Bills

Supply Bill 2019

Second Reading

Adjourned debate on second reading.

(Continued from 18 June 2019.)

The Hon. C.M. SCRIVEN (11:02): I rise to speak to the Supply Bill 2019. I note, of course, that the opposition will not be opposing the bill, but it is a good time to review the Marshall Liberal government over the past 12 months. One thing the Marshall Liberal government made clear before the election was that they would apparently deliver lower costs and better services. What is clear is that over the last 12 months they have not delivered either of those promises.

Let us look at the Marshall Liberal government's record on lower costs. Over the past few weeks the Treasurer has slowly provided announcements to the public that South Australians should prepare for an increase in fees and charges far beyond the rate of inflation.

Car registrations will rise by 5 per cent, driver's licence renewals by 4 per cent and hospital car parking by a whopping 20 per cent, including at Modbury Hospital, where local members, the member for Newland and the member for King, have remained tight-lipped about these increases and once again have remained silent instead of standing up for the north-east. Public transport costs have increased, and individual contractor licences have risen by up to 10 per cent and registrations fees for tradies by 10 per cent.

On top of this, many small businesses in this state in the entertainment and hospitality industry will be hit with what has been labelled the entertainment tax, where small businesses are facing increases of 500 per cent in fees and charges, which no doubt will leave business owners no option but to pass on the increases to consumers, who will therefore once again face further hikes.

Of course, if all that was not enough, we now see increases being proposed to the solid waste levy, where councils across the state, who have already consulted with their communities on their budgets, will be left to choose between three most unpalatable options: they can increase council rates to cover the extra charges, which will thus be passed on to the ratepayers and increase their cost of living; they can cut previous capital works planned in the community for upgrades to sports and community clubs, road or footpath upgrades or other key services that councils deliver in the community; or they can increase council debt, which is of course something the Marshall Liberal government seems to enjoy doing—increasing debt—but it is certainly not a desirable option for many councils across the state.

All of these charges I have just listed will significantly impact on the cost of living of South Australian residents and make them have to dig that bit deeper. It is going against everything that the Marshall Liberal government claimed they would deliver prior to the election. We know that wage growth in this country is stagnant. Wages are not rising and, indeed, many people in our community are struggling. Many have had their penalty rates slashed, yet we see this Liberal state government continuing to recklessly increase the cost of living for many South Australians.

The other mantra that the Marshall Liberal government used consistently in the lead-up to the state election was better services, but the people of South Australia are right to ask: where are they? The Marshall Liberal government is closing three key Service SA centres across the state, including in Modbury, where data shows that the patronage numbers continue to grow every year. Once again, I must ask, where are the members for Newland and King in advocating for their communities? What are they doing to ensure this centre remains open? The answer, as we know, is absolutely nothing.

Has this Marshall Liberal government delivered better services in the health portfolio? Clearly, the answer to that is a resounding no. They forced the Keith and District Hospital in the South-East to crowdfund money to ensure that they can remain open and, in the end, had to rely on the local council just to keep the hospital operating. This is despite, prior to the election, the member for MacKillop and the now health minister promising Keith and District Hospital the world and then delivering them almost nothing. Local councils, it would seem, are now responsible for health services.

They have forced The Queen Elizabeth Hospital cardiology unit into a position of having to make public appeals for donations, cutting funding for the position of the Mental Health Commissioner and cutting funding for mental health by 25 per cent. They have closed 25 beds at the Hampstead Rehabilitation Centre, 16 beds at the Flinders Medical Centre and 20 at the Women's and Children's Hospital, and they have privatised the patient transfers between Modbury Hospital and the Lyell McEwin in the north-east.

Then, of course, there is the debacle the Minister for Health has presided over when it comes to the rollout of the influenza injections. During one of the worst flu seasons on record, 116,000 flu vaccines sat in a warehouse in Adelaide while the health minister made excuse after excuse for them not being available. This, apparently, is better health services. I would hate to see what they describe as worse health services.

The Marshall Liberal government has provided $46 million in cuts to the transport system, which has an impact on some of the state's most vulnerable, including the elderly and people with disabilities. Many commuters will face massive increases of up to $849 per year with the scrapping of the two-section ticket. The state government has also announced plans to increase fares across the board by up to 2 per cent. It is clear that the Marshall Liberal government has not delivered on its promises of lower costs and it has not delivered on its promises of better services.

