Bills

South Australian Productivity Commission Bill

Second Reading

Adjourned debate on second reading.

(Continued from 20 June 2018.)

The Hon. J.A. DARLEY (15:33): This bill will establish a productivity commission, which will look at improving South Australia's economy by improving productivity. I understand this was an election commitment by the government to establish a productivity commission for the betterment of South Australia.

Whilst I put my support for a productivity commission on the record, I have some concerns which are partially addressed by the opposition amendments and also by amendments I have filed. Currently, the government's bill only allows the commission to look at matters which are referred to them by the relevant minister. This could lead to the government pushing their own agenda without the commission being able to independently look at matters which they believe are of merit. The opposition has suggested allowing either house of parliament to refer matters to the commission, and I am supportive of this.

Furthermore, I have filed amendments which would allow the commission to investigate matters of competitive neutrality on their own initiative. This clause is similar to that which exists in the federal Productivity Commission Act whereby a person can complain to the commission if they believe there is an issue regarding competitive neutrality. I have also filed an amendment which would oblige the government to provide a response to the commission's reports. That is to say that the government must indicate whether they agree with the recommendations or not and what they will be doing about it, if anything. My final amendment would cause a review of the act to be undertaken three years after commencement to see if improvements or modifications to the act need to be made. I support the bill and look forward to progressing it in the chamber.

The Hon. T.T. NGO (15:35): I rise to offer some thoughts on this bill and to reiterate some of the concerns that my Labor colleagues have raised in the other place. We are all aware that the establishment of a state-based productivity commission was a long-held policy of the state's Liberals while they were in opposition. While it is admirable that they are holding themselves to account on this promise—and I also acknowledge that states like New South Wales and Queensland have a similar body—I still have some concerns about its effectiveness. The most obvious concern I would raise is that we are looking at potentially adding another level of bureaucracy whose advice could largely end up being ignored for one reason or another.

A perfect example of this, and one I want to focus on in my contribution here, is the federal Liberal government's response to the national Productivity Commission's report into the distribution of GST to the states which was released recently. The Productivity Commission's recommendations saw South Australia standing to lose what our Treasurer, the Hon. Rob Lucas, said would be around $500 million a year. The formula favoured by the Productivity Commission in this instance was in the Treasurer's words 'disastrous'. State Labor has long supported the maintenance of the current system of GST distribution.

I would argue that the report provided by the Productivity Commission did not consider all the economic evidence and devalued the notion of horizontal fiscal equalisation (HFE). Disappointingly, it recommended that the objective of the HFE system should be refocused to provide the states with the fiscal capacity to provide services and associated infrastructure of a reasonable, rather than the same, standard.

A complete lack of focus was taken by the Productivity Commission on the wasteful spending of the Western Australians during their mining boom. I have talked about this issue in this place previously. The Western Australian government, having run a budget in structural deficit for many years, having wasted the mining royalties on unproductive spending instead of investing in real productivity growth, is now left with an almost $40 billion debt with their terms of trade only now starting to head back in their favour but still below the record levels of the boom years.

A breakdown of tax figures covering the mining boom from 2003-04 until 2014-15 shows that a record number of communities saw their average income at least double in Western Australia. Furthermore, over the four years to 2015-16, WA's per capita gross state product averaged almost $97,500. That is almost $30,000 per head or 44 per cent above the average for all states and territories.

There has not been another occasion in Australia's history where one state has been so much richer than the rest of the country as WA had been since the early 2000s. In essence, the system of HFE and the subsequent carve-up in GST worked exactly as it should have; therefore, any recommendations provided by the Productivity Commission should have reflected this.

It was that very activity in Western Australia's mining industry that led to high interest rates and high national currency, which has plagued South Australia's traditional export industries, particularly manufacturing. This has hurt our gross state product over a number of years. This phenomenon, termed by economists as 'Dutch disease', should have also been understood and recognised by the Productivity Commission.

In my opinion, the Productivity Commission in this instance, in reporting on GST distribution, did not come to the government with prudent economic advice. It took unnecessary account of the political will of certain sections of the country, namely, Western Australia. Ultimately, the federal government did not take up the recommendations which, from South Australia's perspective, seemed to be a good thing.

