Bills

Supply Bill 2014

Second Reading

Adjourned debate on second reading.

(Continued from 17 June 2014.)

The Hon. A.L. McLACHLAN (15:20): I rise today to speak on the Supply Bill and to support its second reading. I begin by acknowledging the importance of this bill and, in particular, the ability of the government to have access to the funds it needs to ensure its continued operation ahead of the consideration of the upcoming budget and the associated legislation. However, in supporting this bill one cannot help but pause to reflect on the difficulties South Australia is facing and the state's perilous finances that allow little room to freely chart its course in the coming years.

How did we come to find ourselves as a once wealthy and vibrant community now racked by self-doubt, debt laden and with recurring deficits? Government must work with business to build a strong economy and to secure the state's financial position which, in turn, will allow us to pursue our social endeavours.

At the same time, the environment in which we operate must always significantly determine our spending priorities—yet the state deficit is one of the fastest growing of any state. Unemployment, which is the scourge of social cohesion, is on the rise and there are 18,000 fewer full-time jobs since the last budget. The youth jobless rate is above the national average. In certain economic rankings the state is often the worst on the mainland. Some economic forecasts indicate our growth may be up to four times slower than the national average.

Small to medium size businesses are the backbone of the South Australian economy. One analysis of our competitive environment surprisingly indicates that Melbourne is cheaper for doing business than Adelaide. As a community, led by this parliament, we must carefully review our spending priorities and ensure that their impact is maximised for the benefit of the citizens that have elected the parliament.

There was a time—a happier time—when South Australia could see itself on an equal footing with New South Wales and Victoria. Now we are spoken of comparable to Tasmania. Like Tasmania, we have in comparison to the east coast states, per head, larger government, higher numbers of citizens on welfare and larger numbers of public servants. This is not a recipe for success. These metrics will not deliver us a prosperous future; rather, they are the symptoms of a directionless economy and steered by a government that would rather grow the public sector than create an environment in which its spirited citizens can flourish.

There are two expenditure areas upon which I wish to make some specific comments: the public sector and health. The Public Service is essential to ensure that South Australians enjoy the key services which the government traditionally provides. However, the public sector does not have the skills or motivation to take on risk and create wealth. As I have remarked earlier, we continue to have one of the highest ratios of public sector employees to citizens. If we are to continue to spend at this level on the public sector the focus should be on service delivery and less on oversight and administration.

There is little point spending on employment that has either little or no impact on the ability of our people to create wealth and, in turn, improve employment opportunities. Our public servants need to become leaders of our community rather than merely its administrators. Their focus should be on creating an environment where there is an increase in productivity and participation, not regulation and economic stall.

I now turn to health. Health is the largest challenge for the government to meet its budget expectations. Measures to control spending are an obvious priority. There needs to be an urgent emphasis to reduce waste and inefficiency. The rate of spend in health cannot continue unabated, for it will eventually surpass our ability to raise the necessary revenues.

Health spending has grown about 8 per cent a year and now consumes around 30 per cent of the state's budget. While the spending increases, it directly limits our ability to provide for the other needs of our community, such as education and infrastructure for trade. A transformation or recasting of this sector is necessary so that our community investment derives the best outcome and value for our people. The longer we continue to invest in the existing and unsustainable model of enterprise, the longer it will take to return our finances to an even keel.

It has been said by many that the main objective of fiscal policy should be to contain public debt. I agree with this sentiment. Sustainable long-term growth requires sound public finances. We should turn our gaze to Europe and acknowledge the disaster that expansionary fiscal policy has brought to those countries that have taken this path.

I urge the government to make a serious commitment to identify and realise a sustainable economic model for this state. We should endeavour to have surpluses which will provide security for our people when future challenges or unexpected shocks arise. At present we do not have the fiscal settings that will provide us with the financial strength to confidently embrace our future and the inevitable challenges that await us. Our watchword in all our deliberations must be self-reliance. I urge the government to be more diligent in the leadership and the management of our state. I commend the bill to the house.

The Hon. J.M.A. LENSINK (15:26): I rise to make some remarks in support of the Supply Bill and I thought I might do so by reference to each portfolio and the areas that I have carriage of on behalf of the Liberal Party. I shall start with the portfolio of the status of women.

I would like to commend the Office for Women, the Premier's Council for Women, and, indeed, the minister for the efforts they are undertaking to reduce violence towards women and children. In particular, I note that 90 per cent of the victims of violence perpetrated by men are women, with other situations falling into the remaining 10 per cent. I also place on the record that terrible statistic we have in Australia of one woman being murdered by an intimate partner every week.