Another key part of this Marshall Liberal government's promises before the election, and since, has been in regard to apprenticeships and traineeships; indeed, a promise to deliver 20,800 new apprenticeships and traineeships over four years. But what have we seen? Minister Pisoni recently claiming increases that are at odds with the official, independent information from the National Council on Vocational Education Research.

Particularly in the regions, it is important that we concentrate on jobs for young people and, indeed, jobs for all. The Marshall Liberal government and Minister Pisoni have failed to deliver anything near the amount needed in order to achieve the targets they have set for themselves. We have seen commencements decline, far from the promises that the people of South Australia have heard from this Marshall Liberal government.

As I mentioned, the opposition will not be opposing this bill, but it is only fitting that the Marshall Liberal government is called out on the fact that they have not delivered lower costs, they have not delivered better services and they are not delivering on one of their key promises in terms of apprenticeships and traineeships.

The Hon. M.C. PARNELL (11:04): Normally in addressing the Supply Bill I would go through a similar exercise to the Hon. Clare Scriven. We would look at the government's fees and charges, we would look at their skewed priorities and we would forensically examine who the winners and losers are in relation to government finances. But I do not want to do that today.

The Hon. R.I. Lucas: Hear, hear!

The Hon. M.C. PARNELL: No, you will not be thanking me soon. I want to focus on what might seem one fairly small aspect of the state's finances, but I want to expose it for the cruelty that it will cause to some of the most vulnerable people in our society. The issue that I want to talk about is the abolition of two-section fares on Adelaide Metro buses, trains and trams. This was an early budget announcement. It was originally dropped to the media on 23 May as part of what is now standard operating procedure for a government in a pre-election period to keep the ball in their court and to keep everyone talking about them rather than anyone else. It is just how things work these days. The difficulty with this move is as follows: currently, a person travelling a short distance, usually under three kilometres, only pays $2 per trip rather than the full price of $3.70 using a regular Metrocard.

These two-section fares have been around for decades. They recognise the fact that it is unfair for a person travelling just a couple of stops to pay the same fare as a person travelling 40 kilometres or more. These two-section fares were aimed at passengers who do not receive any other concession—for example, a part-time worker who is not in receipt of Centrelink payments.

When the story first came out, the opposition, as you would expect, jumped on it. They put out a media release claiming that the additional cost to a person travelling a short distance in peak times five days per week would be $17.70 extra per week or almost $850 per year. The opposition said that this is a huge annual increase from the government that was promising only very modest increases in public transport fares. Unfortunately, the opposition botched its calculations, and that gave the Treasurer a free kick. The Treasurer could rightly point out that a person in that position could buy a 28-day pass for only $101, which would mean that they were nowhere near $850 worse off. In fact, they were only $250 worse off per year. That is still a very hefty annual increase.

Unfortunately, it does not tell the full story. Under the government's new pricing structure, there are no winners; there are only losers. The biggest losers are not those who are travelling every day; it is part-time and casual workers who are travelling short distances three or four days per week. These commuters are really copping it in the neck from the abolition of two-section tickets.

I have crunched the numbers and discovered that a person who currently works three days per week and travels on public transport fewer than three kilometres each way to work will be worse off under these changes by a massive $489.60 per year. That is because they are paying an extra $10.20 per week or an extra $40.80 per month, yet it is not worth their while to buy a 28-day pass because that would be even more expensive and they do not need to travel every day.

This part-time worker, the three-day-a-week worker, will need to find an extra $489.60 per year just to get to and from work. The only person who is worse off than this is another part-time worker who travels a short distance on public transport four days a week. Let's say they get a lift home from a work colleague on one of those days, so they only need to use the bus, the train or the tram seven times per week going to or from work. That worker is $540 worse off every year as a result of these changes.

What that means is that the hit to this part-time worker is more than twice the hit to a full-time worker, who is only $252 a week worse off under these changes. Whilst the opposition might have botched their initial calculations, they were certainly on the money. These supposedly modest public transport fare increases are actually a huge hit for those who are not even on a full-time wage or salary. Our part-time and casual workers are the biggest losers.

Of course, if a person in the situation I have described does not have a Metrocard and they buy an individual ticket for each trip, they are put massively out of pocket by these changes. I have not modelled those figures because I do not want the government to shirk the unavoidable consequences of their decision. In the scenarios that I have described, the passengers have taken every possibility to keep their fares as low as possible. There is nothing more that they can do other than walk to work.

I now seek leave to incorporate into Hansard a purely statistical table showing the impact of these fare increases on various classes of passengers. I note, for the benefit of Hansard, that I will provide this table electronically to them.