However, they performed a complete political stitch-up, keeping their constituencies in every state as happy as possible at the expense of good public policy. Disappointingly, the federal government has unnecessarily poured an extra $5.2 billion into the GST carve-up over the next eight years. The majority of these funds are effectively bailing out Western Australia after its previous Liberal government's poor economic management. All this is at the cost of the federal government's own budget. More worryingly in the long term, the federal government will continue putting extra funds into the system to establish a new floor rate of 70c per dollar of GST below which no state's relativity can fall from 2022-23. This will rise to 75c from 2024-25.

In my opinion, all this will do is ensure that if any state is ever again the recipient of the rivers of gold that Western Australia were, it will waste even more money than they did during their boom. The $5.2 billion over the next eight years could be further distributed across the nation and spent more wisely, perhaps used to pay off federal government debt or even to assist in restoring the federal Liberal government's cuts to health and education.

In short, regardless of the Productivity Commission's input into this process, the federal government's policy response on GST distribution has become an example of good politics at the expense of good policy. This is why I am sceptical when Liberal members here and in the other place proclaim how the establishment of a state-based productivity commission, not to mention Infrastructure SA, somehow proves that this incoming Liberal state government is committed to implementing good policy. They say this as they continue to cut and criticise or make their sounds of duplicity about many of the programs and projects that we implemented whilst in government.

The establishment of a productivity commission will only be a good thing for this state if politicians ultimately have the courage to make the right call and back their commission when they should, or refuse its recommendations when they are not in the interest of South Australians. As a parliament, we should be asking ourselves whether the remit of the productivity commission, as set out in this bill, is really no different from how Treasury should be conducting its work. Are we simply adding another level of bureaucracy, where we will inevitably be led to the same outcomes, regardless? Would the state be better off actually exploiting its economic talent, or employing people with such talent, within Treasury?

Treasury officers can provide policy advice to the treasurer of the day in a much more constructive environment. I say this because we have already seen how government can cower in response to a set of unpopular recommendations made public by a productivity commission. It will be interesting to see whether this government is prepared to have some of its signature policies reviewed by this body.

The Hon. Frank Pangallo has already stated publicly that the government's rate capping proposal could have been reviewed or overseen by this new state-based productivity commission. There is also the infamous GlobeLink, which in all likelihood, if referred to a productivity commission, would be determined to be too expensive, inadequate, unnecessary and ultimately uneconomic.

However, the government has made a political decision to appease its Hills constituencies. Far be it for the Liberal Party, then, to pretend they are somehow the sole bearers of good policy process and outcome. As an opposition, we will not let this government hide behind a productivity commission. The government takes sole responsibility for all the decisions it makes during its time in power. With that, I conclude my contribution to the second reading stage of this bill.

The Hon. T.A. FRANKS (15:48): I rise on behalf of the Greens to indicate our support for the second reading of the South Australian Productivity Commission Bill 2018. This bill, of course, aims to establish the South Australian productivity commission, an independent body that will be fully and publicly accountable for the advice it provides and the actions it recommends. The aim is for the commission to act as an advisory body to the executive, in this case the Marshall government. The commission will make recommendations to that government to remove existing regulatory barriers and directly support productivity growth, unlocking new economic opportunities and creating new jobs in South Australia.

One of the economic opportunities that I believe the productivity commission should be considering as one of its first ports of call is the medicinal cannabis industry, shown in Israel and elsewhere to be something that would be an economic boon not only for growers and manufacturers but also for those patients who are seeking that medication and moving away from our reliance on opioids and other far more disturbing drugs in our community. That would be something that, as a member of this place, I would like to see referred to the productivity commission.

I also believe there is a range of amendments, and certainly there have been discussions in the corridors, about ensuring that the productivity is not a tool of government to wield as a stick but is to serve the people of South Australia. The Greens will be looking with great interest and with support not just at this bill but to ensure that this bill is that voice, that the parliament has some oversight and relationship, not just the executive. With those few words, I indicate that we will be supporting the second reading. We look forward to the committee debate.

