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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-05-14 Daily Xml
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SUPPLY BILL

Second Reading

Adjourned debate on second reading.

(Continued from 12 May 2009. Page 2251.)

The Hon. M. PARNELL (11:16): We have just had the federal budget delivered, and we will shortly see the Rann government's latest state budget. To a large extent, both of these budgets are an exercise in spin. However, the reality is that a government's priorities are proven by cold, hard cash. So, we need to forget the spin and the rhetoric, and we need to look at where the money is going.

Another feature of the economic debate in this state is that the government is fond of perpetuating a number of myths, particularly around jobs and the direction of future jobs growth. There is no doubt that our economy is changing and that it will need to change further into the future. Forty years ago, one in three jobs in South Australia were manufacturing. Today, it is only one in eight, with only one in 10 jobs being in the field of consumer durables, such as white goods.

The Premier's statement yesterday continued the perpetuation of myths around mining and defence. These two industries are seen by the Premier to be the salvation of the South Australian economy, yet recent economic statements by the Economic Development Board contain some surprising figures. In relation to mining, the South Australian mining industry contributed just 3.9 per cent to gross state product in 2006-07, which was down from 4.5 per cent in 1994-5. In relation to mining jobs, in 1996, 0.7 per cent of employment was in that sector; in 1986, it was 1.5 per cent; in 2000, it was down to a half of 1 per cent; and it was only 1 per cent in 2008. In relation to the defence sector, only 13,383 people were employed in that sector in 2007-08; in other words, 1.4 per cent of the state's employment.

So, we see a huge focus on these two sectors, yet they make up less than 3 per cent of the state's employment and, in the case of mining, it is only 3½ per cent of gross value added shares by industry. To put this into context, the collection of activities known as 'services' provide the majority of South Australia's employment; in fact, it is a staggering 73 per cent and, in terms of economic output, it is 58 per cent.

What I want to do in my Supply Bill contribution today is to focus on what should be a green direction for our economy and for jobs. In short, we need to create new jobs for a new economy. The Australian Conservation Foundation has done some analysis on the potential for green jobs in Australia, and it points out that the significance of green jobs is not only in relation to the jobs themselves but, more importantly, it is in the multiplier effect in the economy as a whole. The ACF's focus is on jobs that help our economy to move to a low carbon state.

The direct jobs are in fields such as construction, in the retrofitting of buildings to make them more energy efficient. It is also manufacturing jobs in areas such as wind and solar power. The indirect jobs include manufacturing and service jobs created in associated industries that supply intermediate goods for building retrofit or wind turbine manufacture, and that includes timber, steel and transportation. However, there is also a third category of induced jobs; for example, retail and wholesale jobs created by workers in these construction, manufacturing and service industries.

The United States' economy is going through perhaps an even worse crisis than the Australian economy. In the United States, it has been stated that two million jobs could be created through a $1 billion green stimulus package, and that would be at around $50,000 per job. There is a range of sectors that the Americans are looking at to transform their economy. The jobs would be similar in Australia. The ACF identified key market areas in which Australian businesses are particularly well positioned to succeed. They include renewable energy, energy efficiency, sustainable water systems, biomaterials, green buildings and the waste and recycling sector.

In South Australia, we are particularly well placed for renewable energy jobs. We have the best wind profile in the country, which explains all the interstate investment in wind farms in South Australia. We have excellent solar resources, including not only solar voltaics or photovoltaics but also solar thermal, which has the great advantage of being a baseload supply option, with the energy being stored as heat rather than in expensive batteries.

In relation to water, we know that we have within our state the intellectual resources to provide many more solutions to our water security problems than are currently being promoted by the government. The advantage of working in the water sector is that, once we have solved our problems, we can then export those solutions. That is why I shake my head in disbelief at the government's undermining of more sustainable water options, such as stormwater recycling. The reason the government's approach undermines these options is that it puts all its eggs into the desalination basket, and we know that that is the most expensive way there is of producing freshwater. It is more expensive than all the other options, including demand management, effluent recycling and stormwater harvesting, particularly when done in association with managed aquifer storage and recovery.

