Parliamentary Committees

Economic and Finance Committee: Emergency Services Levy 2018-19

Adjourned debate on motion of Mr Duluk:

That the first report of the committee, entitled Emergency Services Levy 2018-19, be noted.

(Continued from 5 July 2018.)

The SPEAKER: Member for Davenport, there are eight minutes remaining, sir.

Mr MURRAY (Davenport) (11:10): Thank you, Mr Speaker. I feel the need to preface my remarks, although I am sure it is not necessary, with something along the lines of, 'Last time we met.' I am talking, of course, to the recommendation from the committee regarding the setting of the emergency services levy. I sought to direct my remarks to a consideration of a similar debate in this place, which took place in November 2014.

What I was deeply interested in, by way of contrast, was that some considerable work had been done by the former member for Goyder Mr Griffiths. The then Liberal opposition, given the imposition that was going to be foisted upon the South Australian community by virtue of the removal of the emergency services remissions, sought to have the motion amended and instead have the words 'referred back to the Economic and Finance Committee for further consideration in light of the 2014-15 state budget'. So, to be very clear, what the Liberal Party sought to do, given the imposition about to be foisted onto South Australian property owners everywhere, was to have the report sent back to the committee.

As part and parcel of that attempt, as I said, the then member for Goyder provided some details as to the level of impost—the level of increase—on a council by council basis. He managed to provide figures for some 57 to 68 councils in question. For the benefit of particularly members opposite, I will flag, quoting from Hansard, some of those imposts.

The Charles Sturt council went up by 198 per cent. The City of Mitcham, one of the councils in the seat of Davenport, went up by 144 per cent. The City of Port Adelaide Enfield went up by about $80,000, or 155 per cent. Amongst speakers thus far, we have had the member for Playford. The member for Playford would be delighted, I am sure, to be aware of the fact that there was a 237 per cent increase in the impost on the constituents of the member for Playford.

The Leader of the Opposition was a participant in the debate last time we met. I am not particularly sure which council to refer to, so I will just refer to the Charles Sturt council. But, just in case, and mindful of some of the interjections and/or recommendations by the member for Waite, I provide notice to the house that the increased take from the City of Unley, in the event that the leader is from that area, was 179 per cent. All in all, it is an enormous range of imposts, as one would expect given the measures that were taken.

In closing discussion of what was the case back then, it is opportune to peruse the vote that was then taken. As I said, the then Liberal opposition sought to remove the emergency services levy remission. As a consequence of the impost that would cause to the poor long-suffering South Australian taxpayers, we sought to have that referred back, deferred and reversed, and we so moved.

Referring to page 2955 of Hansard, that particular amendment was understandably not surprisingly defeated. I note for the record that the noes included Bettison, Bignell, Close and Mullighan, who spoke on this matter when we last met. At the very least, I find it interesting that an attempt—

Mr BIGNELL: Point of order: it is unparliamentary to use people's names. The member should be referring to members by their electorate names.

The SPEAKER: I will listen carefully. Please do that, member for Davenport.

Mr BIGNELL: I am also unsure that—

The SPEAKER: Another point of order?

Mr BIGNELL: —that reflected properly that I have spoken on this matter.

Mr MURRAY: What was the point of order?

The SPEAKER: What was the point of order, member for Mawson?

Mr BIGNELL: About the use of the electorate names rather than individuals' names, and I think I heard the member use my name to say that I had spoken on this matter.

Mr MURRAY: No.

Mr BIGNELL: Okay, thank you.

The SPEAKER: I will listen carefully. Please do refer to members by their electorate names.

Mr MURRAY: I reiterate, Mr Speaker, that I am simply quoting from Hansard.

The SPEAKER: Okay.

Mr MURRAY:Hansard listed the names so, to the extent that I have caused any offence, I am—

Mr Bignell: No, it wasn't offensive.

The SPEAKER: No problem. Let's get on with it. Thank you.

Mr MURRAY: I wish to reassure those opposite that I am very averse to causing any form of offence whatsoever. To the extent that I may have, I do apologise.