Over some time the government has had a strategy, including the Family Safety Framework which is progressing; it has been rolled out to all regions across the state. Obviously, it has had some difficulties in its early implementation stage, but the feedback that I am receiving is that largely, conceptually it is good and varies across regions—depending on the interest and expertise of the personnel who are running that program. It is working much better with non-government agencies than it was initially; it took time for some cultural change to ensure they were included.

We also have the orders which are able to be implemented by police, which we support. The feedback from the sector is that there is a mixture of understanding within SAPOL; there are some officers who are very effective at assisting victims in these areas. One of the problems that we have going forward that still needs some policy work is that victims often do not report, or they feel reluctant to, and that is a reflection of the power differential between people who are being abused and their perpetrators. It is almost a situation where those women need an advocate who is able to ensure that orders are brought in and any breaches are reported much earlier in the piece. I think they are all the things for which the government is to be commended, and they enjoy multipartisan support. The position within the Coroner's office is also starting to bear some benefits, and we look forward to further progress in that area.

On the environment front I will not be particularly complimentary. I first noted in the 2009-10 budget that the funding for the environment was being cut more savagely than in other areas. In the Hon. Kevin Foley's last budget it was also quite savage. A number of cuts are coming into place within the current financial year, which will see a lot of those services disappear. So, I feel like a bit of a broken record standing up here in this place talking about cuts to the environment department. It was an issue in the state election. Of course we have such a colossal level of debt that the requests from the conservation sector that any party commit to doubling of the environment department funds certainly was not attainable and my rhetorical question to them was, 'Which hospital wards would you like me to close to implement that?' My prediction is that the question will arise again in the next election, but the cuts will be so savage that my question will be, 'Which hospital would you like me to close to fund that?'

We have seen a number of changes to the environment agencies over the years: DEH has merged with the old department of water, land and biodiversity conservation. For one year we had a department for water. We had the NRM boards, which came into operation in 2004 and have now all been rolled in together. There are certainly some signs—and my colleague the Hon. John Dawkins spoke about this in his contribution on the Supply Bill recently—that there is a loss of regional management, which was the whole point of implementing natural resource management boards. I have been advised that they are even being told not only that they will have responsibility for native vegetation, that unit is effectively being cut to one-third of its current staff, but that they will indeed be responsible for marine parks—and this is all with less funding.

From the Budget and Finance Committee, the figures that have been provided there on staffing levels: at 30 June 2009 the NRM boards had 306 staff, and that dropped by 30 June 2012 to 280.8 and it is projected to continue to be lower. These NRM staff have quite a conflict. The governance structure for natural resource management and the environment in South Australia is wrong—the only polite way to put it—because that regionalised approach they were suppose to have is no longer there. The increasing fingers of the central bureaucracy is extending over natural resource management.

My interpretation of why this has taken place is that it is quite cynical. The environment was a big issue in 2007-08 when we had the height of the drought. Now that it has come off the political agenda, the environment portfolios are, quite frankly, for this government expendable. In some ways I think the environment department has itself to blame for some of the cuts that have taken place. It has overreached in a number of areas. It overreached with natural resource management. With the implementation of that we saw a number of volunteer organisations being increasingly marginalised.

I attended a Landcare conference last year—Landcare largely representing the landowners and NGOs—and their comments at the conference were that when NRM came into being the professionals turned up and kicked out the volunteers because they knew what they were doing. Those sentiments still exist. There would need to be a huge amount of work to rebuild those relationships. So the environment agencies in South Australia have overreached in that sense and taken for granted the good conservation works undertaken by volunteers and landowners on their own properties, and also in the matter of the marine parks, which was a disgraceful real estate grab by the environment department at the expense of sustainable local fishing, so they are paying the price. I am told that the environment does not have any friends in the right of the Labor Party; they are viewed with some disdain because so many times the attitude has been what can be described as a deep green agenda, which is exclusionary and 'we know best'. It certainly does not take people with it, and we have seen that in relation to the marine parks.

Over 12 years we have seen a progressive lessening. For a while we saw that it was a bit expanded, I think, under the Hon. John Hill, and at a time when revenues were still increasing there were a lot of new environmental programs. I have to say a huge amount of money was wasted on things that did not work, and I think there has been a huge loss of the really rigorous science in that department, which is affecting water allocations and practical conservation efforts. The department is operating in a completely defensive manner at the moment as it struggles to work out how to manage funding cuts.

I think it needs to get back to basics. I think it needs to work out some priorities about what it is they want to preserve beyond their own jobs, and work out the priorities for endangered ecological communities within this state, where the best native vegetation is, where the native vegetation is that needs protection at the highest level, and what strategies we need to put in place to protect the environment, because I do not think it is doing a particularly effective job at the moment.

