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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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COST OF LIVING PRESSURES

The Hon. R.B. SUCH (Fisher) (12:24): I move:

That this house calls upon the state government to take decisive action to help reduce cost of living pressures in South Australia.

Anyone who is not aware of electors—residents—being concerned about the cost of living must be living under a rock because it is probably the most frequently raised issue in my electorate, and it includes not only electricity, water pricing, medical costs, council costs, housing costs and rent but the list goes on and on.

We constantly hear that people are better off in South Australia and Australia than they have ever been. I think that applies to many and it may apply to the majority of South Australians but there are a lot of people who are doing it tough in our society at the moment because of increasing costs. Anyone who is on a fixed income, a pension or a low wage, I believe, would be struggling at the moment to make ends meet. Fortunately, most of us in here are on a reasonably good income. However, anyone who is on a basic income would, at times, be wondering how they are going to pay all their bills.

Some of these things the government can deal with; some not so easily. Electricity is no longer a government entity; that was sold off. I was not happy about that. I was in the Liberal government at the time. We were told it would not be sold and then, straight after the election, it was—a classic broken promise. The government could do some things, as indicated earlier today, and I will not repeat the points that were made by Bruce Dinham in his letter.

The government could do some things about the cost of electricity, including reviewing whether or not we should be in the national electricity market and, if so, on what basis. I recognise that the minister for energy, the Hon. Tom Koutsantonis, went interstate a couple of weeks ago to try to get a better arrangement for South Australia, but, in effect, he was rebuffed by New South Wales and Victoria which were looking after their own economic interests, so he was not able to secure the sort of reform of the national electricity system (so-called) that is needed. The system needs a lot more than tinkering in terms of having some significant reforms and making an impact on the cost of electricity.

Some of the costs have occurred because of a move towards renewable energy, which is a good objective, but having wind farms generally has not meant a reduction in electricity costs: it has meant the opposite. The solar generation arrangements have meant that people who do not have solar panels have had an increased power bill and, in effect, are subsidising the people who have solar panels. There is a bit of a catch 22 there in a way, because while trying to promote renewables is a worthwhile objective, the downside of it in relation to wind and solar is that there has been an increased cost in electricity for consumers.

Water prices have increased and the desalination plant is a significant contributor to that in terms of the capital cost. I believe the desal plant is a form of insurance. It is like any form of insurance: if you never call upon it you might see it as a waste, but if you need it then it is the best thing you ever undertook. Some of these things the government is, in effect, locked into and, irrespective of which party wins the next election, I do not believe there is a lot of room to manoeuvre on those, except, as I indicated earlier, possibly in relation to reforming the so-called national electricity market.

In relation to other expenses, I noticed that private health cover increases take effect shortly. All these increases seem to be higher than the CPI and the cost of living index, which is generally based on a basket of consumables. But what is argued by people in the health area, as in councils, is that their costs have little relationship to the price of a packet of cornflakes. What we see constantly is increases which go beyond the cost of living.

I do not support price control, but what I do support is price justification, and I think that should be the requirement when people increase prices beyond, say, CPI that they are required to justify them. It actually could work both ways with regard to buyers and sellers—and that they may offer some solace to people, for example, in the dairy industry. But I think that the question of the cost of milk has more to do with the high Australian dollar and the export market rather than the naughty people in Woolworths or Coles.

In regard to housing costs, per square metre, building a house is probably cheaper now for the actual building than it was 10 or 20 years ago. It is the land cost that is very significant, especially in the metropolitan area, and that is what is forcing up the cost of homes. I do not have a problem with negative gearing when a new house is built, but I do not see the justification for negative gearing when all someone is doing is trying to reduce their tax by buying an existing house; it does not add to the housing stock. It is a taxation minimisation measure, not an increase in the housing stock.

For a lot of people, in terms of housing, we need a significant increase in affordable housing. I am sure that every member in here has people coming to them asking how can they get a Housing SA house or a low-cost rental house. I have people living in caravans, all sorts of things. That is one area where I think that it is a pity that Tom Playford is not around today, because he was a master at getting low-cost housing—and maybe we need him in relation to electricity as well. We might have to bring him back to get some electricity reform!

So, there are all of these costs. With council rates, I have quite a constant stream of people complaining about them. In fairness, I think that you have to look at what councils provide as well as what they charge by way of rates. South Australian councils are highly dependent upon property taxes for their source of revenue, which is different from many other states in Australia, where councils are not so heavily dependent upon property taxes.

