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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-07-19 Daily Xml
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APPROPRIATION BILL 2012

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. J.M.A. LENSINK (15:23): I have a few more remarks to make in relation to the budgetary situation, and I am sure members opposite will do their best to stay here so that they can listen to it. I think the point I had gotten to was doing a précis of each of the budgets since Labor took office, and I have some remaining comments in relation to the economy in the future and this particular budget, which has just been handed down.

The efficiency dividends that are being applied across departments, which Labor has had to apply because it has not been able to exercise any discipline in the 10 years it has been in government, is a subject of great interest to the Budget and Finance Committee. I also note that a couple of the unions, when reporting on the budget in their journals, are not particularly happy either. One from the Police Association is headlined 'State budget no help to front-line police.' It makes the point that with the efficiency dividends there will be impacts on frontline police, so I think those sorts promises by the government for 4,400 additional police on the beat, for example, are certainly going to be broken as a result of what they are having to undertake.

The Australian Education Union has in its journal the headline 'State budget delivers status quo' and it also has a fairly critical argument about the amalgamations entitled 'Amalgamations: an end to our unique school system'. They are decrying what is taking place under this government.

I think we are in for a rocky time ahead. The economy globally is starting to show a lot of signs of weakening. While Australia has traditionally been able to weather storms, we have difficulties. As my colleague the Hon. Terry Stephens talked about, the budget black hole that the Rudd Gillard governments have delivered us means that we are less able to respond to global shocks, and certainly at state level the same applies here that we are in so much debt and we have no capacity to be able to respond to those things because of the difficult budgetary position that we are in.

We hear almost daily of new large employers getting into trouble locally. We have had ADCIV here with some 1,000 jobs that are under threat. New dwelling approvals are down very badly and they are down the year to April 2012 at 25 per cent; nationally they are not doing too flash either at 17 per cent, but we are certainly far more vulnerable. The information coming in terms of real estate and people purchasing properties is that it is a buyer's market because nobody wants to buy so if you happen to have any cash it is a good time for you but that does not bode well for everybody who might to be in the housing market. The HIA has said:

...South Australia looks likely to experience two consecutive years of recessionary conditions in the new home building sector. It will be detrimental to the state's economy.

It will be challenging for those in the residential building industry. On top of all these problems, the genius federal government that we have has just introduced a brand new tax. I was in the South-East a couple of weeks ago and the confidence among a lot of the small businesses there is really poor. They are very concerned about what the impact is going to be. They are things that everybody has to pay like their electricity costs and it will potentially send some of them, with their already small margins, to the wall.

The last topic that I would like to talk about is in relation to population. We continue to get spin from this government in relation to the two million target. For anybody who is concerned about population growth, they will be pleased to know that we are not going to get there either by 2027 or 2050. The figures the government used in its most recent media, which was a couple of years ago—I think minister Koutsantonis talked about how well the population growth was going—relies on data that does not compare apples with oranges.

Certainly, net interstate immigration continues to take place in this state. This government rather foolishly said that one of its targets was to reduce it to zero. It actually peaked at 4,676 people in 2008-09. That is a demonstration that people are leaving this state and we certainly all know people who are of working age who are leaving this state because they just cannot get jobs. South Australia is a very difficult place for people to find work, particularly as they move higher up into management, so many of them have to go interstate to find that employment and they are of working age population.

What ties into all of this as well is that this two million target has been used—and I think it has been pointed out by other members as well, including the Hon. Mark Parnell—for Water for Good, the 30-Year Plan for Greater Adelaide and the Training and Skills Commission's plan. So, those are all skewed using wrong figures.

The Academy of Technical Sciences and Engineering recently produced a report that predicts that between now and the year 2050 only 10 per cent of the Adelaide desalination plant's capacity is likely to be required. If there are extended periods of drought, that will be up to 30 per cent. We have the farce of the Mount Barker development, which will cause growing pains for that region for a long time to come as they seek to work out how to provide infrastructure, because they are not being provided any funding from this cash-strapped state government.

We will see continuing skill shortages in South Australia and difficulties we have in importing skilled labour is likely to continue to constrain the state's economy in key sectors such as housing, engineering, health, mining and agriculture. The Leader of the Government in question time has been berating us for talking down the state. With the conditions here we need a bit of realism, and for anybody using the two million population target figures on which to base anything, they are completely rubbery, but rubbery is yet another theme of this particular government in the way they go about doing anything. As we know, it is always about headlines and about politics and there is never any substance to anything they do. I conclude my remarks on this bill.

The Hon. R.I. LUCAS (15:30): I support the second reading of the Appropriation Bill. In so doing, I indicate that I made some comprehensive remarks during the debate on the Supply Bill not too long ago about the state's financial and budgetary position, and I do not propose in the Appropriation Bill to repeat all of those statements. If we can summarise where we are at the moment in terms of the state's economy, and sadly the state's budgetary position, it can be summarised in a single word, and that is 'mess'. The mess I outlined in the Supply Bill as it relates to the deficit and debt of the state budget.

In relation to the state economy, in the last week or so we have seen many further examples of bad news for South Australia: the 6.4 per cent unemployment rate to which my colleagues have referred where, sadly, we are leading all the mainland states in Australia, certainly leading the states in terms of the jump from one month to the next. Even if there is some correction or rebalancing in next month's figures, it would still appear that South Australia will be at the upper or higher end of the unemployment rates of all states and territories in Australia.

As the Hon. Michelle Lensink said, we have seen the bad news stories recently with ADCIV, sadly The Dunes development, and Myer nationally and in this state indicating further cutbacks. Sadly, I am told that in the next week we are likely to see a reasonably significant builder in South Australia go under as a result of the current economic conditions in South Australia. One can only hope that they can battle through, but the dogs are certainly barking in relation to that. To cap it off, in the last 24 hours the second of the significant credit rating agencies, Moody's, has broadly indicated that it will follow Standard & Poor's and downgrade the state's credit rating from the hard won, hard fought for, AAA credit rating the state had achieved.

