Legislative Council Tuesday 28 May,2019
Mr President, this budget is a disaster.
I’m not saying the government has engineered the debacle.
But they have presided over the growing calamity that Blind Freddie spotted at least a year ago. I guess they hoped for a miracle.
Unfortunately the gods don’t hand out miracles willy nilly.
We got hit with a GST write down instead.
We should have learnt from the GST write downs experienced following the 2007/08 GFC. Gross National Product may slow a bit, but the determinants of the GST pool may slow even more.
In addition, our own State revenues do not always grow according to projections as we have seen with conveyance duties but Government’s past and present have budgeted as though things will only get better.
We have experienced slower wage growth and slowing house prices. Nationally house prices have fallen. The wealth effect which underpins part of consumption has turned negative. All of this contributes to less than expected consumption which underpins the GST pool.
We can’t say all of this is just bad luck. We all know these ups and downs simply need to be factored into any policy settings.
They weren’t.
We are still getting the tired old rhetoric about the government’s surpluses.
For goodness sake Mr President how long do we have to put up with this nonsense.
The Treasurer’s surpluses do not include the effect of the record infrastructure spend. He boasts about the record infrastructure spend but then doesn’t include it in his surplus figure.
To repeat this important fact to ensure we all understand this - these record infrastructure spends are promised every year but they the spending required to make it happen aren’t included in the calculation of the government’s surplus.
How misleading is that?
I acknowledge and note that the Treasurer of course includes all the capital grants in his surplus figure when they are received. That is when the money comes in. BUT when amounts are provided to some of the government businesses such as the irrigation grants that are contributed to Tas Irrigation and the rail grants that go into Tas Rail, this money goes in as equity contributions and hence they don’t have any impact on or reduce the supposed surplus.
To borrow the Prime Minister’s words - How good is that?
Of course some funds go into government businesses as operating grants and these affect do the surplus calculation.
But those which go in as equity contributions don’t. And these account for a significant portion of the grants to government businesses.
Once again, to borrow that phrase from Mr Morrison….. How good is that?
There are also other outlays such as the repayment of the housing debt to the Federal government that are not included in Mr Surplus’ calculation. Further distorting and seeking to hide the reality.
Mr President I think it is important to remind ourselves what the role of the government is.
The government is a service provider. The Government’s job is to provide services to Tasmanians.
To provide these services, it pays operating expenses.
Spending money on operating, that is delivering services, is what is needed to run the joint.
The government also invests in new infrastructure and provides capital for government businesses.
And it also has to pay some financing costs although at this stage we don’t owe much to third parties except for the unfunded superannuation liability.
It is simply misleading to exclude the amounts spent on investing, meaning spending on infrastructure.
We are not running cash surpluses.
This year the Estimated Outcomes shows our overall cash deficit will be $380 million.
Mr President, that’s assuming the EOs are right. Which they rarely are. The situation might end up being worse.
Over the next four years we will run cash deficits totalling $1.2 billion.
Not $567 million of surpluses as Mr Gutwein has tried to tell us.
People in the street are slowly cottoning on. I’ve been asked “The Treasurer has admitted we will have to go into debt……..how come if we’re running surpluses?”
To which I have to say they’re not real surpluses. The Treasurer hasn’t included all his outlays.
People used to think I was the one who didn’t understand. People are slowly realising that it’s not me. It’s the Treasurer who is telling porkies.
As he has done all along with health funding.
In his Budget speech he repeated the line, it’s on page 3 of his speech “the ongoing challenge of the unprecedented increasing demand in our health system demonstrate how a surplus provides the capacity to deal with challenges”
What a load of absolute garbage Mr President. The only reason the Treasurer was able to manufacture a surplus was because he underfunded health in the first place.
He then uses the existence of the surplus to reassure us he can fix the problem he created. I am reminded of the arsonist who joins the Fire Service to help extinguish fires he himself has started.
But it’s worse than that Mr President, because as I have said, there is no surplus.
It’s sophistry at its worst Mr President. A misleading assertion based on a false premise.
Anyone who advances this bogus proposition is preventing the community from coming to terms with the dire situation facing us.
So how is the government going to tackle the problem?
Plan A is always to raid the GBEs.
MAIB will have $50 million removed next year. MAIB profits arise partly from the good management of that organisation but also because of the level of premiums paid by Tasmanian motorists. The MAIB profits are simply taxes by another name.
One cannot be critical of using taxes to help pay for government services.
It’s would have been difficult for TasCorp to hide from the government raiding party seeing as the Secretary of Treasury is also the Chair of Tascorp.
TasCorp was always going to be the source of funds as the government maxed out the internal borrowings and had to find some other pocket to pick.
This government, in fact all governments in the recent past, have looked to borrow internally from accounts with balances, to help pay for the operations of government. Robbing Peter to pay Paul. Or in this government’s case, it’s Peter who is robbing Paul.
After a while, in 2020/21 Paul will be completely destitute. Peter will have pinched the lot by then. So Peter will have to ask TasCorp for a line of credit.