The councils' argument is that there is a lot of cost shifting, and I think there is an element of truth in that, but I think that, to some extent, councils also take on financial burdens they are not required to. Some councils are very much into economic development. I would have thought that that was the responsibility of the state and federal governments, not councils. A lot of councils get into a whole lot of other areas that I personally do not regard as their core business and, as a result, their rates continually rise.

Part of the problem with council rates, as I have said, is that they are heavily dependent upon property taxes. Councils do not get a share of growth taxes, income tax or GST and, whilst that situation remains, there will be no alternative but for councils to continue to increase their rates above CPI.

Councils currently cannot maintain the infrastructure they are responsible for. They do not have the money to maintain their roads or to provide new bridges and so on; they just do not have the financial resources to do that. But if their funding comes out of GST or income tax, it is still coming from the total community, so it is still part of the total tax burden.

Charges for motor car registration, all of those things, are significant. I think it is now about $190 for three months for a four-cylinder car. That is a lot of money, especially when only part of that money ever ends up being used to improve roads. I have raised in here before the cost of traffic fines, which I think are draconian in South Australia. Unless it is for a very serious offence, I do not believe that people should be paying hundreds and hundreds of dollars for a traffic infringement. I think it is better to tackle demerit points by increasing them rather than fining people to a point where, in some cases, the fine exceeds a good portion of their pension or whatever their low income is. There is no justification for traffic fines that are so heavy-handed.

I had a young French couple come to the office this week who were backpackers. They had parked their car in a parking bay, but facing the wrong way. I think the fine was $119. They said that they had never come across that anywhere in the world and certainly not in France—$119. I do not believe it is hurting anyone. It may not be desirable, but just parking in the wrong direction in a car park I do not think is a terribly wicked thing to do. $118 or $119 is a lot of money. If you want to have a penalty, half that would be more than enough.

I do not know whether members have looked lately at some of the penalties for traffic offences. I know the government reduced the relatively minor offence of exceeding the speed limit by less than 10 km/h, but when you add on the victims of crime levy it is still $210, which is a lot of money for someone doing 58 km/h in a 50 km/h zone. I had a case recently at Murray Bridge where someone said they were apprehended for doing 42 km/h on the bridge where there is a speed limit of 40 km/h. In that case they were able to explain themselves away, but that would incur a penalty of $210 and that to me is excessive.

A lot of these charges are not going to be waved away by some magic wand but I think, leading up to the next election, if any party does not seek to address these issues they will suffer the consequences at the election. We can help the community over time by improving productivity. Australia's productivity is lousy by world standards and is one of the lowest in the developed world. We are very inefficient in many areas, contrary to what we keep telling ourselves. We need to focus more on productivity and become more efficient if we want to increase the standard of living and in so doing, in effect, reduce the cost of living.

We need to be more efficient in the delivery of services. I would like to see that all government agencies in particular have to justify what they do in terms of efficiency and effectiveness. I have been planning a bill for the Auditor-General to have the power to look at that issue. Parliamentary counsel tell me that the Auditor-General can already do it, but I do not believe the Auditor-General has ever looked closely at efficiency and effectiveness of government agencies. I think it is time that that happens, because one way of reducing costs and rising charges is to make sure that all service delivery is done in the most efficient and effective way, and I do not believe that is the case currently.

I put this motion on behalf of not just the people in my electorate, because I believe it is a widespread issue throughout South Australia. I challenge both the government and the opposition to really address the cost of living pressures in the lead-up to the next election, and even sooner if possible.

Mrs VLAHOS (Taylor) (12:38): I move to amend the motion as follows:

Delete all words after 'house' and replace with:

notes that the state government has taken action to help reduce cost of living pressures in South Australia.

On behalf of the government I put forward that this house notes that the state government has taken action to help reduce cost of living pressures in South Australia. This government has long recognised the importance of keeping South Australia as an affordable place to live and one of our seven strategic priorities is to make South Australia an affordable place to live. Certainly in the area of Taylor which I represent, I know from the people who talk to me that it is a common complaint but also that it is something they know we are working to address. In fact, many of the cost pressures they face are beyond the control of the government.

At present the government spends about $200 million a year on measures to ease cost of living pressures on pensioners and lower-income households. Over recent years, the government has increased the water concession from 20 per cent to 25 per cent of a customer's total water bill, and the maximum level of water concession has been increased for owner-occupiers from $200 in 2009-10 to $265 in 2012-13. This has also been raised for tenants from $160 to $200. The minimum level of water concessions has been increased for owner-occupiers from $95 in 2009-10 to $155 in 2012-13, and $55 to $90 for tenants.