The Hon. K.J. MAHER (Leader of the Opposition) (15:50): I indicate that I will be the lead speaker and have conduct of this legislation on behalf of the opposition in this place. The Liberal election commitment was to introduce the SA Productivity Commission Bill within 30 days. I note that it was on 8 May this year—that is 50 days after forming government—that the Premier advised the other place that the South Australian productivity commission, as well as the proposed Infrastructure SA, would be established by legislation. A ministerial statement claimed the Premier sought out members immediately after forming government, and on Thursday 7 June the Premier introduced the South Australian Productivity Commission Bill 2018 into the House of Assembly. This is clearly 50 days late from the stated 30-day commitment.

The bill we have before us establishes the South Australian productivity commission. It establishes the objects of that commission. It establishes the membership, that is, the commissioners. It talks about the inquiries, the staffing and the operations of the productivity commission. It is a brief bill, a simple bill. I will talk about the bill itself and the structure and how it has been drafted a little later.

I think it is probably an opportune time to talk about the need for such an agency. Along with Infrastructure SA, this replicates an effort at a federal level. It is also, as my colleague the Hon. Tung Ngo pointed out, an example of the government not quite knowing how to proceed with policy development, having been out of government for so long. The Economic Development Board is to be replaced with an economic advisory council. When we look at how the government is informing itself of economic policy, of which this is a part, the new economic advisory agency we understand is set to cost about half a million dollars a year, yet we know nothing of it. We have what seems to be a rebranded, slimmed down Economic Development Board to be established as that agency.

Within government, there is a Department of Treasury and Finance and a Department of the Premier and Cabinet, the two central agents of government usually charged with policy development coordination. In the case of the Department of Treasury and Finance, I understand it is responsible for economic and fiscal policy development, but some of these functions look like being outsourced largely to other bodies.

Also in this state there is the regulatory agency of the Essential Services Commission of South Australia. We already know that it is an act that enables the responsible minister, the treasurer, to direct it to establish inquiries, exactly the same ability that this bill confers on the minister responsible. Indeed, the Essential Services Commission of South Australia already plays a large part of this role. I understand that they believe they could play the role that is being outsourced under this function and have made such representations in the past. The former Labor government used the Essential Services Commission of South Australia for this exact purpose.

Through FOIs, we know that the Essential Services Commission of South Australia has already advised the new Treasurer that it is ready, willing and able to play this new role, but it appears that advice has been ignored. We have four potential economic suitors for the government: the watered down EBD, the economic advisory agency, the Essential Services Commission of South Australia and, within government itself, the Department of Treasury and Finance and the Department of the Premier and Cabinet. They are all being ignored by the establishment of this outsourcing policy agency.

Questions that spring to mind are: why is the government ignoring these agencies and bodies and why is the government fixated on its own productivity commission? I think there are reasons that will become apparent when we look at the history of the federal Productivity Commission. The commonwealth Productivity Commission was created as an independent authority in April 1998 by the Productivity Commission Act of the same year. It was an initiative of the Howard government at the time. It followed the collapse of a number of other economic agencies at the commonwealth level in 1996 into one entity—agencies such as the industry commission, the bureau of industry economics and the economic planning advisory commission.

Under the Hawke-Keating federal governments, fiscal, monetary and economic policy agendas were largely developed within government, usually by the commonwealth Treasury through the prime minister and cabinet, with other industry-facing departments and agencies often being involved. There was an inherent trust in the Public Service then to be capable of developing policy reforms and working with the treasurers, prime ministers and other ministers to do so. The economic reforms during that period were significant and far reaching and are largely responsible for the resilience of the Australian economy over the last 20 years.

The Australian Labor Party's newly-elected national president, Wayne Swan, wrote a year ago of the remarkable agenda of macro and micro-economic policy reform that was delivered during these years, and the conversion of one of the most heavily protected economies in the western world at the time under a former Labor federal government.

Fast forward to the mid-nineties and we see the effects of some of these major macro-economic policy reforms: the floating of the dollar, the deregulation of the banks, new capital gains and fringe benefits taxes, enterprise bargaining, the removal of import tariffs and quotas and national competition policy. This is only a small handful of the reforms achieved by the Hawke-Keating governments but they are the last of the reforms that lead us to the establishment of the Productivity Commission in 1998 at a federal level.

One of its purposes is to receive and deal with competitive neutrality complaints. This was one branch of the sweeping competition policy reform agenda. It sought to look at ways to do away with the layers of red tape that choke businesses, and any ways that disincentivise innovation and artificially kept prices high. It was most pertinent in relation to government enterprises, making sure the enterprises they had inherently within government did not suffocate competition or lead to inefficiencies.

