Bills

Appropriation Bill 2024

Estimates Committees

Adjourned debate on motion:

That the proposed expenditures referred to Estimates Committees A and B be agreed to.

Mr PATTERSON (Morphett) (15:57): I do the courtesy of letting the house know that the member for Frome, who I know had sought leave to continue her remarks, unfortunately is unable to do so, so I will commence mine. I know the member for Frome is a strong advocate for her regional community and before in her remarks she talked through what she expected to see in the budget and what was lacking for her community. I wish to continue and echo those remarks on her behalf as I talk through.

If I talk through my own experience, as we went through the estimates process it gave shadow ministers the opportunity to go through in detail the budget and spending that has occurred in their departments, so I had the opportunity through the estimates process to go through Defence SA, to talk through energy and mining and the Office of Hydrogen Power and their expenditure and also industry, innovation and science and go through the spending in that portfolio. At the same time, I also got to sit in on the examination into the budget for the Department for Trade and Investment. They are really important portfolios for the South Australian economy as a whole, and for South Australians.

Before I go into them in much greater detail, if I look at some of the general themes—to pick up on the member for Frome and others who have spoken previously—one of the key areas of concern for the opposition was the blowouts in the operating expenditures in the budgets for so many of these departments.

There was significant overspending in the budget compared with what was budgeted only a year before. The operating expenses by agency for the 2023-24 budget showed over $824 million of overspending by these departments. Chief amongst them was the Department for Health and Wellbeing, which had significant overspending, but also other departments, such as the Department of the Premier and Cabinet, and similarly the Department for Environment and Water overspent by nearly $50 million in terms of their operating expenses.

As I have said previously, you have the Premier and the Deputy Premier, the two leaders of this government, not being able to control spending within their department and so it is quite obvious that many other departments were following suit. They were not under any sort of instruction, any inferred pressure from their leaders, that they too should hold their departments to account and in fact saw overspending as well. In terms of my department, certainly the Department for Energy and Mining had overexpenditure of over $40 million, which I will go into later.

When you look at what is going on with the economy as a whole nationally you have the Reserve Bank wanting to reduce spending because that spending is driving inflation. Their only lever to do that is interest rates. That is a blunt instrument, which has a huge toll on households and small businesses as interest rates go up. The Reserve Bank needs governments to work in tandem with them.

Certainly, interest rate rises have caused consumer spending to drop, which is what the Reserve Bank is seeking to do; however, as I have shown here, spending by the state government and equally by the federal government has not dropped so you have the government not working in tandem with the Reserve Bank and as a result inflation is continuing on. The national average is 3.8 per cent inflation, yet here in South Australia the inflation rate for the 12 months to June was 4.5 per cent. We are well above the national average.

The Reserve Bank has said that what is driving inflation now primarily is federal and state government spending. Households are having to tighten their belts and small businesses are struggling. The government is not doing the heavy lifting to help them and so they feel the pain more. At the same time, because inflation is up and groceries, fuel and lots of household costs are increasing and many of these have GST applied to them, there has been a massive surge in GST collected across the country and that has flowed back into state government revenue.

We have seen over $2.1 billion of GST revenue increase between the 2023 budget estimate and what we are estimating for 2024-25—massive increases there. What has been the pain for households and businesses has been the gain for this government. That is a really concerning outcome and an issue that has been picked up by so many members on this side of the house and investigated as part of the estimates process.

In terms of some of the portfolios, as I discussed before, one of those was Defence SA. I have to say that on the whole while they did overspend in terms of their operating expenses, it was by no means as significant as so many others. At the same time I welcomed the new Minister for Defence and Space Industries and wished him all the best in his new role. He had been in the role only quite recently, but it was certainly an important change. For the previous defence and space industries minister, who was of course the Deputy Premier, there was so much uncertainty in both those important sectors, in the space sector and the defence industry sector, that the minister was not able to provide any certainty for them.

