Bills

Appropriation Bill 2016

Second Reading

Adjourned debate on second reading.

(Continued from 20 September 2016.)

The Hon. R.I. LUCAS (15:27): I rise to support the second reading of the Appropriation Bill. In doing so, I acknowledge, as is most often the case, that the parliament is asked, in considering the budget, to consider two companion bills: one is the Appropriation Bill and one, this year, is called the Statutes Amendment (Budget 2016) Bill.

I will address my general comments in relation to the budget and the government's economic direction and some overall thoughts on the state's future economic direction in my contribution to the Appropriation Bill. The detailed analysis of some of the budget measures I will leave to the companion bill. I note that, as was the case last year, I have been assisted by an eminent tax lawyer around town with some detailed advice and questions for the government in relation to specific provisions of the taxation elements of the budget bill, which I will place on the record in the second reading of the budget 2016 bill and seek a considered response from the government in that particular debate.

The Treasurer of South Australia, in bringing down the budget and publicly defending the budget, described in his own immodest way that this is a 'God's work' budget; in essence, that the provisions or important provision of this particular budget, in his view, was God's work. I think even his own colleagues cringed at the evident lack of humility in the Treasurer's approach to his own budget and the description of the elements of the budget and the potential impact of the budget. I can assure the Treasurer that nobody else in South Australia sees this particular budget in the context of it being God's work.

I think it is self-evident testimony to one of the principal failings not only of the Treasurer but also the government that, after more than 14 years in government, their creeping arrogance now knows no bounds. We see it in the approach of the government generally, of the Premier and also of the Treasurer. I think it is demonstrated very capably by a Treasurer who describes his budget as being God's work. Let us look at this supposed 'God's work' budget in terms of its actual implications. The Treasurer and the Premier again this year describe this budget as a jobs budget.

Last year's budget was described as a jobs budget and, of course, South Australia, through all of last financial year, continued to have the worst unemployment rate of any state or territory in the nation, and jobs growth in South Australia, compared to virtually every other state, was the lowest or the worst over the last 12-month period. In fact, when you go back and compare it to the promise made in February 2010 of delivering 100,000 new full-time jobs within six years—that is, by February 2016—clearly, it is a massive fail and a massive broken promise in terms of the government's lack of delivery on that promise.

That was last year's budget, which was supposedly a jobs budget. Again, this year, the Treasurer and the Premier have described this budget as a jobs budget. However, when one looks at the detail of the budget documents released as part of the budget, one sees that even the Treasurer's own department does not believe that this is a jobs budget. That is clear from the economic growth forecast brought down by Treasury and the jobs growth forecasts brought down by Treasury. In particular, the Treasurer's own department forecast that jobs growth in this financial year, 2016-17, will be only 0.75 per cent—less than half the jobs growth rate of 1.8 per cent predicted by the federal government for the national economy.

We have a Treasurer who says this is a 'God's work' budget and a jobs budget, yet his own Treasury does not agree with that and says that jobs growth will only be 0.75 per cent over the next 12 months—less than half the national jobs growth rate. Clearly, South Australia's unemployment rate will continue to be either the worst or the second worst—the worst of all the territories and states or the worst of all the mainland territories and states, depending on the comparative position of Tasmania's performance vis-a-vis South Australia's performance.

Nevertheless, on whatever measure, it is clear that Treasury believes that our unemployment rate will continue to puddle around at the bottom of the ladder, rather than being anywhere near the middle or the upper echelons of the unemployment figures. In last year's jobs budget, Treasury predicted 1 per cent jobs growth in the year. The actual jobs growth was again only half the conservative estimate of jobs growth for the last year. Last year, they predicted a 1 per cent jobs growth. The actual jobs growth was less than that: it was half a per cent. This year they are predicting 0.75 per cent, and one can only hope that we do not end up with half of that—that is, less than 0.4 per cent jobs growth in 2016-17.

The other thing that is self-evident in this particular budget is the government's continuing reliance on further increases in tax, charges and levies. We see an increase in the solid waste levy, which is going to cost South Australians an extra $64 million over four years. We see that taxis, chauffeurs and ride sharing trips will attract a new $1 levy for every metropolitan trip from 2017-18. There is to be a new 15 per cent wagering tax for online gambling. Parents working in South Australia under 475 visas will now have to pay fees of up to $5,000 for primary school students or $6,000 for secondary school students to attend public schools. There is a raft of other smaller increases in taxes, charges and levies littered throughout the budget documents.

There is an ongoing reliance of the government on further increases in taxes and charges. The Commonwealth Grants Commission, on their independent measure of whether you are a high-taxing jurisdiction (they call it the Commonwealth Grants Commission tax effort ratio calculation), calculate that South Australia, under a Labor government, will be the highest taxing jurisdiction in Australia. There will be massive increases in state-based taxes, charges and revenues whilst at the same time we see very significant increases in federal funding coming into South Australia in 2016-17 compared to 2015-16.

There will be an increase of $528 million in GST fundings coming to South Australia this financial year compared to last year. That is more than half a billion dollars extra in a year-on-year comparison. That is not a four-year comparison; that is just a year-on-year comparison in terms of increases in GST funding. Yet, Mr President, as you and others will know, the government has continued to run a line that there have been actual reductions in commonwealth funds to South Australia.

