Legislative Council, Tuesday 17 September 2024

The Budget catastrophe

Mr President let’s cut to the chase.

This Budget is a catastrophe.

Where do I start – everywhere I look there is bad news. The Treasurer's own speech lacked any vigour – rather sought to blame others and tell us all to stop whinging.

Mr President, my speech today is likely to be seen by the Treasurer as a huge whinge and it that’s the case I am OK with that! 

The Treasurer may have been better to stop whinging himself and take some responsibility.

There is no plan to stop debt servicing costs eating up more and more of revenue each year.

Which leaves less and less each year to provide services.

In the first Ferguson budget, the so-called surplus was going to be delivered in the first year of the FEs.

The next budget, last year’s effort, the surplus wasn’t going to occur till the last year of the FEs. That pushed it back the surplus by 3 years.

This year’s budget the surplus didn’t make it into the forward estimates. Instead, we were promised a surplus by 2029/30, another 3-year deferral.

Mr President, the search for a surplus is like trying to find the end of a rainbow. It keeps moving.

In any event I don’t know why the Treasurer goes on about the sanctity of an operating surplus, when it comprises only a part of what the general government does.

There’s the crucial matter of infrastructure spending which isn’t captured by an operating surplus figure.

And there’s all the contributions into the increasing number of government businesses or the PNFC’s – Public Non-Financial Corporations - which aren’t included in an operating surplus figure.

So Mr President what’s the point about talking about a possible return to an operating surplus, a “sensible” return to surplus as the Premier put it, when there is so much other spending which will ensure that we will continue to spend far more than we receive way beyond 2030.

Let’s just look at the budget year 2024/25 for a minute. The budgeted operating deficit is $793 million. But adjust this figure to include actual outlays on infrastructure and the figure known as the fiscal balance is negative $1.3 billion.

I will repeat that – if we adjust the budgeted operating deficit to include actual outlays on infrastructure and the figure known as the fiscal balance is negative $1.3 billion.

But further adjustments – which to give a more accurate picture -  to include all the other outlays, mainly all the  equity contributions into government businesses, and the result is that we will spend $1.9 billion more than we receive in 2024/25.

The net debt of the general government will increase by $1.9 billion this year.

Again – to repeat this Mr President - we will spend $1.9 billion more than we receive in 2024/25. The net debt of the general government will increase by $1.9 billion this year.

Does anyone else see a problem here?

In the last year of the FEs the operating deficit is projected to be $63 million, but the overall spending will still exceed revenue by $613 million, the result of actual infrastructure spending and contributions into government businesses and paying other accrued liabilities including unfunded super.

The Treasurer has indicated during his post Budget media appearances that “the pathway is there for all to see”.

I can’t see it. Nor can Saul Eslake.

A balanced budget in 28/29 and a surplus 29/30 will “cap out the borrowings” and “normalise” the level of debt. Debt will still be increasing. Is that what normalising means?

How can we go from a situation in 27/28 where we spend $613 million more than we receive ….. necessitating more debt, to a situation two years later where debt is stabilised.

Why is the Treasurer making such ridiculous claims? There is no basis to do so. Doesn’t he understand his own Budget papers?

Many in the media are parroting the baseless claim about a surplus in 2030.

It’s absolute nonsense.

Debt will continue to increase because of infrastructure spending and because of contributions into government businesses and because we will have to keep paying accumulated liabilities.

Mr President if you have time, you should check the Policy and Parameter statement in the Budget papers. It’s quite an instructive read. It shows what amounts have changed in this year’s budget compared to last year’s budget.

The Mac Point outlays were in last year’s budget along with other proposed infrastructure spending.

But in this year’s budget the Mac Point outlays have been removed. In total $595 million was removed from the infrastructure budget.

Wow – just like magic - that certainly made a difference to the fiscal balances in each respective year. The government’s Fiscal Strategy No 5 is to achieve break-even fiscal balances and it helped a little to close the gap.

But wait a sec…. it was just a reclassification.

It was reintroduced as extra equity contributions to Mac Point Development Corp. We’re still spending the same but it’s now a little harder to find in the budget papers. It helped lower fiscal balance   but we’re still borrowing as much. Cynics may suggest it’s just an accounting trick.

Equity contributions into government business, are the fastest growing outlays in the budget.

A few years ago we used to see some equity injections into Tas Rail and Tas Irrigation, but now the contributions are averaging over $400 m per year, including for Mac Point Development Corporation, for Stadiums Tas and for Homes Tas.

It mightn’t impact operating surpluses or fiscal balances, but it still has to be borrowed.

It adds to debt.

So Mr President any talk about return to a surplus that will allow for debt to stabilise is wilfully misleading.

There is nothing in this budget that suggest that is remotely possible.

Just to recap on the Treasurer’s surplus illusions Mr President.

The surplus figure is a narrow figure which only covers operations…. There is an amount of depreciation included but as we spend more on infrastructure than the depreciation amount…… after all this is one of the government Fiscal Strategies……. Strategy No.8 Mr President…… the operating figure understates overall spending. 

The operating figure is also inflated by the inclusion of capital grants. The Budget Papers on page 9 explains:

The receipt of Australian Government funding for capital programs, particularly one-off major projects, has the effect of improving the Net Operating Balance outcome. Given the nature of the Net Operating Balance measure, it reflects the receipt of revenue from the Australian Government for Infrastructure purposes but does not factor in the expenditure of these funds on infrastructure projects.

The fiscal balance figure includes the full effects of infrastructure spending by the General Government but it does not pick up if the spending is via equity contributions into the growing stable of government businesses.

Nor does the fiscal balance pick up the cash outlays for previously accrued liabilities. The most important of these is of course the unfunded defined benefit superannuation liability.

For years the accrued costs of DB super were far in excess of what was needed to pay pensions and lump sums on an emerging cost basis….the government wasn’t even required to set aside super guarantee amounts…. And both sides of politics took full advantage of this special exemption.