Leave granted.

Comparison of Adelaide Metro fares before and after abolition of 2-Section fares on 7^th July 2019

*28-day pass is cheaper than Metrocard fare where 7 trips per week or more are taken.

The Hon. M.C. PARNELL: So why is the government abandoning short distance two-section fares? The government claims that 'hundreds of passengers are rorting the system by paying less but travelling further'. That may or may not be the case, as there is no evidence provided, but what we do know is that the number of people who will be disadvantaged by the removal of these two-section fares is in the thousands.

According to figures obtained by the Parliament Research Library from the Department of Planning, Transport and Infrastructure, over 75 million trips were taken on public transport in the last financial year. Of these, around 1.36 million trips were taken on two-section tickets, with 90 per cent of those being the two-section Metrocards rather than people buying an individual ticket. Overall, nearly 2 per cent of all trips on Adelaide Metro were undertaken using two-section tickets. All of these would have to be full-fare paying passengers because there is no two-section ticket available for concession cardholders, given that the concession fare is already lower than the $2 two-section fare.

To be fair, the impact of the government's other increases for concession cardholders on public transport is minimal. In most cases, the increase over a year is $12 or less, but heaven help the unemployed if they manage to get a part-time job. If their three or four-day job takes them off Centrelink benefits, they then join the ranks of the biggest losers under this government's transport fare changes. I now seek leave to incorporate into Hansard another purely statistical table, showing the use of various types of Adelaide Metro tickets over the last three years. Again, I will provide that electronically to Hansard.

Leave granted.

Total patronage by passenger category and ticket type, showing Metrocard types

Source: Department of Planning, Transport and Infrastructure

The Hon. M.C. PARNELL: Coming back to the government's rationale for imposing this additional charge on public transport users, what it says to me is that their solution to an alleged problem of compliance with the rules is not to employ more ticket inspectors but to penalise those who are doing the right thing, paying the right fare, and then slug them hundreds of dollars per year in extra costs.

What we also need to remember is that not everyone has alternatives available to them. Many public transport passengers are what is sometimes referred to as 'captive' of the system. They do not have cars, they do not have a licence, or they do not have anywhere affordable to park. These include people with disabilities, young people or, most distressingly, people on very low incomes. Not everyone can walk or cycle three kilometres, and neither should they have to when we have public transport available.

The opposition claims that the move will discourage people from using public transport. I agree. I think for many it will. It is also counter to the government's professed objective of increasing public transport patronage. Another possible consequence might be that it actually discourages people from working. A person on minimum wage working three days a week needs to find an extra $489 per year to get to and from work. That represents nearly an entire week's wages just to pay the extra fare. A person in that position is already paying over a week's worth of wages in public transport fares as it is.

The bottom line is that this part-time worker, working three days a week at a workplace only three kilometres from their home, will end up paying two weeks' worth of wages in fares just to get to and from work. However, if they are also earning just enough to be completely cut off from Newstart Allowance, the impact is even greater, as they are not entitled to a concession, or any other concessions that help lower the cost of living for people reliant on social security.

We already know that parents returning to work who have young children often find that the cost of child care eats up much of their salary, even with the changes to rebates that were introduced last year. Adding an extra $489 in public transport fares will make it even less attractive to return to work. These are the sorts of unintended consequences and perverse incentives that accompany short-term decisions like this.

The Greens believe that a far better option would have been for the government to invest more in compliance, such as ticket inspectors, who also serve an important public safety role, rather than penalising those who are doing the right thing, paying the correct fare and just want to use the public transport system for short distances on a part-time basis. I think it is important to point out to the council that what might appear in the budget or in a pre-budget announcement to be an insignificant, small change actually has a massive impact on some of those in society who most need our help. They do not need barriers put in their way.

The Hon. J.E. HANSON (11:21): Like many other honourable members here, I rise to speak on the Supply Bill. As I do, it is worth noting a certain elephant in the room that looms over our state. I have mentioned previously in this place that a federal Productivity Commission report exists, which indicated a number of possible scenarios that were being put forward that would impact South Australia's share of the GST. Well, they now have.

South Australians are being slugged by the federal Liberal government to the tune of almost $0.5 billion in lost GST revenue—$0.5 billion. In response, what do we get? Well, South Australians are being slugged again by a state Liberal government. What has been the response of the state Liberal government to their federal colleagues? Instead of standing up to them, as I think everyone on this side would like them to, their response has been something different. They have thanked them. Many members here, and in the other place, have celebrated and indeed thanked their federal colleagues for removing hundreds of millions of dollars in revenue from this year and every year going forward.