What might have been more accurate was to say that the rate of increase of commonwealth funds to South Australia had been reduced from what had been promised by Gillard and Rudd in a number of areas. It was never accurate to say that there were actual cuts, in real terms, of commonwealth funds year on year. Commonwealth funds continue to increase. The opposition was on the public record two or three years ago, when the commonwealth government indicated that the rate of increase was going to be reduced from what had been previously promised to South Australia by the commonwealth Gillard and Rudd governments.

The sad reality of what we see in the Appropriation Bill and the attached general budget documents is, as I said, an overreliance on increases in taxes and charges, and an unwillingness of the state Labor government, after 14 lazy and unproductive years in terms of economic growth and jobs growth in South Australia, to actually tighten up on gross waste and overspending within government departments and agencies. We see in this particular budget new job schemes with catchy new job titles and catchy new television commercials to sell them, paid for by the taxpayers. If one was to go on the 14-year record of the Labor government, sadly we will not see significant economic growth or jobs growth from any of the government's job programs.

Just looking at the recent history of some of these programs, there is evidence of the inability of the government to recognise the economic problems that confront the state, and what the solution should be. Just over two years ago, the state government announced a $4 million loans to small business program as part of the deal with the member for Frome, in the document referred to as the 'Brockument'.

When in the Budget and Finance Committee we asked, 'Well, there have been four million in loans for small business as part of this deal with Mr Brock, how many loans have you actually implemented?' The answer was: not one single loan had been provided to a single business, anywhere in regional South Australia under this catchy $4 million loans to small business jobs program. Not one business had actually received a dollar from this particular program.

We also had the $50 million Unlocking Capital for Jobs Program launched with much fanfare and publicity, taxpayer-funded advertising, and launched by the Premier and the Treasurer as being a jobs program which was going to create significant numbers of jobs in South Australia. Again, in the Budget and Finance Committee, when we asked how many businesses had benefited from the $50 million Unlocking Capital for Jobs Program, we were told there had been one application and one guarantee to a single firm after the first 18 months of the program. One application, one firm, one grant out of the $50 million Unlocking Capital for Jobs Program.

This is just another clear example of the fraudulent nature of the Labor government in South Australia, the fraudulent nature of the jobs programs that they continue to launch with publicity, with fanfare, with catchy titles and tunes, but just not realising or recognising that they missed the point completely in terms of tackling the jobs problems in South Australia. It is unsurprising when you have a government being led by people like the Hon. Mr Weatherill, the Treasurer, Mr Koutsantonis, with their backgrounds, and ministers in this house like minister Hunt, minister Malinauskas and minister Maher, with no experience, no knowledge and no understanding of the reasons for the economic problems in South Australia.

They have had 14 years to tackle the problems, but have been spectacularly unsuccessful over those 14 years. Should their term in office come to a conclusion, as many would hope, in 2018, I hope some of them would reflect with shame on their performance over the last 16 years, or however long they have been part of the government, and their unwillingness to listen to what needed to be done to try to turn the state's economic future around.

Their arrogance, in terms of being all-knowing, we see all too often in this chamber in question time. The attitude of the three ministers that we have in the chamber is, 'We know better, you don't know anything.' We have this supposed intellectual superiority, which some ministers like to feign, or like to pretend that they are superior in some way to anyone who does not happen to be within the Labor Party or on the government benches at the time: that is part of the problem.

We see the Investment Attraction Agency, which had $15 million in grants up until this most recent budget, when its budget was further increased, but in those first two years, they received $15 million in grants and they had spent $13.6 million on 40 staff to administer the delivery of the $15 million. When the Hon. Mr Darley, the Hon. Mr McLachlan and I heard that in the Budget and Finance Committee we almost could not believe what we were being told. I guess we were unsurprised in this case as it was Mr Hamilton-Smith who had personal responsibility for this, a man known for loving to empire build.

How could anyone, any government, defend having a $15 million jobs program and spending $13.6 million over two years on 40 full-time equivalent staff to give money away to businesses? I just do not know how ministers like the Premier, the Treasurer and the three ministers in this house can defend such gross, abhorrent wastage of taxpayers' money, yet on a daily and weekly basis they stand up and defend their appalling record in relation to jobs programs, jobs growth and economic growth in South Australia.

At the time of the Budget and Finance Committee, which was in May this year, one can only hope that there might have been some progress, but again we had the $10 million Small Business Development Fund announced as part of the Northern Economic Plan, and we were told that no grants had been issued at all to anybody under that particular plan, and that with the $7 million for the Food Park, announced as part of the Northern Economic Plan, again no funding had been provided and no guidelines had been finalised, but that was as at May of this year. I understand that in relation to that there might have been a minimal amount of progress in those areas.

Sadly, I could go on forever and a day highlighting jobs programs that have been announced, packaged, sold and advertised over the last 16 years of this Labor government, and look at their spectacular lack of success. All that happens is that a new title is found, new packaging is done and it is reannounced in a different form in a subsequent budget.

Similarly, we have seen spectacular examples of waste of public money in terms of overspending and managing of government departments and agencies. My colleague the Hon. Mr Wade and others have highlighted the more than $600 million blowout in the cost of the new Royal Adelaide Hospital, and we are no closer to seeing an opening of that new institution.

