Legislative Council, Wednesday 29 March 2023
Ms FORREST - the Government is requesting at least $340.5 million more than was budgeted last year to meet a range of cost pressures, the majority of which are operating. There is only one item that is capital - $7.9 million.
A supplementary appropriation bill is not an appropriate - no pun intended - mechanism for this and does enable parliamentary scrutiny. I am always a little bit cynical as to why some of the proposed expenditure needs were not anticipated, but I will get to that. In any event, one assumes this is not the last of the requests as no doubt we will see a number of requests for additional funding, or RAFs, at the end of this financial year, which should only be for unforeseen expenses at the time of the passage of the 2022-23 Budget.
What I find interesting and perhaps frustrating is the fact the Government never makes it clear why some years we need to pass the supplementary appropriation bill as well as approve the supplementary appropriations facilitated by the Financial Management Act 2016 pursuant to section 24 of the act - there is one in particular that I will come to with regard to that - whereas in other years we have only seem to have to note the section 24 report which relates to some of these transfers.
The exception to this is when we have a supplementary appropriation bill for a single large expense. That is entirely legitimate such as - I cannot think what year it was - for the purchase of a particular power station some years ago when about $100 million was needed to be appropriated - give or take a few million - to purchase the [inaudible] power station at the time.
Just as a refresher for all of us, the supplementary appropriations allowed by the Financial Management Act include:
• the section 20 transfers or appropriations where appropriated amounts get transferred from one-line item within and across departments;
• section 21 provisions: spending of the Treasurer's Reserve where amounts that have already been appropriated are spent. Given that the 2022-23 Treasurer's Reserve received $150 million in appropriations this year, one would thought there is plenty of room for some unexpected outlays that may arise. I know that $100 million of that was specifically appropriated for unexpected COVID-19 related payments or expenditure.
• the section 22 amounts: where an appropriation is needed in cases where Commonwealth grants in excess of what was contemplated by the original government budget, have been received. Always good news for the Government when the federal government hands out a bit extra; and
• the section 30 amounts where the Government has approved emergency funding.
Mr. President, why is the amount of $10.7 million not to be appropriated to State Growth for the delivery of the common ticketing system covering all Tasmanian transport operations or operators, including Metro Tasmania, which is fully offset by savings in Finance-General, treated as a section 20 transfer for inclusion in the upcoming section 24 report at the end of the financial year? I know this was asked in the briefing and I am hopeful that the Deputy Leader will be able to provide some information related to that.
I can list other instances of similar mechanisms and will get to another one bit later, but that will probably just bore everybody. I want to understand the process and the decision making and what sits behind that decision-making as to how different matters are treated, particularly where it is inter-agency transfer or intra-agency transfer.
To that end, I wish the Government would go to a bit more trouble, rather than just providing us with the list of $340 million of supplementary appropriations, 85 per cent of which the public has already been informed about as they were listed in the Policy and Parameter Changes in the Revised Estimates report, which they were. What about the amounts listed as policy changes in the Revised Estimates Report, though which do not appear to be included in the bill like another $3.3 million to the Hawthorn Football Club?
I did note the comment in the Revised Estimates Report on page 51 that said:
For the purpose of a PBS -
which is a policy parameter statement -
a policy variation reflects a specific decision by the Government that has an impact on the budget and forward Estimates and is related to a new policy or represents a change in the Government's existing policy since the previous budget. A decision to change a budget or forward estimate item which is consistent with an existing policy is not a policy decision. [TBC]
Mr President, for that reason if it is not a completely new policy even though you are going to spend more on a particular matter, is that why it is not considered a policy adjustment as opposed to parameter adjustment? Or perhaps, a little bit of tongue in cheek, do we think that Tasmania is not going to get much of a return from this additional outlay via the increased exposure at this pointy end of the AFL season in September, given the first two rounds of football. They might like to contemplate that. I think it is probably the former.
Anyway, to move back to the bill. Then there are the $21 million of items listed as recently announced items. I have no doubt they were all recently announced and I do not question the Government's authority to spend the extra $21 million, it is just the process.