Through the last 10 years of financial disaster, overseen by this current government, having gone through all the pain, it looks like we will have lost the state's AAA credit rating. Its symbol of good financial management appears to have been thrown out the window by Premier Weatherill, Treasurer Snelling and all the other ministers, including the three stooges, if one might refer to them as such, that we have in this chamber.

There are two broad issues that I want to address. The first is the process in relation to consideration of the budget through the parliament. In part, I was prompted by some adverse media criticism, but also the views put by the upper house Greens member, the Hon. Mr Parnell, who put out a press release saying that South Australian estimates is a joke and urgent reform is needed. Those sorts of comments tend to get supporters in the media, who are not overly enthused by the estimates committee process.

I have expressed my personal view on a number of occasions and do so again today. I might be in a minority, but I am of the view that the estimates committee process is a most important part of our good governance framework in South Australia. That does not mean that it cannot be improved, but I think the state and the community would be the poorer if we were just to jettison it, as some would wish, or to make some of the changes that some have been pushing for.

I know that one of the criticisms has been—and the Hon. Mr Parnell was one who has pushed this view, and some of my own colleagues on occasion have put this view too—about the thousands of hours wasted as public servants prepare answers to questions that never come. I am of the view that that process of preparation for questions, whether they come or whether they do not come, or whether they do come in some cases and the ministers and the government never provide the answers that the public servants provide to them, is an important part of the public sector revisiting what it spends its money on and whether or not its processes can be improved.

This is an issue the Hon. Mr Darley has raised when he has talked about, in essence, root and branch reviews or audits of expenditure in government departments and agencies. It is only through going through the process and finding out how you are actually spending your money and what you are spending the money on—and that is assisted by the process of preparation of answers to questions that might come from the media or from the opposition—that you can establish (if you want to, that is) where you can improve, make changes, make cuts or change your priorities as a minister and as a government.

I am not of the school that says, because answers have been prepared and the questions might not have been asked, that that is necessarily a waste of time. A good minister, a good CEO and a good government can and should make use of and value the information that is collected on an annual basis for the estimates committee process. We have lived through a number of years now where departments and agencies have been asked to make expenditure cuts and review their spending. Some have done it moderately well and some have done it appallingly badly. It will not surprise members to know which agencies fit into which particular category there. However, the process can be assisted by looking at all that an agency does, and I believe the estimates committee process can be a useful part of that.

I have obviously spent more years—sadly, from my viewpoint—in opposition than in government but, as an opposition member, I have always found the estimates committee process invaluable in terms of gleaning information about where money is being spent and on issues that should be raised, even sometimes coming from Dorothy Dixer questions that might have been put to ministers just to filibuster and fill out time. Clearly, more useful information generally comes from questions coming from non-government members, and I concede that. However, on occasion, the information provided by way of Dorothy Dixer can help fill out the jigsaw for any hardworking non-government member in terms of where the government is spending its money and on what particular issues it can and should pursue.

As I said, from a government viewpoint, in the period when I was in government I always found, with the process of having the information prepared and having to go through it as a minister, that I was then able to go back to my agency during the estimates, and afterwards, and say, 'Well, why are we doing this? Why are you spending your money on this particular program? Can't we improve in this particular area?' It can and should be a useful prod for a minister who is prepared to do the work to try to become a more efficient and effective agency in the expenditure of taxpayers' money.

As we look at the current structure of the estimates committee process, it can and it should be improved. At this stage, I can only give my personal views on this. Ultimately, a future Liberal government will need to make the decisions as a collective joint party room, but I think this process of the opening statement in some cases taking almost 15 minutes or 20 minutes could and should be removed completely. A situation where a minister can give (potentially) a brief opening statement of no more than two minutes, just to highlight a number of key issues within his or her portfolio, should be more than enough in terms of an opening statement.

Sadly, over the years, we have seen circumstances where the time allocated to a minister for a particular portfolio might have only been 45 minutes to one hour and the minister has chosen to spend 15 to 20 minutes of that on an opening statement and then half of the rest of the time might have been spent on Dorothy Dixer questions as well. So, I think that is something that can and should be looked at.

The second issue to look at is the government spin in relation to how it structures the sitting days. I had my office go back to the last year of the Liberal government: 2001. Essentially, the premier took virtually all of the first day of estimates in one of the budget committees. In 2001, when I was treasurer, on either the first or second day, I spent all day in the committee, from (whenever it was) 11 o'clock in the morning until 9 o'clock or 10 o'clock at night, on Treasury and industry-related matters.

This year—and there was very little media commentary on this—on the very first day, what the government did was structure the Premier, the Treasurer, the Attorney-General, the Minister for Health and Ageing and the Minister for Transport and Infrastructure all on the one day. Why would it do that? For two purposes: one, to put on the ministers who are in considerable difficulty and trouble, such as the Minister for Health and Ageing, late in the afternoon; that is, after the TV journalists have put their stories to bed for the day. The Minister for Health and Ageing was scheduled to come on mid-afternoon or late afternoon and to sit into the evening if he had to. I can give you the exact times: the Minister for Health and Ageing came on at 1.15pm and went through until 6.15pm, so in the afternoon of that particular day. The Attorney-General came on at 4.15pm, in the critical law and order portfolio, and went through to 9.30pm.

What they did, as I say, was to squeeze all the major portfolios into one day so that if there were negative issues for the government they all came at once. Television, of course, tends to concentrate on one news story a day for their evening bulletins. They like to put their stories to bed by lunchtime or soon afterwards. So, the strategy, clearly significantly successful, was to try to protect the ministers in the greatest degree of difficulty, such as the Minister for Health and Ageing, because the media would have done their television story and put it to bed. They are not willing to sit around for five hours from 1.30 pm until 6.30 pm. Their bulletins have gone to air at 5, 6 and 7 o'clock.