We had the spectacular blowouts in the cost of the EPAS program and the significant reductions in scope of the EPAS program to try to keep it within the spectacular blowout figure in terms of the cost of the budget; the spectacular blowouts in the cost of the RISTEC IT program within Treasury, Koutsantonis' own department—a $20 million IT project that blew out to over $50 million—and they still had to reduce the scope of it because it kept on blowing out; and other IT projects in other departments on which the Auditor-General has reported.

This government spent $376 million on targeted separation packages to reduce the number of public servants in South Australia, and when we asked the question, 'Well, okay, you spent $376 million between 2010 and 2015 on targeted separation packages: what has been the reduction in the total number of public servants?' The answer that came back was, 'Well, there hasn't been a reduction; we've actually increased the number by more than 2,000 full-time equivalents.'

So, whilst the government has been shovelling money into the pockets of public servants going out the front door, the government has been shovelling even more public servants in through the back door, contrary to the budget documents over the last seven years now predicting that they would reduce the total number of public servants because they did not need that number of public servants, in the words of the Labor Premier and the Labor Treasurer at the time.

We have seen examples in the Budget and Finance Committee where the new chief executive officer gets a $125,000 pay increase, plus some hidden benefits in relation to car entitlements, and then sacks a public servant, a senior executive in the department, and the taxpayers pay out somewhere between $200,000 to $300,000 to the executive who was dismissed, and within weeks that same executive is re-employed by the Weatherill government in another government agency, in SAFECOM, in a senior manager's position.

An executive is sacked, the taxpayers pay out $200,000 to $300,000, and weeks later the Weatherill government re-employs the person in a government agency, in a senior manager's position within that particular agency. They are the sorts of examples that, sadly, anyone who wanted to devote the time could spend literally hours and hours on in terms of highlighting the waste, the mismanagement, the incompetence, the negligence of this Labor government and, sadly, these Labor ministers.

The reality is that they have no understanding of how to run a budget, no understanding in terms of financial management, no understanding of the efficacy of jobs programs in terms of delivering jobs growth in South Australia, and it is the people of South Australia, after 14 years, who are the ones left to lament. They are the ultimate losers of 14 years of financial incompetence of the government.

If I can conclude this section of my Appropriation Bill debate before turning to another: I guess the one figure which demonstrates this so conclusively is the budget figure buried in Budget Paper 3, which shows that, in the forward estimates, this Labor government is now predicting that total state debt will jump to over $14 billion again. At the time of the State Bank disaster, state debt peaked, sadly, at $11.6 billion. After nine years of a Liberal government in 2002-03, when this government was first elected, that $11.6 billion debt had been reduced to around about $3 billion, a very manageable, low-level total public sector debt—from $11.6 billion down to $3 billion.

What this Labor government has done over a period of 14 years is increase the total state debt to over $14 billion, at a time when they had the rivers of gold flowing into South Australia through the GST deal negotiated by the former Liberal government with the commonwealth Liberal government, at a time, up until the GFC, when they had the rivers of gold flowing in from the property boom and state-based land taxes and other property taxes which led to massive unbudgeted increases in revenue flowing into the coffers of South Australia.

Rather than frugally managing those rivers of gold and managing the budget for the rainy periods that inevitably, in financial terms, would come, the government increased its spending and continued to spend, and we had a period of six or seven years of massive deficits because the state had ratcheted up its level of expenditure, its spending and its overspending, and it was unsustainable in terms of the revenue loads once the GFC and the tough times hit the state of South Australia. That is the lack of financial competence. That is the financial mismanagement and the negligence that, sadly, the people of South Australia have suffered through for the bulk of the last 14 years. They will have an opportunity again in two years, if more than 53 per cent of them this time can actually support a change of government.

The second issue I want to address in the Appropriation Bill debate, which is included in the new expenditure that the Premier and the government have sought approval for, is the whole debate in relation to the nuclear fuel cycle. We have already spent, as a state, just over $10 million and we clearly continue to spend taxpayers' funding out of the budget on an exploration of the nuclear fuel cycle debate and, in particular, the view from the Premier and the Labor Party that South Australia should be considering a high-level nuclear waste dump facility somewhere in South Australia for high-level waste from around the world to be disposed of long term somewhere within South Australia.

As the Premier indicated in his ministerial statement today, and on a number of other occasions, the government continues with its consultation period. The citizens' jury process, again a part of the public funding, continues. The parliament has established a joint standing committee to investigate the issue, which has two major parties and two minor parties represented on the committee. The Premier has recently visited Finland to explore the issues that relate to South Australia being a nuclear waste dump in the future.

Clearly, the imperative in all of this has been the argument that there is much revenue that potentially can be earned for South Australia to help resolve some of the budget problems that we currently confront, and the royal commission report highlights some of those numbers and what the future government might be able to do with the money that it earns from a nuclear waste facility. There is discussion in that report about wealth funds and money being absorbed into the budget and there have been discussions, of course, as to how the state might spend some of the revenue that it might earn in the future.