The big unknown for me is when looking at additional appropriations is how is the Treasurer's Reserve going? Has it been accessed or tapped into yet? How much has been drawn down to date? There is $150 million sitting there. If we are being asked to approve another $340 million of appropriations, should we not be told how much is still in the hollow log that is the Treasurer's Reserve? As I said, there was $150 million there on 1 July 2022. Noting that $100 million was appropriated, as discussed during the Budget debate and budget Estimates for unanticipated COVID-19-related costs. How much is there now in both areas: that is in the general Treasurer's Reserve $50 million allocation and the COVID-19 related appropriation of $100 million? Again, I am trying to understand the process and how the decisions are made with this.
Furthermore, if the Treasurer has approved spending from the Treasurer's Reserve, are the amounts reflected in the policy and parameter statement in the Revised Estimates Report, or do we have to wait until the end of the financial year before discovering what was used from the Treasurer's Reserve? One would assume the answer that is probably yes.
I read with interest the additional costs associated with the Government's ongoing response to COVID-19 because there was the additional $100 million added to the Treasurer's Reserve in the budget for unforeseen expenses related to the COVID-19 response.
The second reading shed little light on the additional costs other than noting they were referred to in the Revised Estimates Report and as reflected in the Revised Estimates Report, we were informed that this bill allocates $77.5 million for costs associated with the Government's ongoing management of COVID-19.
This is below the appropriation agreed in the budget last year of $100 million to fund the additional COVID-19 and unanticipated expenditure that sits in the Treasurer's Reserve. We allocated or appropriated $100 million for the unexpected, unanticipated, perhaps cost blowouts of COVID-19-related expenditure in health and other areas and we have a total of $77.5 million being supplementarily appropriated here to do this very thing.
I am not saying it is right or wrong. I am trying to understand why we are doing it this way. I will return to this point after commenting on each of the items related to this supplementary appropriation. The supplementary appropriation applies $72.2 million to Department of Health including $50.9 million to meet costs related to vaccinations, testing, hospital, ambulance resourcing and the purchase of equipment including personal protective equipment. I assume this is additional to what was expected to be needed and, on that basis, I ask where were the cost increases in those areas. I do not think there has been a particular ramp up of vaccinations from the Government's perspective. Most of the COVID-19 booster shots that members of the public can have now are delivered through pharmacies or GPs. I do not think we still have the big vaccination clinics; I am not aware of them, for example.
Are there additional wage costs included that do not relate to the $21.4 million one-off $200 000 COVID-19 Frontline Health Workers Allowance Payment, which is listed separately? Do we need more than we thought? Had stockpiles been run down of our stockpiled personal protective equipment and needed to be restocked?
I am interested in a breakdown of the additional expenditure as opposed to a comprehensive literally $51 million in additional expenditure, above what was budgeted or expected.
I can understand that the $3.1 million to meet hotel quarantine costs charged to the state by the jurisdictions in relation to the 2021-22 financial year allocated in the bill to Finance-General, may not have been known and seen in the Budget. We were billed later for that, or I assume we were; we know how slowly some of these processes can take. We were required to pay for some of those costs imposed by other states.
The same applies to the $1.6 million to meet Tasmania's contribution to the Pandemic Leave Disaster Payment which was extended to 30 September 2022 by the Australian government. This decision of the Australian government occurred after the preparation of the budget, as I understand, so that makes sense.
The $450 000 to provide payroll tax waivers and grants to businesses in the tourism, hospitality and ancillary industries, associated with a Payroll Tax Pandemic Order 2021, could be seen as a continuing policy decision by the state Government. It was not a new policy, it was a continuation of the existing policy, but it was also driven by some of the bigger decisions being taken by the Australian government and the National Cabinet at the time.
Therefore, if all these costs were unanticipated, or at least the portion that is, why is this bill preferred over a request for additional funding process, particularly as the total amount in the bill related to the additional COVID-19 related expenditure is below the appropriation agreed in the budget last year, the $100 million to meet additional COVID-19 related unanticipated expenditure?
By asking these questions, I am not in any way suggesting that RAFs - the Requests for Additional Funding - are a more transparent process. They certainly are not in times of scrutiny. I ask the question on the basis that additional funds were appropriated to the Treasurer's Reserve for such COVID-19 related purposes. It is a question of why this mechanism has been chosen, rather than use of RAFs for the funds that were appropriated for this purpose in the Treasurer's Reserve?
I noticed the following footnote in the Revised Estimates Report (TBC):
The decrease in agency expenditure for Finance General in 2022-23, primarily reflects the utilisation of the capacity of the Treasurer's Reserve, which is partly offset by provision for estimated increases to Government funded wage costs, based on current Tasmania State Service Wage Agreement negotiations/outcomes.