While kowtowing like this to those taking hundreds of millions of dollars out of their own budget, those same members then turn around and present South Australians with a long list of increased costs on essential services and items. It is the equivalent of thanking the school bully for eating your lunch and then asking if they want to come home to have dinner with you. Well, it is not good enough.

Regardless of partisan views between the major parties in this place, it is fact that when the Labor Party left the treasury benches South Australia had been consistently rated in The Economist as the fifth most liveable city in the world for six years running. During this time, that being the final years prior to the last election, our state also ranked highly in the Lonely Planet guide and international magazines that promote both living and tourism. Right up until the last election, confidence in the South Australian economy was the best it had been for the best part of a decade. Critically, almost one in three businesses said that they were directly aware of the opportunities provided by the previous state government administration to assist them.

Why do I mention all these things? Because it is truly worth noting a short grab of what the National Australia Bank's quarterly business survey for South Australia said in its most recent quarterly report, that being for April of this year, and I quote:

Both business conditions and confidence declined in the quarter. Conditions continued its downward trend since peaking in early 2018 and is now only just above average, suggesting the loss of momentum in the business sector has continued into early 2019. Confidence and forward orders turned negative in the quarter suggesting the outlook for conditions remains weak. The falls in trading and profits in Q1 were significant. Also medium term expectations for conditions (3 and 12 months) and capital expenditure eased further. While the slowing in activity indicators continues unabated…

In terms of alarm bells that our state is drifting unabated, they do not get much louder than that. It seems they will not be heeded by the current government. I recall during the last Supply Bill debate before this house, I noted that it was vital that this government look to the farmers suffering from significant drought, to look to farmers and small retailers who are being squeezed by the large end of town in terms of pricing and supply, and to look to those who face cuts in their local public services the closure of their TAFE or increases in their housing rents.

Why did I do all this? Well, it is good economic principle to say that co-investment in sectors of the economy will drive private investment and good micro-economic reform. Indeed, it was a hallmark of the economic growth in South Australia during the early 2000s. Just one example of this, of course, is the defence industries that called our state home during those years and created such significant tax receipts and employment while they did so.

That said, I am hardly surprised that the government did not listen to me or those on the opposition benches during our previous supply speeches, but I draw their attention to the comments of their own friends in the banking industry and their projections in relation to what has come of their approach versus that taken by the outrageously successful Labor government. The facts are that the Liberals are racking up record debt now. We are projected to see $13.5 billion next year. This will go to $16.7 billion in the year after, and $18.1 billion net debt the year after that. By 2022, of course, we are projected to be in over $21 billion worth of net debt. This is Liberal Party net debt. Interest payments on that are projected to be more than $1 billion per year or nearly $3 million a day—$3 million.

It is important that we all sit here and realise what this means. The principal of debt is in itself not a bad thing. We do not run the government like a household. Debt and the use of debt can be useful at manageable levels for a government entity. But it bears pointing out that $3 million a day could fund many tax initiatives the Liberals may have proposed. To give some further relative context to this, the new state-based bank tax of 0.015 per cent on liabilities was forecast to raise about $370 million over four years. The Liberals stridently opposed that. Over four years, the Liberal increase in net debt will have us paying over eleven times what that measure alone sought to raise—11 times more, every day $3 million. That $3 million a day could similarly fund a lot of free transport like that mentioned by the Hon. Mr Parnell or health programs to disadvantaged South Australians.

I will have more to say on those aspects later but, in short, at this stage in a purely economic sense, at $21 billion the Liberals will have doubled net debt from where we are today to where we are projected to be in just 2022. Over such a short time frame, I do not think it is justifiable as good economic management. In fact, it gets an F from me. Such is the level of debt, the Treasurer has somewhat famously now publicly admitted that the debt probably will not be paid off during his lifetime, or at least as he has since qualified, however long he may live. It seems very unlikely that he will be well over 150 by the time we are paying it off, but who knows? Let us hope the Treasurer lives a long life so he can see it happen.

Without being glib, as I just have been, this may be fine and well for the Treasurer, as he is at the end of his career. He is on the way out the door. That is fine. He has been here a long, long time. But it will be the rest of us, no matter what your political stripe, everybody sitting over there on the government benches now and those sitting on this side, who will be saddled with this Liberal debt for many, many years to come. It will affect all the programs and initiatives you seek to perform.

