Bills

Appropriation Bill 2016

Second Reading

Adjourned debate on second reading.

(Continued from 27 September 2016.)

The Hon. T.J. STEPHENS (15:31): I rise to speak to the Appropriation Bill for 2016. I will attempt, through my contribution, to address the many falsehoods the Labor government is peddling to South Australians in this budget. The Treasurer believes the budget position is sound and that the state is saved because he delivered a surplus—but it is not a true surplus. We know, on this side of the chamber, that the only reason the budget is in the black is because the Treasurer flogged off the Motor Accident Commission, one of the only cash cows of the government.

This improved the bottom line by $403.5 million. This was coupled with cumulative dividends and equity of almost $2 billion over the past three years. This means, without the Motor Accident Commission, the government's budget position is dire. Unfortunately, for the South Australian taxpayer, this surplus has not come about by structural reform and improvement in the budget, but by a crude pillaging of assets. This surplus is unsustainable as a result and cannot be used as an example of prudent financial management, as much as the Treasurer likes to pretend.

Embarrassingly, the Treasurer believes his own fanciful commentary that the Labor government has built this surplus as a buffer against Brexit, federal instability and global financial uncertainty. A structural improvement to the budget, through a sustained reduction in government spending, is the only way to truly achieve surplus or, at the very least, a balanced budget. As I have said repeatedly in this place, once government spending is under control, taxes can be abolished or reduced to a minimum in order to see quality services well funded.

So, where can government spending be reduced? There are plenty of examples in the current budget: all the hundreds of millions of dollars that the government has spent on jobs plans, all to see the state's unemployment rate rise higher and higher. Clearly, these plans are not working and are a money pit. The Northern Economic Plan is a good example of this, to which the Treasurer has just committed a further $24.2 million. Government does not create jobs—private enterprise does. Imagine if all the money spent by this government over their 14 years on job creation was given back to businesses and individuals in the form of payroll tax cuts and stamp duty relief. Where would the state be, in terms of jobs growth and investment?

South Australia could be the most competitive state in the commonwealth, and people would be flocking here to invest and start businesses. Not to mention that everyday South Australians would find it easier to enter the property market—something that is becoming almost impossible for younger Australians right across the country. What if Arrium's payroll tax bill was able to be wiped? Surely, this would be the most direct way, from a state government perspective, to assist the company in keeping the steelworks open and ensuring the job security of the workers of Whyalla? Instead, this government has spent $50 million on upgrading steelworks infrastructure in order for it to be an attractive asset to sell.

Is this the role of government? I would not have thought so. The Treasurer believes his returning of $670 million of state taxes to businesses has created 6,000 new jobs in South Australia, yet recent employment figures show that the state actually lost 3,700 jobs. That is a fair miscalculation. It just goes to show that payroll tax relief is not targeted enough and it requires more thought.

For instance, why are only small enterprises targeted? I understand this encourages start-ups, but what about established manufacturers? Is there any surprise that our large manufacturers are closing down in droves when we consider the costs of doing business in this state? These fanciful job creation claims cannot be believed and neither can the Treasurer's claim that $4,000 grants will lead to the creation of 14,000 jobs over the coming two years. This is nonsensical. A $4,000 grant could hardly be considered an incentive.

I consider education to be a core function of government, and as a result some spending is justified. However, the government has committed over $1 billion in this budget to the upgrading of our schools and the question has to be asked what the benefit to our children is. Given that the state's NAPLAN results are some of the worst in the nation, I think we are entitled to ask whether the current policy and spending programs are working.

Sadly, with Labor, the answer to everything is increased spending, but clearly the government needs to be smarter. The question is whether they are capable of being smarter. I think, after 14 years, South Australians have lost hope of that happening. This is a tired government, incapable of reinvigorating the state. The Treasurer talked about $135 million being spent on 'initiatives to attract and create new industries'. It is incredibly frustrating that the Labor government does not understand that this is not the role of government.

This is $135 million that could go back to business, and we would see the private sector create the industries of the future through the innovation inherent in a competitive market. The funding of an industry attraction agency is a further example of the government having the wrong priorities and the wrong approach. If the government provides the right economic environment, then naturally business and industry will flourish.

Some interesting spends on infrastructure are worthy of mention, including $48 million upgrading diesel railcars. One would think that electrification would render such a spend redundant. The government has dragged its heels on the Gawler line for too long. The $56.1 million spend on 198 additional prison beds at Mobilong, Mount Gambier and Port Augusta will barely address the problem of overcrowding in the state's prison system. This is something that we, on this side, have been questioning the Minister for Correctional Services about this week, with disappointing revelations.

