Published: 02 May 2019


Legislative Council Wednesday 10 April 2019

Ms FORREST (Murchison) - Mr President, we all look forward to hearing good stories with happy endings, especially in these turbulent times, but we need to keep in touch with reality.

The annual State of the State speeches have been a bit of a rallying cry for the troops rather than an analysis of where we are.  One could easily be forgiven for mistaking them for an election campaign launch.

Take this piece from the Premier's speech, where he was referring to our strong economy -

Without it we simply could not invest more into health, education and the essential services Tasmanians need, or take action to keep cost of living pressures down, which we have done, or to build the infrastructure our growing state needs, which we are doing.

Mr President, that is stretching things a bit.  The revised Estimates report, which I am sure members have had a chance to look at, that was issued in February saw a reduction in our own‑source revenue for this year and across the forward Estimates.  How come revenue Estimates were reduced?  The biggest hit was to conveyancing duties.  The Estimates were reduced by 10 per cent in each year.

The Premier went on to say -

This Government remains committed to strong, disciplined financial management, spending less than we earn, keeping the budget in surplus …

That is simply not true.  Have a look at the revised Estimates report - turn to page 44 of that and cast your eyes at the bottom line labelled 'Cash surplus/deficit' and check the figure in the third column labelled 'Revised budget'.  What do you see?  You see a cash deficit that is $350 million - that is the expected cash shortfall this year from Operating and Capital Expenditure spending.  That deficit does not include equity contributions into government businesses or other advances, or the repayment of the housing debt owed to the Australian Government.  If they were included, the cash deficit would be $522 million for the current year.

How can the Premier stand up and totally misrepresent the truth and tell us the Government is spending less than we earn?  His own figures say the complete opposite.  It is almost as if he cannot read the set of financials in front of him.  The Premier stands up and says we are spending less than we are earning.  I am surprised more people do not call him out.

What about the forward Estimates?  If you turn to page 61 of the revised Estimates report, there are cash deficits in every year.  Those deficits do not include equity contributions to government businesses or the other amounts I mentioned a moment ago.  If you include them, the Government will spend more than $1 billion more than it will receive over this year and the next three years.

The Government is doing exactly the same as the previous government did in the years up to 2014.  By the end of the forward Estimates, there will be less hay in the barn than in 2014.  They were highly critical of the previous government doing that but they have done exactly the same.

I took a quick look at Tuesday's federal Budget.  Our GST receipts for this year, 2018-19, will be less.  Last year's budget predicted GST of $2.488 billion.  The revised Estimates chopped it back to $2.465 billion.  The federal Budget says our GST for this year will only be $2.448 billion - a further reduction of $17 million.  The Government's revised Estimates surplus for this year, 2018‑19, was chopped back from $164 million to $7 million.  It is now negative.

Next year's GST will be a further $63 million less than what the revised Estimates predicted.  It is all going in one direction.  The Government's surplus for that year has gone; its cash position is even worse.

The GST falls will continue over the forward Estimates.  The federal Budget told us the size of the GST pool over the forward Estimates has fallen.  We now know from the Treasury yesterday that the pool size is less than our last budget assumed, which means there is less money to distribute around the states.

We do not know for sure our percentage share of the pool over the forward Estimates as the exact share is calculated each year, as members would be aware, through the Commonwealth Grants Commission, but Treasury must have estimated that our percentage share is likely to fall.

One of the lessons of the financial crisis over 10 years ago is that GST receipts slowed down much faster than GDP growth.  That caught everyone unawares, especially our government at the time - a previous government.  At least the Treasurer this time has more warning.

If anyone is still wondering why the Government is not offering more to its workers, it is because it does not have any money, despite all the claims it had a surplus.  It does not have the money it has suggested it has.  The Government is spending more than they are earning.  That is the problem with telling a fib - it comes back to bite you.

In addition, I notice another supplementary appropriation bill laid on my desk yesterday.  The Government is asking for another $217 million, and that is a little more than topping up the petty cash tin.

Its revised Estimates included more for health, operating expenditure and shifting Royal Hobart Hospital capital expenditure from 2019-20.  I expected some supplementary appropriation for this, as flagged in the revised Estimates report.