In any economic sense what we need in any Supply Bill in this state is a bill that should be looking to address the falls in business confidence, address the concerns about momentum in this economy, and address the alarm that there is slowing activity and expenditure in not just the short term but also the medium term. It would surprise no-one that I believe the initiatives of the current government that fund this Supply Bill will not achieve any of those ends. In fact, I think it is frankly bizarre that not only will it not achieve those ends, it actually fails to deliver on them by driving up debt at the same time as it drives down the cost of living through taxes and fees. The fact is that inflation is just 1.3 per cent, yet the Liberals are jacking up taxes way above that inflation rate.

Driving a car will become more expensive, with hikes to motor registration; they are up 5 per cent. Driver's licence renewals are up 4.5 per cent. If you do not want to drive and you are expecting to catch a bus, I have bad news for you there, too. Catching public transport is going to be more expensive, with hikes to fares; they are up 2 per cent. The axing of the two-section card, as has already been mentioned here today, will cost some commuters up to $850. Free Metrocards will now cost $5 each.

Going to the hospital will be more expensive, with hospital car parking up $725 per year for nurses, cleaners and other staff, while patients, their families and friends will pay 20 per cent more than that. Free two-hour parking at TQEH got axed. Ambulance fees are up 5 per cent, meaning it now costs more than $1,000 just to catch an ambulance.

The Liberals are taxing tradies, of course, with their famous tradie taxes. Those licenses are up 10 per cent. Trailer registration is up 10 per cent. Ute registration is up 10 per cent. Any plumber, electrician or gasfitter will have to pay those charges from 1 July before they even lift any of their tools. If you do not think that is going to be passed on to the consumers you are wrong; it will be.

The Liberals are even taxing jobs. They have a 70 per cent hike in mining taxes. The Liberals are taxing entertainment, with hikes worth thousands of dollars on small bars and pubs. The Liberals are even taxing major events with their police rent tax. The Liberals are even taxing a day out with the family to Cleland Wildlife Park; they have hiked the entry fee by 25 per cent, which will particularly disappoint my son. A family pass is now well over $70 for entry, which is more than 10 per cent of the average minimum weekly income for a full-time South Australian worker.

One thing I really want to focus on, which I think is particularly unfair in this budget, is the wheelie bin tax. Even putting out your garbage, that is right, under the Liberals, is going to be more expensive. The Liberals are increasing the solid waste levy by 40 per cent—40 per cent—which means higher council rates. So much for rate capping, right? The impact of this increase alone would blow away any savings made this year by the now hypocritical position of the Liberal Party on their foolish rate-capping proposals.

To give some context to this, the impact on the West Torrens council is $270,000 for the remaining six months of this year alone. That is an equivalent of a 0.5 per cent rate increase. This single decision represents almost 20 per cent of the total rate increase that was contemplated by that council already for the financial year. For the Tea Tree Gully council it will be about a million dollars or a 1.5 per cent rate increase. For Marion council the figure is $400,000, and for Gawler it is more like $600,000.

One would think, with a measure racking up this kind of punishment on local government, that the minister might pick up the phone, that the Treasurer might do so or that the Premier might at least make it known that he was going to take such measures and let the sector know. But, no, the Premier, the Treasurer and the minister asked this sector to adjust their budgetary processes, which are many months in train, by many hundreds of thousands of dollars, or perhaps millions, with just seven days of the completion of their budgets to come.

It clearly did not occur to anyone in the Liberal Party that this kind of adjustment for local government is outside the terms of community consultation in the Local Government Act, but maybe they do not care about that. Governance suits the Liberal Party for local government when it suits them, not when it is good governance for the sector. In short, this is such poor economic practice and governance that it borders on the insane. Where is the good economic sense in any of this? Where is the good governance? Where is the view, as put by the Premier before the last election, that he will be reducing costs? It does not exist.

The $2.5 million that the government has made available to councils and the industry for waste and recycling projects over the next four years is a complete farce when you consider that councils will be asked to contribute $42.5 million through the levy for the next six months of the coming year alone. It is even more farcical when we consider that the Treasurer himself wrote to a prominent South Australian council, probably one council among many, to state his commitment to the priorities for local government if they formed government.

The Treasurer gave a commitment in this correspondence, and possibly the same to some other councils, that a Marshall Liberal government will not continue Labor's cost shifting to local councils. This correspondence, to which I refer, was in February of 2018. Obviously, there is one rule for the Treasurer outside of government and another one for when his federal colleagues come and raid his coffers. In a policy sense, so much for ending cost shifting, so much for reducing costs, so much for rate capping. In a practical sense, of course, for the people of South Australia the Liberal Party has quite simply lost all credibility on any of these matters.