The increase from 2023-24 primarily reflects the impact of the provision for estimated increase to Government-funded wage costs. Does this mean that the Treasurer's Reserve has been fully expended or rather drawn down and thus these COVID-19 related additional costs have to be met through the Supplementary Appropriation bill? We do not have any oversight or sight on the Treasurer's Reserve and what has been drawn down from it. We have no idea.
Personally, I hope that next year we will not see such a large appropriation into the Treasurer's Reserve in this year's Budget. I believe a supplementary appropriation is much more open and a more transparent mechanism that enables parliamentary oversight before the additional expenditure is approved through a supplementary appropriation. In my time here, which is quite long, I have never seen this House ever reject a supplementary appropriation on the basis that the expenditure was not warranted.
I note the supplementary appropriation comprises a total of $332.6 million for operating service expenditure and only $7.9 million for capital service's expenditure. Almost 85 per cent or the $287.8 million of the total expenditure provided in this bill relates to policy and parameter variations already reflected in the Revised Estimates Report as I have already referred to.
To comment on a few other aspects of the bill, I note approximately $69 million of the funding allocated in the bill is required for administrative purposes. We are assured that for the vast majority of these items there is no or limited impact on the budget position other than expenditure timing differences. Items reflected in the Revised Estimates Report are now within the bill which fall into this category to be appropriated the Finance General include the $43 million to be paid through Finance General to Homes Tasmania representing the balance of the former Department of Communities Tasmania specific purpose account that related to Housing Tasmania activities. These funds were transferred back to the Public Account on 1 December 2022.
This makes sense and, of course, these funds should be provided to Homes Tasmania to get on with the job of actually delivering the thousands of homes we desperately need but, again, it seems like a transfer arrangement to me, as I referred to earlier with the Metro ticketing funds. The $13.4 million for the payment of interest on sundry deposits which is offset by increased interest revenues in 2022-23, again, it seems like a transfer of an offset. I know the member for McIntyre was asking whether it was really just moving one department to another, why do we need to reappropriate the funds or appropriate further funds?
The $480 000 for Tasracing reflects the proportionate increase to Tasracing arising from increased point of consumption tax revenues in 2021-22. To digress slightly, this is on the matter of Tasracing and the Office of Racing Integrity - I did write this a few days ago - there may need to be additional funding support provided if a number of serious concerns that have been raised in the parliament and by the ABC with regard to harness racing through a whistleblower have any substance. That may come by way of a RAF, maybe.
The following items are included in the bill and will be appropriated to the Department of State Growth. There is the $10.7 million for the delivery of the common ticketing system which I will refer to. As I said, I do not understand why this is not treated as a section 24 transfer under the FMA and the $200 000 for the first year of funding for the Government's Small Business Growth Strategy Grant Program which we are informed is offset by agency savings and thus, the same question applies.
It is a decision-making process I question here, not the fact that it is done. I do not have an issue that it is done, it is the decision-making process. Why do we do it this way as opposed to through the request for additional funding? I have noted that I do prefer a supplementary appropriation in terms of timely scrutiny.
Also, $908 000 is being provided to the EPA to complete the fit-out of its new accommodation in Hobart. This seems quite a lot for a task if it is additional funds. The way it was worded I was a little bit uncertain as to whether there were additional funds, not the full expenditure. We were informed this was due to procurement delays which may well have elevated the price I expect. However, from the Deputy Leader's comments it seems this is more of a timing issue and it is also part of the original funding that was declared as a saving by the EPA into the last financial year. This actually reinstates the original funding requirements.
My questions on that are, am I right? Is this a timing issue? Also, is it possible for the Deputy Leader to provide the detail of the total cost of the fit-out for the new EPA accommodation so we are clear about that? I do welcome community support measures in this including the $1.3 million for the estimated cost of electricity concessions including the winter bill buster discount - you have to love these names, Mr President.
We all know how difficult it has been for so many people, meeting cost of living pressures exacerbated by high energy prices. Even with this support so many in our communities are going to continue to suffer and find it hard to warm their homes, feed themselves and their families, put fuel in their cars and purchase essential medicines. There is much more than tinkering around the edges that is needed in this area.