I think the first point, in speaking to this issue today—which clearly has significant social implications but I am more interested today in talking about the economic impacts as part of this Appropriation Bill and budget bill debate—is that the joint standing committee only recently returned from a similar venture to the Premier's in terms of looking at some of the nuclear waste dumps and facilities around the world. The Premier visited Finland but the standing committee visited Finland, the waste facility in France, and went to America to talk to the people—we did not actually visit the facilities—at Yucca Mountain in Nevada and the WIPP facility in New Mexico, and we met with many other agencies, individuals and organisations involved in this particular debate.

The comments I make today, clearly, are only my own as an individual. I do not put them on the record today as being representative of the views of any of my parliamentary colleagues on the committee, who may well have a different perspective and different views, and they certainly do not represent the views of my party at this particular stage either.

The trip was both informative and invaluable. I think for the committee to do the job that it has been tasked to do, it could not do that without having the opportunity to actually look at, see and question at first hand the people involved in those facilities and those projects around the world who are trying to tackle this particular issue.

I have to say, in summary, that, as an individual, I returned from the trip more sceptical than less sceptical about the prospects of the project getting up in South Australia. I want to explain why I am more sceptical now than I was before. Prior to leaving, I had publicly indicated my viewpoint that a potential deal-breaker for me, in terms of considering a nuclear waste dump in South Australia, was the evidence the committee had taken from Jacobs MCM, one of the consultants. This had indicated that the taxpayers of South Australia would have to spend up to $600 million before we actually made a final decision as to whether we would proceed or not.

Let us just put that $600 million into perspective. That is one new Adelaide Oval redevelopment; it is allegedly what a new Women's and Children's Hospital would cost—not that I believe the Minister for Health in relation to that cost estimate, but that is what he said, $600 million.

The Hon. S.G. Wade: It is an NRAH blowout.

The Hon. R.I. LUCAS: Yes, it is an NRAH blowout, as my very helpful colleague Mr Wade indicates. Six hundred million dollars is a not insignificant sum of money. To be fair, both the government, I suspect, and certainly the joint standing committee are going to want to flesh out whether or not that amount of money can actually be reduced—that is, we spend less money up front before we make a decision. The prospect of actually spending $600 million on behalf of taxpayers and 10 years down the track saying, 'Whoops, this is all too hard, we're just going to write off $600 million on behalf of taxpayers,' is a bridge too far for me, personally.

On our travels, we did meet people involved with the original Pangea proposal. They frankly said to us that that original Pangea proposal had blown $600 million on looking at a nuclear waste facility—which, in the end, never went ahead—more than a decade ago, as we well know in Australia. However, that was money not invested on behalf of the taxpayers of South Australia. There were private investors, foreign investors and governments who put their money up and lost it at that particular stage.

Would any government, at some stage down the track, want to stand up in the parliament and say, 'Well, it was a good idea at the time from Premier Weatherill, those of you who remember him from a decade ago. We have now spent $600 million, and it is all too hard. We don't have the customers, the financial figures don't stack up, and we are now just going to write off $600 million'? I can assure you, it would not be me in 10 years' time having to stand up to do that, but some of the younger members in this chamber or in another chamber might be involved in governments that would have to confront that particular decision.

Whoever they are, whichever party they represent, good luck to you in terms of explaining to the public that all of these billions of dollars that we were going to reap from a nuclear waste dump in South Australia did not quite work out because it all got a bit too hard. We have just written off $600 million of your money over period of time. So, clearly, it is a potential deal-breaker. Clearly, if the project is to be progressed, that lump of money needs to be reduced, or you need to find stakeholders who are prepared to put up their money, take the punt and lose their money.

To be fair, in relation to this, one of the people that we met overseas indicated that, as with the Pangea project, where foreign governments did invest in that particular project and lost their money, maybe there might be foreign governments prepared to put their money up and risk it. Not a prepayment, as the Premier is currently talking about; that is, prepaying for acceptance of the waste. I think the Premier potentially misunderstands what is being discussed here. That is a completely different issue. What you are talking about is potentially having a government or stakeholders prepared to risk significant amounts of capital up front and to reduce the exposure of South Australian taxpayers to the investigation. If that can occur, that is again something that reduces the element of risk for South Australian taxpayers and is clearly something that would be worth exploring.

I would have to say that this particular person who was associated with the Pangea proposal said, however, that in their view $600 million was an underestimate of the initial costs before we make a decision. This person said the costs are more likely to be $1 billion; that is, the state would spend $1 billion prior to reaching the decision as to whether or not you would ultimately proceed or not. Again, the comments I made in relation to the taxpayers being willing to take a punt on a $600 million investment are magnified if the investment is actually $1,000 million (or $1 billion) in terms of up-front expenditure.

This, from my viewpoint, is a potential deal-breaker and this in and of itself is something which has to be resolved. Either the $600 million to $1 billion gets reduced, and you can make a decision earlier, or somebody else helps defray the costs, other stakeholders come in to help defray the costs of the up-front investment.

The second big issue in relation to my increased scepticism, as a result of the study trip, was the knowledge we garnered from, in particular, speaking to the Americans in relation to their two proposals; to a lesser degree the Europeans, but in particular the American experience. The Yucca Mountain experience in Nevada is the perfect case in point. I think the opponents of a nuclear waste dump in South Australia have portrayed Yucca Mountain and the WIPP experience in New Mexico as examples of failures. But I think it is educative and informative for people to actually look at the real reasons behind that and not just accept them as examples of nuclear waste dump proposals that failed because they were not technically capable of achieving results.

