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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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APPROPRIATION BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 June 2011.)

Mrs REDMOND (Heysen—Leader of the Opposition) (11:02): Thank you, Madam Speaker, and can I indicate to you that I am the lead speaker on this bill for the opposition. I would like to say that it is a pleasure to get up and respond to the government's budget, but I would have to say that that would not quite be true given that this is now its 10th budget and it has delivered more debt, more deficit and more deceit for the people of South Australia.

Households and small businesses are struggling paying their bills and making ends meet. The government is increasing everything from water bills, motor registration, driver's licences, bus tickets, CTP premiums and levies. Not only are households struggling, businesses are struggling and, in fact, this budget comes in the wake of a Dun & Bradstreet survey, which examined the businesses that are moving to other states right around the country. Would you believe that, out of the whole country (and we have only a bit over 7 per cent of the population in this state), 22 per cent of the businesses moving to other states came out of South Australia.

I think that the history of this government and the way in which it has dealt with small businesses and families are ample reasons to explain why that would be so. The government seems not interested in looking at it, but in fact only 4 per cent of the small businesses in this state actually approve of state government policies. It promised the world for families and businesses, but it does not deliver it.

I want to look at why this government is so on the nose, and I think that this morning's information in The Australian and other newspapers indicates that the government is on the nose. Indeed, a member of its own side, Leon Bignell (the member for Mawson), indicated yesterday that the government is on the nose, and there is a reason for it. It is not just that they are unpopular because they are tired, arrogant and disinterested, and it is not just because of their infighting: it is because fundamentally it is the economic mismanagement of this state—which is typical of a Labor government—that is causing the problems and causing people to need to leave this state.

Last December, on 16 December I think it was, they had their Mid-Year Budget Review and at that time the government indicated that it anticipated that for the next year, that is, for the 2011-12 tax year, there would be an $81 million surplus. They bring out the budget this month and what do you know? That $81 million surplus has turned instead into a $263 million deficit. So, in six months—in fact, it was slightly under six months by a couple of days—they have turned an $81 million surplus into a $263 million deficit.

When this government came into office, the state's income was roughly $8.5 billion a year, and that has basically doubled. So we should be on easy street. We should be sitting pretty. With a doubling of income, they should be doing really well; but, in every year, every budget it has had, this government has spent more than it has budgeted. Over the nine years, it is a total of $3.5 billion more than they budgeted, year upon year. They were warned about that. Time and again, the auditor-general Ken MacPherson warned them, and the subsequent Auditor-General, Simon O'Neill, repeated the warning, that they were relying on unbudgeted-for, windfall income from GST and property taxes to make their budget balance, and still they could not make their budget balance, even with those revenues coming in.

So, what do they do? They put up taxes. We are now the highest taxing state in Australia. The government seems to think that being a high taxing state is just another mechanism to get more income to waste on our behalf instead of recognising that high taxes mean that people cannot afford to run businesses here and, hence, the 22 per cent of businesses nationally moving to another state coming out of this state.

Tax revenue overall since this government came into power has increased by 88 per cent. Tax revenue has gone up by 88 per cent. That is why we are the highest taxed state in the nation. Because of GST state revenue—which this government, of course, opposed but has been its great saviour—they have an extra $5 billion per annum being paid to the state. Every state Labor government, by the way, is running a deficit budget and, guess what—every state Liberal government around the country is running a surplus budget. Funny, that!

Ms Bedford: Lies and statistics.

Mrs REDMOND: The member for Florey says, 'Lies and statistics'. I can tell members that the truth of this budget is coming home to roost with the people of South Australia, and the problem is that this government is deaf to the cries of business and families who are suffering because of the decisions that this government has made year after year in its term in office.

We already knew that the debt for this state was at about $4.5 billion and that the government intended for it to go out. Of course, in his first day in the job in this chamber the new Treasurer said, 'Of course we intend to increase the debt.' So we knew it was going out from $4.5 billion to about $7.5 billion, but now they are going to take it out even further to $8.2 billion. Of course, that does not include the new hospital at the rail yards.