Competitive neutrality has now been baked into government enterprises across Australian jurisdictions. It is an impressive reform agenda from that era, one that I think most commentators agree has not been seen since and is unlikely to be seen in the current federal government. This was all done without a productivity commission at a federal level. At a state level, we have achieved much. We have built Techport and re-established the defence industry in this state. We have started and grown a plan for the accelerated development that saw SA as the most prospective mining resources jurisdiction in Australia before the GFC and fifth in the world.

We have reformed our WorkCover regime, massively reducing costs to employers of over $200 million a year. We have reformed our state tax regime and instituted savings in payroll tax and land tax. SA is one of the most competitive places to do business, according to many agencies and reports, particularly recent KPMG reports. The Financial Review rates us as the third lowest taxing jurisdiction in Australia per capita.

There have been dozens of industry reviews and reforms completed in South Australia. We have established a 30-Year Plan for Greater Adelaide, planning reforms, the 30-year integrated transport land use plan to guide and prioritise infrastructure development, successfully delivered PPPs and established an unsolicited proposal framework. There has been an independent water pricing regime, a huge amount of economic reform, without relying on a productivity commission. Indeed, the structure of robust Public Service agencies and targeted additional expertise through the Economic Development Board has allowed these economic reform policies to be developed and implemented.

So it draws us to the question: what is the need of the new Liberal government for a productivity commission? What is the government seeking to achieve by its establishment? The Liberals, for a very long time, have defined themselves mostly by what they oppose. The now Premier opposed small business payroll tax cuts when first introduced by the former treasurer, the member for West Torrens. The new Liberal government is now making a virtue of copying them.

The Premier labelled infrastructure development as a 'false economy'. The Future Jobs Fund, industry assistance and industry attraction are to be ended and ended proudly by this new Liberal government. This new Liberal government boasts that it will not be providing direct assistance or giving help to industries or major employers. Yet, when the Premier was asked whether they would support Liberty OneSteel at Whyalla, there was a resounding yes.

Further, the new government, according to the Premier and Minister for Transport, has an aggressive deregulation agenda, yet some of the very first bills that this government introduced have been to oppose additional regulation in various areas. The Liberal government, after 16 years in opposition, really do not know what they stand for. The increased regulation, in pursuing an aggressive deregulation agenda, has meant that there is a confused and incoherent policy agenda.

They need to be seen to have an economic agenda, yet they do not trust the Public Service to advise them. We have seen a clean out in public sector ranks, with Cabinet Office particularly, of experienced, qualified and competent chief executives across a range of areas. We are seeing some of the regrets the new government has in terms of infrastructure delivery and transport projects that have been 'set in stone'—set in stone for delivery, after having sacked executives who have a record of delivering, and then not being able to meet their own 'set in stone' promises, which I understand caused great frustration to cabinet colleagues when one of their own uses phrases like 'set in stone' and embarrasses all of them.

The solution the Liberal government seems to have come up with is to appoint an agency to tell them what to do, and that is largely what we are talking about in this bill. Some political commentators like to say productivity commissions are desirable so they can test the policies a government would not otherwise be game to do. Those sort of comments that you hear occasionally ring the first alarm bells.

But, I think the concerns are more fine grained than the implications of such a sweeping statement. The commonwealth Productivity Commission has a chequered history. I think at times it has been an agent for positive change, but it has also been an agent for absolutely disastrous economic policies, and particularly disastrous economic policies for South Australia. Frank and fearless advice to be accepted or rejected by a productivity commission is one argument, but it is not as simple as that.

Many times the work of the Productivity Commission, commentators have reflected, has represented the whims of its political masters, and there lies one of the extraordinary risks of such a body, and I am happy to give some examples. Positive outcomes from Productivity Commission inquiries have included things such as the consumer policy framework released in 2008, about better industry regulation to protect consumers and to establish a consistent set of regulatory arrangements across industries to enshrine the rights of consumers purchasing goods and services.