The issue in relation to Yucca Mountain is illustrative of the absolute critical need that all levels of government, local, state and federal, have to be in lockstep to support a nuclear waste dump proposal anywhere in America, and the lesson for us, I suspect, is anywhere in South Australia or in Australia as well.

In Nevada, you had a situation—I will not go through all the detail leading up to it—where ultimately the Congress passed what residents of Nevada referred to as the 'Let's screw Nevada bill'; that is, that every other state representative in Congress passed a law which said America's nuclear waste dump facility would be at Yucca Mountain in Nevada. There are a lot of reasons for that, there is a lot of background for that, and I will not trace the history of that on this particular occasion in this debate. Nevertheless, there is a congressional law which says there shall be a nuclear waste facility at Yucca Mountain in Nevada.

As part of the increasingly interesting American political experience, when now President Obama was running initially for office, the state of Nevada was critical in terms of his election. A then senior senator from Nevada, Senator Harry Reid, was a very powerful Democrat senator who promised to deliver the state of Nevada to Mr Obama if the Yucca Mountain facility was stopped.

That political deal was done, the state of Nevada was delivered to Mr Obama, who became President Obama, and that set in train a series of actions to undermine the decision that had been taken by the Congress; that is, through a series of devices, funds were removed from Yucca Mountain, with the assistance of both the new President Obama and Senator Harry Reid, who was at that stage the Senate Majority Leader. He has also been the Senate Minority Leader, but he has chaired a very powerful Senate committee and, through that particular Senate committee, he made sure that various proposals never got out of his Senate committee that related to Yucca Mountain in Nevada, so that funding was cut off.

There was opposition from other counties and the state legislature in Nevada, so various devices were taken to remove water licences to the mine operators. It is a bit difficult if you do not have access to water if you are going to try to run a national nuclear waste repository. The state legislature was opposed. It was controlled by Democrats at the time, so that particular device was used.

The local community at Yucca Mountain, a community of some 40,000 to 50,000 residents of Nevada, actually supported the nuclear waste facility in what would be the equivalent to our local government district, so you had local government strongly supporting it, but you had the neighbouring local governments in Las Vegas and other counties opposing it. You had the state legislature, the senior senator from Nevada and the President of the United States opposing it, so even though the law said, and still says, that the dump should be in Nevada, Senator Harry Reid and President Obama never had the numbers to overturn the law. They had the numbers to stymie, filibuster and delay, but they could never get the numbers to actually overturn the law, so the law remains that the dump should be in Nevada. It has not been able to proceed.

That is the perfect example of why, in South Australia, a dump or facility will never proceed unless, if it is in a local government area, the local government area supports it, both the government and the opposition in South Australia support the facility, and both the federal government and the federal opposition support the facility because there are many aspects to the proposal for a nuclear waste dump in South Australia which cannot proceed without the support of the federal government and the federal parliament.

There are national regulators, such as ARPANSA, which will have to have their regulatory arrangements changed to look after these sorts of facilities. There are national laws which will have to be amended, as well as state laws. There will have to be international treaties and agreements, where the only signatory happens to be the federal government and not the state government of South Australia, which will have to either be renegotiated or complied with.

As we took evidence from some people, there was the view from some in the international nuclear fuel cycle community who say that, if governments are going to write contracts with a provincial government, like the government of South Australia, they will only do so if they know that there is the full backing of the commonwealth government should something happen to the regional government of South Australia. Bear in mind, we are not talking about the next five or 10 years; we are talking about hundreds of years.

There is the view from some that, if these agreements are to be struck, if contracts are to be written, whether or not the commonwealth government would actually be signatories, they would nevertheless have to have actively endorsed and supported them, and be prepared to do so over a long period of time. That raises an interesting question in the case of South Australia and Australia, because currently the federal Labor Party is publicly pledged to oppose a nuclear waste facility anywhere in Australia, let alone in South Australia.

At an upcoming federal election in 2½ years' time, where federal Labor candidates are campaigning in South Australia against a nuclear waste facility in South Australia and, potentially, candidates from the Greens and the Nick Xenophon Team are campaigning against a nuclear waste dump or facility in South Australia, it will be a courageous Liberal candidate or member in a federal campaign who would be out there campaigning hard to support Premier Weatherill on a nuclear waste dump or facility in South Australia.

The challenge for Premier Weatherill and Mr Koutsantonis and others is that, if they want this to be progressed, they have to get the support of the federal Labor Party. If there is not going to be the support of the federal Labor Party, then we, the taxpayers of South Australia, will be spending tens and maybe hundreds of millions of dollars on fool's gold—fool's uranium, fool's nuclear waste dumps. There has to be the support of both the major parties at state and federal level.

Even if the state Labor and state Liberal parties agreed to further progress investigation of the project, I am increasingly sceptical, given the pressures on federal Labor and their current policy position. I do not profess to be an expert on all that goes on within the federal Labor Party or indeed the state Labor Party but, after a number of years in this parliament, I have a passing interest and a passing knowledge of what goes on within the Labor Party and within the factions. I know there will be inner-city Labor Party ministers and members in Sydney and Melbourne tackling battles with Greens candidates who will be pledged to oppose a nuclear waste dump in South Australia.