The minister and the rest of his government are failing on corrections. Of course, overcrowding forces a spend on programs to hasten prisoner parole, and the government is spending $10 million to this effect. It is extremely disappointing. The Treasurer complains that the state has to fund $527 million in order to make up for a commonwealth funding gap and that this money is hard to come by. However, this is not good enough. The Treasurer could easily find this money if unbudgeted spending was reined in.

In the four departments of DPTI, DCSI, DECD, and Health and Ageing, there was at least $444 million of unbudgeted spending. This is the government not keeping spending under control or spending it on what it says it will. If this much unbudgeted spending is going on, what is the point of the budget documents? How can the parliament be satisfied that the substance of what is being debated in the Appropriation Bill, and the related budget measures bill, is actually what the government is spending taxpayers' money on? This should be of great concern to South Australians.

South Australians should be outraged that their cost of living is going up for the sole reason that this Labor government and the Treasurer cannot spend within their means. They have no concern for the taxpayers of this state who are largely small business people and mum-and-dad investors who are forced to pay for this government, only to see their hard-earned money squandered. As convention dictates, I commend the bill to the council.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (15:38): I rise to speak to the Appropriation Bill 2016. Clearly, we know that the government is keen to pass this bill. I suspect that there will be some issues with it if we do not pass it today. The state will plunge into further turmoil.

The Hon. J.M.A. Lensink: Chaos.

The Hon. D.W. RIDGWAY: More chaos. Clearly, one of the biggest issues facing this state is jobs. We have seen the unemployment rate continually rise and fluctuate, but we are still the worst in the nation. Something that really concerns me is that our youth unemployment rate is now 13.5 per cent and our underutilisation rate is the highest on the mainland at 16.8 per cent. Labor made a promise of 100,000 new jobs by 2016, Mr President: 11,140.

There were a whole range of comments made, I think, when the Premier spoke recently at the Australian Institute of Company Directors. He was almost trying to lower people's expectations, wanting people not to have a high level of expectation that we were going to improve. It was unbelievable. The Premier is on the record as saying, 'If we are able to do that and at the same time keep growing in terms of employment, it will be an extraordinary achievement.'

The title of a leading article published on InDaily was, 'Jay's pride in SA's unemployment rate has business leaders in disbelief'. I will not go on with too many of the comments of business leaders, but there was a collective shaking of heads in disbelief in the room, given how many people are struggling and how many people are unemployed. The Premier does not seem to be taking that seriously.

In terms of our state and our state pride, I know that for some of the agencies funded part of their funding agreement is to engender state pride. I think that is an outrageous abuse of government resources, to have people expected to tell South Australians what a good job it is doing when people can clearly see it is doing a very poor job indeed.

If we look at the state debt, and the financial position that we find the government in, the net operating balance, the government's projected surplus will only come about by selling off assets. It has sold off Forestry at the bottom of the market, then the Lotteries, then the Motor Accident Commission. This is coming from a government that says there will be no more privatisation. It says one thing and does another.

The state's debt is now forecast to peak at $14.2 billion, up $700 million from the Mid-Year Budget Review. This government's economic mismanagement is costing South Australian taxpayers hundreds of millions of dollars every year in interest just to service a debt accumulated by this recklessly spending government.

The government's economic mismanagement has meant that it has had to dig deep into the pockets of hardworking South Australians. For three consecutive budgets the emergency services levy has gone up, for South Australian households, businesses, schools, charities and other community organisations, over $90 million every year since the remission was removed in 2014-15.

In this budget we have seen an increase in the solid waste levy; taxis, chauffeurs and ride sharing trips will attract a new $1 levy; there will be a 15 per cent wagering tax; and parents working in South Australia under 457 visas will have to pay for their children to attend public schools. This is a cost of about $5,000 for primary school and $6,000 for secondary school. It is sad when a government gets on the tax treadmill; its only solution is to continue taxing. Of course, the Treasurer will boast that he has a surplus budget, but it is actually a surplus derived out of taxing hardworking South Australians.

No minister opposite is keen for us to progress this, but I want to make a couple of quick comments on some of my portfolios. With agriculture, food and fisheries we all know the importance of this great industry; whether it is from the sea or the land it really is important. We know that the agricultural industry is worth over $18 billion to our economy and directly employs over 37,000 people; almost one-quarter of the state's economic activity is generated from primary industry, and the sector employs almost five times as many people as the mining sector.

Despite these facts the government continues to cut funding from programs, cut R&D, and neglect our primary industries. From this $18.2 billion industry we saw only a pathetic $1.2 million in new initiatives in the 2016-17 budget under PIRSA. Sadly, this city-centric government focuses on where it thinks it can get votes in the next election, not on what is going to grow the economy.