Yet, having sunk what will eventually turn out to be around $2 billion into desalination, and then announcing the end of water restrictions, we have to ask: where is the incentive for investment in these more sustainable options and the jobs associated with those options? We have to ask ourselves what happened to the findings of the Adelaide coastal water study, which showed that we need to stop putting polluted water into the gulf, where it kills the seagrasses.

When governments make poor decisions on water security, the cost is borne by future generations. Outside the environment sector there are also new jobs that need to be created in the health sector, in particular in preventative health. The South Australian Department of Health has estimated that, if we do not change the health system, by the year 2032 total health spending will be higher than the total South Australian budget. So we look, for example, at the government's response, and that is what used to be called 'the Marj' and now has a different name. Forgetting the name, the most important question is to ask whatever happened in the government's planning to the Generational Health Review, which argued for less spending on hospitals and more spending on preventative health. The government has overturned those priorities in its desire to create a new hospital or a new disease palace, if you want to look at it like that. The focus is not on health but on 'illth'. It is baffling why the government is doing this, and it has scary financial consequences for our state in the long term.

The next thing we need to look at in relation to new jobs for a new economy is the area of training, in particular the skills shortage. Despite the opportunities that exist in new industries that focus on reducing our carbon footprint, there is a real danger that Australia will be left behind in the international market in particular if we do not develop the right skills base. We know that we already have in South Australia and elsewhere in the country a shortage of tradees with the skills to install things like solar panels and water saving technologies. If we do not have these skilled tradespeople we cannot put solar panels on roofs or retrofit our houses the way we know we need to.

At the national level, the Greens have proposed an Australian Green Jobs Task Force to tackle the urgent need to develop a workforce capable of rolling out the energy efficiency, renewable energy and public transport infrastructure that Australia will need to build a zero emissions economy. The present economic climate provides an opportunity to develop a green collar workforce, creating new job opportunities for those losing their jobs and offering transitional training and skill development options, and ensuring Australia is taking the lead as a green economy. It is particularly important at a state level, because so much of education and training is a state responsibility.

When we look at South Australia and compare our advantages and disadvantages with the other states, we note that wages in South Australia tend to be lower than in other states, we have a higher proportion of the population on benefits and allowances (not counting the age pension), we know that job participation rates are lower and unemployment rates are higher, and generally skill levels are lower. That is why it is baffling in the extreme why the state government allows for crucial training schemes to be downgraded or axed. I have had a fair bit to say in this parliament over the past several months about TAFE courses, in particular cuts to important programs such as women's education and other entry level courses. Once we can get people engaged back in the workforce and train them, then they are ready for these new jobs in the new economy.

We also have a responsibility to advance our economy through the development of specialised knowledge. One of the most disappointing decisions to come out of the federal budget this week was the loss of funding for Land and Water Australia. That is why I backed the call from the South Australian Farmers Federation to keep funding for climate change research in agriculture, so that our farmers stood the best possible chance of being able to adapt to climate change. Certainly the calls of the Greens and those of the Farmers Federation fell on deaf ears, and $16 million was lost to agricultural research and development funding. Now more than ever we need to invest in finding out how our farmers can respond to our changing climate.

If we are serious about maintaining a viable farming sector in this state, and ensuring that farmers can grow the food we need in future years, research and development funding is absolutely vital. Climate change is forcing many farmers to rewrite the rule book when it comes to rainfall, propagation and breeding patterns, and we need to invest funds to help farmers respond. Now that the Rudd government has cut that funding, the state government needs to step in and fill that breach. Of course, we also need to spend money on mitigating climate change by cutting our emissions, but we also need to invest in adaptation, especially when it comes to helping our farmers stay viable into the future.

There is another area of information where the government has failed, and that is illustrated by the recent example of mini wind turbines on government buildings. In light of the very poor experiences of that program, the government needs to engage in an honest conversation with the South Australian people about what can and should be done about renewable energy.

One of the frustrations that individuals, businesses and governments find is that they do not have adequate data, they do not see independent testing of new technologies (especially renewable energy technologies), and they often have to rely on just the glossy company brochures that spruik these products and then hope for the best—hope that they work. I think that is where the state government can step in. The government is ideally placed to road test new technology and provide free, independent advice to all. I think that would be a much better contribution from the state government to the greenhouse debate than the waffle that we usually hear.