The energy concession has also been increased, from a maximum of $120 in 2009-10 to $165 in the 2012-13 year, and extended to eligible low income earners. The fixed property emergency services levy concession has also been increased from $40 in 2009-10 to $46 in 2012-13, and the sewerage concession has increased from a maximum of $95 in 2009-10 to $110 in 2012-13. These are all sizable, important and relevant increases.

The concessions for motor vehicle registrations and driver's licences have also been increased. In addition to the 50 per cent concession available to low and fixed income earners, the 2009-10 budget introduced free public transport for Seniors Card holders in metropolitan Adelaide on weekdays from 9.01am to 3.00pm—something I know that was very heartily welcomed in my electorate—and all day on weekends and public holidays. In fact, many people on the new Virginia 407 bus route have welcomed this immensely, especially at the residential parks.

The 2011-12 budget introduced a medical and heating cooling concession to give extra support to eligible low-income earners who need to control the symptoms of chronic medical conditions like Parkinson's disease and multiple sclerosis. This concession will be doubled to a maximum of $316 in the 2011-12 year, increasing to $330 a year in the 2012-13 year.

In framing the 2012-13 budget the government faced a $2.8 billion revenue writedown, but it was aware of the need to combat the cost pressures that families are facing. The budget introduced no new tax measures and included a one-off water security rebate of $45 or $75 to 600,000 residential customers—again, something that was welcomed in my electorate.

The budget also introduced help for lower income households to pay their utility bills, and the measures include utility literacy programs to improve financial management and energy efficiency practices, and the review and expansion of the emergency electricity payment scheme. Our government wants to ensure that as many South Australians as possible can afford to buy their own home and, because of this, the budget also retained the first home buyers grant of $8,000 for a further 12 months, in addition to other actions taken since then. I commend the amendment to the house.

The Hon. I.F. EVANS (Davenport) (12:43): I rise to speak for the motion moved by the member for Fisher and against the amendment moved by the member for Taylor. I know what it is like being on the backbench in government, when ministers ask you to come in and move funny amendments to motions and give you speeches that you have to give on behalf of the party.

We all know, of course, that the constituents in Taylor do not believe what the member for Taylor has just put on the record in the chamber. Anyone thinking that the cost of living is not a major issue out there must be living in a different world to the one I am living in. Certainly, like the member for Fisher, my constituents raise the cost of living on a regular basis.

There are reasons why the cost of living in South Australia is so high. It is very simple: your cost of living is the cost of Labor. It is as simple as that. The cost of living is the cost of Labor. Go and look at what has happened to the cost of living when you have a federal Labor government in for six years and a state Labor government in for 11 years. The cost of living has gone through the roof over that time.

Just look at the water price, a 249 per cent increase. The poor old taxpayer could be on Black Caviar and it would not have caught up with the water price. It has sprinted ahead of every cost of living, every CPI and every inflation measure you want to use over that period. The water price has absolutely skyrocketed because of this government's own incompetence over a desal plant.

It spent two years telling South Australia it did not need a desalination plant and then it comes out and says, 'Actually, we will build one twice as big as we need.' Then they realised they needed to loop it with some pipes, and that was another $400 million. What you get is a desal project that originally was around $400 million and it goes to $2.2 billion.

Mrs Geraghty interjecting:

The DEPUTY SPEAKER: Order!

The Hon. I.F. EVANS: That feeds into your water price. Then you have got that joy of joy, the carbon tax. That has put the price of everything down—like rubbish! That has put the price up. The member for Fisher talks about electricity prices, and we all know what has driven up electricity prices. It is the carbon tax. Everyone on the other side, every Labor local member in here crying crocodile tears over the cost of living, all support the carbon tax. They wanted Julia Gillard to bring in the carbon tax. They knifed Kevin Rudd so Julia Gillard could bring it in. That is the reality of it. Your electricity prices are higher because Labor has brought in the carbon tax.

Let us go to the mismanagement of this government. We now have the highest debt the state has ever had. We have the fastest growing state debt in Australia. This state is paying the highest interest rates on its debt than any state, according to the Queensland audit commission. What that means is that the South Australian taxpayer faces an increased cost of living because the interest payments are growing to over $800 million a year.

Where does the government get its interest from? It gets it from increased car registrations, it gets it from increased speeding fines and it gets it from increased water prices. It gets it from increases in all the government taxes and charges. If you want to go and look at the government's taxes and charges, that feed into every household and every business, over the last decade taxes and charges have gone up above inflation over the whole decade—in fact, more than twice the rate of inflation over the last decade.