After criticising the Labor party for not setting aside any amounts….. the government followed suit when it came to power…… do you realise Mr President that since 2014 the government has saved $1 billion by failing to set aside any super guarantee levy amounts ….. currently now 11.5% of salary…..

If you didn’t know that Mr President, you’re not Robinson Crusoe…. Most people don’t know either…. And those who should are often afflicted with convenient amnesia.

Now everything has come to a head….. the cash amount needed to pay pensions and lump sums on an emerging cost basis are starting to exceed the accrual costs each year…. This is because DB members are gradually all retiring…. Most will retire in the next 10 years.

What this means that neither the operating surplus figure nor the fiscal balance figure reflects the extra cash need to pay past accrued DB super liabilities. 

Extra cash… which means extra borrowings …..are needed and more cash is needed to pay the interest bill.

It’s not just DB super liabilities which need servicing….. there are other liabilities notably provision for compensation for victims of sexual abuse in State care.

Whilst the amounts were included in the preliminary 23/24 figures, thus leading to the large deficit in the 23/24 year, they were accrual amounts.

They will need to be paid over the next few years… and when they are paid they won’t affect the operating or fiscal balance figures….. they will simply reduce the accrued liability over time….. but it will require cash…… more borrowings …. And an increase in net debt.

I hope Members and anyone else watching or reading this fully appreciates the enormity of this.

So to reiterate Mr President……the operating deficit for 24/25 is expected to be $793 million.

But after including all the infrastructure spending by GG, the fiscal balance becomes $1.3 billion. 

The inclusion of equity contributions into government businesses and the cash needed to reduce previously accrued liabilities, notably the DB super liabilities and the compensation for victims of sexual abuse in State care gives a figure of $1.9 billion being the cash outlays for 24/25 in excess of revenue for the year.

The operating deficit figure doesn’t give the full picture at all. A further $1.1 billion will be have to be borrowed.

So even if and when an operating surplus is achieved there will many more outlays requiring funds…. And more borrowings.

Mr President I hadn’t intended to give such a lengthy explanation of the Budget outcome but I was quite taken aback when the Treasurer’s media appearance post-Budget suggested he didn’t understand his own figures.

Mr President the Budget Papers indicate there is no chance of a surplus in 2030 which allow net debt to “normalise” as the Treasurer put it.

We can’t start trying to fix the problem unless there is an admission that we have a problem.

The Treasurer tried to sell his caring side by suggesting he is not implementing a slash and burn or austerity approach to rebuilding Tasmania’s public finances.

Mr President if he’s not doing that, he’s doing a very good imitation.

Let me explain.

Have a look at the income statement – page 61. Expenses are $9.7b in 24/25 and $9.5b in 27/28.

Mr President most remedial maths students will identify that as a fall over three years. A fall of 2.4 % over 3 years in fact.

But as we all know an increasing portion of expenses will be devoted to debt servicing.

If you exclude the debt servicing costs …. The borrowing costs and nominal superannuation interest….. as well as the non-cash amount of depreciation you derive a figure for what is actually spent on delivering services.

That figure shows a fall of 5.8 % over the 3 years of the FEs.

But there’s worse Mr President.

Inflation which incidentally is Jim Chalmers fault …..something new I learned from the Treasurer’s Budget speech Mr President…… is expected to increase by 8.2% over the period. The CPI projections are on page 28 of Budget paper No 1.

So if you adjust for inflation, the fall in the amount spent on delivering services is 13%.

So to make that clear Mr President ….. In real terms the amount to be spent on government services in 2028/29 is 13% less that what will be spent this current year 24/25.  That sounds a bit like austerity to me.

And …. That’s how the Treasurer is proposing to rebuild Tasmania’s public finances.

Forget all the talk about record spending in nominal terms. In real terms spending on services over the forward estimate is projected to fall by 13%.

That’s the reality disclosed by the Treasurer’s own figures.

That’s the reality that Tasmanians need to understand.

Its not much better on the revenue side. Growth in revenue over the FEs is only 5.6%.... that’s not 5.6% per year Mr President…. That’s 5.6% for the three years.

But adjust for inflation and in real terms revenue will fall by 2.5% over the FEs.

That’s the government’s response to Saul Eslake’s report. The need to raise more of own revenue has been addressed by the government showing a budget with reduced revenue in real terms.

Mr President if it wasn’t so catastrophic I’d be laughing.

 Mr President I’m at a loss as to where we go next.

  was optimistic the Eslake report would be the circuit breaker…. That we can finally start solving our problems.

 Thus far, at least, everyone accepts there’s a problem.

 But no-one is particularly keen to work out ways to find a solution.

 Let’s just kick the can down the road for a few more years.

The gods may save us. Who knows we might even find the end of the rainbow.

The Treasurer was right about one thing he said in his Budget speech which was Saul Eslake ‘s report was in many ways consistent with the Government’s new Fiscal Strategy presented in the 2023/24 Budget.

 The only trouble is Mr President the government is yet to reveal how it intends to achieve the Strategy. The progress report in the Budget Papers this year suggest the 2032/33 targets are even more distant.

 What….. pray tell me ……is the point of a Strategy if there’s no plan to meet the targets?

 Mr President, the fiscal strategy is underwater and there are no actions to address it – rather what we see is the use of equity injections that have distorted the out year outcomes. Mr President, I am not delusional as the Treasurer appears to be – I know these budget papers DO NOT provide  any semblance of a pathway to  sustainability.

 Mr President, I will comment further on the so called Fiscal Strategy – the one with no plan to meet the targets.

 As noted in the Treasurer’s own budget paper 1 – the Fiscal Strategy provides a 10 year timeframe approach to provide a clear and stable assessment of fiscal performance in the short to medium term and provides improved links to Fiscal Principles embedded in the Charter of Budget Responsibility Act 2007.

I will specifically focus on two of the provisions in this Act referred to – though all are equally important and arguably not met.

One Fiscal principal is to - prepare for unexpected events by building a robust financial position; and

Another – to ensure transparency and accountability in developing, implementing and reporting on fiscal objectives.