In relation to the project that I mentioned, the mini wind turbines on government buildings, if the government was genuine about that being a demonstration project of new technology, it has to publish its findings, good or bad. As it is, we know the findings were bad; we know that the project was unsuccessful. However, finding out that something does not work as well as we had hoped is often just as useful as finding out that something does work; and, also, we need more specific information to help others not to make mistakes that we might have made.

So, when it comes to those wind turbines, did they work on certain buildings and, if they did, why did they; and why didn't they work in other locations? Were they too small? That is all information that the government now needs to publish and share with the community. It was public funding that went into those programs. The government owes it to us to share the results. I say good on it for trying new and promising technology, but what is the point of having done it if no-one is allowed to know the results?

There have been two environmental impact statements released recently which both have big consequences for the South Australian future economy. The first is the Roxby Downs expansion. We know that the impacts and the costs will be huge, not just environmentally but socially and economically as well, which is why we need to ensure that if that project goes ahead it maximises the benefits for our state, not just in the present but for future generations of South Australians as well.

That is why the Greens call for an increase in mining royalties and for the increased proceeds of those royalties to be invested in a South Australian future fund to ensure that South Australia has an ongoing source of wealth once mining at Roxby Downs ends. Mining royalties in South Australia are generally less than half the other mining states such as Western Australia or Queensland, so what we are doing is allowing big mining companies to waltz in, extract our mineral wealth and pay us far less than they should in return.

When it comes to the Olympic Dam expansion at Roxby Downs, the world's richest mining company reckons the mine will make $1 trillion over its life. So, we have to ask: why is the Rann government afraid to ask for our fair share? According to SA Unions, South Australian mining royalties are less than half other mining states, with our state earning only 3.5 per cent compared with 7.5 per cent in Western Australia for bauxite and iron ore, and between 7 and 10 per cent in Queensland. So, the Greens are calling for the royalty rate for all mining in South Australia, including Olympic Dam, to be doubled to 7.5 per cent, with half the increase invested in a future fund.

When using mining royalties, we have two choices. We can spend it all at once, as we do now, or we can keep some for that inevitable time in the future when the minerals run out. We can learn a lot from what happened with North Sea oil. The UK government chose to spend its royalty share on current expenses and now, with the oil coming to an end, it has very little to show for it. Norway, on the other hand, invested its share in a future fund that will provide ongoing income to the Norwegian people forever. We have a huge responsibility to future generations to use the proceeds from non-renewable resources wisely. Part of that responsibility is not blowing it all straightaway—or, even worse, giving it away at bargain prices.

The second environmental impact statement that I want to refer to in relation to its impacts on supply and the South Australian economy is the Buckland Park development. If this project goes ahead, it will have huge future consequences for state finances and spending, and much of it will be directed to fixing social, economic and environmental problems that are completely avoidable. We had some discussion in question time yesterday about the Buckland Park development during which the minister referred to it as a satellite city. It is not a satellite city: it is an old-fashioned, American-style, car-dependent commuter suburb, and the EIS makes a virtue of its siting within the greater metropolitan Adelaide region, but it is a suburb, not a city or a township, and labelling it any other way does not detract from what it really is.

The EIS is a weak and poorly constructed document and gives scant attention to very important issues. For example, there are only a couple of paragraphs on issues of smell, even though the facility shares a common boundary with the Jeffries composting facility and demonstration farm. As members would know, the only reason for that facility to be at Buckland Park is that it had to move from the residential area where it was previously located.

In relation to flooding, the EIS talks about dealing with a one in 100-year flood, yet what we previously thought of as a one in 100-year flood risk is now happening much more frequently, and with climate change it will happen more frequently still. Planning authorities have recently rewritten the flood maps for areas around the Gawler River. The minister praises the proponent's consideration of water, yet the project will only capture and store for reuse a very small proportion of its stormwater.

The minister is plainly wrong when he said yesterday that the Greens are opposed to all development. What we are opposed to is bad development. We are all in favour of good development, and that is why we have publicly praised the Clipsal site redevelopment, and we are firmly behind any genuine transit-oriented development.

Despite what the minister said, I have not referred to this development as a ghetto. I have referred to it as a 'ghetto in waiting', and the distinction is very important because people will be attracted by cheap land, but they will then be marooned by high petrol prices. The social damage will not emerge straightaway, but only in years to come. Then a future government will be saddled with the huge cost as the community struggles. The Greens say that it is economically reckless and short sighted.