Other good outcomes from the federal Productivity Commission have included important changes that have been acted on, such as paid maternity leave, paternity leave and parental leave. The final inquiry report into this was sent to government on 28 February 2009 and was publicly released on 12 May 2009. The then Australian government asked the Productivity Commission to undertake an inquiry into paid maternity, paternity and parental leave. The inquiry concentrated on support for parents of newborn children up to the age of two years. It considered the economic, productivity and social costs and benefits of providing paid maternity, paternity and parental leave.

It assessed the current extent of employer provided such leave. It identified the models that could be used to provide such leave against a number of criteria. These included cost-effectiveness, impacts on business, labour market consequences, work-family preferences of parents, child and parental welfare, and interactions with the social security and family assistance schemes. It assessed the impacts and applicability of the various models across the full range of employment forms, such as self-employed, people such as farmers and shift workers. It assessed the efficiency and effectiveness of government policies that would facilitate the provision and take-up of these models. As part of the 2009-10 federal budget, the Australian government announced its intention to introduce a paid parental leave scheme. The scheme being introduced was closely based on the proposal in the commission's final report.

Another area was about the performance of the public and private hospital system released in 2009. The study was commissioned at a time when there was a new national healthcare agreement and COAG had agreed to introduce a nationally consistent approach to activity-based funding in public hospitals, with the government looking to move towards a nationally consistent reporting regime for public and private hospitals. That was in response to a call, I think, at the time from the government to end the blame game in health. By injecting many billions more in funding to the commonwealth-state health agreement, it helped to rebalance the funding roles between the state and the commonwealth.

The inquiry conducted by the commission was tasked with assessing the relative performance of public and private hospitals, with particular regard to the cost of performing clinically similar procedures; the rate of hospital-acquired infections; the rates of informed financial consent and out-of-pocket expenses for privately insured patients within the public system, and also in private hospitals; and it also gave advice to the government on the most appropriate indexation factors to the Medicare levy surcharge thresholds.

The commission found in this inquiry that at a national level public and private hospitals had similar average costs. However, a significant difference was found in the composition of those costs: general hospital costs were higher in public hospitals; medical and diagnostic costs were higher in private hospitals; and capital costs were higher in public hospitals. The commission identified potential improvements such as consistent national reporting of costs and infections for both public and private hospitals.

The commission also found that the most appropriate indexation factor for the Medicare levy surcharge income thresholds is average weekly ordinary time earnings. The commission's inquiry provided the evidence base for the structure and details of the funding agreement between the then Australian government and the states and territories. This saw many more billions of dollars flow from the federal government into South Australia for health care.

It is worth noting, though, how quickly this work was undone and undermined by the slashing of funding by the then new Abbott government in its very first budget in 2014. Under the current South Australian minister, the Hon. Stephen Wade, in this place, it appears we have signed up to another health agreement that again disadvantages this state.

They annul a positive: the strengthening of economic relations between Australia and New Zealand. In 2013, Australia and New Zealand marked the 30^th anniversary of the Closer Economic Relations forum. In the lead-up to this milestone, prime ministers Gillard and Key requested both the Australian and New Zealand productivity commissions to together scope further initiatives that would strengthen the trans-Tasman economic relationship and improve economic wellbeing in both countries.

The study looked forward to what more could be achieved as both countries pursue their shared aspiration in the Asian century. The study identified more than 30 initiatives to promote beneficial integration and to address regulatory barriers to services and trades and commercial presence and some of the remaining impediments to integrations, goods, capital and labour markets.

In relation to barriers to effective climate change adaptation, a report was released by the government in 2012. The commission in this area was tasked with assessing the regulatory and policy barriers to the effective adaptation that inhibited the effective and unavoidable effects of climate change.

The commission examined the costs and benefits of options to address those barriers and assess the role of markets and non-market mechanisms in facilitating different approaches in relation to government intervention. The commission found that Australia's climate is changing and will continue to do so for the foreseeable future, with the Australian experience most likely being changes in the frequency, location and timing of extreme weather events. The report found that governments at all levels should embed consideration of climate change in their risk mitigation management practices and ensure flexibility and regulatory and policy settings to allow households, businesses and communities to manage the risks of climate change.

The report also found a range of policy reforms that would help households, businesses and governments deal with the current climate variability and extreme weather events, such as reducing perverse incentives in tax; transfer and regulatory arrangements that impede the mobility of labour and capital; increasing the quality and availability of natural hazard mapping; clarifying the roles, responsibilities and legal liability of local governments and improving their capacity to manage climate risks; reviewing emergency management arrangements in a public and consultative manner to better prepare for natural disasters and limit resultant losses; and reducing tax and regulatory distortions in insurance markets.