Members interjecting:

Mr MURRAY: So much love in the room, indeed. The inevitable result the last time we met is that the Labor government voted to implement those measures. I draw the attention of the house to what to me at least are amusing attempts to deflect the truth of what actually occurred. With reference to the member for Lee, there is a post on his site dated 20 April 2015 that states:

It is a lie that ESL contributions by households will be used for purposes other than funding our State's emergency services.

The pretty clear implication is that all of that $90-odd million in extra ESL money as a result of removing the remission was obviously injected back into emergency services.

Members on this side may recall that, as part of the election campaign in March of this year, some questions were asked about our policy to reinstate the remission and 'where the money would come from'. Continuing the love in the room theme, I would like to pay some credit to the member for West Torrens, who is quoted in InDaily as giving lie to what I think the truth was, which was the fact that that $90-odd million of course did not go to the emergency services—it went primarily straight into general revenue. Surprise, surprise. To quote the member:

What we've done is removed remissions from the Emergency Services Levy for everyone except for pensioners [and] transferred those remissions into health—that's the prudent thing to do.

When Labor made the changes it did, the record will show that the Liberal Party sought to offset and ameliorate those, unsuccessfully at the time. The Labor Party sought unsuccessfully to portray those as something other than they were, which is basically a blatant tax grab. The Liberal Party has sought election on a mandate to reinstate the remissions and, as a result, has delivered upon that. I commend the committee for its recommendation in that regard.

Mr TEAGUE (Heysen) (11:19): I rise to note the Economic and Finance Committee's first report and commend it for the very good work it is doing in this 54^th parliament. The report documents for the restoration of $90 million per year to households through the restoration of the general remission on the ESL. It makes good on yet another of the Marshall Liberal government's commitments prior to the election to reduce day-to-day costs of living for families and households across the state of South Australia. We are getting on with the job of doing just that.

As a new member of this side of the house, I applaud the Marshall government for getting on with the program of doing just that—reducing day-to-day costs for families and households. That is precisely what this is all about. It is a moment to shine a light on the sorts of choices and priorities that governments need to exercise in making decisions around revenue and the extraction of the costs required for the running of government.

We all know, and we have heard most recently from the member for Davenport, about the sorry history of the removal of the remission by the previous government four years ago. So that there is no doubt at all, the previous government removed the general remission without warning, without going to the electors prior to the election that had been held in that very year, without establishing a program or an argument as to why this was a good thing to do and without seeking an electoral mandate for the extra impost. They went about imposing this substantial additional burden upon households at a moment's notice, immediately in the wake of the election, and they did so by making a choice, by determining where their priorities lay.

As the member for Davenport said just a moment ago, the former government was quite blatant in the way it went about it. Indeed, the former Treasurer admitted that the removal of the general remission was not about providing additional resources to those who provide our emergency response. It was not about funding additional equipment, it was not about making life easier for our volunteers and it was not about increasing the facilities those wonderful people provide in our community. It was not about that at all. It was about propping up the state budget in circumstances where the previous government could not manage its finances.

So what did it do? It said, 'Let's find some low-hanging fruit. Let's go and exercise priorities as we see them.' As the member for Davenport has just referred to, the Treasurer admitted at the time—and he is quoted as saying as much—that 'we [the former government] removed this remission from the ESL, and we transferred the remissions into Health'. So it could not be clearer.

In the time that I have available, I want to really focus all of us in this house, and those who follow this debate on noting this committee's report, on the sort of priority that that decision evidences and the sort of clear difference that the former government had in terms of priorities. The former government decided that if it needed to prop up its budget, it was okay to search for more money from households and families—just to go and dip into their pockets—and to do so without notice and without a mandate and to do so substantially.

I have seen the case made, in apparently sensible terms by those on the other side, for the need for governments to determine their priorities and how there are difficult choices to make. Nothing could better illustrate this than the response of our dedicated volunteers in the wake of that dramatic increase in 2014. We saw the practical result of that for those in our regional and rural areas, including in my electorate of Heysen, and what that meant.