Now the Government is asking for even more.  It is hard to believe the budgeting can be that bad.  The GST cuts over the forward Estimates must be even worse than the cuts from 2019-20 in statement 3 of the federal Budget papers.

The Treasury model must show future changes to our percentage share, as other states - for example, Western Australia - receive more, and perhaps the GST pool is growing slower than the last budget assumed, which seems to be the case.  This is what has happened with stagnant wages growth - people do not have disposable income to share, and we saw the falling retail sales.

Property values are falling in the big states, New South Wales and Victoria.  When GST relativities are assessed by the Commonwealth Grants Commission, those states receive more.  The pie is only so big.

The ABC news talked last night about $500 million reduction in revenue through less GST and stamp duty.

How did the Government get this so wrong?  At least the property market seems to be holding up in Hobart.  The downturn of the property market and the falling housing property prices and values in other jurisdictions will have a flow-through effect.  We are a federation and that is what happens.

It is time for the Government to be more honest about the position we are really in here.

Developing a 10-year infrastructure plan is something I wholeheartedly support.  In fact, I moved a motion some time ago suggesting we do just this.  The 10-year rolling infrastructure plan, plus the longer 30-year plan which the Government are focusing on, is good -

Ms Rattray- It was supported.

Ms FORREST - No, it was not.

Ms Rattray - Wasn't it?

Ms FORREST - Not by all.  Not unanimously supported in this House, no.  But an infrastructure plan without a funding timetable is pointless.

Without funding, to lock in a plan for what you are going to do in the future with the infrastructure spend is pointless.  Unless the process of a clear plan of funding of infrastructure projects is removed from vagaries and meddling of partisan politicians, particularly leading up to election time, it becomes another pork fest.

If an example of what not to do is needed, we need look no further than the Royal Hobart Hospital.  Back in 2011, the Royal Hobart Hospital master plan was a four-stage development.  The latest updated master plan now lists six stages, one of which is fully funded and nearly complete.  The second, which has recently been given the green light, is only partly funded, and another four stages, including a major development and another campus, are on the drawing board, and may be tackled somewhere between 2020 and 2050, which is a pretty broad time frame.

To use the words in the recently completed master plan, 'this work will be completed as and when funding is secured'.  None of it is funded.  None of it.

That is the problem.  The budgets each year have featured lots of infrastructure spending, but they are the first thing to get the chop when cash gets tight.  Every year infrastructure spending has been, on average, $100 million less than budgeted.

The Premier talks about a massive program to build the infrastructure our growing state needs.  His past record has been awful, every year.  Capital expenditure on our infrastructure projects has been pushed back to meet the needs of other areas of government, particularly the operating expenses related to health and other areas.

The revised Estimates report has a commendable level of planned infrastructure spending, but a conspicuous lack of detail as to how it is to be funded, especially in view of the fact that the Government is spending far more than it is earning. 

The second stage of the Royal Hobart Hospital needs an extra $63 million, as the Premier told us in his address.  Where is it coming from?  The budget is coming in May and we hope to see more in it.  We can all talk about what we are going to build, but if you do not put money with it, it simply cannot happen.

Mr President - The Budget was $6.2 billion last year.  It was $1.8 billion in 1995.

Ms FORREST - The infrastructure spending?  The Royal?

Mr President - The budget itself.  That is how much it has increased.

Ms FORREST - We are still spending more than we are getting in.  As we grow, there should be a bigger budget.  We would wonder what the heck was happening if it were not, but if we keep spending more than we are getting in, that can only lead in one direction.

We cannot keep going like this.  We are trying to build a substantial facility, one of the largest in the state's history, from current cashflow.  We were given a $340 million grant from the Australian Government, but that was all clawed back by the consequent reduction in GST receipts over the next three years.  It was a Clayton's grant.  It was simply GST in advance.

I read the other day the German government's bond price is negative.  That means people are actually paying the government to look after their money rather than the other way around.

TASCORP has borrowings with interest rates of 3.25 per cent, according to its 2018 financials.  Ten-year Australian Government bonds are paying under 2 per cent interest.  There are other ways to fund these major intergenerational infrastructure developments.

When I read the revised Estimates report and see the slide into net debt in three years time, I thought at least we could have a discussion about sensible levels of borrowing to ensure the needed infrastructure is built sooner, when it is actually needed, rather than cutting and shutting, postponing and deferring.  That has been the pattern with infrastructure spending over the past 10 years, regardless of political affiliation.