I also note $6 million to support commercial and industrial businesses to offset the impact of high wholesale electricity prices, with grants up to $20 000 eligible businesses that have experienced, demonstrated hardship. How many businesses have accessed this funding of up to $20 000? I do not want their names, in case we have to go down that rabbit hole of an argument. I want to know how many; and, for example, if there were 20, how much did each of those businesses get? Otherwise you do not know what the total cost of this is. I would also appreciate knowing how many customers have taken out the Energy Saver Loan Scheme for commercial and industrial customers, and how much of this $600 000 has been allocated for that purpose.
I also note the $200 000 to provide assistance to Homebuilder and First Home Owner Grant applicants who were conditionally approved to grant for grant funding, but who may subsequently may breach one or more of the eligibility requirements as a consequence of their builder no longer being able to operate. Does it include those who simply cannot get a start because a builder is unavailable? Is that what it is designed to do? Or is it only for those who have gone bankrupt, died or disappeared?
The $10.1 million for recovery activities to assist communities in the north and north-west of Tasmania impacted by the October 2022 flooding event, is welcomed by many primary producers and retailers who were seriously impacted by these floods. How much of this funding will we be reimbursed by the Australian Government, or does just relate to the state's contribution? We know that the federal government will pay some of the funding for it.
The same applies to the $250 000 to the Department of State Growth to provide emergency response grants of up to $25 000 to support small businesses impacted by severe weather in 2022-23. I am interested to know whether this included any of the businesses along the Bass Highway. Many of those businesses were significantly impacted by the Cam River Bridge episode. I can name several of them, right from the Doctors Rock area - including the Nursery that is not far from that area - right through to the Burnie end. Places like Young's Vegie Shed, the wholesaler there, and many others had significant downturns during that period. I know Young's Vegie Shed had to dispose of a lot of produce because it just was not moving; people were too scared to pull out of the queue as they had been already waiting two or three hours to get across. Occasionally, the beautiful staff at Young's would take fresh fruit and vegies to the cars that were lined up, particularly where they had children in them. That was a lovely gesture, but at a cost to the business.
A comment and a question with regard to the $500 000 to provide a grant to support and strengthen services provided by the Boag's Brewery Business Centre. I understand this centre has already had significant financial support from the Government over time. I am not saying that they should not support these sort of businesses. However, I have heard from a number of smaller breweries, who felt that this support could have been wider in terms of the challenges that many smaller, boutique and start-up businesses experience. We have a very vibrant boutique brewery sector. They see significant funds going into a major brewery that has major backing, and a much stronger balance sheet, and here they are, plugging away and doing great work.
I am not a beer drinker so I do not drink their product; but some of them make ciders - which is very nice. It seems to me, and to many of these small breweries, that it was a very uneven playing field. What consideration has the Government given to that? They are trying to get a foot in the door and make a business of it, and they see this. My question - aside from that one - is how is the return on investment for this use of public funds going to be measured? It is half a million dollars. In the scheme of the Budget, it is a drop in the ocean; but if a small brewery could get even a third of that, it would make a significant difference to their ability to participate. How will the return on investment be reported, and what consultation was undertaken across the broader brewery sector regarding this decision, if any?
I do not have any problems with $947 000 to provide grant payments to support major events and partnerships. We have some great events in the state and, as we know, the majority of them - particularly where they are not heavily ticketed events - need support to benefit their local community, including the $150 000 for the Beaker Street Festival and the $450 000 for motor sports events. I declare a conflict as I am on the board, but I welcome $347 000 for the Unconformity Festival. I am on the board, I always want to declare that; but it is very welcome to help us put on this year's festival, after the pretty tragic event of last festival, which was severely impacted by that three day lockdown in Hobart. Even though it was on the West Coast, we know what happened.
As you may expect, I welcome and thank the Government for the $250 000 grant payment to Big hART - also based in my community and my electorate of Wynyard - to continue a program to support mental health, workforce engagement, prevention of violence, and sustainability. Big hART has runs on the board. They provide successful programs with great outcomes - particularly for youth - and some of the participants of Big hART programs are doing amazing things now, making the whole community very proud. These are kids who may well have fallen off the radar, and ended up anywhere but at university, or making a real go of their lives.
We are extremely fortunate to have Big hART in our region, making a real difference for these young people, particularly for disengaged youth and disadvantaged youth. They are also a really go-to organisation if you want to hear the voices of young people. A criticism the Minister for Primary Industries and Water may well have heard, was at some public information sessions regarding the Salmon Plan.