Increasingly, even the newspapers' deadlines are mid-afternoon, and no later than late afternoon, unless it is a really big story, for the following day's newspaper stories. The political spin from the hundreds of spin doctors within the government is to schedule all the key portfolios on as limited a number of days as they can, to squeeze them up if they can and put the difficult ones, or the ones in the greatest difficulty, on later in the afternoon or in the evening.

The other thing that the government has done—and again my office has pulled out the information—is that, when you look at the 2012 estimates compared to 2001, it has actually reduced the number of sitting days. There were five days of estimates back in 2001; there has been a 20 per cent reduction to four days of estimates in 2012. The other thing it has done is significantly reduced the total number of hours of the estimates committee process.

There were just under 70 hours of estimates committees in 2001. That had been reduced by approximately 20 hours down to just under 50 hours of estimates committees in the 2012 estimates committee process, so a reduction of approximately 30 per cent in the time available to put questions to ministers in the House of Assembly. That too seems to have escaped any commentary from sections of the media as to how this government has been manipulating the estimates committee process.

The other thing that the government seeks to do for an important portfolio—for example, like the Treasury, where you should have literally hours and hours available to the shadow treasurer and other members to put questions on the budget—is to restrict the number of hours of questioning, but then in a portfolio like the Minister for Veterans' Affairs, the Treasurer, Mr Snelling, is scheduled for one hour of questioning. I am not critical of the importance of veterans' affairs, but in budgetary terms in the state it is insignificant.

Virtually all the expenditure on veterans' affairs comes from the commonwealth government. When one looks at the budget lines, in South Australian terms, the number of officers involved and the expenditure, it is virtually negligible in terms of its budget, yet what the government does is schedule minor portfolios in terms of their expenditure, like veterans' affairs, for an hour, while critical portfolios with billions of dollars may well only have three or four hours of questioning. Clearly, much time is allocated to minor portfolios like veterans' affairs. There are a number of others—an hour, for example, on road safety, minor in terms of expenditure. I know there are a couple. Minister Gago scheduled an hour for the Minister for the Status of Women, yet only 45 minutes was scheduled for the critical tourism portfolio, about which there has been much controversy.

In my own area, with the much and rightly criticised minister Wortley, they scheduled one hour for him as the Minister for State/Local Government Relations. Again, in relative budget terms of state government expenditure, that is a relatively minor portfolio area, yet a full hour is listed for that. Again, there was another hour listed for the Minister for Industrial Relations when virtually all of the industrial relations portfolio is now a federal jurisdiction. Most of the Public Service industrial relations are handled by other agencies of government—or not the minister, anyway—and SafeWork SA is really the only significant expenditure item within that industrial relations portfolio.

With the Minister for Science and Information Economy, there was again another hour for that particular portfolio, yet the Minister for Water and the River Murray—and what more critical issue could we have—is only allocated an hour, which is the same amount of time that we allocate for volunteers or for science and information economy. The reason again, as the Hon. Mr Darley, I am sure, will sorely attest, is that, where you have an incompetent minister who cannot handle the portfolio, what you do is put them in an out of the way timeslot and restrict the number of hours for which they can be subjected to questioning by non-government members to try to hide their incompetence in terms of the management of their portfolio.

These hundreds of spin doctors employed in ministers' officers have got to be doing something so they spend half their waking lives trying to work out how to structure estimates committees to protect most of their weak ministers and to minimise the potential for questions and damage being done to the government and to the ministers during the estimates committee process. The other, I guess, reform that a number of members, including the Hon. Mr Parnell in his most recent statement to support it, has been the involvement of members of the upper house in the process. I have said this before and I say it again: I do not support that notion of having members of the upper house involved in a House of Assembly process.

Firstly, we are and should strenuously protect ourselves as an independent house of a bicameral system of parliament. We have already seen the blurring of the lines with the continued operation of joint house committees, and that has been accepted now for almost 20 years, but the notion that the upper house should be subsumed into a government dominated lower house estimates committee process is something which is anathema, I think, to the notion of an independent and equally strong upper house of parliament that is there as a safety net or a protection for the people of South Australia.

The situation with any joint house committee system in most governments will be that the government of the day would obviously only agree if they dominate and control the estimates committees; that is, they would be insisting on government members to chair the committees. Having looked at the performance of some of the government chairs in restricting questioning during the estimates committee process, again, that is not conducive to greater transparency and accountability. Sadly, the government members in many cases are there just to seek to prevent the release of information and to protect, to the degree that they can, their colleagues who are ministers.

Having the upper house's scrutiny of the budget being, as I said, subsumed by the government of the day and its estimates committee process, whilst superficially to some appears attractive and gets a head nod, I think is dangerous. I believe effective scrutiny of government expenditure can and should be done by the upper house separately to an improved scrutiny process in the House of Assembly.

As I said, there are a number of ways that they could agree to improve the scrutiny and accountability. As with answers to questions on notice in parliament, a government and a premier could give a commitment to actually answer the questions within a certain time frame. It used to be the case with the estimates committees that the requirements and rules which say that you need to provide answers within, I think, either a month or two would be complied with by and large by previous governments—Labor and Liberal, to be fair.

It has only been this government since 2002 that has effectively snubbed its nose at the convention of accountability, jettisoned any pretence of being prepared to answer questions and refused to answer thousands of questions on notice. It generally snubs any difficult questions that it might receive from the estimates committees. In many cases, any answers that are provided are provided well into the following calendar year. Given that the estimates committees are generally in June, sometimes it can be close to the following year's estimates committees that some of the answers trickle in.

The process can actually be improved by a premier and a government that is genuinely prepared to improve accountability and transparency. It is not unreasonable to expect any government—Liberal or Labor—within a period of a couple of months, to make some attempt to answer questions which have been asked in the estimates committees and, similarly, questions that have been put on notice.