If I talk through some of the issues occurring in space, we had the federal government slashing and axing many very worthwhile programs. The Deputy Premier, the former minister, was not able to stand up and fight on behalf of SA and stop the federal government from axing those programs, which would in turn have benefited the space industry in South Australia. They were programs such as the $30 million Moon to Mars program, which would directly affect South Australian companies that were looking to put their satellites into space and develop space heritage.

There was $32.5 million cut in the development of Australian spaceports. Of course, we have Southern Launch here, who have a test range in Koonibba and are also looking to set up a launch facility in Whalers Way. A really important part of the space industry is launch, and to have that taken away is really disappointing. Of course, there was $1.2 billion of cuts to the National Space Mission for Earth Observation program to try to give sovereign capability for the nation.

We have just seen the launch of Kanyini, which is the first state-owned satellite from South Australia to go up into space. The benefits of getting that space heritage, the benefits of having that sovereign capability in space, are so important. Additionally, and I think really close to home here, there was the $20 million cut by the federal government to the Australian Space Park, which was a terrific opportunity looking to bring a consortia of space companies here. That was cut as well. Under the Deputy Premier when she was in the role, there was real uncertainty for the space industry.

When we talk about the defence industry, it was subjected to the Defence Strategic Review, leading then into more uncertainty with the Surface Fleet Review. What really culminated in a show of where the priorities lay for the Deputy Premier, of course, was the disastrous Auditor-General examination late last year, when she showed quite strongly that her priority was the environment by not even bringing the Chief Executive of Defence SA to that examination. She then had to do a mad call and have a mad dash from the CE to try to come in here in that time.

As the CE was in transit, we asked questions important to that portfolio. It really showed the minister was not across the portfolio and her focus was not on defence, which is just so important when we know we have AUKUS and the focus for that. While the first submarine is not scheduled to be delivered until the 2040s, the rubber needs to hit the road immediately because, of course, from the South Australian defence industry's perspective, we need those companies to get into the supply chain.

The Labor Party have tied themselves up in knots around what their positioning is, what they feel about the future of conventionally powered and nuclear-powered submarines to be built in South Australia. Just last year, we saw Labor branch members in Boothby, which is situated in my electorate of Morphett—Boothby is represented by Louise Miller-Frost, the Labor MP there—pass an anti-AUKUS motion, one of the few such motions across Australia that were passed by Labor sub-branches.

This would indicate that the Labor MP there, Louise Miller-Frost, is not fully supportive of the thousands of jobs that the AUKUS nuclear-powered submarines being constructed in South Australia will create. We need to have a defence industry minister who is totally focused on the success of that massive undertaking for the nation's security.

Questions were asked along those lines during estimates, and they were answered. Being new in the role, we hope that what appears to be very strong support for that from this current minister continues, because we know how important it is to the South Australian economy.

I move on to another department that I was able to interrogate the costings of, and that is the Department for Energy and Mining, responsible, in no uncertain terms, for delivering affordable energy here in South Australia for households and businesses. Of course, the budget preceded that. The Australian Energy Regulator brought out its default market offer after two years of increases, where they skyrocketed by significant amounts: for households, 34 per cent, up to $710, and for businesses it was staggeringly more, increases of over 40 per cent, upwards of $1,750. They came down by a very slight amount, by as little as 1.5 per cent for households and for businesses a little bit more.

If you look at the three default market offers in the term of this government, power bills for both households and businesses have increased over 30 per cent and, at the same time, the average household here in South Australia is paying more for their electricity bill than households in Melbourne, Sydney and Brisbane. This is a really serious environment for households and businesses.

We saw even more the impact this is actually having on businesses in the papers as recently as this week. We have had a local business, Ballaboosta, explain how their quarterly electricity bill year-on-year has gone up by 35 per cent in the quarter, up from $5,800 to $9,200. That is a massive amount and it is hard for the business to pass on those costs, which results in fewer opportunities for employment, the business owner working harder and the business owner struggling to survive.