It is great that Tasmania has picked up its game of late.  However, we need to remember that just because two events occurred together does not mean one caused the other.  It might be coincidental.  I do not mind the Government taking credit for all the good things but the danger is they start believing it.

Much of the state's improvement has not been caused by the Government.  People like David Walsh do not make decisions depending on who is sitting on the Treasury benches.  They just get on.

When the Government boasts of its spending on new projects, most of the funds required come from specific purpose grants.  Roads, irrigation, the Bridgewater bridge, for example.  The list is very long.  We saw that in budget papers previously.

If the Government continues to insult us each year by allocating less in hospital budgets than the immediate year prior, they surely cannot be taken seriously.

You cannot argue with the figures.  They are there in black and white - the budget, the spend in annual reports and the budget papers.  The figures are there.  They were also reported in the last committee report of the acute health services subcommittee of government Administration Committee A.

If the Government needs to borrow, they should tell us.  Stop pretending.  When the chickens eventually come home to roost, we are all going to find out.

I am a little sceptical about the constantly repeated need to have 'a competitive tax system'.

Too often that means giving concessions to one section of the population.  This means the burden falls on other people rather than raising a little extra revenue and using it to pay the interest needed if we borrowed and built the much-needed infrastructure a bit sooner.

Borrowing is much more likely to have positive spin-offs than having a competitive tax system, which for me is just a code for granting concessions to one group.  You cannot look at things in isolation.  The Treasurer will probably put his own spin on this and throw this back in my face, saying I want this and that, as he tends to do across the table in Estimates.  We have to look at ways of funding infrastructure that does not rely on our cashflows, which we know are not good.  We have a cash deficit so you have to look at other ways of funding it.

We need the infrastructure.  Everyone who drives on the roads in Hobart knows we need investment in infrastructure as well as schools. 

On a separate point, I was a little bit sceptical about what the University of Tasmania is up to.  We all support the need for better educated people in our population generally, and access to a university education is part of that.  It is not the be-all and end-all - vocational training and education are equally important.  But there are times when I think UTAS, particularly recently, has become more of a property developer than an educator.

The Australia-wide university model where fee-paying students are needed for universities' bottom lines, in my view, has seen UTAS's expansion of its interest in Hobart's property market and a subsequent need to house so many students from elsewhere, whether it be international or from the mainland.

It must be having flow-on effects for local residents seeking rental accommodation, as is the so‑called sharing economy; all of this must affect the broader housing market.  I know the Government is trying and we have seen the Minister for Housing recently talking again about these matters, but I noticed the Speaker downstairs recently reminded us quite publicly in the newspapers that we still have a long way to go.

I think most of us know there are challenges in housing across the state, but it seems to be particularly difficult in Hobart.  When large areas in the CBD are being taken up by the university, yes, they are housing their students, but that is then pushing other people out who have relied on some of those areas for accommodation in the past.

The purchase of the K&D Warehouse site for conversion from a commercial property into a mixed‑use property with some accommodation will increase accommodation and is probably a positive in that regard, but taking up some of the other properties previously used for rental accommodation for other Tasmanians has been a real challenge.

Mr Willie - There is another accommodation to be built on the old Red Cross site as well.

Ms Forrest - I am not saying they are not doing the right thing in that, but it has put pressure on and that is what we are hearing.

The issue of housing and the impact on housing is multifactorial but it is not just one thing that has caused this big challenge - population growth, cost-of-living increases, the sharing economy with accommodation-sharing platforms and that sort of thing have also contributed.

Mr Willie - Slack wages growth.

Ms FORREST - And slack wages growth, as the member for Elwick suggests.  If your costs of living are increasing but your wages are stagnant, it is really hard to meet the necessary payments you have to make, including rent.  People are finding it hard to get into the housing market to buy as well.

Adding a further plan to the infrastructure plan, and that includes housing, is important so the project can be built in a more efficient and timely manner rather than just dribbling out amounts out of the current cashflow if and when the Government can afford it.  We need to look at a different way of funding very necessary infrastructure.  The vagaries of the economy will not necessarily work in our favour and we cannot just sit back and wait and hope.