In relation to the on-notice system, I have previously called for a system whereby a government would be prepared to commit to the sort of standing order change which occurs in virtually every other jurisdiction, where there is a requirement on a minister, within a certain number of days—generally about 30 days, sometimes up to 50 days—to bring back answers to questions on notice. There is no logical reason why that sort of standing order reform could not be instituted by a premier and a government interested in transparency and accountability. Certainly it is my hope that, if there is a change of government in 2014, we will see those sorts of reforms in transparency and accountability with Isobel Redmond.

The Hon. Mr Parnell raised another issue, and I note his headline was 'South Australian estimates is a joke.' I must admit that, when I read his suggestion, I thought he was subscribing to the headline of his own press release. He said that the majority of questions asked during estimates should be given to ministers in advance to enable answers to be scrutinised in the public hearings and followed up. That is exactly what we do, and what we have been doing since 2002, with questions on notice. Questions have been given in advance, and all the government does is ignore them. In many cases, the government just ignores questions asked without notice in this council.

We had the extraordinary position today—and this occurs in the other place as well—where simple questions relating to a contract that the government has entered into for salary sacrifice were put to the minister and he just bald-faced got up and said, 'Well, I have already given you the answer.' Any independent observer comparing his answers yesterday and today to the questions would know that that statement is just untrue. The answers were not given. He knows that they have not been given. He has been told, 'Just get up and say, "Well, I've already given you the answer to that" and then just sit down.'

This notion that the Hon. Mr Parnell has, that by giving the majority of questions to ministers in advance to enable the answers to be scrutinised, I think is up there in cloud-cuckoo-land in terms of its capacity to improve the estimates committee process. From my viewpoint, the estimates committee process—as with question time—is there to put ministers under pressure, to see whether or not they understand their portfolio, not whether or not their hundreds of ministerial advisers can write an answer to a question. It is to see how well they understand their portfolio. Are they actually running their department? Do they actually know anything about it?

We had the Dorothy Dixer from the government backbencher today and the minister was waxing lyrical about the work, and important work, that SafeWork SA inspectors do. The first question you would think would be: how many have we got? When the supplementary question came to the minister today, 'How many inspectors have you got doing this good work, and have you reduced them in the last two years?', minister Wortley was unable to answer the simple question.

He only has one small agency within his control. They took WorkCover away from him, for the first time ever for an industrial relations minister, because they could not trust him with it. They gave him state/local government relations because no-one can mess that up, surely. He managed to do that within four or five days with Burnside council and others. They took WorkCover away from him and they just left him with SafeWork SA.

If that is all you have—you have 15 full-time staff, three part-time staff and a chauffeur in your office—and all you have to manage is SafeWork SA, basically, and the main work they do, the biggest employment section, is inspectors, you would think at some time in the last year or so he might have asked somebody, 'How many of these people do we have?'; and, if he did ask, he might have been able to remember it. Mr President, the sad reality of the quality of the ministers that your party is offering up in this chamber, and another chamber, is demonstrated by the incapacity of minister Wortley to answer even the simplest of questions. That was not a very difficult question: how many SafeWork SA inspectors do you have, minister? You cannot get much simpler than that. I guess we cannot get much simpler than the minister because he could not answer that simple question.

The Hon. Mr Parnell suggests there should be no opening statements from ministers. As I said, I agree with that principle. I think perhaps there could be a limit of two minutes, just in case something useful can be offered by a minister in terms of a major issue or expenditure item.

The Hon. Mr Parnell raises the chance for the public to put forward their views on spending priorities. I am interested to know how he sees that being involved in the estimates committee process. I do not have a problem with the public putting forward their views on spending priorities, but how that is incorporated into the estimates committee process I will await the Hon. Mr Parnell's suggestions.

Then he talks about different sessions spaced over the year. The dilemma for the estimates committee process is it is actually the committee stage of the budget bill, so you cannot spread that over the whole year. You can have estimates committees, and other jurisdictions do it, in the lower house and in the upper house, but the estimates committee process of the Appropriation Bill is the committee stage of the bill. It is a House of Assembly process and, when that is finished, they then have the third reading, the bill passes and it comes to the Legislative Council. So it is impossible to space the estimates committee process of the Appropriation Bill throughout the year.

You could have estimates committees which do work similar to the Budget and Finance Committee on an ongoing basis, and that is a separate issue. They already have a committee that could do that, the Economic and Finance Committee, but the government, because it controls the numbers, closes down that committee. So I think it could be a useful segue. I think 'ill-informed' is perhaps too strong a word. The Hon. Mr Parnell's suggestions, which I just do not think will work, could work and will be an improvement, so perhaps moving to a system where you can see greater transparency and accountability.

I think we have already started that process in the last three years or so, through the establishment of the Budget and Finance Committee of the Legislative Council. The reform ought to continue. After the next election, the Budget and Finance Committee should become a standing committee. It should have permanent, ongoing staff who can develop corporate knowledge and expertise to advise the members of the committee in terms of the questions.

Members have heard me speak of it before but I will speak again, and quickly, that the advantage of the Budget and Finance Committee is that it is not controlled by the government. It is not chaired by the government. It will not be chaired by the government in the future—unless at some stage the government manages to control the numbers in the Legislative Council, and that has not occurred under our electoral system since the 1970s, and it is unlikely to happen.

It is a better process because, rather than having ministers practised, or relatively well practised, in not answering the questions, we have senior public servants—the chief executive officers and finance people—before the committee answering questions from members of parliament in terms of how they are spending the money. It is also a better process because it is ongoing; it meets on a fortnightly basis. There is no reason why, at some stage in the future, it could not meet more frequently than that if it wanted to do so; it is just a workload issue for members in terms of membership of committees.