According to the document, an important element of the presentation of the Fiscal Strategy is that it includes commentary on what action the Government will be taking over the Budget and Forward Estimates to seek to achieve the established Actions and Targets over the long term.

We are also reminded that it is important that the Actions and Targets in this chapter are also considered in the context of the Risks and disclosures detailed in chapter 1 of this Budget Paper.

Mr President, to me the requirement, under the Act for transparency and accountability in developing, implementing and reporting on fiscal objectives is a massive fail.

The fiscal strategy is hopelessly reported – it should be transparent, with commentary against each measure as to whether it is on track or not and if not, there should be a clear statement to indicate why not and what action is to be taken.

Rather what we are presented with is broad motherhood statements and the promise of a review of the targets in 2026/27.

It should be easy for the reader to determine if each strategy and related action is on track or not. And if it’s not what we are going to do now to correct it – without blaming everyone else.

The review of the targets is almost code for we will need to change them to be sure we can succeed against them rather than we need to look at how we will achieve them and tell the people of Tasmania what a viable plan is.

We don’t want or need some delusional falsehood that we are on a path to sustainability

The motherhood statement of all motherhood statements was on page 48 –

Future Budgets will address strategies to restore fiscal sustainability and actions to curtail the growth in debt and borrowing costs.

Mr President this is appalling and I wonder how the Treasurer still has his job.

We have to wait for future budgets to have any idea about what actions may be taken to restore fiscal sustainability. Hasn’t the Treasurer read the Treasury Fiscal Sustainability Reports?

If he did, none of this would be news to him and after being in this position for I think it’s three years now you would think he would have taken some action before it becomes nigh on impossible. God help the next Treasurer.

Mr President, this is followed up with Fiscal Balance on the next page – whilst I have already mentioned this I will add – on page 49 – the measure or target is a “Balanced fiscal position” over a rolling four-year average –with the PO and 2024/25 budget appearing to head in the wrong direction - but how would we really know –

so I dutifully move on to the commentary – we are provided with the following …

5. Fiscal Balance

The Fiscal Balance takes into account the accrual impacts of Government revenue and expenditure excluding depreciation, as well as investment in infrastructure. The target (based on a rolling four-year average) reflects an appropriate balance between revenues, expenditure and investment decisions, in the context of the broader economic, social and fiscal conditions that may be impacting Government.

It recognises that a short-term deficit may not be an issue for concern while also recognising the importance of the capacity to repay debt. The value reported for each year is the average of that year and the three preceding years (i.e. a four-year average).

So what is the Treasurer going to do to more fully inform us all of the reality …. This is followed with …

2024-25 Budget and Forward Estimates Actions and Targets

The Government is taking action to improve the Fiscal Balance over time, as demonstrated by the fiscal measures included in this Budget, including through constraining the annual increase in general government operating expenses to below the long-term average growth in revenue.

Improvement in the Fiscal Balance to achieve the long-term target will require the achievement of the established measures and an ongoing focus on Budget productivity and efficiency improvements.

So Mr President –are we heading to a balanced fiscal position or down a dark tunnel with very little light at the end of it? Is it getting better or worse and if its worse don’t we need a little more clarity on what actions will be taken beyond the focus on Budget productivity and efficiency improvements.

Might I suggest Mr President a traffic light approach – green – on track – orange – heading to the tunnel with corrective action needed and red – we are in the tunnel and it might be good to let us know how strong the light at the end of it is or isn’t and what it is going to take to get there.

Then we head to number 6 – page 50 for those following along at home - Total General Government Sector Own-Source Revenues as a percentage of Total Expenditure

The statement follows - The Government will continue to maintain a competitive tax environment with an objective for state taxes, fees and charges to be efficient, fair, simple, stable and sustainable, and will continue to ensure appropriate returns from government businesses.

Mr President, this is not a new addition and I want to re-iterate – our state taxes are not efficient, fair, simple, stable and sustainable.

The Chart indicates we are well below the set target – though we might be heading towards the target by perhaps 2029 but if you read the risks and sensitivities section in the earlier chapter I think this representation may also belong with Alice and the white rabbit.

If it is achieved it will only be because expenses have fallen, meaning less services will be delivered. I will comment more on this in a minute.

But rest assured Mr President, we are informed the Government will foster economic growth and promote business investment and job creation to achieve this measure over time. Will the Treasurer give any indication of how this efficiency, fairness, simple approach, stability and sustainability will be achieved?

That too must be in a future budget.

Mr President number 7 the Impact of Government Business Enterprises and State-owned Companies on the General Government Sector Financial Position is negative with due to significant contributions from government – whilst the average impact over 10 years is positive – there is little detail as to how we are going to see the return to positive returns especially with some of the major capital works some GBE’s and SOC’s are undertaking.

Think about Hydro, TasNetworks, TTLine, TasPorts … More traffic lights needed to give a meaningful representation of where we are at…

 Mr President, I will move on to discuss the Budget Efficiency dividends. When I read about the efficiency dividend – which should have been called taking money in right hand then handing it back, with a bit more, in the left hand – I am almost speechless.

In BP 1 pages 6 & 7 it read:

Rebuilding Fiscal Buffers

… Since the 2023-24 Budget, the Government has worked with individual agencies to identify the most appropriate approach to achieving this Budget adjustment. This has allowed agencies to identify where efficiencies can be implemented to improve productivity while ensuring that frontline services are protected.

The Budget adjustment is an additional $50 million in each of the three years up to and including 2026-27.

The 2023-24 Budget reflected the cumulative impact on the Budget of $150 million in 2026-27, and a total of $300 million over the 2023-24 Forward Estimates.

Mr President, the so-called  Budget Efficiency Dividend which represents approximately 0.5 per cent of total annual expenditure in 2024-25.

However, as noted in the budget papers new funding to the General Government Sector agencies significantly exceeds the savings task in order to meet the priorities identified above.

Mr President, I think every Minister should be ready to answer questions next week as to exactly where these saving were found such that we can understand these areas impacted by these cuts and what the new funding will be applied to specifically.