We continue to hear about the advances made by the Government in access to public housing, but the Government's own reported data show this is clearly not true.  The same can be said for access to health services, particularly in mental health care.  I mentioned that in a previous debate.

I am sick and tired, no pun intended, of the constant claims, for as many years as I can remember being here, that we will have a dedicated adolescent mental health unit built soon in Tasmania.  I know beds are being built in Launceston, but we still do not have an operational unit - there are still Tasmanians requiring this care.  We have to make provision for these young people now. 

We also need to fund those beds, not just the physical rooms, but the care, the qualified psychiatrists for adolescents and mental health nurses who can care for those young people.  There has been, and remains, an urgent need for this level of appropriate care.  Child and adult acute mental care has not been adequately provided throughout the state despite pleas from medical staff, patients, families and carers of those with acute mental healthcare needs.  There are still extraordinarily and unacceptably long times that some mental health patients are waiting for admission to emergency departments across the state.

Young people with acute mental health conditions continue to be provided a level of care that does not meet their needs and is not provided in an appropriate setting.  Despite the absolute best efforts and care of the medical and nursing staff, young people need to be cared in clinically appropriate facilities.  That is not happening for young Tasmanians unless you can afford go to the mainland and pay for expensive private care.

The same can be said for access to termination of pregnancy.  It is clear some terminations are being provided in some private settings and possibly other locations in the state.  However, this ongoing secrecy about where and how to access this health care just continues to perpetuate the stigma and shame attached to it.  It is a shame the Government seems to condemn women seeking a legal health service.

Mr President, I just saw in the media that the High Court of Australia has upheld safe access zones around termination of pregnancy clinics in Victoria and Tasmania, so women will be free to access those without fear of being harassed and vilified. 

Waiting times for elective surgery, ambulance response times and issues such as access block continue.  The Government seems to have its head in the sand, saying that its so-called record funding in health is addressing these issues.  Both are wrong and the information on their database clearly shows that.

Mr President, there is much to be done.  It will be interesting to see what funds flow our way from the federal election and the pork-barrelling exercise we are going to see.

There are a few matters I wanted to raise with my electorate.  I do not want to raise too many because the opportunity will come in budget time, when we see what is committed to in the budget. 

One thing is the Burnie Port expansion, which was formally in the Leader's electorate but is now in mine.  I am sure she still has a great interest in that port.  It needs to be focused on in a major way, particularly when Copper Mines of Tasmania in Queenstown becomes operational again.  There is not the capacity to handle ore from that mine as well as ore from the reprocessing of tailings at Hellyer Mine.  What do they do?  Does one cut back production?  There is a real need to make sure we get the Burnie Port expansion complete so we do not have to say, 'Sorry, we cannot ship your product'.

I have spoken about a number of schools at different times in this place.  There has been some great work done over the last term of my time here, such as Smithton High -

Mr Willie - The Smith Family works in Wynyard.

Ms FORREST - Yes, the Smith Family is working in Wynyard High.  Most of the schools have had little bits of work done.  I visited Montello Primary School a few months ago.  The age of the buildings and their set-out is just dreadful.  It was built in the 1960s or maybe the 1950s.  There was a bit of a façade rework during the Building the Education Revolution time, which put in some new toilet blocks.  The other toilet is at the end of a very long corridor, down two or three flights of stairs, in a back corner where there is no other access.  There are two toilet blocks there, absolutely ripe for bullying.  Kids have to go all that way to get there.  Those who have mobility issues have to go around the outside of the building because there is no other access to it.  The ones that were built - and all credit to the intent - were unisex toilets in a small block that was level and near the top entry to the school.  The main road that goes past the school entry faces the toilet block.  You walk into the little corridor to all the unisex toilets.  They are all unisex toilets which is great, so kids just to and fro.  The little corridor has big windows right along the side so any child going to the toilet is in absolute total view from the street, only metres away.  Who was thinking about the design of this when it was built?  Children from kinder up are going to these toilets and anyone standing in the street can watch them.  They cannot see them in the cubicles, but it is hardly the point.  This was not well thought through.

The classroom facilities are really dated and cold.  They and other schools have demountable classrooms that have been there way too long -

Mr Willie - Years.