Our volunteers respond to fire emergencies—and sometimes respond as volunteers over many decades—which may have been in their area or far-flung and a long way from their own properties, involving a significant impost on their own time and resources. Those very volunteers were in the focus when it came to extracting more revenue to prop up the former government's incompetent administration of the finances.

It was not surprising that in the wake of that, volunteers in the regions protested. They asked, 'Why should we show up to put out fires on government land? Why should we leave our own properties to burn and instead go and continue our volunteer work when we are being forced to pay, in some cases 1,000 per cent more because of landholders?' In many cases, this was many hundreds and indeed thousands of dollars more. They said, 'Why should we pay that extra money, and be told that we are part of propping up an incompetent government's incapacity to manage its budget? We are there at the front line of propping up the government's budget and we are also expected to continue our volunteer work.'

To say, as has been said by the other side on the unhappy journey we have taken over the past four years, that there is somehow virtue in having an ESL because it takes the burden off volunteers by having substantial resources dedicated to funding their work and relieving them of the obligation to run chook raffles and so on to fund their services, misses the point. The former government's removal of the general remission forgets that those very volunteers are now having to dip further into their pockets.

I can tell you that plenty of fundraising goes on in the regions to support our volunteer services. We are very fortunate in my local area of Bridgewater to have the Bridgewater op shop, which is the envy of CFS brigades across the state. It provides substantial top-up resources for our local CFS brigade. The op shop has kept my children in bicycles, among many other things, for the past decade. It has been a regular stop-off point on the way home from school over the journey. It acts as a tremendous boost to the fundraising efforts of the local brigade.

To tell local communities that they are the first in line when it comes to propping up the resources because the state cannot fund its budget is an insult. It is a mischaracterisation of what we ought to be about in reinforcing community commitments, and it is a shame on the former government that it elected to make the decision to remove the general remission. I applaud the reintroduction of the general remission and I commend the report to the house.

Mr McBRIDE (MacKillop) (11:29): I rise today to speak in support of the motion to note the first report of the Economic and Finance Committee, a report that focuses on the emergency services levy and funding arrangements for 2018-19. Importantly, the report highlights the step the government is taking to slash emergency services levy bills by $90 million per year. A key feature of the levy arrangements includes the inclusion of concessions that will cut emergency services levy bills by $90 million per year, which will provide much-needed relief to households across the state.

Importantly, the change will not affect the current level of emergency services provided, ensuring that this reduction in cost to households does not incur a reduction in the quality of service to South Australians. This is a dramatic and welcome change for households, compared with the position of the previous government which, for the past four years, stripped an extra $90 million a year from the pockets of South Australian taxpayers. Furthermore, implementing this cut to emergency services levy bills will add strength to other measures being implemented by the Liberal government in seeking to stimulate the economy and drive down the cost of living.

In 2014, soon after the previous election the Weatherill government imposed a massive tax increase on family homes, businesses, farms, churches, community organisations, independent schools and many other groups. The impact of this emergency services levy reached right through the economy and the community. Add to that the increased price of electricity and the general cost of living in South Australia and the result was a population of people who have been struggling to afford simple amenities.

This cut will cover all eligible fixed property, regardless of the type of land use, providing relief to households, businesses, farmers and a wide range of community groups, an action that will benefit all South Australians across the state, including those in rural and regional areas. Regional South Australia will see an incredible benefit from the government's plans. The people in these regions suffered a jaw-dropping increase of 900 per cent on the emergency services levy due to the removal of the primary producers concession by the government of the time.

I touched on this point in my maiden speech and I believe that it should be addressed again today. There was never a response from Treasury to the review on this increase at the time, but the resulting changes to taxation were devastating and skewed in favour of urban areas. Quite frankly, I have been left shaking my head at the audacity of the opposition in their criticism of the concessions that the Liberal government has defined to achieve the $90 million cut for taxpayers, in particular, in light of the stealthy way they removed concessions during their time in government. When the member for Narungga spoke on this issue, he said:

…it is not surprising that it is just another example of a party addicted to higher taxes. It is breathtaking and galling to hear them criticise us for the relief we have provided to South Australian households: $90 million in total, statewide…

The member for Narungga also said:

It is absolutely breathtaking to hear the member for Lee and the member for Ramsay lecture us about not lowering bills enough after they ramped up the bills sneakily after the last election with no forewarning at all to the people of South Australia.