On this front I would like to say that over the past 12 years we have continually seen the Greens preference the Labor Party. Now, I can say categorically that if we had had a Liberal government in the last 12 years the savage cuts that are taking place now would never have happened. We would not have had the overreach that has made a lot of government cynical about what the environment department gets up to, and we would not have had the sort of overspending and recklessness of this government, which has led to this extreme belt tightening.

I think it is time for the conservation sector to appreciate that the Greens do not necessarily work in the best interests of conservation, ultimately: first, because they preference the Labor Party; and, secondly, because if you run around in a panic all the time you just put people off, the mainstream gets switched off to your message, and ultimately you need them if you are going to bring the community with you.

The majority of conservation efforts take place on private land, and I do not think the people who are involved in those efforts have been appreciated for quite some time. We have had some effort from the community. Gerry Butler of Landcare has been undertaking a sterling effort, and, frankly, deserves reward for trying to bring back some common sense into the system. I commend him and that organisation for their efforts.

However, if we are actually going to have some effective conservation efforts we need a few truths told, and I think the Department of Environment, Water and Natural Resources is quite dysfunctional and probably has been for some time. It needs to take a good, hard look at itself. I commend the bill to the house.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (15:38): I rise to speak to the Supply Bill 2014, and make some relatively brief comments about the bill. I was just chatting with some of the table staff and attendants here; we were instructed by the minister that we should be prepared to spend Tuesday night, Wednesday morning, Wednesday night, Thursday morning, Thursday night, and even Friday morning here, but I suspect we will be finished government business well before 5 o'clock this evening. So I am not quite sure what the minister was proposing, given that there are only six items the Notice Paper, or why she was so forthright in that letter. Nonetheless, we are here today.

Our support for this bill is nothing more than a conventional formality. It is not an endorsement of the Labor government's financial management; it is simply a measure to ensure that our hard-working public servants are paid and that the South Australian public has access to state government services.

This Weatherill Labor government was elected to its fourth term in March and will subsequently deliver its 12^th budget. Unlike a newly elected government, which would typically deliver its budget based upon a vision for the future, this stale Labor government will deliver a budget based upon crisis management and nothing more. Make no mistake, this state is on the cusp of economic crisis. Our manufacturing sector is in turmoil, we have the highest unemployment rate on the mainland—in May alone, 4,500 jobs were lost—and our business environment is such that we are struggling to attract private investment.

As this Labor government is in its 12^th year, there are no scapegoats for South Australia’s woeful financial position. This is not a hangover of previous governments. Labor has had full control of the coffers for over a decade now, and with that power comes responsibility. They are 100 per cent responsible for our current financial situation.

When we look to the Public Service, sadly they have been let down by this government. I will summarise what the situation is, and I will be brief because it has been explained in thorough detail in the other place by my colleague (the then shadow treasurer) Iain Evans. There is a $300 million to $350 million disparity between the projected revenue from the state’s own tax/stamp duty revenue and that which we are actually receiving. So, before the election, Labor was unrealistically optimistic with their budgeted revenue and now, following 15 March, we are seeing the ugly truth. Labor has run six deficits in seven years—that is a deficit of over $1 billion this year, an over-spend of $1,000 million. The government predicted that it would be a $480 million surplus. So they were $1.5 billion out in their predictions.

If you add up every surplus promised by this government, they total $2.6 billion, and if you add up every deficit that has actually been delivered, it is $2.9 billion. That is $5.5 billion that this government has mis-budgeted. This government has lost our AAA credit rating. This, coupled with the fact that we have the highest debt in the state’s history ($14 billion), has delivered us an interest bill of over $1 billion per year. That is a snapshot of where our state’s economy is at under this Labor government. Situations like this do not happen overnight. They are the result of 12 years of terrible fiscal management.

I have often wondered what advice Treasury has provided the Treasurer and, in turn, cabinet. Those public servants in Treasury would be giving, I would expect, frank and fearless advice. I suspect that, sadly, from their point of view, it has almost always been ignored. Clearly, you could not imagine a government going down the path this government is going—$5.5 billion that it has mis-budgeted or mismanaged. You could not imagine that happening without the staff in Treasury saying to the Treasurer, to other ministers and the chief finance officers in each of the departments, 'Minister, we've got a problem; we need to correct it.'

In the midst of all of this turmoil, the Premier has appointed a new Treasurer. It is his first budget today and I am sure we will see what comes of that over coming weeks. However, it has been interesting to look at the rhetoric around that.