We are further informed that a further Budget Efficiency Dividend of $150 million has been included in 2027-28 – this additional $150m in 2027/28 is delusional and whilst noted as an expenditure risk in BP 1, in my view it is there to cook the books and make it look better to the tune of $150m especially in the out years, where we are on this imaginary pathway to surplus.

Allegedly this allows Government and each agency time to review existing efficiency programs and identify how best to allocate the Budget Efficiency Dividend in future Budget Development processes, well before they need to be implemented.

Mr President, whilst I am absolutely certain there are a number of areas where efficiencies can be gained these are by and large not in the active front line, and active back line supporting the front line of those delivering services. How much more can we expect to be cut from these services deliverers until it is impossible to hide the front-line impact??

I think there is an over inflated belief in how productivity improvement is one of the keys to help solving out problems.

Mr President if I may I’d like to say a few things about productivity.

It’s one of the constants in life…… the call for workers to be more productive.

Often it is nothing more than a few code words for a belief than workers should be paid less.

But when the Shadow Treasurer as part of his Budget response talked about the need to lift productivity, I thought what exactly does he mean, as the Treasury spokesman for the party representing workers.

If you want to talk about productivity the starting point is the value of what is produced.  A lot of what is produced in an economy are what economists call intermediate goods and services, which are used to make final goods and services.

Anything that’s an intermediate good, gets eliminated when adding up what’s produced across an economy, otherwise there would be double counting.

Mr President much of what the State government produces are final goods……. Education and health services, community services and so on.

So how is what State government workers produce valued when calculating what the nation produces?

Mr President the output of our public education system is primarily what the government spends on public education.  So, to increase productivity you need to either spend more or reduce staff.

Pay staff more and productivity rises. That’s the reality for government workers producing final goods such as education and health and police and public order services.

So when I hear calls for government workers to raise productivity, my first thought is fine, but my first question is - how are you going to measure increased production, if the only way to value output is by the amount spent by the government.

Cutting workers might save money, but that in turn means output falls because government spending has fallen.

Less production with less workers doesn’t mean productivity has improved.

The productivity argument is a nonsensical argument used as a stick to beat workers.

It’s unlikely to increase production per worker because the way production and therefore productivity is measured is by the amount the government spends when these worker produce final goods and/or services.

My concern is the productivity argument will be used as a bargaining chip when we try to solve out sustainability problems when it is largely a red herring.

To implicitly suggest professional service deliverers are similar to assembly line workers who produce a measurable product is a quite silly.

So, Mr President - Back to the Budget….

The Budget Paper goes on to say - The 2024-25 Budget supports the Government’s aim – I would call it a pointless delusion - to return to a Net Operating Surplus in 2029-30 as I have already discussed.

We are informed - It will be important that Budget risks are carefully managed, and the Budget Efficiency Dividend requirements are met, to ensure that the Government is able to continue to meet emerging service demands, maintain appropriate investment for the future of Tasmania and to respond to any further negative impacts on revenue that may emerge.

Mr President, who does the Treasurer think he is kidding?? We already know about many of the emerging risks that are simply not included in this fanciful comment!

These include the works needed at Berth 1 and 2 at Devonport if the new Spirits are to avoid being at anchor somewhere in Bass Strait, the Derwent River or elsewhere slightly more hidden …. We have the Macquarie Point stadium, we have the end of the Mersey money with a mere $28.2m in 2026/27.

We also know that cost of living pressures are creating challenges in hospitality and tourism – there is less money to spend on discretionary spending and whilst the interest rates remain where they are, or even worse for so many, go up, the impact on GST receipts could well mean our reliance on this untied funding could expose us further.

This risk, whilst identified in the Budget Risks and Sensitivities chapter, is not quantified.

And then Mr President, we add in the risk of unfunded commitments – referred to in BP 1 p. 21 as:

“Commitments made subsequent to the finalisation of the 2024-25 Budget estimates have not been included in the 2024-25 Budget Papers. These will be reflected in the 2024-25 Revised Estimates Report’.  – Essential reading for all Mr President, but are there some of these already? I will be asking further about this next week.

Whilst it is usual and expected to have the risks to revenue and expenditure listed in the Budget Risks and Sensitivities section in Chapter 1 in BP 1 – there are some massively expensive risks, many that are quite likely to occur.

Also backing up some of my previous comments it is clear some of the assumptions in the budget are “heroic” – I say heroic that in inverted commas as they are almost inconceivable - The reality, just for a couple of examples is that:

• wages growth is too low without a major reduction in staffing and when a large number of our staff are front line service deliverers who are already under the pump and feeling unsupported; and
• a further $150 m efficiency dividend seems fanciful.

 Mr President, as I have mentioned previously, I detected an underlying theme in this year’s budget….. nothing is ever the government fault …. It always someone else’s.

The Federal government was listed as a reason for some of our problems … from its inability to “slay the inflation dragon” to its reluctance to provide funds for every project on its wish list.

With regard to the latter a new table was included in the Budget papers, on page 144, setting out the $1.64 billion in project ready to go if only the Feds will hand over $1.134 billion in funds.

The Government continues to perpetuate a misunderstanding of how the Commonwealth Grants Commission works, so I’ll be asking the Treasurer to update the table to disclose which of the grants will affect our share of GST in the future.

For instance, won’t a $60m grant for the Northern Heart Centre be clawed back…. Apart from our per capita share of $2m or $3m or so?

Trying to hoodwink Tasmanian continues to be almost a pathological obsession for this government. Take for example this comment from the Treasurer’s speech:

Tasmania’s Net Debt remains low compared to other states and territories, being the lowest on a nominal basis and the third lowest as a percentage of Gross State Product.

Not an outright lie Mr President but a deliberately misleading statement knowing that most people don’t read Budget papers which if they did they would learn whilst Net debt may be low, net debt plus unfunded super liabilities is the highest amongst States.