Today we have really seen what the effect has been on big businesses that use significant amounts of energy. We have had Nippy's, a much loved South Australian icon, come out and explain that their monthly electricity bill has more than doubled in a year, despite Nippy's using fewer power hours. Their bill has gone up from $51,600 last June to $109,580. That is a significant amount. About a third of that was because of network charges. These are massive costs.

At the same time, the Dairyfarmers' Association have flagged the massive electricity costs that that sector is facing. They have experienced an up to 38 per cent increase on average. Almond farmers as well have explained the massive surge that they have seen, saying they have experienced increases in the last three years while Labor has been in government of 60 per cent. There are real struggles going on for businesses and, at the same time, there does not seem to be much good news on the horizon, because AEMO just last month released their quarterly updates around wholesale energy prices and they showed that in the second quarter this year prices had increased by $80 per megawatt hour, so up from $55 to $135 per megawatt hour. They are massive increases. So on the back of big increases they are staring down the barrel of more.

So in estimates, of course, the first question asked of the minister was what was he doing, because if you look in the budget measures for this budget there were no new measures in the Department for Energy and Mining to help bring down power prices for household electricity. There was money put aside for a green iron and steel strategy, money put aside for the Hydrogen and Renewable Energy Act, money put aside for the Whyalla steelworks transformation and money put aside for Whyalla accommodation for the hydrogen plan workforce.

So there was money being poured into hydrogen, and at the same time money was being spent on the power plant: $126 million according to the budget for 2023-24, with another $380 million projected to be spent in this financial year, on a project that the government have said is not targeted at lowering household electricity bills. Of course, the minister's fallback, when explaining what they are doing, was to blame anyone but the government and to blame it on an east coast energy crisis.

But when the point is made, as I made previously, that we are seeing prices paid by South Australians for their power bills that are more than for the average household in Brisbane, in Sydney and in Melbourne and that that does not stack up, then it is explained that the plan is going to be more of the same. It is the same approach that was taken when the current minister was the energy minister in the former Labor Weatherill government, when we saw electricity prices skyrocket. Those were brought down when the Liberal Party was in government for four years, and now, when we are back in the opposition seat, we see prices skyrocketing once again. So the plan is for more of the same to go with, as I said, what is coming down the line in terms of wholesale prices. These are really concerning responses.

In terms of the actual spending, I talked briefly about the overspending going on in the Department for Energy and Mining. One of those areas, of course, is in the Office of Hydrogen Power SA. The very first budget, the 2022-23 budget, said that that office would be spending $2 million per annum and would employ 8 FTE. Last year's budget said that it increased: it went up to $7.8 million and 23 FTEs in the estimated result. What we find in the budget now is that the actual for 2022-23 was $13.6 million. So, even in the space of a short two months, between the budget and 30 June, costs blew out even further.

In fact, what we see is this continuing at an alarming, escalating rate. We see another blowout occurring in the 2023-24 year, where the estimated spend in the Office of Hydrogen Power was $35 million, and this year it is budgeted to be $25 million. So, all up, it is nearly $75 million, and then we have to take with a grain of salt that that $35 million will be $35 million. All up, for that $75 million over three years we are on track and on trajectory to be spending $100 million in the Office of Hydrogen Power over and above what is meant to be spent in terms of the power station itself.

In terms of that, questions were asked about what the $126 million had been spent on. Of course, when I asked how much had been spent on storage, the minister could not explain and was not able to tell because it was under procurement. When I asked what was to be spent on the electrolysers, he said, 'I can't say; it's under procurement.' When I asked what was being spent on the turbines, we at least got out of them that $25 million had been spent. So that is another $100 million where we do not know where it has been spent, and we have no confidence about what the other $380 million coming up in this financial year is going to be spent on.

Time expired.

Mr PEDERICK (Hammond) (16:18): I rise to make a contribution to the Appropriation Bill. Budget estimates are always an interesting time. Sometimes you get some reasonable answers and sometimes you do not, but it is a process that we go through in the parliament. I commend all the public servants who do the research in the background to make sure that the ministers can at least be informed.