In the 2016-17 budget we saw a $100 million cut to the PIRSA budget over the forward estimates from $255 million to $166 million and, one of the things I think is the most alarming, the government has withdrawn funding for the Australian Centre for Plant Functional Genomics, which is roughly $1 million a year. This is a centre that does a whole bunch of pre-breeding work for our grain producers. It is important to have this work done, and the government of the day, the minister's office, the cabinet, has seen fit to withdraw funding of $1 million from a sector that produces $18 billion for our economy.

In relation to the drought loans, we had a particularly tough season, and only $3.7 million was distributed to farmers out of a total allocation of $60 million. Only six of the 730 loans nationwide were awarded to South Australian farmers, yet PIRSA and this government have seen fit to use $2.65 million of the money made available to administer the loans. It is almost as much money as the farming community received to administer the loans. Only one dairy loan, which we have for the dairy industry at the moment, has been approved to date. Water and livestock are not being used as security by PIRSA for these particular loans. In response to a question last week, as published in this week's Stock Journal, minister Bignell says:

South Australia's legislation is slightly different. While PIRSA does take into account water licences when assessing property values, water licence arrangements in South Australia do not provide financiers with an ability to register a formal security interest over a water licence.

Surely, the easiest thing to do would be to commit to bring in some legislation and change it so the water licence can be recognised by lenders. It is an asset, they charge the levy on it and they charge a fee for their water licence. If what minister Bignell says is accurate and they are not legally structured, then bring in some legislation. Minister Hunter is in this chamber. If it is a tradable asset, surely we should be able to structure it in such a way that the banks can take security over it. In the future I expect we will find that the water may be more valuable than the land.

In relation to Mobile Black Spot Program funding for regional South Australia, the government has only contributed an insufficient amount of $2 million in round 2. We only received 11 of the original 499 towers because we did not contribute any funding. This $2 million equates to less than 2 per cent of the $104 million contributed by other states. It really does show how serious this government is in relation to supporting regional South Australia. The Loxton Research Centre is now 12 months late. The Sterile Insect Technology Facility in Port Augusta is now 18 months late and $800,000 over budget.

I was going to focus on electricity but I am not going to talk a lot about it. In question time today I asked minister Malinauskas about the early meeting they had yesterday before the event occurred, which I think he replied was a subcommittee of cabinet and subject to cabinet confidentiality. I did see his colleague, minister Hunter, nod when I asked, 'Were you briefed that this was likely to happen because it was a one in 50 year event that we were having, and the weather bureau was saying we haven't had winds and rain like this since 1964?'

The Hon. I.K. Hunter: I wasn't nodding.

The Hon. D.W. RIDGWAY: Minister Hunter said he was not nodding. Your head was moving up and down—

The Hon. I.K. Hunter: I might have been nodding off.

The Hon. D.W. RIDGWAY: You might have been nodding off perhaps. Nonetheless, the question I would pose is: if they were briefed that the system was vulnerable to a one-in-50-year storm, were they briefed in 2002, when premier Rann said he would build an interconnector—we accept an interconnector would not have made much difference in this event—that our system is vulnerable to an event like this?

The commentary today has been about a high-level Australian Energy Market Operator inquiry by the regulator. I think we need an inquiry at a COAG level by the energy ministers and a local inquiry to look at what happened in the event. Nobody has been looking at our infrastructure and asking, 'What do we need to do to it? Let's have an inquiry to see what needs to be done to make sure we are not vulnerable and this does not happen again.'

If it is a one in 50 year storm, it may happen again in 50 years; who knows? Treasurer Koutsantonis said we had a one in 1,000 year event not long ago. What I want to know is: what is being done to make sure our infrastructure is enhanced and made robust enough to withstand these events? The minister opposite talks about climate change and says that we on this side of the chamber are all deniers, yet he constantly tells us that we are going to have more severe weather events. I would like to know what his government is doing to make sure that we are protected from those severe weather events.

I would like to touch on the Tatiara Creek early flood warning system. I raised that a couple of weeks ago in question time. Minister Hunter and others have said, 'You don't want us to spend money in regional South Australia.' I think it is about $150,000. I lived on the Tatiara Creek, I used to swim in it, I used to catch yabbies in it. I know how it floods. There is no mountain range or big range of hills where you get a flash flood. It is about 50 or 60 kilometres long and it is gently undulating country. If it rains in Victoria, we know what the rainfall is and yes, if it is a wet year the water will get a bit higher. It just seems a strange thing.

He says the local council supports it. I know how these things work. Somebody in an agency has said, 'I have a good idea: we will put this early warning flood system in.' They tell the council they are going to do it. The council has no say in whether they want it or not, and it is built. It is a good example of the minister's department saying, 'We have a good photo opportunity. We will put this in.' This creek is running right now. It runs 2½ to 3 years in 10. Farming practices have changed. The minister says we have climate change, and so I expect we will see this early warning system. When it runs 2½ to 3 years in 10, it does not flood; it just runs. Right at the moment, it is running a moderate stream. I expect it will pick up a bit because it has had a bit of rain on it.