We have on a number of occasions had government members toss up the Dorothy Dixers. We had one CEO who thought he would be half smart by delivering, with a smug look on his face, a ministerial-like opening statement, which went for about 20 or 25 minutes, and then he proceeded to answer at great length a number of Dorothy Dixer questions from the government members. The committee has the capacity, and did so on that occasion and will do so again, to say, 'Well, okay, we didn't get through the questions. You'll be back here next month to finish the questions.'

That is not possible with the estimates committee process of the House of Assembly. There is a set time set by the government and, once it is filibustered out, there are no more questions, and ministers can use that process to filibuster the time available. That is not possible in the Budget and Finance process of the Legislative Council. Those CEOs who try that particular game can come back, and come back again, if they need to. Some of the smarter CEOs who have come before the committee have recognised that and are either making no opening statement or making a brief two-minute opening statement and are moving directly into questions.

We are now at a stage with the Budget and Finance Committee process that most of the bigger agencies are being visited twice a year—so it is not just once a year—so that Education, Health, Treasury, Premier and Cabinet, Transport, and Justice (the bigger agencies) are giving evidence to the Budget and Finance Committee virtually, on average, about every six months.

The invitation to the Hon. Mr Parnell is there, as it is to all other members. This council has passed a motion which allows all members of the council to participate in the Budget and Finance process. On occasions, the Hon. Mr Parnell, the Hon. Ms Franks, some of my colleagues and other minor party members and Independents have attended to ask questions at the Budget and Finance Committee. So, the Hon. Mr Parnell has the opportunity, which I would encourage him to continue to use, to attend the Budget and Finance Committee meetings for the agencies he might have a particular interest in. Through that process of accountability and scrutiny, together with changes in processes, with questions on notice in both houses of parliament and others, we can see greater accountability and transparency of whichever government happens to be in power at the time.

The second area I want to touch on—and it builds on from the work of the Budget and Finance Committee and others—is the areas of wastage that occur in public sector expenditure. I have spoken previously on the big ones, such as Public Service numbers, blowouts in government projects and programs, ministerial staff numbers and those sorts of things, so I do not propose to address those again.

However, I want to work on the premise of the smaller areas because, as a wise person once said, 'If you look after the pennies, the pounds will take care of themselves.' I want to look at some of the smaller examples of the wastage that goes on within government departments and agencies, many of which have been picked up by the work of either members in another place or the Budget and Finance Committee, to highlight that there needs to be a mindset change by governments, ministers and their staffers in terms of the oversight of public sector expenditure and identifying the sort of waste that goes on.

An example that gained a lot of publicity in the past 12 months was the area of 'cartridgegate'. It was first raised because in a very small section of the Department of the Premier and Cabinet—Aboriginal Affairs—a particular officer had spent $80,000 in a relatively short period of time on printer cartridges. That is enough printer cartridges, one would have thought, to run a commercial print shop, let alone a small section of Aboriginal Affairs of a major department, that being the Department of the Premier and Cabinet.

How on earth the audit and management processes are such that an officer who can spend $80,000 on printer cartridges—putting aside for the moment the fact that the officer was getting personal benefits at the time—the mere fact that so many printer cartridges were being purchased and stored in one small section of a major government department right under the nose of the Premier, and no-one knows anything about it, is alarming in itself. The head of that section and the new head of the department—and to be fair to Mr Hallion he had only just become the CEO of DPC—came before the Budget and Finance Committee in September of last year, and when asked about this they had no knowledge of this particular expenditure in their own section in their own department.

We asked questions of the same officer in relation to expenditure on consultants. Let me give one example in the Aboriginal Affairs section about Gientzotis Consulting: $500,000 was spent on consultancies with that Canberra-based consultant. When we asked the head of that section, Ms Peel, what this money was being spent on, she was unable to indicate what the money was being spent on, why Gientzotis Consulting had been given contracts to the value of half a million dollars without going to tender within that particular division of the Department of the Premier and Cabinet.

Eventually we were told that the $500,000 was being spent on capacity building and governance arrangements on the APY lands—capacity building and governance arrangements on the APY lands. My colleagues who have travelled to the APY lands in recent years and have highlighted the lack of services and facilities, I am sure are appalled at the notion that, at a time when expenditure is tight, a government, a minister, a Premier and senior bureaucrats would decide that $500,000 being spent on capacity building and governance arrangements is a better expenditure of taxpayer dollars than on improving services, health, schooling, roads and security services in the APY lands. That is the difference between this government and what I believe to be a good government. We cannot go on wasting money on capacity building and governance arrangements consultancies as opposed to actually delivering improvements in services.

Not surprisingly, soon after that Budget and Finance Committee appearance, Ms Peel's contract with the government was terminated. She was two years into a five-year contract. At the last meeting of the Budget and Finance Committee we asked, 'What was the cost of the termination of that contract?' We were not given exact figures but we managed to glean the ballpark of the payout and that is approximately three to four months for every unexpired year of the contract. That is three years to go and so three to four months for every one of those years. In addition to that, there is an extra three to four months for an early termination of the contract.

We asked the question, 'Well, rather than that, why not make her do some work for three or four months so we don't have to pay three to four months for an early termination?' There was no answer to that. We know that, given that her contract was in excess of $300,000 (or of that order), the total cost to taxpayers was somewhere between $300,000 and $400,000 in termination payments, not taking into account any accrued recreation leave, long service leave or anything like that. The taxpayers had to pay out $300,000 to $400,000 for the termination of that contract.

What we also found—talking about 'let's look after the pennies and the pounds will look after themselves'—is that about three months after the contract was terminated in December, in February of this year, there is an invoice in the Department of the Premier and Cabinet for $2,200, in essence, to a consultant to provide retraining to Ms Peel. The question remains unanswered—and we are waiting for the answer—but why do the taxpayers of South Australia have to put their hands in their pockets for $2,200 for some retraining of a senior bureaucrat who has just been paid out $300,000 to $400,000 of taxpayers' money because their contract has been terminated? If that officer needs retraining from a consultant in Canberra, that officer can spend some of the $300,000 or $400,000 on retraining costs. Why should the taxpayers of South Australia be asked to put their hands in their pockets for another $2,200?