I will be seeking a chart updating Chart 7.3 in the Budget Papers showing how our debt and unfunded super as a % of GSP will move over the FEs and how this compares to other States.

Hopefully someone from Treasury can pass this request on to the Treasurer so he will have it read next week.

Mr President, it’s time to stop the pretence that all is ok.

The unfunded super liabilities are de facto debt amounts - for no other reason than both parties chose not to fund any DB super, not even the super guarantee portion, choosing instead to spend the cash rather than borrow, whilst knowing that it was kicking the can down the road and that borrowing will eventually be needed. And as Saul Eslake has pointed out the real determinant of our true sustainable position is to look at the overall PNF sector…. The public non-financial sector…… which includes government businesses as well as the general government.

What the government does is inextricably linked with government businesses.

We need to look at the complete picture if we are to face the future with eyes wide open.

To that end I will also be asking the Treasurer to provide a chart of net debt and DB super liabilities as a % of GSP for all states across the FEs. We need to understand exactly where we are instead of the Treasurer cherry picking stats to downplay the seriousness of our dilemma.

As I said earlier, Mr President, this decline in the budget and the reality we are facing is no surprise. If anyone read either of the last two Treasury Fiscal Sustainability Reports, prepared by Treasury – not the Treasurer – in 2021 and 2016.

The looming challenge was laid out clearly. Action to address the challenge of financial sustainability for the State needed to be taken earlier to avoid the need for more drastic action.

Sadly, Mr President, these warning went unheeded and in fact exacerbated by two early, and very expensive for the State, elections.

No longer will taking one or two actions do the job. We need to pull many levers AND we need to agree to a way forward. We need to consider Federal-State financial relations and the related agreements as a part of this.

The solution to many of our problems will require federal-State agreements. I am concerned along with the Treasurer about the Federal government desire to cost shift to States……

 Mr President, I wrote about this in a recent Oped in part responding to Saul Eslake’s Report ……

The reality is that if we are to have any credibility on the national stage….. to earn our place at the table and have people takes us seriously……. We have to start sorting out our own problems first.

And that is something Mr President ….. this Budget has palpably failed to do……Saul Eslake called it a triumph of politics over economics. I think he was being kind.

I regard it as a triumph for wilful ignorance.

Mr President, I wish to now move on to some more specific areas in the budget I wish to comment on.

Gender Budget Statement

I commend the government on this improved Gender Budget Statement. It is good to see much more detail as opposed to a list of initiatives that may benefit women.

I also note the use of a gender impact assessment framework that was applied to seven budget initiatives. This is a really important step and an approach that should also be taken to all policy positions.

The statement stated Tasmania’s gender pay gap is 5%, and improvement since the 8.3% gap in 2021 and significantly below the national average. However, the government have chosen not to use the Workplace Gender Equality Agency assessment used our gender pay gap would be 21.7% - still an improvement on this assessment of 11.5% in 2021.

Just so Members are aware the Workplace Gender Equality Agency is an Australian Government statutory agency created by the Workplace Gender Equality Act 2012. It should be used as the authority on this and it should be consistently used across all government departments, agencies, GBE’s and SOC’s.

Despite this improvement however, the gendered nature of industries, childcare costs, and family violence continue to limit women’s economic security. Initiatives like half-price fares and outside-of-school-hours care aim to reduce financial strain but lack robust solutions for systemic inequality in workforce participation and career progression.
Mr President, I won’t comment on all measures however I would like to draw Members attention to some.

If we look at the Snapshot on pages 8 and 9 of the Statement it is clear inequality and inequity persist.

Some might say it is almost contradictory – with 34.5% of women and 24% of men attaining Bachelor degrees or above, the pay gap persists and the proportion of women in part-time work and underemployed is still significantly higher than men. Interesting Budget paper 1 informs us on pages 36 -37 that –

While both male and female employment have experienced growth, most of the growth since August 2021 has been in female employment.

Whilst this is identified there is no mention of the data contained in the Gender Budget Statement – that the Treasurer also had a message for readers in.

Of course, these a reasons for this and workforce interruption through the childbearing years for women is a part of that. This can be addressed more-so through greater access to affordable childcare and improved parental leave entitlements.

Some workplaces and institutions do this better than others with generous maternity and paternity leave provisions and access to childcare.

My youngest daughter is an example of having a proactive employer in this at LaTrobe University where she was recently awarded a significant promotion whilst on maternity leave, with quite generous maternity leave provisions, also supported by the Victorian government and a transition to return to work part-time to full-time.

It can and should be done, especially in our government funded organisations and departments. The statement notes the labour force participation is improving it is worse than the national measure.

When we consider Leadership & Participation, despite improvement in women’s representation in politics and leadership, subtle workplace biases persist such as that referred to with regard to the analysis of the Regional Tourism Loan Scheme. In terms of economic security the statement notes:
It is likely that for capital investment projects supported through the Scheme, economic benefit will initially be directed towards male dominated industries as part of construction work.

In applying to the Scheme, applicants must demonstrate that personnel within the business have the key skills required and that the proposal will create jobs. As such, given women make up at least half the tourism workforce, it is possible that the Scheme will support women’s employment, particularly in regional areas.

Under Leadership and Participation it states:

Research suggests that an employee’s gender can be a significant factor in wages received in the tourism sector.

Without positive discrimination towards female-owned or led tourism businesses as part of the eligibility criteria in this Scheme, it is difficult to know what impact it will have on women’s leadership in the tourism sector.

However, it can be assumed that a portion of loans will be directed towards businesses that are either female-owned or have women in key leadership positions. …

It is common across the tourism sector internationally, for men to dominate conferences and networking events. Australian tourism conferences tend to include a greater proportion of female keynote speakers then elsewhere and it is hoped that women supported via this Scheme will receive positive recognition for their efforts.

Under Safety:
The Scheme is not expected to have major impacts on women’s safety. Increasing opportunities for employment in regional areas may contribute to increased economic security for women which could enable more autonomy in decision making when in unsafe domestic relationships. This is dependent on the security of the jobs created.