Having outlined that the current state government is praising a federal government that is cutting our GST revenue, doubling the net debt over the forward estimates and engaging in massive hikes in fees and services, one would think that this would be enough. They would be wrong. There are cuts proposed in the supply to this government. The tourism department budget is cut by $100 million, Brand SA and the I Choose SA campaigns—two champions of our state's small business and agriculture—are being closed down.

Reclink have had a cut of $50,000 a year. Their grant, which they have received for the past 14 years—a decade and a half—has been completely cut, and we have seen all the funding to RecFish be cut as well. There are cuts to crime prevention grants, discontinuing crime prevention and CCTV camera grants. The Legal Services Commission had cuts of $1.2 million a year put into it, and the Communications Partner Service grant was cut by $390,000 a year. This grant, which previously supported adults and children with complex communication needs who come into contact with the criminal justice system, arguably a vital service, has been cut, too.

There is $46 million in cuts to public transport which leave many people without the vital transportation they need, impacting on the most vulnerable, such as the elderly and the disabled. There are proposals, as I have already mentioned, to scrap two-section fares on buses. This means that a worker who relies on public transport to get to work may have to pay an extra $150 a year just to get there. Many South Australians will have to bear the brunt of the cuts, with over 1,170 services affected. I note that the state government has also, of course, cut the Footy Express and free public transport for the Christmas Pageant—how mean.

Then, of course, we have SA Pathology. We know that there are plans to cut services across hospital laboratories, cut staff and shut down collection centres with unrealistic KPIs and budgetary processes applied to them. Then, at the end of the day, after all these cuts, the Liberals of course, famously, will not rule out the sale of the trains and the trams and SA Pathology in any event anyway. What kind of vision is this for our state?

The fact is the Marshall Liberal government is hitting South Australians very hard. They are hitting them hard with massive tax hikes way above the inflation rate. Steven Marshall promised lower costs and yet he is jacking up taxes on every South Australian. He has broken his promise. Every time South Australians drive their car, catch public transport, go to hospital, or even put out their wheelie bin, the Marshall government is there taxing more and more money.

The Liberals are also racking up a record debt while they were doing it of more than $21 billion. Interest payments, as I have said, will be $3 million a day. Under a Marshall government, South Australians are paying more now through higher taxes and we are paying more later with skyrocketing debt. Under a Marshall government, South Australians are having their services cut now so that the government can spend up big on infrastructure projects and the majority, by their own papers, will not be seen until after the next state election.

With so little economic sense and so much pain for working families, it is little wonder that so many South Australians are wondering what it is that the Liberal Party even stands for these days. We will have to continue to wonder for at least the next two years, as I have to support this bill.

The Hon. R.I. LUCAS (Treasurer) (11:39): I thank honourable members for their contribution to the debate. Whilst it is technically the Supply Bill, the various presidents have appropriately interpreted very liberally much of what has been discussed in today's contribution more appropriately, I guess, in the Appropriation Bill debate, which we will be having soon again in a few weeks. But that is not something I will take issue with in terms of allowing members to vent if they need to.

In responding to some of the issues that have been raised, I think in more detail when I have more time I will respond appropriately in the Appropriation Bill debate to some of the issues, but I do just want to pick up a handful of issues raised briefly this morning and just correct the record. I am not sure what parallel universe the Hon. Mr Hanson lives in, but it is clearly not the real world. As I said, I can address most of his issues on another occasion, but if I can just correct the record for some of the claims he made, purported to be fact but are not.

The first point is that the commonwealth government has not cut GST payments to all the states, in fact, but in South Australia in particular. As I have indicated in this house on any number of occasions, the $2.1 billion cut in the forward estimates for GST is completely beyond the control of the commonwealth government. In the first instance, federal Treasury just estimates the size of the GST pie that is being collected—that is how much money people are spending on GST-able goods and services, if I can put it that way, and their most recent estimates are a significant reduction because of the softening national economy and the fact that more money is being spent on goods that do not attract GST and not as much as was predicted on goods that do attract GST.

The second issue, which is again completely beyond the control of the commonwealth government, is the independent Commonwealth Grants Commission, which we support, and which made a decision in March that South Australia's share of the national GST pie will be smaller next year than this year. This year we get $1.47 for every dollar, but next year we will only get $1.46 for every dollar. It is only a 1¢ difference, but it actually costs South Australia about $170 million a year as a result of that decision from the independent Commonwealth Grants Commission. So it is not accurate for anyone to say that the commonwealth government has made this particular cut. It is a decision completely independent of them, and it would not matter whether there was a Labor government still here in South Australia or a new Liberal government jumping up and down about it; it would not change the situation. The federal government does not have the power to change those two particular issues.