We need to look at the 12 years of financial management and some of the promises that were made at the 2010 election. One of the biggest areas of government expenditure is the Public Service itself and the number of public servants. After the 2010 election the Sustainable Budget Commission recommended—and I think it was adopted—that some 4,000 positions should go. Looking at the figures today, 1,400 more positions have gone—5,400 positions.

It is an interesting concept that when you employ experts to look at the budget and recommend a range of measures, one of the measures you adopt is a reduction in Public Service numbers, which of course is one of the major costs on government, and you do not actually adhere to it and there are now 1,400 more than at the last election. It is really hard to believe anything that we are likely to see in today's budget.

Someone once described a very effective analogy to illustrate the contrast between Labor and Liberal. They said that Labor will smile at you and put $100 dollars in your front pocket and, of course, most people will be happy to have some extra cash handed to them. It will perhaps encourage the perception that this is a government that supports you and deserves your vote, but it is just a distraction.

Indeed, while the recipient is reflecting on the positive opportunities given by this quick cash injection, Labor will be crouching behind them stealing $1,000 from their back pocket. Of course, the public will not notice that it is missing immediately, but you can be sure that over time, as their debts and expenses become more of a burden, they will call on that money and it will not be there.

At the other end of the spectrum is a Liberal government. It will not be out to trick you. It will not coax you with an offer of quick cash; instead, you will be asked to participate in a budget which is prudent and financially responsible. But, in turn, down the track, when you call on the $1,000 in your back pocket, it will still be there, and perhaps it will have even earned some interest. This government simply does not understand long-term financial management, much as they do not understand what South Australians do with their hard-earned taxpayer dollars.

As the shadow minister for primary industries and tourism, I have had a quick look at some of the figures that have been tweeted and what have you—and the Treasurer probably has finished his budget speech now. Primary industries is, of course, our premium food and wine, the agricultural sector—and we have a former minister sitting opposite. One of Premier Weatherill's seven key strategies is to rebuild our economy on the back of one of these seven key strategies.

Over the 12 years Labor has been in office, we have seen a steady decline in the number of personnel, FTEs, in PIRSA and, of course, the budget allocation to it—the appropriation to primary industries. It is rather bizarre, as I mentioned before, that we have probably some 5,400 more public servants than we should have if you look at the 2010 Sustainable Budget Commission. One of the seven key strategies is our food and wine sector, our agricultural sector, which is still our biggest industry, yet there is less support from government today for that than there has been at any time in the last 12 years. It just flies in the face of everything they have said.

If you look at tourism, it has had the lowest FTEs on record in the last 12 years. It is not quite the lowest appropriation, but it would be bordering on the lowest appropriation. It was some $60 million under treasurer Foley; it is now down, I think, to about $44 million or $43 million. So, it is the lowest on record. We have minister Bignell now in charge of this. In PIRSA, he has the lowest appropriation on record and the lowest number of FTEs. He has almost the lowest appropriation on record and the lowest number of FTEs in tourism. At the same time, I suspect that his ministerial travel is at the very top end of the spectrum, where he is spending like a drunken sailor on his overseas travel. Yet we see that his departments, and the people those agencies are there to support, are getting neglected and becoming more despondent as time goes by with the lack of support from government, other than the rhetoric that it is an important part of the state's economy.

I will also quickly touch on another little bit of waste. We saw the visitor information centre close on King William Street a few years ago. It was $1.4 million a year to keep it open, and the government simply could not afford it. It was a budget measure. They thought that it was important, but they could not afford it. It went to a basement in Grenfell Street to save money. It then went to North Terrace, and the services were co-located with Services SA. The minister opposite me was the minister for tourism at the time.

Now, of course, it has gone into a shared facility in James Place, a side street off Rundle Mall. In fact, my understanding is that it is staffed by Adelaide City Council volunteers. You are not able to make a booking there, and it is a poor support for our tourism industry. That was to save $1.4 million. It is interesting that, only two or three weeks ago, the government announced that it would be very happy to spend an extra $2 million a year (that would more than fund the visitor information centre and leave $600,000 left over) for a new member of the Labor cabinet.

The member for Waite was sworn in as a new member of the Labor cabinet. I am sure that he will be completely ineffective in contributing to the betterment of this state, and this is why: he promised his electors that he would fight within cabinet for policies and principles on which he was elected, but he was elected as a Liberal member on Liberal policies and Liberal principles, and you, Mr President, and your colleagues opposite have no interest in having anything to do with Liberal policies or Liberal principles. That is why you sit on that side of the chamber, and I am sure that he will be extremely ineffectual. Premier Weatherill is wasting $8 million over the forward estimates on a minister who is supposedly promoting Liberal causes in which you and your colleagues have no interest, and he is trying to tell the public that it will be a worthwhile budget measure.

