preventing kids burning themselves, for example, so you are preventing them going into hospital rather than having that cost on the health budget. The health budget should be putting in some preventive spending, as is the department of road transport. We know that the roads maintenance area in South Australia is sadly lacking in being up to date. Again, we should be making sure that money is being spent on road safety as well as on road repairs because the ripple effect, the savings in lives and property, is huge.

In relation to the MFS, the amount of $137.6 million is an increase on last year. The new EB is coming out. They will be trying to cut down, as I understand, on their overtime payments by running more recruit courses so that they have more firefighters. The average age of the cohort of firefighters right now is getting right up there. There will be a lot more retiring, so we will need to run more recruit courses. Again, they are doing a sterling job with limited resources.

Not long ago, the Productivity Commission put out reports showing how much was being spent on fire services across Australia, and for many years South Australia was spending the least of all the states and territories. That may not be the case now, but we are certainly not leading the pack, and that catch-up that has to be undertaken is putting a lot of pressure on our emergency services.

During the estimates committee, I asked a question of the minister about extending the WorkCover protections given to the South Australian police members. If you were seriously injured, you were cut off after two years if you were less than 30 per cent injured. That was removed for South Australian police. The minister said that that is now being extended not only to paid firefighters but also to all first responders. Whether that includes ambulance officers will be an interesting question to ask, and certainly in relation to volunteers in the SES, the CFS and Volunteer Marine Rescue, I would think.

It is a good move, it is a welcome move and it is an overdue move. I assume it will be done by legislation because there is no EB for the CFS volunteers, but it is very good to see it happen. I look forward to seeing the legislation come in here and, with the support of both major parties, be put through this place. It is a small cost for the return we get on our investment, as is the ESL. What we get back from our emergency service workers is priceless.

There are no real surprises in this report on the ESL but just a lot of disappointment that the remissions are still not there. I can put on the record, and I said it in the Appropriation Bill speech, that the one case where I would have backed the bank tax—the only case where I would have backed the bank tax—was if that money had been hypothecated to reinstate the remissions on the ESL. If that money were put in to do that to reduce the burden on so many businesses and individuals and property owners across South Australia, then I would back the bank tax. That is the only reason I would back the bank tax because, as I have said before, it is a retrospective, retrograde step to the BAD tax and the FID.

The ESL was a Liberal initiative. It has been changed, it has been nuanced, but now it is being used to really punish South Australians by having those remissions removed, and those remissions should come back in. I note the Liberals are promising to do that at the next election, and that certainly has my strong support.

I look forward to the Labor Party manning up, recognising the impost this is on all South Australians and using some of the money that they are getting from the sales of their assets. Their no privatisation policy is out the window. With what they are reaping now—and the Lands Titles Office is going to be next—let's have the remissions back in so that South Australians can at least live their life with a little bit less stress on their costs and their daily outgoings.

Mr WHETSTONE (Chaffey) (11:25): I would like to make a short contribution on the 95^th report of the Economic and Finance Committee, regarding the emergency services levy in 2017-18. As we have heard, the report states that emergency services is projected to have a $302 million budget, funded by the levy of $291 million, plus other revenues from the emergency services fund of $1.9 million and a cash balance of around $8.5 million.

Firstly, I would like to acknowledge all the volunteers: the CFS, the SES, the marine volunteers and all the emergency service volunteers. It is not just about men and women, the young ones in uniform; it is about all the volunteers who help in an emergency, the service groups in particular. In the electorate of Chaffey, the Riverland and Mallee have a great support team behind the team of emergency service volunteers. Those service groups are always there to help by supplying food and support. Anything they can do, whether it is cleaning up roadsides or picking up rubbish, all contributes to reducing the risk of fire and reducing the risk of any emergencies.

During the hearings, the Economic and Finance Committee was told that in the year before the remissions were removed, there were people who just could not pay. The government are obviously hell-bent on increasing taxes, taking away the remission that was put there to support families and the cost of living, and it is clear that the current government just do not care. The current government are about survival and what matters to them. This emergency services levy hits people in regional centres harder because they have bigger land areas to pay levies on, they have more vehicles, they have more of most things to help their businesses run and they have more of most things to help the state's economy.

But the membership base of the current government, their electors, is primarily in city electorates that are not impacted like regional South Australians. At the time of the hearing, there was $12.5 million owing in ESL bills in 2016-17 and just over 105,000 final notices were sent out with about 25,000 referred to debt collection. That is a sad story to tell when you consider that 96,000 had not paid in the 2014-15 year, and after the remissions were removed, that number obviously increased dramatically.

Based on the median residential house value in metropolitan Adelaide—$443,000 in the 2015-16 year—the average ESL bill was $264.75. Again, the ESL is a wealth tax; it is nothing more than that. With the removal of the remission, we are seeing more pressure put on day-to-day living, and more pressure put on cost of living for every person in South Australia. Whether you own a small dwelling, a large mansion, a small farm or a large farm, those people are being impacted on and it is all relative to the size of those properties.

The high levy rises are hurting business confidence in the state. Every little chip of the paint, every little bit of tax, every little increase is reducing the confidence in South Australian businesses and the confidence of South Australians in general to go out there, whether they are setting up a business, whether they want to be exporters or whether they want to employ more people. This continual tax burden that the South Australian government continues to put on South Australians really is deplorable.

The ESL tax does not hit just home owners. As I have said, there are levies on sporting clubs, community organisations, churches and independent schools. All these organisations have to pass on that cost somewhere, somehow. At the end of the day, it comes back to the cost of living for every person who is a part of those organisations. Whether it be a sporting club, a church, or an independent school, all those associated costs are passed on.

Obviously, it has been widely documented that the South Australian Liberal Party will return the ESL remission. The ESL rises have added to challenges and we have recognised that; we have recognised what it means to South Australians and what it means to the cost of living. We have already heard that the continual increases in taxes, the continual increases on burden to do business and the continual burden just to live here in South Australia is something that the current government just does not realise. Congratulations to the South Australian Liberal Party on acknowledging that and promising to reinstate the remission.

In 1998 when the then minister, the Hon. Iain Evans, introduced the ESL, the cabinet submission, and a line previously quoted by Labor MPs, stated:

Everyone in the community has the right to expect access to affordable services...for the protection of life, property and the environment, and everyone has a responsibility to make a reasonable contribution towards the cost of doing so.

I want to stress the word 'reasonable'. This is where the current government are looking a gift horse in the mouth. They have whited out 'reasonable' and now they have said it is necessary tax that we need to put on every South Australian. This is why they have crossed out 'reasonable'—so that they can install this extra burden.

Farmers in South Australia are the ones who are going to be hardest hit; employers of any shape or form are going to be the people who are hardest hit; anyone who creates employment, anyone who creates an economy, anyone who has any form of business in South Australia that is supporting South Australia, supporting the bottom line when it comes to exports and the economy, is going to be hardest hit.

I note that every minister in the government stands up and takes the accolades for those businesses that do such a great job of employing and creating an economy. They take the credit. They stand up and say, 'What a wonderful job we have done. What a wonderful job we are doing supporting these businesses,' yet they whack them round the back of the head with another levy or an increased levy or an increased tax. It really is something that will take paint off them leading up to the March 2018 election. After that small contribution, I support the 95^th report.

Mr ODENWALDER (Little Para) (11:33): I will not keep the house. I thank everyone for their contribution to this motion. I thank the members of the committee who worked very hard. I think it is universally acknowledged this is the hardest working committee in the parliament and I think the 95^th report of the Economic and Finance Committee bears that out. I thank the staff for all their hard work. I commend the motion to the house.

Motion carried.