The Treasurer stood there and said, 'What we don't want to do is run up a credit card debt for the children of today to have to pay. No, we won't do that, but we are going into this new rail yards hospital,' and when it is built the person who is 15 today is still going to be paying $1.1 million a day for that hospital as they turn 50.

An honourable member: A day?

Mrs REDMOND: Every day: $1.1 million a day. That is not for a doctor, nurse or any of the other good things about our medical system in this state: it is just to supply a new building because this government wrote itself into a corner wanting to have that new building.

When you include the debt from the rail yards hospital, of course, that adds another $2.73 billion-plus to the $8.2 billion debt, so we will have about $11 billion in debt. But, when you add all the bits and pieces together—the whole lot: the unfunded superannuation, WorkCover, the public sector workers compensation liabilities, public sector long service leave and the new hospital—the total debts and liabilities for this state come to $24 billion, or $15,000 per head for every man, woman, child and baby in this state. It is $15,000 a head, and this government says it has been a good economic manager. As I have said, the new Treasurer said on his first sitting day, 'I will not allow this state to run up a credit card debt which will be left for our children to pay,' but that is exactly what he is doing. Indeed, he is one who has signed us up for this new hospital.

So, having got us into this cash-strapped situation, what is the government going to do about? It has to do something like sell some assets. Of course, Labor promised, remember, that there would be no privatisations. But since then, of course, we now have the new Royal Adelaide Hospital contract—we own a hospital along the road—which is going to tie us up for 35 years of more debt and more credit card payments.

We have one consortium building six new super schools. We have wonderful community schools but, no, we are going to replace them with six super schools, built in private consortium's hands. They are going to forward sell the state's forests, which will decimate the economy of the South-East. That is why even the kids from the Kalangadoo Primary School have travelled up here time and again to try to make the government understand that that is not only a privatisation but something which will be a disaster for the people of South-East.

Now, of course, in this budget is the announcement that we are going to sell the Lotteries Commission. As I have said about each of those things, be it the state forests, which produced an income for us last year of about $40 million, or the Lotteries Commission, which produced an income for us last year of about $86 million—the goose that lays the golden egg. Why would you sell them? In my view, you would sell them only for two reasons, one being that you are offered such a fabulous price that you would be silly not to take it—if someone came along and offered me $2 million for my house in Stirling, I reckon I would take it because it would be so far over what it is really worth. That is not what is happening.

The other reason you would sell an asset that is producing an income for us is that you are cash-strapped, and that is what the case is here—that this government is so cash-strapped. I loved hearing about the fact that, if public servants want even a new highlighter, they have to trade in the old one to prove that they are not taking it away. Because we are so cash-strapped, we have to deal even with that sort of thing.

Not only has the government privatised things such as the hospital, the schools, the state forests and now the lotteries office, but it has also, in spite of its rhetoric, failed to bring back into public ownership the things it objected to being put into private contracts in the first place. With things such as the metropolitan bus services, the prison security services and the piping for the SA Water network and so on, it could have brought all of those back under government, rather than renew the contracts, but instead it opted to renew the contracts.

Before I move on to look at the public sector and what role the government plays (and I heard a new radio ad by Janet Giles as I came in this morning, which is still criticising this government—and with good cause), there is one other matter I want to mention, and that is a budget measure, or what the government is purporting to call a budget measure, which we intend to oppose on this side of the house, and that is an attempt to use the budget to take away a fundamental right of the citizens of this state.

The Statutes Amendment (Budget 2011) Bill seeks to amend the Summary Procedures Act 1921 by establishing a presumption that costs will not be awarded against the police in a summary prosecution even though the police prosecution has been unsuccessful. Historically, in this state, we have always worked on the basis that, if you go to court and win, you will basically have the costs paid. If you are a successful litigant, the other side will pay your costs in a civil matter. Equally, if you are taken to court by the police and you win, the police have to pay your costs. That is the way it has always been; that to me is a fundamental right.