As I start to close, I remind all the members in the chamber that you could have left the visitor information centre where it was for $2 million a year and had change. You could have reinstated the $3.5 million annually to the Community Recreation and Sports Facilities Program, which is due to be cut by Labor in 2015; you would have had enough over the forward estimates to fund that. It would have almost gone all the way to increasing the energy and water concessions by 2, 4 and 6 per cent and I note the member for Waite's plethora of media releases prior to the election expressing concerns about the cost of electricity. I wonder how many old age pensioners in his electorate would like to have a further reduction on their electricity bill via a concession rather than have him as a minister.

A vital three-year funding commitment to the McLaren Vale hospital to invest in technology to attract more surgeons and patients could have been funded out of that $8 million. An increase to the Patient Assistance Transport Scheme—again, a pretty important scheme—could have been funded out of that $8 million. An increased number of short-stay acute mental health beds at Lyell McEwin Hospital or Flinders Medical Centre—again, a very important need in our community—could have been funded with that $8 million.

Of course, it could have funded a reintroduction of car registration stickers, an issue which in some parts of the community has been accepted but in other parts of our community still brings a fair level of distress. People are devastated when they get a fine for driving a vehicle that has been unregistered and they had no knowledge that it was unregistered.

Those are some of the things that that $8 million could have bought but, instead, that $8 million has bought a minister who has control of less than 0.2 of 1 per cent—that is one-fifth of 1 per cent—of the budget. I think it is about $38 million out of a $17 billion budget, and he believes he will be an effective member of cabinet with control over 0.2 of 1 per cent.

This illegitimate government has no vision for South Australia, offers no financial security for the future of the state and I believe that under the continued rule of state Labor we can have a genuine reason to be worried about the outlook for our children finding work, providing for their own families and having all the opportunities that we have all been lucky enough to have. With those few words, I support the bill.

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:52): I believe there are no further second reading contributions to this bill. By way of concluding remarks, I would like to take this opportunity to say a few things. Firstly I would like to thank all honourable members for their second reading contributions and just state that this bill provides for government service delivery until the budget has been passed by the parliament and the Appropriation Bill 2014 receives assent. In the absence of special arrangements in the form of the Supply Act, there would be no parliamentary authority for expenditure between the start of the new financial year and the date on which the assent is given for the main Appropriation Bill.

In closing the debate, I want to emphasise some of the achievements of the government's economic management. Total South Australian exports have grown from $9.1 billion in the 12 months to February 2002 to $12.2 billion—a new record high—in the 12 months to March 2014. In trend terms, South Australia's retail turnover rose 0.3 per cent and was 4.9 per cent higher than a year ago. There has been a positive growth in nominal trend retail turnover in South Australia for the past 13 months. In value terms, trend nominal retail turnover is at its highest level on record at $1,522 million.

Mineral exports continue to be the largest growing export sector in the state, rising from $1 billion in the 12 months to February 2002 to $4.4 billion in the 12 months to February 2014, up by 332 per cent. Commodities produced include iron ore, gold, copper, zinc, lead, uranium and heavy mineral sands. Mineral and petroleum exploration expenditure has also increased significantly, rising from $74 million in the year to March 2002 to $519 million in the year to December 2013—a 602 per cent increase—resulting in new discoveries.

An amount of $12.3 billion (current prices) has been spent on private new capital expenditure to develop these new discoveries into production. South Australia's share of national mineral and petroleum exploration expenditure has also increased strongly, rising from 4.6 per cent in the year to March 2002 to 7.3 per cent in the year to December 2013.

Total employment in March 2014 is 16 per cent higher (109,200 jobs) than in March 2002 (trend data) and full-time employment has increased by 13 per cent (59,400) and part-time employment by 23 per cent (49,800) over that same time period.

In the year to December 2013, the number of overseas students studying in South Australia was 143 per cent higher than in 2002 and the state's share of the overseas student market has risen from 4 per cent to 5.1 per cent over the same period.

Real private new capital expenditure was 114 per cent higher in the 12 months to December 2013 than in the 12 months to March 2002 and in the year to the December quarter 2013 there was $12.4 billion in new business investment, 100 per cent higher in real terms than in the 12 months prior to the Labor government coming into office ($6.2 billion in 2001).

GSP per capita (which is a better measure of living standards than GSP) in South Australia has increased by 18 per cent since 2002, compared to growth nationally of 17 per cent. I thank honourable members who have contributed to the debate on this Supply Bill and look forward to it being dealt with expeditiously.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:58): I move:

That this bill be now read a third time.

Bill read a third time and passed.