That in itself will place pressures within the federal Labor Party and the federal Labor caucus as to what their position might be. Whilst a lot of work can be done and should be done in this early stage in terms of the work of the joint committee—looking at what occurs in Finland, France and America—equally imperative, if the Premier wants to progress this, is the work he needs to do here. I am assuming he will have the numbers in the convention later in October in South Australia and that the right will crush the remaining fragments of the left that exist within South Australia.

Even though there is the occasional squeak from the left and the occasional meeting to protest about nuclear fuel, organised by the member for Ashford and others, I am assuming that the right will crush the views of the left at the coming state convention. That is a small part of the task. The big task is the national policy at the national convention and the position of Mr Shorten and others at the federal level. To prevent, potentially, a lot of time, energy and money being wasted, progress needs to be made in that particular space by the Premier, the Treasurer and others if this is to be further explored.

I would like to make a couple of final quick points in relation to my personal reflections. One of the key assumptions, in terms of the billions that we might potentially make, is the royal commission's estimate that we might receive $A1.75 million per tonne of heavy metal. That is a critical part of the billions that we might achieve. I think, to be fair, we heard evidence from some around the world who thought that was actually a conservative figure and that it might be higher. We also heard from some who thought that the number might actually be lower. No-one actually knows, to be fair.

I note that some in the media have reported that the Premier will speak to some of the prospective customers—the three key customers were Japan, South Korea and Taiwan—to see what interest there was and what price they might pay. I do not discourage that; I think that is potentially a useful discussion that needs to be had for a number of reasons. It is easy at this stage for a senior public servant, a nuclear fuel official in one of these governments or even a current minister to indicate a potential price.

The bottom line is that until someone actually has to sign a contract, they can say anything or promise the world. They are not held to it, and in five or 10 years' time can say, 'Well, the whole world has changed since then. We have had two GFCs, and whilst we said $1.75 million was a reasonable price, there is now competition from somewhere else in the world and we are only prepared to pay $1 million.' That is impossible to disprove. Whilst the discussion might be useful, it is certainly not going to be confirmative or definitive in terms of the potential price that we might receive.

In relation to that, we also received conflicting views about the interest of Japan, South Korea and Taiwan in being customers. Whilst it would be unfair to say we had an official view from the International Atomic Energy Agency, we met with around eight or 10 of their people and one of their senior people expressed a view, if I could put it that way. In his view, both Japan and South Korea were currently pledged to looking at waste facilities within their own countries.

Japan was looking at two sites. South Korea in particular, he said, had significant political capital invested in finding their own site. In his judgment, he thought that they would not be interested in being a customer of South Australia until they eventually got to the end of their process and found that they could not find a site within their own country. Bearing in mind that the three big countries in terms of our customer base, according to the royal commission, were Japan, South Korea and Taiwan, if we were to lose one or even two of those, then there is a significant hole in the financial modelling in South Australia.

To be fair, we heard a contrary view from someone in America, who said what whilst they understood that to be correct, it was possible that South Korea and Japan might be prepared to look at plan A and plan B at the same time; that is, proceed as they are with finding their own nuclear waste facility sites within their own countries, but nevertheless be prepared to invest in the exploration of a plan B in South Australia.

I am putting on the record my personal reflections to indicate, as I am sure the Premier and the proponents acknowledge, this is an extraordinarily complicated issue, but it is much more than that. I do not know how much more of an extraordinarily complicated issue you can be, but whatever that is, it is that and much more.

The definitive nature of some of the estimates of the royal commission report and the consultant's report could lead some to believe the accuracy and the adequacy of some of the financial estimates in terms of what the state might earn from this facility. They might be right. I do not stand here today and say that they are right or wrong because I do not think anyone can say whether they are right or wrong; that is part of the challenge of the work of the standing committee.

I suspect it will be very difficult for the standing committee to come to a conclusion, definitively, in relation to what is right and what is wrong. Hopefully, it will be able to shed some more light on the issue and help provide more information for decisions that this parliament, ultimately, has to take. With that, I indicate my support for the second reading.

The Hon. G.E. GAGO (16:25): I rise to speak on the Appropriation Bill. I am very pleased to say that the aim of the 2016-17 budget is to create jobs, to develop future industries and to ensure our children have the right skills for transforming a modern economy. This year's budget:

builds on the 2015-16 budget;

provides further support to grow local jobs;

develops our future industries;

continues to build on our infrastructure;

invests in the community; and

delivers a sustainable budget, both now and into the future.

The budget delivers a surplus in 2015-16 and across the forward estimates. Expenditure initiatives in the budget deliver government services and support jobs growth, while being maintained at a sustainable level. Average real expenditure increase across the forward estimates is only 0.4 per cent per annum.

The budget provides tax relief for industry in several ways: first, by extending the payroll tax rebate for four years, with extension of the current concessions for employers with taxable payrolls less than or equal to $1.2 million ($40 million over four years). The maximum rebate is $9,800. Secondly, the government is providing job accelerated grants. This recognises that, whilst some traditional industries are under pressure, new industries are growing. Support businesses are also growing, and it provides up to $10,000 grant for businesses paying payroll tax for each additional worker hired.