What the government proposes is to remove that, to change that presumption. That is going to mean that the average person can be hauled into court by the police, who will face no adverse consequences, regardless of the outcome and regardless of how unjustifiable their case against you might be. There have been people in this state who have literally lost their home defending themselves. What the government now seeks to do is take away their right to be reimbursed their costs of having to go to court to defend themselves, no matter how wrong the police turn out to be. That is not a budget measure, it is not something that we on this side of the house are prepared to accept, and we will, in due course, move an amendment to seek to undo that.

I invite the government to reconsider its position on that, and I particularly invite the Attorney-General to stand up, as the new Attorney-General of this state, and nail his colours to the mast about whether he actually supports that budget measure. He is not only the Attorney-General: he is the would-be pretender to the throne. He wants the premiership just like the Treasurer, just like Jay Weatherill. They are all vying for it. Let's see where his colours are nailed to the mast on that issue.

I want to move on to the issue of the Public Service because, since Labor was elected in 2002, public sector employment numbers have increased by 18,105. They only budgeted for 2,500 of those employees but somehow, in spite of budgeting for 2,500 new employees, they have managed to employ over 18,000 extra.

Those of us on this side of the house who run our own businesses can only be gobsmacked at the idea that anyone running any sort of a business could put up a proposal and say, 'Well, we're going to increase our workforce by 2,500,' but then increase it by over 18,000 instead. Indeed, if they had been in the private sector, I am sure that their board would have sacked them by now. As if that were not bad enough, the fact is that most of the people that they have employed have just been extra bureaucrats.

I know that the member for Cheltenham (Hon. Jay Weatherill) loves bureaucrats. He actually likes to dismantle things like the Julia Farr Centre, the Independent Living Centre, the Intellectual Disability Services Council and all those organisations and defund things like the Brain Injury Network—all those things in the disability sector—because his view of the world is that we are much better off with a big bureaucracy running all these things and hence the need for more bureaucrats.

We certainly have no more efficiency in the system as a result of doing that, but we do have a lot more bureaucrats. Out of that 18,000 extra people who have been employed, a total of about one-third—just over 6,000 of them—are actually front-line service providers like doctors, nurses, teachers and police, so about 12,000 are actually just new bureaucrats.

One of the other debacles that has been overseen by this government has been its so-called reform called Shared Services—and I refuse to give it the title of 'reform'. Costs continue to blow out. The Shared Services plan was supposed to cost an initial $60 million as a once-off payment and save us $60 million a year. Every public servant I know—and I know quite a few, and they are in different departments—complains about Shared Services.

It is not just bad in terms of its failure to provide the service that it is supposed to provide, it is bad for a range of reasons, amongst which is the fact that it takes business out of the country and our regional centres. Every time you remove one person from a regional centre with a government job, it can mean that a partner or a spouse loses a job locally because they all have to come back to the city. It means the kids are pulled out of the school. It makes the school less viable and you could lose teachers at the school. It has a ripple effect through those communities.

They originally said $60 million was a once-off but it would save us $60 million a year. That sounds like good maths but, just in this budget, an additional $10.5 million is going towards Shared Services, and it is going to cost a whole lot more before we are through, because we know that at present there are fewer than 700 employees in the organisation but they are still planning to get to a 2,300-employee target in due course. It has blown out already by tens of millions of dollars. It is going to cost us another $10.5 million this year and still we are getting no better management. Indeed, from all accounts that I have ever heard, we are getting much worse management of all those things in this state.

The other aspect of that, I might mention, is that, if you are a pay clerk out in a suburban area—say, at the Flinders Medical Centre—and you cannot be a pay clerk there any more because Shared Services is going to do it all centrally, and they have guaranteed that you will keep your job so you come in to work here, that means of course that the extra time and extra cost are impositions on you, the employee. That is where the impact of this is being most felt, apart from its failure to provide any decent service.

I said in a speech the other day that this budget deals with figures that are so large that none of us can actually comprehend the sorts of billions of dollars that we are involved with. So, we decided it would be a good idea to look at what the impact is on the actual household because, after all, the new Treasurer makes out that he is a family man—as if he understands life on struggle street—and that this is a family-friendly budget.