The report also recommended further actions to reduce barriers to adaptation to future climate change trends such as designing more flexible land use planning regulation; aligning land use planning with better regulation; developing a work program to consider climate change in the building code; and conducting public reviews sponsored by the Council of Australian Governments to develop adaptive responses for existing settlements that face significant climate change risks.

However, the federal Productivity Commission has been used for damaging policy developments—very specifically, damaging policy developments against South Australia's interests. One that we are all familiar with at this time is the inquiry into horizontal fiscal equalisation.

In 2017, the Liberal federal government ordered the Productivity Commission to report into horizontal fiscal equalisation. The main factor in relation to the instigation of this inquiry was the noises made by Western Australia because of their GST pool remaining low due to lags involved in the equalisation process after the mining boom. All of those years of receiving relatively high GST under HFE for the mining boom has now reduced it, and Western Australians wanted changes that could leave South Australia much, much worse off.

In 2018, a draft report was released. The draft findings were absolutely terrible for South Australia. The Productivity Commission recommended a revised objective for horizontal fiscal equalisation where it should aim to provide states with the fiscal capacity to provide a reasonable level of services instead of the same level of services. According to the Under Treasurer, David Reynolds, who gave evidence at a forum of this parliament, this could cost South Australia up to $2 billion a year in GST revenue. The federal Productivity Commission's draft recommendations could cost South Australia up to $2 billion a year. The draft report overview, at page 2, stated:

The Australian Government should articulate a revised objective for HFE. While equity should remain at the heart of HFE, it should aim to provide States with the fiscal capacity to provide a reasonable level of services.

−Equalisation should no longer be to the highest state, but instead the average or the second highest State — still providing States a high level of fiscal capacity, but not distorted by the extreme swings of one State.

So we see the federal Productivity Commission being used in a way that will have absolutely detrimental benefits to South Australia. As the Under Treasurer said, it could cost us up to $2 billion a year—$10 billion over a decade—in forgone revenue because of the recommendations of a Productivity Commission instructed by a Liberal government.

One thing that many South Australians will be aware of is the Productivity Commission's involvement and their report into Australia's automotive manufacturing industry. It was commissioned by the Tony Abbott Liberal government in October 2013. Most people have no doubt, particularly those in South Australia and Victoria where the effects were most critical, that the reason this report was instigated was to kill off Australia's automotive manufacturing industry.

In the lead-up to the 2013 federal election, Holden presented a new business case to the then federal Labor government, an update on a March 2012 deal where Holden agreed to build the next generation of Commodore and Cruze in Australia from 2016 until 2022. The federal government, the Victorian government and the South Australian government agreed to provide $275 million in assistance.

When the Abbott government was elected, instead of pushing ahead with this deal, they engaged in the audit of automotive manufacturing in Australia via the Productivity Commission inquiry with the express purpose of killing off this industry due to an ideological bent that you should not provide assistance to industry, regardless of the devastation it could have on workers and on families.

Before the report was published, in December 2013 General Motors announced that Holden would cease manufacturing in Australia by the end of 2017. On 10 February 2014, Toyota announced that it would also cease manufacturing in Australia by the end of 2017. The federal Liberal government had fulfilled its objective of killing off Australia's original automotive manufacturing industry.

For the record, when the final report was released, the Productivity Commission's report into the Australian automotive manufacturing industry recommended no longer providing industry-specific assistance to automotive manufacturing firms as the economy-wide costs of such assistance outweighs the benefits. That is of very little solace to the South Australian companies and employers who had relied on automotive manufacturing for over half a century in this state.

I note that as I have been speaking there are some members who have been interjecting, 'Look at the employment rate.' I would challenge them to talk to some of the families who now do not have work and see how much comfort that gives them. There was the resultant closing of the automotive manufacturing industry for original automotive manufacturing as a result of the federal Productivity Commission's recommendations into this area.

In terms of workplace relations and the workplace relations framework, the Productivity Commission inquiry in 2015 into workplace relations recommended aligning Sunday penalty rates for hospitality, entertainment, retail, restaurant and cafe workers with those on a Saturday. We know how dramatically what they have done has—and I will conclude very shortly, Mr President, with this.