Mrs Geraghty interjecting:

The Hon. I.F. EVANS: The poor old member for Torrens, that great carbon tax supporter, keeps on interjecting—

The DEPUTY SPEAKER: There is a point of order.

Mrs GERAGHTY: I ask the member to withdraw his comment that I am old.

The DEPUTY SPEAKER: I am sure the member would be happy to do that.

The Hon. I.F. EVANS: I did say 'the poor old member for Torrens'. I will withdraw the comment that she is old, Mr Deputy Speaker, and I will also withdraw the comment that she is poor. It was a colloquial term. Mr Deputy Speaker, the member for Torrens, that great carbon tax supporter, keeps—

The DEPUTY SPEAKER: Is there another point of order?

Mrs GERAGHTY: No, I was actually going to remind the member for Davenport that he was here when he sold ETSA.

The DEPUTY SPEAKER: I do not think that is a point of order.

The Hon. I.F. EVANS: I was just about to say that was a frivolous point of order and, normally, they would get warned. We certainly do in question time. I will just make the point to the member for Torrens that there is now a debate by the federal Labor government urging the state governments to sell their electricity assets to deliver cheaper electricity prices.

The Labor Party is a hypocritical party. You have got Prime Minister Gillard running around saying, 'Isn't this outrageous! The carbon tax has put up electricity prices. The way to deliver cheaper electricity prices is to sell your electricity assets to private enterprise,' and then the member for Torrens comes in here and says, 'Don't forget, you guys leased'—actually leased—'the electricity assets.'

So, what is the Labor Party's position? The Labor Party's position is that in the Eastern States private enterprise can deliver cheaper electricity prices but in South Australia the pensioners and the single families, all those people out there, can pay 4 per cent to 5 per cent more on their electricity price to cover the carbon tax. That is where the cost of living is being driven—through your carbon tax.

Guess what? If Tony Abbott wins the next federal election, they can reduce their cost of living. Australians can reduce their cost of living very quickly. If you want cheaper electricity prices, it is very simple, you vote for an Abbott government. If you want higher electricity prices, you keep Julia Gillard there. The big question for the government is whether the federal Labor Party will even dare to leave Prime Minister Gillard there and whether that will not be changed within the next three weeks.

The reality is this: this government's high debt, high interest and mismanagement of government services is what is driving the cost of living. You cannot have the highest debt in the state's history, the fastest-growing debt in the state's history, the highest interest of any state, the record level of interest payments of $800 million a year and not expect your cost of living to go up.

What did the government think was going to happen when it deliberately went out to lose the AAA credit rating by driving up the debt? I will tell you what they expected: they expected the cost of living to go up. So, for the member for Taylor to come in here with her crocodile tears and somehow talk about what the government has done in relation to the cost of living is rubbish and the electorate will see straight through it. The electorate will see straight through it like a window.

The Labor Party are not concerned about the cost of living. If you were concerned about the cost of living, why would you put a carbon tax on everything that moves? Why would you do it? I will tell you why you would do it: because you are out of touch as a government and that is exactly what the federal government are.

The reality is this: the cost of living is high in South Australia, as the member for Fisher rightly points out. It is high in South Australia because we have got layer upon layer of maladministration by state Labor governments and the federal Labor government. I look forward to reducing the cost of living by voting for the Abbott government at the next election to get rid of the carbon tax because I know that will deliver cheaper electricity to every household.

We could go to the business community. We have got the highest taxes in Australia. We have got the highest WorkCover cost in Australia. All of that cost is passed on to consumers, which feeds into their cost of living.

The reality is the cost of living in South Australia is a cost of the Labor government. If you look at your cost of living and you think it is too high, that is the cost of a Labor government. If you want to reduce your cost of living, it is very, very simple—get rid of this Labor government. That is what you have to do to reduce the cost of living. We congratulate the member for Fisher for bringing the motion and we will be voting against the member for Taylor's motion because we think that illustrates that the government, after 11 years, is out of touch.

The Hon. J.D. HILL (Kaurna) (12:52): I am glad to be able to respond to some of the comments made by the member.

Members interjecting:

The Hon. J.D. HILL: Well, it is good to see the member for Davenport in good form again today. Last week, the member for Davenport was trying to argue that there should be a no-taxing government introduced into South Australia. He was opposed to taxation because it puts the price of things up, so that is his strategy for government—no taxation whatsoever.