The emergency services levy is put aside exclusively for the Metropolitan Fire Service, the Country Fire Service, the State Emergency Service, Volunteer Marine Rescue SA, South Australian Fire and Emergency Services Commission, Surf Lifesaving SA, South Australia Police Rescue, and the South Australian State Rescue Helicopter Service. The importance of these services to the state and its community is paramount, and the activities of these services and their volunteers within the MacKillop electorate are highly valued.

Recent dangerous bushfires, including the Sherwood fire in January 2018, which resulted in significant livestock losses and the loss of more than 12,000 hectares of farming land and numerous houses, could have been much worse if not for the efforts of the SES and CFS crews and their many volunteers. The horrific conditions under which these services fought that fire and contained it will long be held in the memories of those involved, with the repercussions of the damage caused that day still being felt by landowners and the local community.

The services of local CFS and SES crews were also required to fight fires at Keilira in January this year and in the Bangham and Frances areas in February 2018. The changes to the emergency services levy will mean that the support offered to regional services such as these will be maintained, while households benefit from reduced bills.

The people of the MacKillop electorate also know the value of maintaining the role of the State Rescue Helicopter Service, with the southern extent of its range, prior to refuelling, being at the Keith township on the Dukes Highway. This is a vital service which supports saving lives in the South-East and surrounding regions. In emergency situations, time is critical, and the availability of the rescue helicopter saves lives.

I have already alluded to the value of volunteers to these services. A great many of these emergency services are made up of volunteers, and I note that public hearings related to the emergency services levy highlighted that the CFS has about 13,500 volunteers and the SES around 1,500. Maintaining and improving investment in equipment, support and coordination for these volunteers is something the emergency services levy enables.

Ensuring that there is no loss of funding for the support services through our government's direct investment in the Community Emergency Services Fund, whilst enabling $90 million to be slashed from emergency services levy bills, is a balanced approach that values the emergency services and their volunteers as well as South Australian taxpayers.

I would like to refer back to other speakers, including the member for Lee. They claimed that they spent a great deal of time looking at this tax and making sure that the government lived up to its promises. A comment like that comes because I think they were bewildered: 'Yes, we had so many promises and, yes, we're going to deliver on them.' It was highlighted by the member for Heysen, who asked why this emergency services bill was increased to such an extent in the 2014-15 period. To quote the member for Croydon, it was a result of $80 billion worth of cuts to their government at the time.

The issue is that this $80 billion may have been talked about from Canberra, it may have been a wish list, but it was never put through the due diligence of a budget. It was hypothetical. This is what was so galling about the emergency services levy being increased to such an extent: they based it on the fact that they were going to miss out on these funds, which were only ever talked about and were never actually confirmed to occur. I come back to the member for Lee, when he talked about the way the levy would be reduced and where the levy was going to be felt most.

As the member would know, when the emergency services levy was increased it was not increased evenly over the state of South Australia. Those with the highest rates, the most rates to pay, paid the largest share of the levy. He then said that we were not being responsible to our community members by lowering it for those who are, let us say, the most vulnerable, that it was never the intention to have an uneven process. It was about unwinding what the state government implemented way back in 2014-15, bringing it back to a more level playing field.

They were also critical in saying that we are not actually giving the $90 million in full, claiming only $70 million is being given back because of CPI and the like. The promises we made way back in our election program were based on the year back then; not only that, even if they were half right, to give them any credibility, and be critical of their so-called $70 million reduction, they do not understand the implications of increasing taxes, the implications across the state, how it actually unwinds our economy and makes it difficult for business to operate here.

I am so proud to be part of a government that wants to respond to the high costs of state government, that wants to respond to a government that had been in government for 16 years prior to our coming to power and that I think had become very complacent, perhaps even lazy in their management. They had become expensive, they had become bureaucratic, they did not have the will. Perhaps they had become tired, perhaps they did not even want to see it. They actually became part of the problem, the reason our state was struggling to prosper compared with many other states in Australia.