There was a young man at the Wynyard event, which I attended, who rightly asked 'how are you engaging with young people on this'? Young people whose futures depend on our environment, and the future of our waterways and our seas. These are young people who live and breathe the sea; they have lived on that coast all their lives. They participate in water- based activities all the time. Many of them are surfers, but they just love being out in the water. There was no clear answer for that. Scott Rankin was there as the head of Big hART, and he offered to organise many young people to turn up and give their views in a format that would attract them - put on a music event, put on a bit of food, those things, they will come then. There was a couple of young people at this public event, there was a lot there, we had to keep getting more and more chairs; but the young people who were there felt quite disempowered. I look forward to continuing to advocate on behalf of Big hART and the work they do.
The items not mentioned in the revised Estimates report include a number of initiatives related to tourism and hospitality, including specific projects and broader industry support. I heard out and about that tourism is doing very well at the moment, even in some of the more challenging markets down the west coast and places like that. Targeted support for training and specific areas of need is not unreasonable. You want to be able to deliver good customer service when you have a lot of tourists coming through. It certainly is a sector that attracts significant Government support. Having said that, I sincerely hope that this $600 000 grant payment to the Cradle Coast Authority, to support the completion of sections of the North-West Coastal Pathway, sees this project start some construction - especially the Wynyard to Burnie section.
With regard to the operational cost pressures, I note the $17 million for costs associated with the National Redress Scheme and compensation payments for victims of institutionalised child sexual abuse. I accept that sadly, there is likely to be an even higher cost to this over time for those who are victims of institutionalised childhood abuse. Regardless, they deserve this financial redress and I sincerely hope it will enable others who have hidden their experience for far too long, to also be assisted and come forward.
In addition, I know the bill appropriates $5.9 million to cover increased costs of workers compensation in the Department of Police, Fire and Emergency Management, resulting in increased claims costs and claims experience.
Mr President, that tells me that things are not good. There is always an anticipated cost for these sorts of matters, but we need an extra $6 million in addition to what was budgeted to deal with these issues. I hope when we get to Budget Estimates next year if Committee B still has Police, Fire and Emergency Management, it will dig into that and what has been done.
The bill appropriates $62.1 million to meet above budget wage negotiation outcomes for 2022-23. This funding reflects estimated increases to Government funded wage costs based on agreement negotiations at the time of the Revised Estimates Report and includes both off and base salary increases. The funding is initially allocated to Finance-General to be transferred to a relevant agency as soon as practicable. Again, it is a transfer.
The bill also provides appropriation for $200 000 for the Department of Premier and Cabinet for the employment of an independent executive program director to commence implementation of the recommendations arising for the Motion for Respect; Report into Workplace Culture in the Tasmanian Ministerial and Parliamentary Services, and we understand the work that is done behind that.
In summary, I prefer if the Government felt supplementary appropriations were needed, they were actually organised and maybe difficult to table, but at least informed of before the Revised Estimates Reports are put out. Obviously, it is known at the time of publication of the Revised Estimates Report because they are all listed in there. I am wondering why they do not prepare a bill before that to reflect, so it is ahead of the game.
The Government has said that 85 per cent of the supplementary amounts of $340 million are included in the RER, so it is easy to identify that number, but some of the items in there are easy to find and others are not so obvious. The remaining 15 per cent of $340 million, equates to $51 million. That is the bit not identifiable easily and it is not an insignificant amount, in terms of this bill before us. Does this mean the Government expects the deficit to be $51 million worse than revealed in the RER just a month ago? That is the question I have, is that the expectation that the RER comes out at a point in time, mid February and the $51 million that was not identified there, is that because it is an extra cost blow out?
We have a process which dare I say, few of us understand entirely, and the processes that sit behind that decision making are unclear. I do hope that the current Government Administration Committee A inquiry process into the Financial Management Act, may shed further light on these and other areas. It is confusing and there is no clear reason as to why things are dealt with the way they are, particularly the COVID-19 related expenditure when there was a specific and dedicated allocation of $100 million into the Treasurer's Reserve for that purpose. Being that it is only $77.5 million, in COVID-19 related expenditure in this Supplementary Appropriation Bill, that is short or under the $100 million, that has been specifically appropriated into the Treasurer's Reserve for that purpose.
I look forward to the Deputy Leaders comments and responses in relation to the matters I have raised, because they are important questions and it would help us all to understand it better.
Go Back