There have been so many examples in relation to consultancies where money has been wasted by departments and agencies and in relation to the game that departments and ministers are playing where, instead of calling a consultant a consultant, they reclassify them as a contractor and hide their expenditure from public revelation. Why is it different? Only this government could explain. The game is that, under the Commissioner for Public Sector Employment or whatever his latest title is, if you employ a consultant, you do have to provide some sketchy information in the annual report of the department. If you can reclassify them as a contractor, you do not have to provide any information at all other than that the department reports at the end of the year, 'We spent $15 million on contracts,' and that is it.

So even though the firm may well be Gientzotis Consulting and it is clearly a consultant, there is an incentive for ministers and CEOs to say, 'Well, we don't really want to reveal that. What we will do is we will say that's a contractor.' It goes into the contractor classification and they do not have to reveal in the annual report that taxpayers have spent $500,000 on Gientzotis Consulting and give a brief description of what they did, or similar. That is what has occurred with many of the consultancies that we have raised with the departments over the last few years.

That is an area where reform can occur and all it requires is a reform-minded premier and government in essence to say, 'We will reveal in the annual reports the same level of information for contractors above a certain level'—because there may well be lots of small contractors or something being employed on a regular basis—'but, for contracts above a certain threshold, the same amount of information will be revealed as is required in relation to consultants in annual reports.'

One final example of the issue of 'look after the pennies and the pounds will look after themselves' is the area of professional development training. We have only scratched the surface of this through the Budget and Finance Committee. What we established in the Department of the Premier and Cabinet—and the CEO has now conceded this—was that with one particular executive the CEO had approved the taxpayer provision of $40,000 to send this particular individual to a management training course in another state.

The interesting issue of why the management and training courses in South Australia were not good enough is an issue for the government and for the CEO to respond to. What the CEO had approved was that the total cost of the management training course at an interstate management training facility would be met by the taxpayers. Professional development is encouraged in all jurisdictions, but the normal principle is that the taxpayers may well meet, let's say, half the cost and the individual meets the other half of the cost.

Having spent $40,000 on management training for a particular individual, public servants are not bonded in any way to continue to be employed and to provide services to the public sector. There is nothing that prevents some of the public servants in these cases from moving on to the private sector or to another public sector jurisdiction where the benefit of any professional development or training is not received by the taxpayers in South Australia, the jurisdiction which has paid for the professional development.

That would still be the case if the taxpayers had met 50 per cent of the cost of the training; I concede that; but at least in that way the individual has made some contribution towards his or her own professional development, the taxpayers have made a contribution and, hopefully, more often than not the state of South Australia can benefit from the professional development that it has paid for.

As I said, the Budget and Finance Committee has only just scratched the surface of this issue. I would hope that over the coming year we will continue to explore the costs of professional development and training in the public sector to see what we are paying for and what the benefits are of the expenditure that is going into the professional development and training. As those members of the Budget and Finance Committee know, for example, the state of South Australia has paid for quite lucrative scholarships for people to attend Carnegie Mellon. It may well be that the state has paid for lucrative scholarships for other universities and institutions as well. It will be work for the members of the Budget and Finance Committee to try to establish the total cost of what those might be.

I have given those half a dozen examples to indicate, as I said, that it is not just the big projects and the big expenditures, it is not just the 20,000 extra public servants, the hundreds of millions of dollars of blowouts on projects like Adelaide Oval, transport projects and hospital projects, and it is not just the millions of dollars being wasted on extra ministers and public servants and spin doctors, where the expenditure is being wasted. It is right through the public sector under a fat and lazy Labor administration, governed, if one can call it that, by ministers who are either ill prepared to do the work or are incapable of providing financial oversight of the expenditure of their chief executives and their agencies, and we are literally wasting millions, tens of millions, hundreds of millions of dollars of taxpayers money because of this lack of financial oversight by this government and by its ministers. With those comments I indicate my support for the second reading of the Appropriation Bill.

The Hon. J.S. LEE (16:24): I rise today to also contribute to the second reading of the Appropriation Bill 2012 and speak about the government's latest budget. The Leader of the Opposition in the other place, and other members, and also the Leader of the Opposition in the Legislative Council, the Hon. David Ridgway, and all the honourable members from the opposition have made significant contributions debating this bill, and rightly so, because it is important that the people of South Australia know the poor affairs of our state and the mess that the Labor government has put us into.

Once upon a time South Australia had a AAA credit rating. After Labor delivered its eleventh budget the state's AAA credit rating had disappeared. As we know, the Labor government is calling for a new branding to promote South Australia. Perhaps the Labor Party should also be thinking about rebranding itself and renaming it as a DDD party—D for downgrade, D for debt and D for deficit. All the Ds add up to one big D for 'disaster'.

It is like watching a horror movie—or worse, when you are actually in that horror movie. I can see why the Hon. Michelle Lensink earlier mentioned the movie called Hollow Man. After a decade of Labor mismanagement we see the Weatherill Labor government deliver the biggest deficit and the biggest debt in South Australia's history. According to the Financial Review analysis, a downgrade works out to be over $22 million in extra interest per year, and that is on a debt of $9 billion.

This budget has forecast a massive $13 billion debt by 2015-16, the biggest debt in South Australia's history. The budget delivers an $867 million deficit for 2012-13, the biggest deficit in South Australia's history. Three years ago Labor forecast a $304 million surplus in 2012-13. The budget now forecasts an $867 million deficit in 2012-13, which is a $1.2 billion turnaround. Labor has budgeted for six budget deficits in seven years.