Mr President, I did find the language in this one unsettling – especially the reference to enabling more autonomy in decision making when in unsafe domestic relationships.

Whilst economic security is vital in this situation the reality of some abusive relationships can also be financial and even if a woman is earning her own money it is not always easy for her to safely keep.

That said – I do appreciate the approach being taken to apply a gender lens to these initiatives.

To move on Safety Mr President – this is not good news.

Despite reforms targeting family violence, data indicates that rates are worsening. The Rapid Rehousing Boost and Change for Children initiatives offer critical support for victims, but long-term reductions in violence require more comprehensive prevention strategies.

Family violence is a national crisis that requires a critical response. Whilst we are seeing greater investment we are not making the positive change we need.

Furthermore, in terms of general safety we are not making the positive change needed here. On page 36 of the Statement a quote stating “I honestly don’t know a time I feel completely safe as a woman.”

I know this to be the lived reality for so many women.

We have to give more thought to the route we will walk to and from work or in the community – especially after dark.

We do think about what we are wearing, we do think about how we might defend ourselves.

We do think about locking the doors of our car when we are driving and stopped at a traffic light.

We know the society broadly expects us to be responsible for our physical safety.

We also know how important financial security is and we also know many of us don’t experience this.

We know more of us, our daughters, our mothers, our grandmothers, our sisters and our female friends are more at risk of experiencing family violence is all its forms.

We know the most dangerous time to try to leave such a relationship is when we or our loved one makes the decision to leave and when we or they actually leave.

We worry about this because we know that this is the most likely time a woman will be killed by a current or former intimate partner is at that time.

We know that sometimes the first act of physical violence against a woman in an abusive partner is murder.

We know that young women and young girls are overwhelmingly overrepresented in sexual assault statistics – assaults that have life long and life impacting outcomes.

We know it is not our fault but we also know society often tells us it was our fault.

Mr President, I could go on but it is exhausting and frustrating is equal measure.

I acknowledge the very important initiative that is being rolled out to respond – that being the Multi-disciplinary Centres or Arch centres – Burnie’s is yet to be built – and I do note the budget commitments related to this.

These are important after the event measures – we must also focus on evidence based prevention.

I do appreciate some of this reality being clearly outlines in the Gender Budget Statement. We can’t un-see this Mr President and we must do so much better.

Mr President, I also acknowledge the sad over-representation of men in suicide statistics. And a warning I will add to these comments regarding suicide and suicide ideation.

As noted on page 51:

While males are more likely to die by suicide than females, the data shows that females are more likely to attempt suicide. Females are also more likely to be diagnosed with depression, which is one of the main leaders to suicide.

Men are more likely to die as a result of their attempt. That is a global phenomenon and is reflected in the national statistics on suicide also.

In Tasmania, suicide is the main cause of death for people aged between 25 to 44. This is comparable with Australia, where suicide is the main cause of death among people aged 15 to 49.

In Australia, the data shows that trans and non-binary people are more likely to experience suicidal thoughts and attempt suicide when compared to the general population.

Mr President, this reflects the work undertaken by the Joint Committee on Gender and Equality into the Gendered High Rates of Suicide ideation and Suicide in Tasmania which included 4 recommendations.

One recommendation was for the government to take a whole of government approach be taken to:
a) address the social and economic drivers of suicide ideation and suicide as a critical focus for effective prevention; and
b) actively build and sustain community networks.

Understanding the factors that drive suicide and suicide ideation are critical if we are to address this challenge.

As we know, suicide has a truly devastating effect on the family and friends of those reflected in these tragic statistics – real people experiencing real distress.

I note the response in this Statement to this area is commentary on Men’s Sheds. These are a fantastic and important response to men’s mental health and wellbeing but not enough.

I appreciate there are other initiatives included in the budget itself and we must act in an evidence informed manner to address this.

Mr President, I could say more on this but at this stage I again wish to acknowledge the work that has been done and look forward to responses to these inequities and areas of inequality. This document has come a long way forward since it was first introduced so credit for that.

Montello Primary School

Montello – uplift of $2.5m to a total of $9.6m – always was under funded and inadequate.

Whilst I am very grateful for the efforts of the Minister – this is not an equitable outcome for my community of Montello PS.

I note another Primary School – also in need of redevelopment – getting funding of $14m. I find it hard – as my community of Montello Primary School do – to understand how and why $4.5m more is provided to redevelop a school on a relatively flat site, that is a newer – though still old building would attract this level of funding?

I fully support the funding for Burnie Primary however I know my community of Montello feel disrespected and unheard. As I have said for years now – this is a school in a very low socio-economic area with a disempowered school community.

We have many fantastic advocates and families willing to speak up and fight for their school but it is much harder.

Burnie Primary School also services some low socio-economic areas but also has a catchment that includes more advantaged families who are more adept at engaging in these processes.

It is great to see this re-development progress for Burnie Primary School where they have outgrown much of the current facility.

Mr President, I know that the additional and welcome extra $2.5m will assist to do some of the upgrades to Montello Primary School that are desperately needed including replacing very dangerous windows, but it will fall short of delivering the original set of works required to deliver a fully contemporary learning space that these families deserve.

It also makes sense to do a proper job in the first instance – coming back to do more work at a later time is never economical and is disruptive to student learning.

Just outside my electorate in Havenview is another Primary School and this school will receive $11.6m – I don’t fully know the requirements of Havenview but I do know it too is a very old building.

It just seems Mr President that the community of Montello Primary School are the poor cousins here on a very steep and challenging site, with a very old school that is unsafe in many ways and inaccessible in many areas, in a low socio-economic area with a broadly disempowered parent body.

I am grateful for the increase in funding but will be asking in Budget Estimates if any other buckets listed in the Budget papers could be accessed to assist do a full and proper job.

Funding of Parliament

Mr President, I wish to close with another very important matter.

Mr President, I now wish to raise a matter that is important to democracy – the adequate funding of the Parliament.