The second point that is clearly wrong and demonstrates, I guess, the lack of financial competence that characterised the former Labor government's management of the state's budget and economy, is the claim that taxpayers will be paying $1 billion interest a year, or $3 million a day, as the shadow Treasurer (the Leader of the Opposition) and now the Hon. Mr Hanson have been claiming. That is just a demonstration of the inability to read the budget papers, or a deliberate attempt to make up a particular number.

As I put on the public record, the new Australian accounting standards require a number of items, including gambling and revenue expenses but also interest expenses, to be reported in 2019-20 onwards in a gross expense or revenue fashion, whereas previously under Labor and Liberal governments for many years it was reported in a net revenue or interest expense fashion.

So the reality is that next year the state will be paying around $350 million-ish in interest on its debt, and it is forecast to be paying in the mid-500s, I think it is—535, or something like that—in the fourth year of the forward estimates period. It is certainly not the billion dollar number or the $3 million a day number that the Hon. Mr Hanson has claimed.

The point that needs to be made, if one puts aside the partisan positioning of the Labor Party on this particular issue, is that the critical determinant of this is the view of the independent credit rating agencies. Moody's have said that for a government with a $22 billion budget with the debt profile that we are forecasting, it is a manageable level of debt; that is, with our budget and with the level of debt that we forecast, it is manageable. On that basis they have maintained the credit rating improvement that we got last year at the second highest level of any of the states in Australia.

Even more significantly, Standard & Poor's, the other independent credit rating agency, in maintaining, again, the second highest credit rating for the state of South Australia of all the states, said that 'one of the reasons for doing so was the solid financial management record of the new government', a very interesting phrase to use after 16 years of the former Labor government and with now just over a year of a new Marshall Liberal government.

Both of those independent credit rating agencies have looked at the budget. They have had a look at the debt profile, they have looked at these claims about interest expenses and those sorts of things and they have said, 'Solid financial management of the new government, tick; manageable level of debt, tick; keep the credit rating agency improvement that we gave you last year, tick.'

It is their judgements which are more important than, frankly, those of the Hon. Mr Hanson. Why they are more important is not only that they have more credibility; they are more important because ultimately it is the credit rating which dictates the level of interest rate that we have to pay in the market. Just two weeks ago, SAFA on behalf of the state of South Australia went into the marketplace and borrowed $500 million at 1.66 per cent. The reason for that is the solid financial management record of the government, the liquidity that it has kept in terms of its debt profile and its assets and liabilities, and also the fact that we have achieved an improved credit rating for the state of South Australia as a result of last year's budget.

As I said, there are many other things I could address, but there is one final thing, because I do not want to delay the Supply Bill debate. I think now we have had a clear indication from the Hon. Mr Hanson. Very importantly, he has put the bank tax back on the agenda for the Labor Party. His leader indicated today that they will be outlining their position supposedly sometime early next year, and the Hon. Mr Hanson has clearly today defended the former Labor government's position on the bank tax. He is clearly a very strong supporter of the bank tax, and this is a clear indication of the direction the former Labor government and now Labor opposition is heading in—that is, a bank tax in relation to this particular issue.

I think the people of South Australia need to bear that in mind because the former Labor government's approach to budget management was: anything that moved, they would try to slap a new tax on. There was the car park tax. There was the bank tax. There were any number of new taxes from the former Labor government. As I said, if it moved, they would seek to whack a particular tax on it. It is clear—

The Hon. I.K. Hunter: And you have introduced a rubbish bin tax. That is your legacy: a rubbish bin tax. Brilliant! Really clever!

The Hon. R.I. LUCAS: I think everyone else has been listened to with great respect during this debate, but the Hon. Mr Hunter interjects out of order. He talks about the rubbish bin tax. The rubbish bin tax started off at $5 under a Labor government and then increased to $100 a tonne. It went from $5 to $100 under the former Labor government, so if one is talking about what they euphemistically call a rubbish bin tax, it was indeed one of their own making, and it went from $5 to $100.

The important point I wanted to make in concluding is that given the Hon. Mr Hanson, the Leader of the Opposition and the shadow treasurer in the last few days have attacked the level of state debt, clearly it is the intention of the Labor Party, if elected in 2022, to reduce the level of the state's debt. That will mean—

The Hon. J.E. Hanson: Like we did before.