Just over a month after ratings agency Standard & Poor's cut South Australia's rating from AAA to AA+, Moody's Investors Service has indicated that it is likely to follow suit. The reason cited for the possible downgrade is of major concern. Debra Roane of Moody's said:

We certainly see downward pressure in South Australia as they have moved away from a plan to really control expenditures.

This is a shocking measure for the incompetence of Labor's performance. It confirms that it was Labor's mismanagement that has lost the AAA credit rating, the cost of which will be felt by every South Australian through increases in cost of living as interest payments on state debt rises.

Some financial commentators have said that interest payments on the debt will increase by $22 million per year as a result of a downgraded credit rating. The government has the responsibility of controlling the budget. It is not good enough that Treasurer Snelling conveniently points to the global financial market and a downturn in revenues as the cause of South Australia's downgraded credit rating.

The cost of living is skyrocketing in South Australia, with electricity prices about to become the world's highest, water prices are the highest of all capital cities and the state taxes the highest in the nation. Taxes will rise by $1 billion over the next four years. There have been four sets of economic data released in July that show that South Australia's performance is heading for disaster. ABS figures released on 11 July 2012 show that, in the six months to May, South Australian housing finance commitments dropped by 0.9 per cent, the worst performance in mainland Australia and significantly lower than the national increase of 2.2 per cent.

These statistics follow a string of poor results for South Australia. In July ABS figures also showed that in May South Australia experienced the lowest month of building approvals since April 2001, the lowest figure in 11 years; and in the 12 months to May the number of new building approvals dropped by some 24 per cent, the worst of all mainland states. In the month of May South Australia experienced the lowest month of building approvals—as I mentioned before, the lowest monthly figure for 11 years.

The shadow treasurer, the Hon. Iain Evans, said that Labor's uncompetitive tax regime was devastating the housing industry and increasing household costs, which in turn affected the confidence of South Australians to invest. Under Labor, South Australia is the highest-taxing state in the nation, which creates an uncompetitive market for business, increases household costs and puts pressure on ordinary South Australians. Time and time again the Weatherill Labor government likes to cite the global economy in defence of poor economic results. The reality is that South Australia is part of Australia, and the rest of Australia is outperforming us. A combination of high taxes and lack of confidence is devastating the South Australian housing market and everything else, such as retail markets and those I have mentioned previously.

I also want to mention the collapse of The Dunes golf course and residential development on Yorke Peninsula, which I think the Hon. Rob Lucas mentioned earlier. That demonstrates another example of why the land tax system in South Australia needs review. Land tax in South Australia is charged at 40 per cent above the Australian average. It has been reported that The Dunes development was being charged $1 million a year in land tax and owed $1.2 million in land tax at the time of its collapse. With only 100 allotments sold, an annual $1 million land tax bill was always going to be a huge strain on the development's finances.

On 19 May 2011 the Liberal opposition moved, in parliament's Economic and Finance Committee, to conduct an inquiry into the land tax system. Labor used its numbers to defeat the motion on the basis that there were not enough complaints. What a joke! While the land tax is hurting The Dunes development, it is hurting others as well. I am very pleased that the shadow treasurer will again move, in the Economic and Finance Committee, for a review of the land tax system, because it is long overdue.

The start of the new financial year should be a time for people to have new plans and new hopes to map out what they would like to do for the next 12 months. However, this year 1 July will be remembered by many as the D-day for disaster because of this Labor government's mismanagement. That is because 1 July has seen high taxing Labor at its worst, with Labor having a big appetite for imposing huge taxes in the new financial year.

The state and federal governments will reach new heights in the way they extract cash from householders' pockets. As of 1 July, federal Labor's carbon tax will drive up the cost of everything we buy, South Australian households will pay an extra $114 on their electricity bills and 25 per cent extra in water rates, and the state government's solid waste levy will drive up council rates. As of 1 July our councils will also be forced to increase their rates to recoup the cost of the carbon tax. Poor policy decisions and mistakes have left Labor extracting every dollar it can from householders' wallets, and this is hurting families and individuals around South Australia.

In May this year I supported the Hon. Michelle Lensink in her motion to condemn this state government for its 10 years of failure to stem the extraordinary flow of young people leaving South Australia for study, career and lifestyle opportunities interstate. South Australia experienced a net loss of 2,325 people due to interstate migration, more than twice the levels experienced under the previous state Liberal government. In addition, South Australia has recorded the lowest population growth of all mainland states, according to the June 2012 ABS statistics. South Australia's population grew by only 0.7 per cent in the last 12 months, compared to a national growth rate of 1.4 per cent.

The opposition has pointed out that the Labor government has failed on its own targets to stop the flow of South Australians to the other mainland states. The Labor government originally stated that it would reduce net loss to interstate to zero by 2008—in your strategic plan, minister. However, that target has now disappeared, just like the AAA disappeared, from your strategic plan. In net terms we have now lost more than 30,000 people from South Australia in the 10 years of Labor.

The Hon. R.P. Wortley interjecting:

The Hon. J.S. LEE: You've lost it. I do not think you care and I do not think the Labor government cares about the people of South Australia—the hardworking small businesses, the struggling families, young people, pensioners and the regional country people. You don't care.

The Premier does not care. What he cares about is something else. He cares about keeping a very expensive office. He maintains a team of high end public servants who cost taxpayers in excess of $2 million. There are many hardworking public servants out there. What justifies seven people in the Department of the Premier and Cabinet earning in excess of $300,000? He cares about keeping a very expensive office, this Premier. The people have been forgotten by Labor because if you drive a car, catch a bus, use water, pay insurance or have children at school—basically, if you live in South Australia—you are worse off under this budget than ever before.

Land tax is levied at 40 per cent above the national average. It is the worst of all Australian states. Stamp duty is levied at 27 per cent above the national average—again, it is the worst of all the states. Insurance tax is levied at 53 per cent above the national average. You just want to make our state the most costly state to do business and to live.