The PRESIDENT: No, you take as long as you wish, Leader of the Opposition.

The Hon. K.J. MAHER: We know the devastating effects the reduction in penalty rates that have been instituted recently have had on South Australians. Many South Australians have relied on the income that penalty rates provide to make ends meet. I have talked to many people, including many workers and particularly the trade unions which represent many workers, and some of these workers are amongst the very lowest paid in South Australia who are no longer receiving penalty rates. Let's be clear, this is a result of the Productivity Commission's review into this, fulfilling an ideological obsession of the Liberal Party to see those who are some of the lowest paid get paid even less because of their ideological bent against organised labour, but particularly against some of the many wins that have been won for workers, including penalty rates.

It is clear that the federal Productivity Commission has been used as a weapon against South Australia's interest many times through horizontal fiscal equalisation, advocating taking away SA's GST share to the tune of $2 billion a year; in respect of automotive industry assistance, removing government assistance for Holden which saw the closure and collapse of that industry last year; and through penalty rates. They are taking away penalty rates from thousands of South Australians who are amongst some of the lowest paid in this state. The federal Productivity Commission and the inquiries the federal Liberal government has set them have been used to weaponise policy against South Australia's interests.

As to the bill before us, the South Australian bill, its objects seem pretty well plagiarised from section 8 of the policy guidelines of the commonwealth bill. There are some glaring omissions, for example regarding employment in regions. Also, the commonwealth requirements for a variety of viewpoints to be used and for at least two different economic models to be used, again, are not required in the South Australian bill. The membership, not representative, is at the sole discretion of the government on recommendation from cabinet and the minister who refers it to cabinet.

There is nothing about employment whatsoever, full time or part time. There are no requirements in the bill about those who are going to be members of the Productivity Commission about potential conflicts. There are no requirements or specifications about remuneration, no termination requirements. There are no quorum requirements, except a majority of current appointees, yet this is specified in the commonwealth act. So if there was one appointee, they would be able to constitute a majority for the quorum.

Inquiries are at the discretion of the minister, with no requirements for inquiries or hearings, unlike the commonwealth which has time lines factored in. The tabling of reports is 90 days. It is more than three times longer than the requirements under the commonwealth. So as weaponised as the commonwealth Productivity Commission has been used against the interests of South Australia, they have far more detail and far more safeguards in place than the South Australian bill.

Given that, this bill requires amendments in the view of the opposition. We think there needs to be substantially more transparency around the commissioners and there is a role for parliament to play here, given the outcomes from Productivity Commission inquiries federally, the ones I have mentioned in terms of the auto industry, HFE and penalty rates used federally. But also with the paid paternity, maternity and parental leave and some of the positive outcomes, we think there is absolutely a role for parliament to play in the appointments.

Those appointed to the commission should be subject to the same arrangements as MPs around conducting their work and other pecuniary interests. The exclusive relationship between the minister and the commission should be broadened to include a role for parliament. As legislators, we are the ones creating this body and we firmly believe that we have a role to play in what it does; not just create it and leave it up to the minister of the day to do whatever they please with it.

Already, the Premier has made it clear in the committee stage that he envisages draft reports being made. These should be mandated and they should be made public at the time of their production. The commission should be required to seek a diversity of economic models or opinions, the same as the commonwealth commission. The commissioners should have similar representative skill and experience sets to bring to the commission, as set out in the commonwealth act.

The chair of the productivity commission should subject himself or herself to parliamentary scrutiny each year, similar to that faced by the Auditor-General of the state. There should be a thorough annual report provided to the parliament, like so many other agencies are required to do. As I said, reports should be tabled much more quickly than is currently envisaged: in 30 days, like the commonwealth, rather than 90 days that for some reason this act gives leniency to the government of the day.

There should be minimum quorum requirements, in effect, to ensure that the government appoints sufficient members to comprise the commission and to ensure that a diversity of skills and experience is always present on the commission. This is a list that some of the amendments that have been filed by the opposition go towards. With that, I commend to the chamber the amendments that have been filed and look forward to some full discussions about this in the committee stage.

Debate adjourned on motion of Hon. D.W. Ridgway.