The Hon. R.I. LUCAS: Mr Hanson has just confirmed that—like they did before, or so he claims. He has just confirmed that is their policy position for 2022. What it will mean is that a significant number of infrastructure projects will now be cut or would be cut if a Labor government was elected.

All of those people who will be looking for major transport projects beyond 2022, major regional road upgrades and major intersection and level crossing upgrades in the metropolitan area will be at risk under the prospect of a future Labor government because the Hon. Mr Hanson and, indeed, his lower house representatives have confirmed that they are going to reduce the level of the state's debt. The only way you can do that is by slashing the infrastructure programs that are being funded.

What will also be at risk will be the Women's and Children's Hospital development. The north-south corridor project will be at risk because of the new policy position of the Australian Labor Party. A significant number of important school upgrades will be at risk and thrown into chaos because of this policy of the Australian Labor Party.

I can say on behalf of the Marshall Liberal government that we will very happily campaign right through to the year 2022. We will put on the public record that we will happily campaign, that we are going to build infrastructure in South Australia and we are going to build and construct and renovate new schools and existing schools. We are going to undertake new health and hospital projects: the Women's and Children's Hospital but also major hospital upgrades as well. We will undertake significant road and transport projects in the metropolitan area and in the country area.

All of those are going to be at risk under the new policy direction of the Australian Labor Party. We will have no concerns at all in terms of campaigning right though to 2022 on that particular policy platform difference between the two major parties.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. K.J. MAHER: I am wondering if the Treasurer can put on record at this point the total amount that the Supply Bill seeks to provide for? Is the Treasurer able to outline how the amount that is in the second reading explanation is calculated?

The Hon. R.I. LUCAS: Treasury provides governments with that particular estimate. It is basically calculated on trying to work out how much the government needs to spend on maintaining public services until it is expected that the Appropriation Bill will pass for next year. The Supply Bill allows us to pay the Public Service and keep our ordinary annual services going through to an estimated date of the Appropriation Bill passing through the parliament no later than about October or November of the year.

They work out, roughly, five months' worth of expenditure in the Public Service on normal spending. It is enough money to keep paying the services. If ultimately the Appropriation Bill does not pass by then, then we run out of money and we have either an election or a significant problem. The normal expectation is just how much it costs to fund the ongoing annual services for the five months or so before we actually pass the Appropriation Bill, which gives you the funding for financial year 2019-20.

The Hon. K.J. MAHER: In regard to the amount of funding that the Treasurer assures us is in the second reading explanation but does not have it in front of him at the moment, how is that funding financed? That is, how much, for example, will SAFA be raising for the financing requirements?

The Hon. R.I. LUCAS: SAFA does not operate on the basis of just raising money for this particular Supply Bill. SAFA will have an ongoing series of funding arrangements. We will have bonds which come due this year, next year and almost every year into the future. It has a rolling program of debt financing. Some will be shorter term; some will be longer term. I think I said to the Press Club yesterday that, when I was last in government and I arrived, we were rolling over bonds that had been raised 20 years previously.

There is a bond currently, not a SAFA bond, in the market at 30 years at 3.1 per cent from one of the other state entities evidently. SAFA does not raise specific money just for this $5 billion or $6 billion, whatever the number is, outlined in the second reading of the Supply Bill. It just continues its ongoing financing program for the total level of the state's debt as it exists at the moment, not this particular component of it.

The Hon. K.J. MAHER: I am sure the Treasurer will not have this with him, but will he take on notice and bring back a reply as to, at this point in time, how the total amount of SAFA financing is structured? What are the interest payments and what are the length of terms for the various bond rates? Historically, over the last four years, at the end of the financial year, what have been the terms and conditions, length of time and interest rates for the bonds at that point in time?

The Hon. R.I. LUCAS: I think we have recently placed on record some sort of debt profile, but I am happy to take it on advice and provide some information in relation to that. I am advised that the exact number evidently in the Supply Bill second reading was $5.5 billion, and the time period is a four-month period. We have anticipated that the Appropriation Bill, given that we have introduced the budget at the usual time of June—last year it was September—is to finance us through to the end of October.

Clause passed.

Remaining clauses (2 and 3) and title passed.

Bill reported without amendment.

Third Reading

The Hon. R.I. LUCAS (Treasurer) (11:59): I move:

That this bill be now read a third time.

Bill read a third time and passed.