Ms FORREST - Yes, that is right, they need to have space and while the demountables were meant to be temporary, they are almost a permanent fixture.  That is a school I would really like to see.  I have written to both the Minister for Education and Training and the Minister for Infrastructure to raise their awareness.  It is in his electorate so I am sure the Minister for Education and Training would be interested.  Many schools need work done on them, but this particular one needs attention.

In terms of my electorate's other major road infrastructure matters, a lot of work has been done.  The member for McIntyre talked about the Murchison Highway, where the problem is that the road surface has to be resealed constantly. 

The member was lucky she drove over it after it had been resealed again. These massive potholes are terribly dangerous for motorbikes coming around those windy bends.  It is terrifying.  I have asked a number of questions of the Leader about this and we are still working it through.  It was resealed recently before we went looking at the salmon farms, and I have been back since.  We have not had a really wet period yet to test it again.  Hopefully, they will get it right this time, because it has been like the Illawarra Road, and members know how many times that has been done.

The other area of highway is the Bass Highway, west of Burnie.  Not only west of Wynyard, but out to Marrawah, there are some really dangerous sections.  This section of the highway carries many heavy vehicles and school buses as well as all the other usual traffic.  We keep hearing various commitments from both federal and state governments about prioritising this.  Little bits have been done around Rocky Cape area, but there is still a real need to upgrade some areas of this highway subject to such a high volume of traffic.

The area between Burnie and Wynyard, commonly and affectionately known as the 'Cooee crawl', rivals Hobart traffic for about an hour each morning and afternoon going in one direction.  One direction is okay going against the traffic, but going with the traffic can take an extra half hour to get from Wynyard to Burnie or Cooee.  That is where you have the double lanes at Cooee.

Work has been done there.  The Department of State Growth conducted a good interactive consultation process.  Online, you could click on particular sections of the road, including intersections, and put your particular views on that section of the highway.  It was a good process, and I am looking forward to the outcome.  It is difficult to address because the Cooee crawl section goes right through the residential and then commercial area of Cooee where there are new car yard showrooms.  Widening the road here would require large acquisition of land and potentially some new buildings.

The long-term plan suggested in my contribution to the consultation process is a bypass around the back.  Again, there is the flat bit at the front and a big hill with farmland up the top.  I accept it is not an easy solution without taking too much farmland -

Mr Farrell - Tunnels, maybe?

Ms FORREST - Tunnels, yes.  Talking about tunnels, there is another option to reach the top of Mount Wellington.  You could tunnel in from the base and have a lift to the top.  You do not need a cable car then.  Think about that for an option.  They do that in some places in Switzerland.

Mr Valentine - That was thought about many years ago.

Ms FORREST - Elon Musk might like to do that.  Maybe you should contact Elon Musk and say, 'Here is a bit of a challenge for you - come and have a look at this one.'

Mr Valentine - It is bluestone, that is the only thing.

Ms FORREST - I am sure Elon Musk would love the challenge.

Mr Valentine - I am sure he would.

Ms FORREST - He would have some way of dealing with those challenges, which he would see as only opportunities rather than challenges.

Mr PRESIDENT - In Gibraltar, the roadworks in that rock are amazing.

Ms FORREST - Yes, I know.  Never say never.  There is always someone who wants to prove they can do it.

Mr Valentine - I will touch on that later.

Ms FORREST - Okay, on Elon Musk or the mountain?

Mr Valentine - The tunnels.

Ms FORREST - In terms of dealing with the Hobart traffic, too.  These are key issues.  They are difficult issues, otherwise they would have been dealt with by now, I have absolutely no doubt.  Governments past and present are aware of these issues.

If you have an accident on the Cam River bridge, the whole north-west west of Somerset is cut off.  You have to go a very long way up the Murchison Highway to get across the Cam River.  If there is a crash on the bridge, you cannot even get the ambulance beyond it, if someone needed an ambulance further down.  You could get the local ambulance but you cannot get to the hospital.  I guess you could always get a helicopter in, but you should not have to do that.  It is a road that should be able to be used.

I note the Premier's address.  Those comments I make stand.  We need to be more honest; the Government needs to be more honest and be truthful about what the state of the budget really is.  That would be much more of a point of interest around the budget, which is not that far away.  As the Treasurer said yesterday, they are going to have to cut the cloth to meet their - what are the words?


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