Urban form is critically important to our future budget health. By placing thousands of people far away from services without adequate public transport we are setting up that community for failure—and that is irresponsible. I am certainly not opposing the 15 per cent affordable housing in new developments, but to make a virtue of affordability in this case is a false claim because affordability goes far beyond the cost of land, bricks and mortar: it includes the cost of living there, and that means car travel.

The minister made the point that the project looks to embrace green building design. Now, that is just meaningless spin because the project will have only a five star energy efficiency rating, despite imminent moves at the national level in COAG to increase the standard to six stars and beyond. Even worse, the environmental impact statement states that the project, especially in its early years, will have higher greenhouse gas emissions than the average for metropolitan Adelaide. That is absolutely bizarre and foolhardy. How can any government say that it is serious about climate change and approve a brand new 25 year development that will guarantee its residents have a larger greenhouse burden than the average Adelaide resident?

A big part of that is the woeful lack of public transport. Even though there is a train line nearby, train services will not be provided. Even worse, a new bus service for the site is not scheduled to start until the year 2022. It is not surprising, therefore, that the EIS estimates that only 5 per cent of trips in 2036 will be by public transport.

We should contrast that with the South Australian Strategic Plan target, which is to increase public transport use to 10 per cent of all metropolitan kilometres by the year 2018. This proposal thumbs its nose at the government's own Strategic Plan. The minister tried to imply yesterday that I was expecting a direct bus route to the city—that is not true—but it surely should not be too much to ask for a direct bus to the nearest shops at Munno Para or Elizabeth some time over the next 11 years.

If there is a genuine need for housing in the city's north, why do we not follow Perth's lead and put down a train extension first, with planned housing developments afterwards? In the case of Buckland Park, the jobs are 22 kilometres away and it is a massive petrol guzzling commute. They will expect every household to have two cars and, therefore, be subject to petrol prices which we know will get higher.

I say that it is irresponsible and economically reckless to promote developments such as this, which will create suburbs of real disadvantage into the future. The government will stand condemned by future generations if it saddles those generations with the cost of servicing such obviously flawed developments.

Another example of the government's short-term planning and economic irresponsibility comes from the very recent announcement that the Adelaide desalination plant is to be doubled. The federal budget included an extra $228 million, on top of the $100 million already promised to double the size of the Port Stanvac desalination plant from 50 gigalitres to 100 gigalitres; and the state has now agreed to match that extra funning.

This means that South Australia's bottled electricity will now come in a jumbo sized pack. This is supersizing gone mad. Unlike other water supply options that get cheaper in the longer term, desalinated water uses huge amounts of electricity for each and every litre produced. South Australians will be saddled with a huge ongoing electricity bill and householders will be hit big time in the hip pocket. This is economically reckless, as well as environmentally and socially irresponsible, and to make it worse the Premier and the Treasurer are out in the media saying that a larger desalination plant will mean no more water restrictions. Not only are they saddling households with future water costs but their message to South Australians is: turn your back on water saving.

In a dry year we know that Adelaide gets up to 170 gigalitres of water from the River Murray. The desalination plant will produce 100 gigalitres, so we will still be 70 gigalitres short, even with a doubling of the desalination plant. The Greens alternative water policy that prioritises stormwater infrastructure and wise water use is a much more economically responsible path. Instead South Australia will bear the cost of the Rann government's reckless water policy for years to come.

In relation to the taxation base, we do need to shift from taxing goods, if you like, or things we want more of, like employment, and that means shifting from payroll tax to taxing bad things, things we want less of, such as pollution and carbon pollution, in particular. Yesterday we passed some minor changes to payroll tax legislation, but we should have been looking at abolishing the tax altogether and replacing it with a tax that does not discriminate against employment but, rather, does tackle problems of pollution.

In conclusion, in my contribution to the Supply Bill I draw the council's attention to the economic recklessness of many current decisions being either made or contemplated by the Rann government. The Greens are weighing into this debate as serious players. We are a party of economic responsibility. We are the only party that is looking at the economy in terms of the long term, and that means we need to make wise policy choices now in order to avoid unacceptable costs in the future.

Debate adjourned on motion of Hon. J.M. Gazzola.

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