If we value democracy, accountability and transparency we do need a properly funded Parliament. Mr President, society expects the Parliament to pass law, debate and inquire into relevant matters and hold the government and thus the executive, to account.

The role of the Legislative Council is very important in this as a House of Review.

This Parliament has been underfunded for years. As we all know, Mr President, under resourced bodies including the Parliament means less timely scrutiny and sometimes limited scrutiny itself.

In terms of timing for budget submissions, I will note Budget Submissions are provided to Treasury in January or February. When this was done this year I have no doubt it was done in good faith.

We also know an early election was called that resulted in ten additional Members being elected to the House of Assembly resulting in an extraordinarily large workload to accommodate these Members without the anticipated 12 month lead in.

Parliamentary Committees are crucial to the effective functioning of parliament and for as long as I have been here I can recall the sum of $12,000 for the Legislative Council under the line item 1.2 Committee Support Services.

The Legislative Council has a small but very effective committee secretariat, and I sincerely thank them for their hard work. The Council also administer many busy Joint Parliamentary Committees, including the Public Accounts Committee, which has been very active lately, the Subordinate legislation Committee which has a significant administrative workload.

We also administer the Commission of Inquiry Committee and the Workplace Culture Oversight Committee. All of these Committees have a large and complex workload.

Unlike the House of Assembly, the Legislative Council has received only a modest amount of additional funding to assist. We also have Select Committees from time to time – including the UTAS Inquiry still on foot.

Since 2010, Mr President, when I successfully moved for the establishment of our Government Administration Committees A and B – these Committees have done a power of work without any additional budget. except for occasional requests for additional funding or RAF’s as required.

So Mr. President, what do we see this year? We see the same amount of funding this year and over the forward estimates.

However, when we look at the House of Assembly, there is a new allocation for Investigatory Committee Support Services with funding for 2024-25 of $131,000. While they now have two Administration Committees, we have worked for 14 years without additional funding.

Our committee secretariat is stretched thin and not adequately supported by the Government in terms of funding. In addition in this house we have a very small Chamber team with only one Parliamentary administration officer who does a power of work but is still only one person.

Although there are 10 new members in the House of Assembly and some extra spending due to Parliament's expansion, there should be a sense of equity when it comes to the funding of both Houses. The work of parliament in a bicameral parliament means that the work of one House impacts the other.

Mr President, as you know, a bicameral parliament operates under principles of exclusive cognisance – that is we are masters of our own destiny and control our own affairs – and we respect the comity between the Houses – that is the principles of equity and fairness.

If the Government chooses not to fund the Legislative Council adequately in this area, what does that say about their priorities for scrutiny, transparency, and accountability?

Mr. President, but the funding challenge for the Parliament does not stop there. I want to mention that over two years ago, the government commissioned Sarah Bolt, the Discrimination Commissioner, to review the workplace culture across Parliament and Parliamentary and Ministerial Services.

Sadly, this review was very similar to other reviews undertaken in parliaments around the country with many cultural challenges and legacy issues that needed to be addressed. We know any change recommended in the Report is hard, it takes time and resources.

As noted in the Bolt Motion for Respect Report:

Change can be confronting and difficult. The Independent Reviewer warns against the denial of issues now evidenced to exist. To deny that significant structural and cultural issues need extensive improvements would be to undermine all people who participated in the Review in the hope it contributes to the betterment of the MPS Workplace.

And further:
The Independent Reviewer implores leaders across the MPS Workplace to embrace need for change as a positive path forward, resulting in a workplace where every employee can thrive. The inconvenience of change must not be an excuse for inaction.

Mr President, as per recommendation 2, a Joint House Committee was established and funding was made available to resource an independent project manager or IPM to be appointed and report to the Committee. The IPM was appointed and work on the recommendations that the IPM was to deliver on began.

The work of the Committee was interrupted by the early election, however in that time over the first 6 months of this year, an enormous amount of work has been undertaken by our Clerks and DPAC, to implement recommendations relevant to each area.

Mr President, whilst the administration of Parliament may not be a matter we as Members should or should not involves ourselves in, it does affect our working lives. Each House and Legislature General work hard to support us in the discharge of the Parliamentary duties.

I know our Clerks and Committee secretariat regularly work on weekends and late during the week to keep up with the workload and seek to meet our expectations.

Our very small team, including the Corporate Services manager is also responsible for managing 15 electorate officers and electorate offices with all the requirements to manage leases and related matters. They effectively are required to do this off the side of their desks.

Whilst a new joint senior position has been funded this position is not one to lead and manage the change that is required under the implementation of the recommendations in the Bolt report.

Mr President, as a Member of the Committee overseeing the delivery of the recommendations, we know, and other would be aware the recommendations required the Committee to commission an independent review of the Ministerial and Parliamentary Services organisational and governance structure, including an audit of instruments of appointment, employment conditions, recruitment processes and pay structures.

Mr President the delivery of this report of the review was delayed as Parliament was prorogued for the election and thus the Committee was unable to act until re-established in June 2024 after the previous meeting held on 18 December 2023.

The Report has been provided to the Committee and the Report has been provided to the Clerks to inform next steps. As staff across the Parliament would know, the Clerks have invited all staff to the regular Town Hall meeting scheduled for this Friday.

At this meeting the Clerks are planning to share information, as authorised by the Committee, about the independent review of structure of the Tasmanian Parliamentary entities commissioned by the Independent Project Manager (IPM) reporting to the Joint Sessional Workplace Culture Oversight Committee.

This report is an independently commissioned report of the Committee, not the Clerks and as I mentioned was to review the Ministerial and Parliamentary Services organisational and governance structure, including an audit of instruments of appointment, employment conditions, recruitment processes and pay structures.

In an institution as old and as important as Parliament it is vital Parliament and Ministerial services staff walk the walk and accept the need for change in line with contemporary ways of working with a clear, open, contemporary and effective governance model.

As I mentioned above – change is hard, takes time and must be adequately resourced.