Now that we have been in government for four or five months, it is really rewarding to see the tide turn in this state. We see there is optimism, there is confidence, and I am very proud to be part of a government that reduces taxes and helps South Australian ratepayers as much as possible.

Ms HABIB (Elder) (11:39): At the March 2018 state election, we promised South Australians that, if elected, a Marshall Liberal government would cut the emergency services levy bills by $90 million a year. We are now delivering. As with all our promises, we are delivering as promised, when promised. In saying that, this forms a suite of policies and actions that will contribute to lowering costs and not only improving the quality of life for all South Australians but also restoring faith in our government.

The events surrounding the ESL provide one of many examples of why the community would have had such little faith in the former government. Mr Speaker, you only need to cast your mind back to 2014. Soon after that election, the Labor government imposed a massive tax increase on family homes, businesses, farms, churches, community organisations, independent schools and many other groups caught up in its bulging tax net.

The impact of the emergency services levy cascades through the entire economy and community. Without any mandate, because Labor did not tell voters before the election what it was intending to do, the government withdrew a general remission on the levy. As a result, for the past four years, Labor has been taking an extra $90 million a year out of the pockets of South Australian taxpayers.

Fortunately, with the election of the Marshall Liberal government, we are now able to right this wrong and that is exactly what we have done. We reinstated the ESL remission from 1 July this year, about a month ago. This cut in the emergency services levy will cover all eligible fixed properties, regardless of the type of land use, providing relief to households, businesses, farmers and a wide range of community groups.

The savings for the owner of a home valued at approximately $450,000 are estimated to be worth $600 over the first term of a Liberal government—$600. I do not know anyone, of my friends, family, residents in the great seat of Elder, who would not want an additional $600 to spend as they please. Imagine what you can do with $600—holidays, getting ahead in life, paying off credit cards, all sorts of amazing things. Fortunately, with the Marshall Liberal government, that is what households, businesses, farmers and community groups will be able to do, because they will have, over the first term of a Liberal government, $600 worth of savings.

Mr TRELOAR (Flinders) (11:42): I rise today to speak to the first report of the new Economic and Finance Committee, entitled Emergency Services Levy 2018-2019. As many of the contributions from this side have indicated, it has been a significant issue for many of our constituents, so much so that we announced early, going into the recent election, our most significant election promise, which was to reinstate the remission for the emergency services levy that the previous government removed in 2014 without any consultation.

It dropped like a bomb on many of our constituents. It significantly impacted homes, businesses, community organisations and farms, and it was the farmers in my area who particularly felt aggrieved by the previous government's removal of this remission. As the member for Heysen quite rightly pointed out, many of these landowners and farmers are active CFS and SES volunteers. It felt very much like there was some double-dipping going on.

Not only do these landowners and farmers contribute through the payment charged to their property through the ESL but they also give their time—often, a significant amount of time through any given year—to the emergency services in their district. This aggrieved them so much that a number of CFS brigades in my electorate took the unprecedented step of making a decision not to respond to any fire call-outs that might occur on government land.

The Greenpatch brigade springs to mind, and they certainly led the charge on this, but there were other brigades. I think either Kapinnie or Brimpton Lake and one farther to the north took a very serious position on this. In some ways, it conflicts with what encourages and drives them to become CFS volunteers. I do not know for sure whether that position was tested in the end, but certainly they made it quite clear that they would not be prepared to respond to a call-out to any emergency or fire on government land, and that included national parks.

On Eyre Peninsula, there have been many fires in national parks over the years. I recall responding to one myself. There was a fire in Lincoln National Park many years ago. I jumped on my local brigade and the Edillilie truck. I was an active member for quite some years; I am no longer, but obviously I am still a supporter. We travelled down to Port Lincoln, and my job was to load the fire bombers, amongst other things. It was the early days of firebombing, and they were targeting the fire front in Lincoln National Park. All those extracurricular activities that landowners undergo were at threat because they felt so aggrieved.