It provides up to $4,000 grant for small businesses (not paying payroll tax) for each additional worker hired. There are estimated grants of $109 million over three years for 14,000 jobs. Coupled with our extension of the payroll tax concessions for a further four years, any South Australian small business hiring two extra workers over the next two years, bringing them into a taxable payroll of just under $1 million, would benefit from almost $40,000 in concessions and incentives. Treasury estimates that these grants will support 14,000 new jobs over the next two years.

Extending and expanding the off-the-plan stamp duty concessions for one year: eligibility has been extended from inner metropolitan Adelaide to the entire state. A maximum concession of $15,000 is available, and it is estimated that 800 apartments will benefit from the concession. The budget invests over $1.5 billion each year in building and upgrading key infrastructure. This creates an average of 5,800 jobs per annum.

Over the next four years the government will invest over $12.1 billion in infrastructure, including:

$3.2 billion for health facilities (including NRAH);

$2 billion for roads (including the Northern Connector, Torrens Road to River Torrens South Road upgrade, and the North-South Corridor Darlington upgrade);

$1.6 billion for water infrastructure;

an additional $783 million for public transport (including the Goodwood and Torrens rail junction upgrade, the O-Bahn extension to the city, and the Adelaide to Salisbury rail line electrification);

new spending includes a tramline along North Terrace; and

$588 million for housing.

That is just some of our commitment to infrastructure. The budget includes $500 million to develop and upgrade STEM (science, technology, engineering and maths) facilities in primary and secondary schools. STEM is an area that, as we all know, is vital to innovation and advancing an economy. It is an area that we often fall short on in Australia, and in particular in South Australia. We know that our need for STEM qualifications far outstrips those skills that are available.

The cost of providing STEM education is generally high for schools and educational institutions. For instance, a science lab is one of the most costly outlays for a school, and due to this cost it is often very difficult for schools to upgrade and modernise their facilities when faced with a high rate of change. The pace of change in technology is extremely rapid, and so many schools do struggle to maintain up-to-date facilities.

These grants will allow schools across our education system to benefit from modern STEM teaching techniques and create a new generation of STEM students eager to contribute to our innovative society. The government is providing $250 million for 139 science, technology, engineering and mathematics facilities in public schools, 77 in primary schools, 44 in high schools and 18 in R-12 and area schools. A $250 million loan facility for non-government schools is providing funding for school infrastructure projects at the government's borrowing costs. The inclusion of non-government school loans in the scheme ensures that regardless of the type of school and its financial situation, South Australian children will be able to access modern, up-to-date STEM facilities.

The budget also recognises the importance of the defence sector to the South Australian economy. We know that South Australia is undergoing a change in the type of economy that we have, replacing the devastating loss of Holden's. Without the federal Liberal government's assistance to Holden's, we now know that they are going to withdraw their facility in South Australia. Therefore, our defence sector becomes critical to our future.

South Australia has proven that we had the ability to be a strong player in the defence sector. We have a proud history and a good track record in that respect, and after a long hard campaign by this South Australian Labor government, the federal Liberal Coalition finally saw fit—actually they were dragged kicking and screaming—to value the people of South Australia over international interests and support our bid to receive the submarines building contract—even though they did try to renege on it at one point in time.

To support and continue our growth in this sector and to ensure it recognises the full potential of the defence sector, we are investing $6 million over three years to support the attraction and development of defence-related industries, $4 million over four years for an engagement strategy with France to maximise the economic and job opportunities for the submarine contract, $2 million over four years for the continuation of the Defence Teaming Centre and $1 million for a master plan for Techport.

As noted, we are in flux in our economy. We are transitioning from a traditional manufacturing economy to a much more high-tech economy. As such, innovation is absolutely necessary to underpin that transition process to help our businesses and our economies develop a strong basis into the future.

The budget supports innovation in South Australia by spending $80 million dollars on an innovation package; $50 million for a South Australian Venture Capital Fund to partner with the private sector venture capital funds to grow SA businesses; $30 million over four years in this budget, including $10 million for the South Australian Early Commercialisation Fund grant program to support entrepreneurs and managers of start-ups and new businesses to grow; $7.5 million for the University of South Australia's Future Industries Institute; and $4.65 million towards the Gig City Project.

The budget supports South Australian businesses by providing $2 million to Brand SA to undertake an awareness campaign supporting South Australian products. This includes partnering with retailers to clearly distinguish the SA made products that they offer. This will enable the public to easily identify and purchase products and services that support South Australian jobs. Many South Australians are only too happy to buy South Australian products; however, when faced with a myriad products in front of them—I know when I go supermarket shopping, it is very hard to see easily and simply which of those products are South Australian made, so particular branding and signage helps those who want to support South Australian produce to make their decision and to make that easier for them to be informed.

It supports industry and investment by extending the Tourism Marketing and Major Events Fund to $35 million over two years to continue to grow visitors to the state and secure new events; providing a further investment in the Investment Attraction Agency, $20 million over two years to continue to support the attraction of businesses and industry to the state; and investing $24.8 million over four years on ePlanning reforms to facilitate faster approvals, consistent planning rules and ready access to information.