It is interesting the easy way this government can just spend money because it sounds like a good idea, without actually having a look to see whether it is good use of that money. Maybe that should have gone into country health or suicide prevention; there are a whole range of projects that $150,000 could have gone into in the Tatiara community that would give lasting benefit, rather than an early warning flood scheme.

I am intrigued by the Mid North forests. Tomorrow is the last day, I think, of September. The future of those forests was to be announced by the end of September, so I assume we will see something from minister Bignell in the next couple of days. I hope it will be before the end of September, not like his wine industry development scheme that was promised on 1 July 2016 and is still not available; it has reduced by nearly $1 million and people have no idea exactly what the new scheme is. It was originally the Cellar Door Liquor Subsidy Scheme; it is now called the wine industry development scheme, and some committee has been put together. The government gave a commitment that it would commence on 1 July and we have still heard nothing.

Just quickly, a couple of things to do with tourism. Recently, the government announced the Great Wine Capitals of the world. We have always been a bit sceptical. Melbourne was that and they gave it away. During the parliamentary break, I took the opportunity to travel to Argentina and went to Mendoza, which is also one of the world's Great Wine Capitals. I met with the Great Wine Capitals people there. They said, 'It is a good program, but you have to invest; you really have to invest in it.' Part of the program is that you host the international conference one or two years after you join. I asked how many people went to that conference, and they said it was 62 people, so I do not see that this Great Wine Capitals is going to boost our tourism.

They have said to me, 'You have to invest. From a tourism and industry point of view, you have to invest to capitalise on it.' I know we are going to pass this bill today, but maybe the minister could bring back a reply in the budget measures bill. What I would like to know is what budget—PIRSA, tourism, Brand SA, all of the organisations—has been set aside to capitalise on the Great Wine Capitals of the world? It is fine to say we are going to join it—it is about $30,000 or $40,000—but it is leveraging off that to actually get a benefit from it. Surely, there has to have been a budget allowed for that.

It is interesting that our percentage, or our share, of the international travellers market is going down. We do have increased growth in tourism, but other states are growing more quickly, so there is clearly something we are doing wrong in South Australia. We are all trying to do the best we can. I managed to get the proponents of the World Whiskies and Spirits Conference to put a bid into the bid fund, and thankfully that was supported. Next year, in August, we are going to have the World Whiskies and Spirits Conference, and we are optimistic that we may get it for two more cycles, and there could be up to 1,000 delegates each time. I think we are all trying to work and grow our tourism sector.

I will finish quickly. I think the most alarming incident in tourism in my time as the shadow minister for tourism was the collapse of Elite Systems and the government washing their hands totally of it. The government told those poor small businesses that they should do their due diligence. They had a contract, a brand-new contract, with Elite Systems. Those small businesses that did business and signed deals with Elite Systems trusted that the government had done their due diligence, and they lost, collectively, about $1 million.

It is interesting to note that the government was happy to compensate the small business of the Kangaroo Island Surf and Music Festival. With Word Adelaide, the South Australian Tourism Commission lost $700,000. It really interests me that they are not interested in supporting these small businesses. The Clipsal event is designed to be a great event—and it is a great event—and it is there for small businesses to benefit, whether it is a pub or a restaurant or somebody providing labour. They failed them on every count.

The taxpayers are also owed about $600,000 and the small businesses are owed about $1 million between them—and the government has washed its hands. Even Nigel McBride, the head of Business SA, said they should do their due diligence. I am really surprised that Mr McBride would say that because they had a contract with the government. The ink was barely dry: it was dated May, it started in December and these people started doing business with them in August. I think it exposes the government when they say you should do your due diligence. Not one person in this chamber has ever run a successful small business, or even run one whether successful or unsuccessful.

You have run a business, Mr President, but you do not like me to refer to your days in the gasfitters union where you had a lovely cash business on weekends with the gas company's backhoe, so I will not talk about that. Even in the House of Assembly virtually none of the Labor Party, none of the government members, none of the cabinet ministers, have actually run a business and so for them to say, 'Oh, you should just do your due diligence'—they did their due diligence because they had a contract with the government and I think it is a disgrace how this government and the South Australian Tourism Commission are not prepared to support those small businesses.

With those few words—and I do hope I get an answer on the Great Wine Capitals of the world and what budgets have been set aside to promote that—I support the bill.

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:56): I rise to close the debate. I thank honourable members who made a contribution to this most important bill, and I especially thank the chamber for its cooperation and its speedy passage this afternoon.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (15:57): I move:

That this bill be now read a third time.

Bill read a third time and passed.