But, if you look at the facts, as I have already mentioned, every South Australian—because of this government's mismanagement of the economy—faces a debt of some $15,000 per man, woman and child. So, in your average household with mum, dad and a couple of kids, there is a government debt of over $60,000 for them to meet. And that is in addition to them paying their taxes, of course.

Madam Speaker, if you catch a bus, drive a car, consume water or electricity, pay insurance, or if you are looking to help your kids get into their first home, you are worse off under this budget. On our calculations (and we did them very conservatively) the average household will pay about $750 extra per year in government taxes, charges, water and other utilities. Across the whole lot, it is an increase of 11 per cent year on year, which is well above the rate of inflation.

Can I simply first refer to water: we have already had the announcement pre-Budget that there would be a 65 per cent increase in the supply charge and a 50 per cent increase in the water rate usage for the base water rate. Even with a concession, the average pensioner is likely to face an increase of up to 74 per cent on their water bill. Indeed, there are businesses that are looking at having to close because of the increases in the water bills alone in this state.

Average water bills have trebled under this government and, on top of this, the sewerage charges are going to go up by 12 per cent this year, when you include the property prices. You would be aware, of course, that a couple of weeks ago we heard 'Darren the Plumber' who rang up the radio station out of the blue. Darren was so sick of the rising costs of trying to get ahead in this state that he was leaving the state and going to Queensland, where he figures he will get an even break, because they will not give a sucker an even break in this state.

Today, I have been out to Newton meeting with another proprietor of a commercial laundry, in this case. This guy has a small business and employs nine or 10 local people. It is in the member for Morialta's wonderful seat out at Newton. Angelo and Rob Mignone run this wonderful business; they launder the towels—you know when you go to the hairdresser? I don't know about the fellows, but I assume you get the little towel around your neck. This guy launders about 9,000 of them a day. He supplies the towels to 300 hairdressing businesses around town, and he is looking at having to close his business because he has just had a 32 per cent increase in his water bill.

You can imagine that, when you are washing 9,000 towels a day, there is a fair old water bill, but going up by 32 per cent now, another 40 per cent on 1 July, and another 40 per cent on the next 1 July, it makes it an unbearable imposition on a business that has to use water because of the nature of the business. They cannot shortcut it; they have to provide a healthy, clean product for all those 300 businesses that they, in turn, supply. They cannot pass on the cost on a per towel basis, because most of their customers would simply walk away. So, that business is looking at having to close because of this government's increases just in the area of water.

Honourable members: Shame!

Mrs REDMOND: Add to that property taxes, which have more than doubled, primarily due to increased stamp duty and land tax. South Australia is one of the most expensive places for stamp duty. I have previously mentioned a constituent who recently came into my office in Stirling who has a $15 million property portfolio in the residential market that he has built up over a lifetime's work, to provide rental properties to people in this state. He is now—because of the land tax regime in this state, and because of the other taxes and charges—moving the entire portfolio to the Northern Territory. So, he is selling everything in South Australia because he cannot make a quid at it out of this state.

That, in turn, affects not just him; it affects the availability of rental properties. It affects the people who are the most vulnerable and who have not managed to get into the property market themselves. They are the ones who are renting and they are the ones who will pay the price for this government. And yet, treasurer Foley and, no doubt, Treasurer Snelling following in his footsteps, think that land tax is simply something that rich people pay so you do not need to worry about it.

The reality is that land tax affects every single person in this state and that the nature of the tax regime in this state is forcing businesses out of the state, as evidenced by the Dun & Bradstreet survey. In this budget, of course, the $8,000 first home buyer's subsidy on newly constructed home purchases has been slashed. What the government is trying to do, because it is cash-strapped, is actually get people who want the First Home Owner Grant to get into the market quicker than they would have otherwise done. A few weeks ago, you may recall, it reduced by $60 million the amount of stamp duty it thinks it is now going to get. Everyone I have spoken to in the real estate industry says that is not a big enough adjustment.