Today, he is trying to rewrite history because it was he, when he was leader of the opposition, who introduced the policy initiative to have a desal plant in South Australia. Initially, we felt that this was not necessary. When the drought conditions were such that there were no alternatives, we adopted a desalination strategy. So, for the member for Davenport to come in here and accuse this side of the house of hypocrisy, when it was his idea and his party which was advocating for it, strikes me as the most arrant hypocrisy we could ever see. The fact that it is a bigger—

An honourable member interjecting:

The Hon. J.D. HILL: You can have your turn when you get the call. The fact that it is a bigger desal plant than we initially intended is because the commonwealth government stumped up the remainder of the money, so we got an insurance policy which will make sure that South Australia will never, ever be short of water in the future. It strikes me that that is a good deal. The other issue that the member for Davenport raised was the issue about solar power on roofs and the cross-subsidisation. As I recall it, the then minister for the energy at the time, the member for Elder, attempted to put limits on the extent of those subsidies, and it was the opposition, in collaboration with the third parties in the other house, as I recall, who insisted—

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Order!

The Hon. J.D. HILL: Mr Deputy Speaker, I do not know who it is over there talking, I do not actually recognise him, but he is a making noise, he is interrupting my flow. I sat quietly and listened to the member for Davenport rave and yelling and shouting in this chamber, yet this nobody from the other side just keeps having a go. He can get up and say what he likes when he gets the call, Mr Deputy Speaker.

Mr GARDNER: Point of order, Mr Deputy Speaker: the member is in breach of standing order 127.

The DEPUTY SPEAKER: Remind me what that one is about.

Mr GARDNER: He is making personal reflections upon other members.

The DEPUTY SPEAKER: I did not think he was making personal reflections. I had actually called the member to order, and I am sure he will listen to the member for Kaurna in silence.

The Hon. J.D. HILL: Thank you, Mr Deputy Speaker, I listened to his colleague in silence—it was a struggle but I did listen. I am trying to contribute to this debate. The point I was making is that for the other side to claim that the solar panel rebate scheme is putting prices of electricity up is a valid one, but to say it is the responsibility of this side without their wearing some of that responsibility is just nonsense, because it was their side, as I recall, who insisted that the scheme went for longer and was more generous than was originally intended by us. So, you cannot come in here and argue that, as a result of government action, this is a particular problem. It was the opposition that imposed some of those requirements.

The other point I thought was very interesting was the member for Davenport had a general spray about the cost of living in South Australia, and you expect oppositions to do that, but what solutions did he offer? What solutions, what policy initiatives did the Liberal Party offer? There was one, and that was you should vote for Tony Abbott. That is the first policy that I have heard the opposition make: vote for Tony Abbott and Tony Abbott will bring down the cost of living.

Won't it be interesting come next March, if Tony Abbott has been Prime Minister for six months—and the polls at the moment suggest that is not an unlikely outcome, as much as it would grieve me to see it—and he is Prime Minister at the time of the next election, we have the former leader of the opposition, the member for Davenport, promising that the cost of living in South Australia will have come down? That is the only policy position that the Liberals have, and that is the only initiative that they can point to which they believe will bring down the cost of living in South Australia.

They are empty in policy. If the Liberal Party is serious about the cost of living issues—and I can assure all members that this side of the house is focused on bringing cost of living pressures down and dealing with the issues in relation to cost of living—come forward with ideas. The only idea they have is to vote for Tony Abbott.

The former leader of the opposition, the member for Davenport, is trying to rewrite history with his explanations as to what has caused it. The desal plant was an initiative of his term—a brief and unspectacular term—as leader of the Liberal Party. It was adopted by our side of the house. The solar panels, which he pointed to, were also embraced by the other side, so to come in here and try to say that this is a result of the initiatives of this government without taking some of the responsibility himself I think shows not only hypocrisy but cowardice.

Mr PISONI (Unley) (12:58): I rise to speak against the amendment but in support of the motion. While I am doing that I want to explain the extraordinary cost of living increases that have been put onto the families who send their children to government schools in South Australia. As you recall, back in 2008 Labor slashed the funding for school electricity bills that schools received by 75 per cent of the 2003 level. In other words, the department would reimburse schools only 75 per cent of what their electricity price was on average back in 2003. Look at the increase that we have had in the price of electricity since that time.

What has been the outcome of that policy? We have seen school fees increase. When this government came to office it collected $17.7 million per year in 2002 ($102 per student on average). These figures are from the budget papers. That figure has now blown out to $85 million, and that is in excess of $520 per student. That is a massive 400 per cent increase. If we relied on CPI to give us some idea as to what the CPI increase should have been in that time, it has increased by only 33 per cent over that same period. I seek leave to continue my remarks.

Leave granted; debate adjourned.


[Sitting suspended from 13:00 to 14:00]


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