I want to talk about development. In the first instance, we are all well aware of the housing crisis, not just in this state but throughout this country and around the world. It is something that needs to be addressed, and I am proud that my electorate is doing its bit to address it on a local basis. Part of that process is the Gifford Hill development that is coming online over the next 40 years. When I say it is coming online, there is action already underway on the housing part of it, a project that is only going ahead because of the vision of the Murray Bridge Racing Club, the horse racing club, to move their facilities from in the town out to Gifford Hill, about three or four kilometres outside Murray Bridge, procuring some land.

This conversation started back in 2003, three years before I got elected. Certainly, I applaud the Murray Bridge Racing Club for their forward thinking, on going out there and working with Burke Urban at the time, not just getting a racing club built but a project that is part of a bigger plan of revolutionising Murray Bridge and surrounding districts. As we move forward and as the discussion has been through estimates and beyond the Greater Adelaide Regional Plan and the growth that is forecast to happen from Murray Bridge up through to Callington, I was very pleased to see the other day the announcement of these 17,100 homes that Grange will build.

One thing that was very interesting was that there were no government members or ministers near the announcement, which was disappointing. You have to wonder, when it is such a major announcement in this state. This will really be a game changer. There are plenty of negative Nellies online and wherever else saying it will not happen, but people need to remember that this project started 21 years ago and it is a long-term project. Within a couple of years, the first 1,400 homes will be on the way.

Obviously, you have to dodge through that minefield of planning regulation, not just through the state processes but local government processes. Obviously, there will be multiple schools, there will be healthcare facilities over time and it will essentially triple the size of Murray Bridge. The developer, Grange, certainly has interest in land not just at the original Gifford Hill site. There is land adjacent. Some of that land is fine. It is not in the Environment and Food Production Areas, but some of it is. So there are going to have to be some changes around the Environment and Food Production Areas to see the full realisation of this project, not just in the area near and around Gifford Hill but further out as it moves forward over the decades.

Minister Champion and the government need to be aware of that. If I had my way, the EFPA (Environment and Food Production Areas) block on development in this state would be completely got rid of because there are so many planning rules and people have to jump through so many hoops anyway, and this is just a hoop that blocks realistic development into the future. I applaud everyone involved in that major development locally.

Also, during estimates, we had a discussion around regional roads. It was very disappointing to see that, through the budget process, the capital program funding for regional roads and transport projects has decreased by $172 million compared with last year. There was $310.6 million in new money allocated for regional road and transport improvements, but $250 million of that is for upgrading the South Eastern Freeway between Mount Barker and Adelaide. This leaves a measly $60 million in new money for the 24,000 kilometres of truly regional roads across the state.

It is a bit like the $98 million that we saw allocated to road safety funding but then we see $40 million or $42 million of that going to upgrade a roundabout in Mount Barker, which does not have to be upgraded. I challenged the local member when he was the Speaker one day in here and said that money should be transferred to the intersection on the freeway outside Mount Barker, which is essentially a dog's breakfast and needs a new roundabout and a new way, as part of the Hahndorf project, to get people onto the freeway or off of the freeway appropriately. Anyone I talk to in Mount Barker is just stunned at this other roundabout, where there will have to be compulsory acquisitions and it will take out the local fish and chip and chicken shop and other houses, etc. Anybody locally can see that it just is not the issue that it is made out to be.

I was questioning the Minister for Transport about alternative freight routes between Murray Bridge and Mannum to get freight out of Murray Bridge, which is part of the discussion of the Greater Adelaide Freight Bypass. As we have seen, and I have mentioned multiple times in this house, there has been an expansion in the size of freight options moving forward, noting that nothing bigger than a B-double truck can come down the freeway. All of those bigger combinations—right up to AB-doubles, which is essentially a B-double with another semitrailer hooked to it—have to go around.