To make any changes, where people are involved and may be impacted, this must be done respectfully and openly with experienced, skilled change management staff. To do this, the Parliament and particularly, our Clerks, needs resources and support.

Important and necessary change simple cannot be managed off the side of a person’s desk.

Mr President, the challenges of change have also been articulated in other similar Reports.

The May 2019 External Independent Review into Bullying and Harassment in the New Zealand Parliamentary Workplace by Debbie Francis noted:

While in the following sections I identify a number of things that could be actioned right away, sustainable behavioural and cultural change takes time and must be executed on a systematic basis, accompanied by rigorous progress review and reporting.

Change management research, and recent examples in the New Zealand public sector, such as the culture changes at the Police over the last decade, give us confidence that it can be done; but getting it done will require extraordinary leadership, investment, tenacity and joined-up effort.

This will be difficult to manage in a parliamentary context characterised by short electoral cycles, short attention spans, competitive pressures, changing political leadership, parliamentary agencies that are modestly resourced and no single accountable leader.

And further:
… making the changes recommended here is a significant body of work and will require sustained effort from agencies and Parties. It will take three to five years to see meaningful cultural change in the parliamentary workplace that better addresses health, safety and wellbeing risks and reduces or eliminates bullying, harassment, sexual harm and other inappropriate conduct.

Mr President, this necessity is not new – not only does change take time, it takes resources. The need for adequate resourcing to enable change is a safe, sustainable and effective manner is also referred to in other similar Reports.

The Francis Report noted:

It is my underlying contention here that Parliament should invest in a range of protective factors that reduce the risks of bullying, harassment and other adverse behaviours. This is likely to require significant additional resources and funding. Factors that create a strong and healthy culture in Parliament will reduce the risks of harm.

And … in the Combined Union response – this call is repeated:

…we echo the call in this Report to ensure that our parliamentary agencies are resourced to provide appropriate services. We must be mature enough to see that properly funding the work needed to support our Parliament is about the health of our democracy and not partisan politics and ensure our decision-making systems are future proofed to ensure this.

So Mr President, without the resourcing needed to engage the needed experts in change management to support this important work, we will be failing in this duty.

The resources needed must be provided. The work required by a change manager is imperative to support the Clerks in undertaking their role.

I note in the budget paper No 2, Vol 1 pages 255 and 269, additional funding has been provided in DPAC for 2 additional staff for this purpose. From the Parliament’s perspective I find it surprising that we have to beg for money to do what every other workplace and department is funded for to ensure worker safety.

We need to remember that it was the government that commissioned the Bolt Report and from my perspective it is incumbent on the government to appropriately fund and resource the change needed to provide a contemporary structure.

Mr President, I know this is a delicate matter to speak publicly about, but I am a bit tired of being silent and I know some, not many in our community think we and the Parliament shouldn’t have any additional funding, especially when times are tight.

Mr President, this is exactly the time when Parliament needs to be funded properly if we are to hold the Government of the day to account and provide a safe workplace for all.

Mr President, some of us that have been here for years know the Parliament has been under-resourced for years. The necessary changes haven’t been made and proper processes put in place. Thus, a huge burden of this work now falls to the new Clerks.

We do have one new senior position that is being filled, as noted in the budget papers, which is good. However, significant change or cultural reform requires more expertise and funding.

Mr President, to return to one other unacceptable inequity between the Houses, simply to highlight it in light of the principle of comity – that is the equity and fairness between the Houses.

I know that Independent, and possibly other opposition party members in the House of Assembly have at least 2 staff to support their work.

They are no more busy than Members in this House and I would argue many in this House take on a larger workload through Committee work. As we all know we have one electorate officer only.

Those of us who don’t live in Hobart spend a lot of time away from our electorate and there is very little funding to support our staff to travel to Hobart for Parliamentary sitting.

This arrangement disrespects this House, it disrespects Members of this House and when you consider this is a House of Review, again I ask, what does this say about the current governments approach to timely scrutiny, accountability and transparency.

Mr President, I know this is not an area Members normally speak about but it has been amplified in the budget for all to see. I sincerely hope Estimates Committee B will take up some of these matters with the Premier as I will with the Treasurer next week.

Mr President, there are many other areas I could have spoken about and I know this has been a much longer speech than I usually make.

However, given the dire state of the budget, the absence of a path to fiscal sustainability and fanciful notion of an imaginary surplus, I believe it is appropriate to shine a light on this and a couple of other key areas that matter to many people.

Mr President, I note the Budget Papers and look forward to Estimates Hearings next week.

Spreadsheet supporting calcs of revenue growth and EBITDA expense growth (excl debt servicing and depreciation)

 

	2023/24	2024/25	2025/26	2026/27	2027/28
From GG Income statement
Revenue	8,591.3	8,951.8	9,093.6	9,188.8	9,448.9
Expenses	10,097.2	9,744.6	9,480.3	9,625.5	9,512.1
NOB	-1,505.9	-792.8	-386.7	-436.7	-63.2
Debt servicing adjustments
Depreciation	473.1	486.5	510.4	519.8	547.5
Nom super interest	310.8	306.3	306.0	305.0	303.1
Borr costs	179.2	223.3	308.2	383.3	441.1
CPI increase		2.75%	3.00%	2.50%	2.50%
CPI deflator		100.0	103.0	105.6	108.2
Revenue as per budget		8,951.8	9,093.6	9,188.8	9,448.9
Revenue % growth over 3 years		5.6%
Expenses as per budget		9,744.6	9,480.3	9,625.5	9,512.1
Expense growth rate over 3 years		-2.4%
Expenses excl debt servicing& depr		8,728.5	8,355.7	8,417.4	8,220.4
Expanses growth rate over 3 years		-5.8%
Revenue in real terms(24/25 Ss)		8,951.8	8,828.7	8,703.6	8,731.6
Revenue real growth over 3 years %		-2.5%
Expenses in real terms (24/25 $s)		8,728.5	8,112.3	7,972.9	7,596.4
Expenses real growth rate over 3 years  %		-13.0%

 

 

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