We have got to try and stimulate the housing sector very quickly, so what are they doing? They are pulling the First Home Owner Grant, so that it is going to disappear—half of it next year and the year after that it will be gone. When they do that, that will mean that young couples—or young people generally; they do not have to be couples—trying to get into the first home market are going to move forward their decision and try to stimulate the housing economy that way. It was brought in only a few years ago. They reduced it last year and now they are going to slash it altogether.

What they will do, though, is price people out of the market. Can I compare it to Queensland, where first home owners, under the new arrangements there, can receive $17,000 for their first home. In Queensland there is no stamp duty for first home buyers purchasing homes under $500,000, so I wonder why people might choose to go to Queensland to buy their first home. Yet we know that from our population we are losing about 3,000 people a year interstate. We need to stimulate bringing people in here, especially with the ageing population. That means we need to get more people in the workforce age group into the state, but no; the government goes in exactly the other direction.

Land tax, as I have already said, has increased hugely: 346 per cent since they came in. It has more than quadrupled since they came into office. We have by far the worst land tax regime of all the states and, as I have already said, it is not just a tax paid by the wealthy. The other more down-to-earth things, though: driver's licence renewal up 32 per cent, and speeding fines. This gets me, because the speeding fine increase is 29 per cent if you exceed by less than 15 km/h, so the highest increase is actually on the smallest part over the speed limit. It is not trying to get the really bad drivers. It is trying to get the people—

Ms Chapman: Creepers.

Mrs REDMOND: Yes, all those signs. I would love to know how much those signs cost all around the state. It means that if you are caught driving at five kilometres over the speed limit, so you are doing 55 in a 50 zone—and I have arguments about those 50 zones anyway, because they promised us when they introduced them that it would be 60 on the arterial roads, then they made it 50 on the arterial roads. I have had innumerable people come into my office. They have had unblemished driving records for 40 years and suddenly they inadvertently get caught because they have been doing 54 in a 50 zone, not knowing it was a 50 zone.

Taxes overall all are up by more than double the rate of inflation; in each year of the forward estimates that is more than double the rate of inflation. It will amount to $1.1 billion in extra tax revenue—and the government wonders why people, particularly young people, are going interstate! That is why our share of the national population is declining, and one of the reasons our share of the national economy is declining.

Under this government our share of the national economy has gone from 6.8 per cent to 6.3 per cent. That might not sound like a huge loss, but that is a massive loss when we actually still have over 7 per cent of the population. We were not even up to par, and now we have gone backwards under this government. Our national population has declined from 7.75 per cent to 7.35 per cent. I know that my deputy here mentioned the other day his own daughters, who qualified here, but have only worked professionally interstate, because they cannot get the jobs in this state. Why? Because of the tax regime of this government.

An honourable member interjecting:

Mrs REDMOND: Yes, 100,000 jobs! If we had kept pace with the national growth, we would actually have in this state, at this time, 38,000 more jobs than we have now. What is more, given the direction we are taking, Access Economics has forecast that jobs, economics, exports and population will all grow at less than the national growth rate for the next five years. Again, it falls on deaf ears with this government. If we do not look out, we will continue to lose and lose and lose. We will lose our voice on national issues because we will be considered just such a backwater, instead of being proudly and loudly, as we once were, the third-biggest state.

In terms of the overall economy, of course, this state relied on agriculture and, particularly post-World War II, manufacturing, but, 25 years ago, in each of the sectors of mining, manufacturing, farming and fishing, we had more jobs in South Australia than we do now. I will repeat that: 25 years ago, we had more people in mining, manufacturing, farming and fishing than we do now. Hopefully, the long-term outlook for the mining and defence sectors is very good in this state, but, for nine years now, Mike Rann has been spruiking a mining boom which has never amounted to anything more than a mining exploration boom. We are still looking for it to become a reality and to start to deliver the things that we have so long been promised by this government.

Can I let you know, Madam Speaker, that in May there were only 9,500 mining jobs in South Australia. Now, in Queensland, there were 62,000 and, in Western Australia, 88,000 mining jobs. So, if you compare our rate of royalties, for instance, we have achieved, I think, something in the order of just under $200 million in royalties from mining—

Mr Williams: 154.