I applaud the work that is being done on the Halfway House corner on the Sturt Highway and am questioning the minister about that. That is being built for triple trailer road train capacity. I applaud that forward thinking going into the future, because you do not always see it. But sadly, there is the Hahndorf project, where we saw $250 million sucked out of a project by the Labor Party both federally and state. There is $200 million that has been sucked out of the Truro freight bypass project, which is disgraceful when we are trying to do our best to get as much freight as possible around Adelaide and around the Hills and off the freeway.

Carriers are already doing that. It does have its issues, because it does add extra time for truck drivers, and time is valuable. They can only be on the road for 12 hours a time, so it is not just a simple process of adding another hour or an hour-and-a-half to a journey, because obviously they have to manage their logbooks for safety reasons. It is something we need to be mindful of.

I note that the government are looking at another bypass route instead of taking heavy freight through the current Morris Road-Hindmarsh Road route through to Mannum Road and then up towards the state highway. They are looking at coming in around Monarto, which some trucks already do, but making it the formal route. A new $4½ million roundabout will have to be built at Monarto on the Old Princes Highway corner and the route will be put around there.

The business case is still underway for the Swanport Bridge duplication: the first five kilometres of the south-east duplication of the Dukes Highway—or Princes Highway; it is pretty close to each one, but heading out towards the Motorsport Park—out of Tailem Bend to get that duplication program that is so desperately needed. I know there have been different investigations and business case studies underway, and we learned during estimates that they are ongoing, but the Swanport Bridge definitely needs duplicating.

We definitely need a major investment back into our regional road systems. In the time since we were in government, I am appalled to see the progress of mainly projects that we instigated when we were in government. I look at the duplication works to Lochiel on the Augusta Highway project and it is appalling. This project should be finished by now. We started it in government and there used to be a lot of vehicles, people and machines working on that project; I think I saw one truck movement the other day when I was going through. It is just starved of workers. It is like the government are deliberately starving the budget for that.

Another project that I am passionate about is the Strzelecki Track upgrade project, which still is only 40 per cent completed and I believe is collapsing under poor management decisions and just not getting the money that was allocated in the budget to get that project completed.

Talking about emergency services, I am still intrigued about the CFS facilities audit and the $817,000—and we asked questions about this in the estimates process—that has been allocated to the CFS to investigate their facilities, which includes CFS trucks, sheds, bases, etc. This is an organisation where hundreds of millions of dollars have been invested over many years. I salute the 13,000 volunteers in the organisation; I am one of them. It is just bizarre that an organisation that big cannot go to a database of what their facilities are like and what they have and just dial it up. I am stunned at that.

I know that during the process there has been an amount of $1.65 million allocated to the Metropolitan Fire Service for PFAS remediation and testing. It is good to know that that testing is underway and some contaminated sites have already been identified.

Another thing that shocked me: the other day I went to my local brigade, Coomandook, for the annual general meeting and I saw a big checker plate alloy bin. I said, 'What's that?' and they said, 'That's the laundry bin.' I said, 'Are you serious?' Right across the state, these laundry bins are being deployed—with a big lock on them, obviously—and put outside the sheds so that people can put their uniforms in there if they need to be sent away to get washed. They will go in tubs and be pulled out and there will be a contractor who will drive right around the state picking up uniforms. I just cannot believe it.

For the money to build these storage bins, you could have put an industrial washing machine at every facility. I just cannot understand the money going into this project. I get the theory of it because of structure fires and problems with asbestos. We had a structure fire that our brigade fought last year, I think it was. I get that it is about protecting people and getting the clothes looked after without taking them home to wash, but I think there is a far more economical way to do it.

In veterans' affairs, it is great to see that in South Australia more than 47,000 people have served in the Australian Defence Force. Mental health and wellbeing continue to be the main matters of importance for veterans. There are still some issues with the federal Department of Veterans' Affairs. It is an ongoing challenge for veterans in South Australia.

I must say as a proud Port Adelaide supporter—I am very happy to see them at number two on the ladder, and they will get two home finals—it was great to hear about the great work they are doing with veterans via the Power Community Limited ADF Veterans Program assisting veterans with the transition to civilian life. It has also been good to see the Veterans SA Career and Business Mentoring Program ongoing. This was an initiative of the former Marshall Liberal government and I hope it will continue well into the future.