The Hon. R.P. Wortley interjecting:

The Hon. J.S. LEE: You should be ashamed, minister, of your Labor government. I want to make a point about selling the forests and the Lotteries Commission. Being on the select committee about ForestrySA I am so sad about the people in the South-East and other South Australians losing the forests because debt is going up at $4 million a day and the interest we are paying is $2.3 million a day. If you wonder why our cost of living is going up, that is the reason—$4 million a day for eight years. This is after we sell the Lotteries and the forests. The net increase is still $4 million a day for eight years. That is why people's cost of living is so high and that is why the Liberal Party recognises that people out there are struggling under Labor's high cost and high tax agenda.

I want to also talk about small business. Let's look at small business, the engine room of our economy. There are some 135,000 small businesses in South Australia. When we look at the budget, what has the government done? It has slashed expenditure and support for the small business sector. In fact, over the last two years there has been a 53 per cent decrease in expenditure in this important area.

Let's also look at the programs that have been cut recently. The government has taken away all the funding of the BECs, Youth Entrepreneurs Scheme, the Small Business Emergency Helpline, and Small Business Month which has been cancelled. The SME Investment Development Program has been completely cut.

When you look at the size of the budget for the current financial year it is $1.98 million for small business which has been allocated. If we divide that figure by 135,000 small businesses, that amounts to $14.67 expenditure for each and every one of the small businesses in South Australia. Is that a joke? That is what this government is allocating per small business in South Australia, and they say that they understand the sector. This is a laugh.

This afternoon I asked a question about regional development because I do not think the Labor government actually cares about the regions at all. The South Australian Centre for Economic Studies, in a report commissioned by the Local Government Association, highlighted the fact that regions have suffered from years of state government neglect. It talks about there being a feeling in the bush that the state government did not take the regions seriously. It says that in the regions people think the government believes the state economy is from Noarlunga to Gepps Cross, because that is where the seats are and where they have to win government. That philosophy does not help this state.

The Hon. J.M. Gazzola interjecting:

The Hon. J.S. LEE: It is. I want to restate that because it is so important to show that the Labor government does not care about the regions. South Australians are sick and tired of having to pay for Labor mistakes. If the Liberal Party, under the leadership of Isobel Redmond, wins government in 2014 it will immediately establish an Audit Commission. The aims of this commission will be to return to a sustainable budget surplus and lower debt to restore the AAA rating and to provide cost-effective service delivery, as South Australians deserve.

It has taken Labor only 10 years to lose AAA and everything else that could produce a prosperous future for our state. A Redmond Liberal government is not afraid of the hard work ahead, and we know that for the sake of the state's future we have to get it back on a sound economic footing.

I also congratulate all other members who spoke for the opposition in support of this bill and also say that I agree with the Hon. Rob Lucas, who spoke about the transparency and accountability that a Liberal government will bring to the state to restore confidence for South Australia. In conclusion, I join my Liberal colleagues and we look forward to offering the people of this state a truly alternative, credible government.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (16:42): I believe there are no further contributions to the Appropriation Bill, so I rise obviously in support of the bill and conclude the debate with a couple of very brief comments about the budget. Against the backdrop of a deteriorating world economy and a major revenue writedown of around $2.8 billion since the 2011-12 budget, this government has set responsible fiscal targets that will enable the sustainability of state finances.

These measures include the achievement of a net operating surplus by the end of the forward estimates, limiting operating expenditure growth to trend growth in household income once surplus is achieved, and making sure the net debt to revenue ratio does not exceed 50 per cent. The forward estimates period reflects a major investment program to upgrade the state's infrastructure for the future, creating many jobs and employment opportunities for South Australians. The state economy is expected to experience solid rates of growth, underpinned by a pipeline of public and private sector projects, as well as growth in our agricultural and resources sector.

As well as keeping the state's finances sound, this budget was one that directed services to those who need it most, and that is why we made a record investment in disability services and implemented further measures such as the water security rebate to help ease cost-of-living pressures. I thank all members in this chamber for their contributions and support for this bill.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I am wondering whether someone has now told the Minister for Industrial Relations how many inspectors he has in SafeWork SA. He did not know the answer to that in question time today, so I am wondering whether someone has now told him and, if they have told him, whether he can now advise the committee of the house what the number of SafeWork SA inspectors—

An honourable member interjecting:

The Hon. R.I. LUCAS: It is an expenditure item in the Appropriation Bill.

The Hon. G.E. GAGO: Minister Wortley took that question on notice and agreed to bring back a response. He has given that commitment and he will honour that commitment.

Members interjecting:

The CHAIR: Order!

The Hon. R.I. LUCAS: Any member is allowed to speak during the committee stage of a bill, including the Minister for Industrial Relations. My question is to the Minister for Industrial Relations and I hope he is not going to try to hide behind the skirt of the Leader of the Government in his inability to answer the question. Can he indicate what the number of inspectors within SafeWork SA is and, in particular, whether they have reduced in the last couple of years?

The Hon. G.E. GAGO: An adequate response has been given. A commitment has been given by the minister and he will honour that commitment.

Clause passed.

Remaining clauses (2 to 8), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (16:47): I move:

That this bill be now read a third time.

Bill read a third time and passed.

Members interjecting:

The PRESIDENT: Order! The honourable Minister for Industrial Relations will come to order and the Hon. Mr Stephens will come to order! I think there are some people looking on at the behaviour of the Legislative Council today thinking it is pretty ordinary, started and led by the Hon. Mr Lucas, of course, as usual.

The Hon. S.G. Wade interjecting:

The PRESIDENT: The Hon. Mr Wade will put a sock in it.

The Hon. D.W. Ridgway: You ought to retire.

The PRESIDENT: Thank God, I am.

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