Mrs REDMOND: Yes, $154 million in royalties from mining last year. Next year, Western Australia expects to get $4,790 million in royalties.

An honourable member: Big difference.

Mrs REDMOND: A big difference. The government does not seem to understand that it is not in our best interests to over-spruik our mining and our prospects for mining. In particular, I would question the value of putting up billboards in Western Australia. What the Premier and the Treasurer should be doing is going and actually talking to the mining companies and asking, 'What is it you need?' I think they will find that what they need is power, water, infrastructure and a trained workforce—a pool of people who can work here. Instead of discussing that with them, they think the answer is to put up a billboard in an airport in Perth.

We do not just need mining, of course, in this state but also vibrant manufacturing, agribusiness, tourism and service industries. These industries are absolutely fundamental to our state and they will remain an important part of our state. We have to build on them, not neglect them, but this government thinks that they can just concentrate on spruiking mining, which they have not managed to bring to fruition as yet. We cannot afford to have the lowest proportion of exporting businesses of any state and we cannot afford to simply put all our eggs into the mining and defence baskets, as important as they might be. We cannot do that.

The government, of course, has always asked what we would do. It is a difficult question to answer because, for a start, we simply would not be proceeding with some of the things that this government is doing. We certainly would not be putting our children's credit card debt up by entering into this new hospital which—can I remind you, Madam Speaker—when it is built, is going to start costing those children $1.1 million a day for 30 years for the building—every day for 30 years—without a doctor or a nurse included in that price. Of course, we would not necessarily proceed with the new Adelaide Oval—another $535 million, plus the footbridge of $40 million, plus the car parking. So, it is likely to be $600 million.

We will have to deal with the state's finances as we find them when we come to office, hopefully in March 2014. To illustrate just how difficult it is to predict where that might be, I have brought down a graph which indicates the changing budget forecasts that this government has given us for the coming year. So, for the coming financial year of 2011-12, back when they did the 2008-09 budget, they said that, for the next year, we were going to have a $424 million surplus. By the Mid-Year Budget Review, they had reduced that $424 million surplus to a $288 million surplus. By the next year's budget, they had reduced it to a $96 million surplus.

Then, what do you know? In 2009-10, we were coming into an election. So, it will not surprise you that we had a slight recovery. In the Mid-Year Budget Review, immediately before the election, we went from a $96 million surplus to a $127 million surplus. Then, of course, it tailed down again to a $55 million surplus and, as I have already mentioned, we then went from a $81 million surplus in the Mid-Year Budget Review in December last year to now where, as the true picture comes out, we have gone to a $263 million deficit.

Obviously we do not control the purse strings at the moment, and we cannot afford to make big spending promises. What we can guarantee is that, if elected, we will provide concessions for those who need to keep their house cool for medical reasons. We announced that, and what do you know? The government copied us on that particular promise. We have also announced our commitment to restore funding for the community hospitals in Keith, Ardrossan, Moonta and Glenelg.

We will make other policy announcements, we will set our agenda. Although this government is so bad that it deserves to be thrown out, people generally stick to the devil they know rather than the devil they do not know, so we know that we need to come up with policies, and on this side of the house we have the benefit that quite a number of us have run our own companies or firms. We have been engaged in business, and we know what it is like to put our own house on the line, we know what it is like to try to make ends meet, not to have holidays and to work seven days a week. We know all those things. I know what it is like to have to get money out of my savings account to pay my secretary because the people who owed me money had not paid it. I know what it is like to run a small business, and that is something that is sadly lacking on the other side.

We have a commitment to the good financial governance of this state because that is what underpins everything else. Unless you have a sustainable economy you will never have a sustainable social justice agenda, you will never have a sustainable environmental agenda. We have to have a sustainable economy, and this government has demonstrated, over the last nine years, that it is completely lacking in any ability to understand—let alone manage—the finances of this state.

Debate adjourned on motion of Hon. J.J. Snelling.

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