I want to talk about energy quickly. I know gas was raised today during question time. With all the talk about green energy and how good it is, I think we are really going to see what goes wrong with the massive solar farm and the amount of wind turbines that are going to be built to run the so-called hydrogen plant at Whyalla. I think it is going to have to generate a massive amount of energy because 80 per cent of that energy will be lost in the transition through to hydrogen.

I think the only way it is going to work, in my mind, is a great big gas pipe in the back of the plant. The issue is that we are running out of gas, and one of the reasons for that is we have protestors—whoever they are and whoever they want to be—protesting against gas developments right around the country, whether it is the Scarborough project off WA or the Barossa project off the Tiwi Islands run by Santos, and the billions of dollars they will put into the country. There is also the stalled Narrabri project in New South Wales.

There was a bit of a conversation by Minister Koutsantonis about factors affecting gas shortages across the country, and he mentioned where our party voted to ban gas extraction in some parts of the state. One comment he made was:

I exclude the member for Hammond from that criticism [of that decision] who was a supporter of the gas industry and was prepared to cross the floor to vote with the opposition to stop that. He is a man of principle.

That is very interesting coming from a mining minister who, when the Bird in Hand project was fully authorised by the department and had the full environmental approvals after over a decade of assessment, stepped in as the final arbiter and stopped the Bird in Hand goldmine in Woodside with his decision, overriding all the environmental statements and investigations that had been done. It is just outrageous.

There is similarity to where Tanya Plibersek federally has just blocked a billion-dollar goldmine near Orange. I note that the New South Wales Labor Party is having a fight with the federal Labor Party over getting that investment into New South Wales because they acknowledge the need for the money to be extracted, literally the gold and those critical minerals, for the state and the country.

As my time is starting to roll out, there were questions about net zero and agriculture. There is great concern about the baseline of where those investigations start, because farmers have been utilising single-pass, no-till and zero-till farming practices for over 30 years, which has been putting in great amounts of carbon sequestration over that time. Farmers come to me and say, 'Where do we stand in this process? Where do we stand going forward?'

The minister, the Hon. Clare Scriven, asked me if I was referring to carbon credits. I said that it is not just carbon credits but farming in general and what they are doing to build up the soil profile. The minister made the following comment:

I think, on what might be a fairly rare occasion, I am going to agree with the member for Hammond on a topic, which is that the farmers have been doing a lot of great work.

Yes, they have, but they need to know where they stand going into the future. It is one thing to say, 'We'll have this net zero program,' but if the line in the sand is going to be in 2024 and not back in the 1980s or 1990s when a lot of these farming practices were changed from multiple passes over paddocks and people were taking great advantage of managing their soils, managing their water retention and managing the whole process, where do they stand? There needs to be a major investigation into that going forward, and I hope the minister takes on board the discussions that we had during estimates.

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries) (16:38): I thank all honourable members for their contributions. I recognise that in the contributions members have taken the opportunity to reflect on the committee stage of the Appropriation Bill or, as we refer to it in the standing orders, the estimates process. I also recognise that members have taken the opportunity to make a number of reflections on matters that pertain to their own electorates. As members would be aware, there is not always the ideal opportunity for members in contributions on legislation to speak more about their electorates, but the Appropriation Bill, along with the Supply Bill, is one of those rare opportunities.

I thank all the members for their contributions. I also thank them for their participation in the process of considering the bill, including in the estimates committees. I thank members on both sides for their participation in that. I also thank the staff of the house for assisting the members in going through that process and the two Chairs for their conduct of the committee stages of the bill, one in each chamber. With that, I conclude my remarks.

Motion carried.

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries) (16:40): I move:

That the remainder of the bill be agreed to.

Motion carried.

Third Reading

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries) (16:40): I move:

That this bill be now read a third time.

Bill read a third time and passed.