As I said, the removal of the remission was a massive impost for people throughout our community, farmers in particular. I do not want to talk about farmers specifically, but I feel that they were caught up in this in a way that others were not for reasons I have already described. ESL payments increased often and by three figures in percentage terms. I heard reports of between 200 and 800 per cent. The previous treasurer was a bit glib in response to some questions by the opposition at the time, the now government. I got the sense that he thought, 'Well, they're pretty well off. They can afford to pay for it anyway.' That is beside the point.

The real issue was that the previous government was dipping into the pockets of all South Australians. As the previous speaker indicated, that was money that could be better spent. Today, we are speaking on the emergency services levy 2018-19 and the report of the new Economic and Finance Committee, ably chaired by the member for Waite, who I am sure is enjoying his task. As a bit of background to the emergency services levy as discussed in this report, the total expenditure on emergency services was projected to be $302 million in 2017-18. Total expenditure is now budgeted to reach slightly more than that, about $900,000 more. The report continues:

Emergency Services Levy (ESL) rate settings for 2017-18 were set to raise $291.6 million with the balance to be funded from a cash rundown of $8.5 million and $1.9 million in interest earnings and revenue from the sale of certificates showing the ESL status of individual properties.

ESL receipts relating to 2017-18 rate settings are expected to be $1.7 million higher than originally estimated mainly due to higher than expected fixed property ESL revenue.

Ultimately, these levies are set against the value of properties. We all like to see the value of property increase in this state.

Cash balances in the Community Emergency Services Fund (CESF) are forecast to be $21.9 million at 30 June 2018.

It comes back to expenditure:

Total expenditure on emergency services is projected to be $318.4 million [this coming financial year]. This excludes the cost of election commitments which increase emergency service expenditure.

Of course, the election commitment mentioned here is the policy that we, the now government, took to the 2018 election to reinstate the ESL remission. It is a significant election commitment that amounts to some $90 million per year, or $360 million over the out-years, the four-year budget period, all of which will be returned to households, businesses and individuals here in South Australia. The report continues:

The 2018-19 target expenditure of $318.4 million is $15.6 million higher than the 2017-18 estimated outcome…In addition to standard growth in base expenditure, additional funding has been provided for several new measures including improved aerial firefighting capabilities for the Country Fire Service…and the cost of new enterprise bargaining agreements…

I must declare an interest here with regard to my daughter's fiancé—that is a good old-fashioned word, fiancé.

The SPEAKER: Spell it. No, don't, it's okay.

Mr TRELOAR: I was going to have a go. I will check Hansard afterwards. I think it has a grave accent on the e; is that right? My daughter's fiancé is an ag pilot and spends a significant portion of the summer period manning the station at Port Lincoln Airport and fire bombers which are on standby for most of the time. Having experienced this firsthand, I know when attending a fire, whether it be on a farm fire unit or on the back of a CFS truck, there is nothing more comforting than to see the fire bombers appear in the sky and drop vast quantities of water very accurately right on top of the fire front.

They cycle through with just minutes between them. It is a very effective, efficient way of managing a grassfire but also scrub fires. We have seen them used to great effect in recent years for the Pinery bushfires and others closer to Adelaide, so I can only be complimentary of the work they do. They are brave young men, I know, because they cannot always see where they are flying.

The Hon. D.C. van Holst Pellekaan: Because he is marrying your daughter and he is going to be your son-in-law.

Mr TRELOAR: That is not the reason, and I am not going to be tempted on that, member for Stuart. Remissions for general property will be introduced in 2018-19, reducing the effective ESL bills paid by property owners, so that is our election commitment coming into play as of 1 July this year. In the minute remaining, I might run through where some of the expenditure goes because constituents are interested in this, particularly those who volunteer for the various services.

Without identifying specific amounts, payments are made to the SA Country Fire Service, SA Metropolitan Fire Service, SA State Emergency Service, Surf Life Saving, Volunteer Marine Rescue organisations, SA Police, Department for Environment and Water, SA Ambulance, state rescue helicopter, the Attorney-General's Department for emergency communications management, shark beach patrol, and there are, of course, a couple of million dollars for any other costs that may come out. I commend the report, I commend the work of the Economic and Finance Committee, and I also congratulate the incoming Liberal government on their election commitment.