One of Adelaide's and South Australia's key strengths on the world stage is our liveability, which has been noted on many occasions and our culture is a core to that liveability. Sport is obviously a big part of the Australian ethos and contributes to a healthy community, both in terms of community spirit and bonds and in terms of physical health and the wellbeing of our community. As such, the government is supporting South Australian sports in this budget.

The budget invests more than $40 million to support local sports infrastructure, including an upgrade to soccer facilities, $10 million; Women's Sporting Facilities Fund, $10 million; St Clair Recreation Centre, $7.5 million; Port Pirie Memorial Oval redevelopment $5 million; new indoor community recreation and sport facility in Lightsview, $4.6 million; and the O'Halloran Hill BMX facility, $2 million.

South Australia wants a safe environment where people who fall into offending are truly rehabilitated and not condemned to a life cycle of reoffending. As such, the government is making the community safer by investing $56.1 million towards 198 additional prison beds at Mobilong, Mount Gambier and Port Augusta prisons; $16.1 million over four years for the government's commitment to recruit 313 additional police officers and support initiatives for more police officers providing front-line services; $9.9 million additional funding over four years for rehabilitation programs to assist in reducing the rate of reoffending; and $1.3 million over three years for a new SA Police IT system and National Domestic Violence Order Scheme.

South Australia has often been the political punching bag of the Federal Liberal Coalition, between quips from the defence minister, Marise Payne, that South Australia is not interesting, to their contempt for South Australian jobs through their attitude to and lack of support for Holden and Arrium, to their slashing of services for the South Australian community. The state Labor government has decided that, if the federal Coalition does not value South Australia as they should, it is up to us to ensure South Australia grows in spite of their contempt. Therefore, this budget invests in community wellbeing by spending:

$526.8 million over four years to further address funding cuts from the 2014-15 Liberal Coalition federal government budget and to support ongoing reforms in the state health system;

More than $90.7 million over four years for additional disability services and to support the transition to the NDIS;

$44.4 million to improve Aboriginal health outcomes; and

$8.7 million to continue the community and mental health rehabilitation service in Whyalla.

Again, that was in response to the federal Liberal government's withdrawal of support for those really important services. We have always been a cultural juggernaut, from the Fringe Festival through to OzAsia, and all the wonderful events that make up the festival state.

The budget includes more than $65 million towards upgrades and cultural programs, providing a significant economic contribution to the vibrancy of the city, and this includes $35.2 million over three years to develop Her Majesty's Theatre; $15 million over four years to invest in the state's cultural capital; $7.3 million to revitalise laneways between the Adelaide Central Market and the Riverbank precinct, the total cost being $14.6 million, jointly funded with the Adelaide City Council; $3.1 million over four years for additional support for the OzAsia Festival; $1.4 million over three years for the live music events start-up fund; and $500,000 to develop a business case for a new contemporary gallery.

We know that our environment is paramount to our future and that we must transform our living to better protect our environment, or suffer the grave consequences in years to come. In response to these challenges the government has invested in a cleaner environment by spending $6.41 million on solid waste levy initiatives to sustain and enhance our clean environment, including $26.4 million on local government waste resource recovery grants and grants for infrastructure investment and innovation in green industries; $15.8 million over four years on environmental assessment and remediation and waste reform; $11.9 million for climate change initiatives; and $10 million to provide improved infrastructure to promote low carbon forms of transport, increase cycling and public transport journeys.

These measures have been funded from an increase in the metropolitan solid waste levy from $62 to $76 per tonne, from 1 September 2016, and an increase to $103 per tonne by 2019-20. Replacement of around 30 per cent of the state government fleet vehicles, with low or zero emission vehicles within the three years, is another initiative to help ensure that we maintain a clean, green environment. One city does not a state make. We have been an incredibly active state government when it comes to a regional South Australia and I know there are many challenges that our rural and regional communities face.

The budget includes $384 million on new initiatives in regional areas, including $106.5 million to refurbish and redevelop contemporary sites, STEM facilities and regional schools; $50 million to support the future owner of Whyalla Steelworks; $20.4 million to support the continuation of the Leigh Creek township; and $9.6 million to support small businesses experiencing cash flow challenges as a result of Arrium entering administration.

Upgrades to the Kangaroo Island and Mount Gambier airports are other examples of our commitment to regional development in South Australia. The Regional Development Fund supported 61 projects and, according to independent research, will generate economic activity for the state and in regions, which includes many additional regional jobs. The government has needed to take measures to support the budget, including: public sector wage growth to be capped at 4.5 per cent over three years (1.5 per cent per annum) for the next round of enterprise bargaining. CPI is currently 0.7 per cent and forecast to be 4 per cent over the three years (2014-15 to 2016-17) and there will be a saving of $357 million across the forward estimates.

The government will proceed with separating and commercialising some of the transitional services provided by the Land Services Group; there will be a review of options for private sector involvement in loans to HomeStart customers; and there will be the introduction of a tax of 15 per cent on net wagering revenue on bets placed in South Australia—$10 million per annum from 2017-18 onwards.

As a result of these initiatives, the budget not only meets all of the government's fiscal targets, but will ensure growth, vibrancy and success for South Australia's future.

Debate adjourned on motion of Hon. J.S. Lee.