Peter’s got a good working relationship with Tascorp because on June 30th each year Peter gets a loan from Tascorp for an amount equal to everything he has pinched….. I should say borrowed…… from Paul.
So when the financial accounts are made up as at 30th June, all the rightful balances have been restored to all of Pauls bank account, but there’s a borrowing owed to Tascorp.
Next day on 1st July, Peter once again mugs Paul, borrows all his money and repays Tascorp the amount he borrowed just 24 hours earlier.
It saves having to pay interest to Tascorp. Peter only gets charged interest for 1 day.
I am not suggesting this is wrong, it is a practice that has been going on for years, rather I am explaining what happens now – to balance the books at the end of each Financial Year and how this will change in 2020/21.
The time will come sometime in 2020/21 when the funds that will be needed fund spending will be in excess of what can be borrowed internally. The government will have to set up a line of credit with Tascorp.
When the internal borrowings need to repaid so that the funds can be spent as originally intended, the line of credit will be used. Ever heard of getting another credit card to pay off an existing one? I think that is how it will work Mr President. The Treasurer didn’t overwhelm us with too many details at this early stage.
Tascorp fortunately has a lot of money invested at any one time. It borrows more than it needs at any time, so it is never caught short if it has to refinance any loans to government businesses and to smooth and match expected interest received from borrowers to the interest it has to pay to its lenders.
For next year 2019/20 the government has asked Tascorp for a $39.5 million dividend. Initially I was unsure where this would be taken from and needed to be sure the Mersey Hospital account wasn’t about to be raided.
Of course this would be against the law we passed in this place when we received the $730m from the Feds to run the Mersey that is supposed to last 10 years. Some optimists claimed it might last 12 years. After last year’s Estimates I left with the impression it will run out in 9 years.
After closer inspection of TasCorp’s financials I guess from the dividend will be paid from Tascorp’s retained earnings which were $82 m as at last June 30th.
Again, I am not suggesting this is inappropriate but it does nothing to fix our problems and could in fact ultimately create other challenges further down the track.
However, back to the decision to take a dividend, rather than borrowing the money from TasCorp that always has extra cash ready when needed, generally for infrastructure in government businesses. TasCorp would earn interest if it were a loan as the General Government would pay that interest. Receiving it as a dividend means the General Government doesn’t bear the cost, TasCorp does.
This is Peter taking money from Paul to prop up his budget and is the best result for the government in terms of how its bottom line looks.
The Government gets a dividend. Tascorp will have slightly less assets and hence will wear the costs via slightly lower returns.
This way Tascorp will carry the cost rather than the government. Win for Peter!
However, in the context of the Total State Sector it makes no difference. It’s just a question of who bears the costs… the General Government or Tascorp.
Over the FE’s Tascorp will have to pay more dividends. Up till now it hasn’t had to pay the level of dividend required by the other GBEs. When the dividend is paid, TasCorp will pay slightly less by way of income tax equivalents because its profits will be less due to the extra dividends paid to the General Government.
But the extra dividends won’t be enough because a line of credit will be needed from some time in 2020/21.
The story of the Tascorp dividends is simply one of cost shifting to Tascorp. A choice between dividends and loans is just a cost shifting matter. It makes no difference to the state as a whole.
Nor does the shift of Bass Strait Island CSOs to Hydro Tasmania. An immediate cash flow boost to the General Government followed by subsequent lower returns from Hydro Tasmania. There may be sound commercial reasons for the change, but it may well be just another way of getting a short term boost for the General Government.
What is quite extraordinary Mr President is that without special dividends from MAIB and Tascorp in 2019/20, the cupboard would have been completely bare by June next year.
The internal borrowing would have been equal to everything that was supposed to be in that cupboard…. About $930 million Mr President…….
By the way Mr President that’s more missing than when your party left office in 2014. There was only $920 missing in 2014.
It seems we have just done a full circle back to the past when this Government came to power and criticized the management of the hay in the barn by then Premier and Treasurer Ms Giddings, only to do the same themselves now.
This is a matter that is being much more broadly understood and reported on now – making it harder for the Treasurer to hide from the truth.
The media are now also reporting the reality more clearly.
In an article in the Advocate by Anthony Haneveer published late in the day on Budget Day, May 23 he said:
The forecast operating surplus of $57 million, meanwhile, will again be attacked as only having been made possible due to a raid on government business enterprises and state-owned companies.
In 2019-20, the Motor Accident Insurance Board and the Tasmanian Public Finance Corporation will be asked to pay special dividends of $50 million and $39.5 million respectively.
Both are in addition to the standard year-to-year dividends they - and other GBEs - pay.
Likely to be an ongoing cause of friction, meanwhile, is the demand in this Budget for government departments and agencies to find savings.
The Treasurer says the "efficiency dividend" required of the public service will be "modest", representing three quarters of one per cent of its total spending.
However, this totals $450 million in unallocated savings that must be achieved over the next four years, beginning with $50 million in the coming year.
We are entitled to be sceptical that these savings can be achieved without, as Mr Gutwein maintains, impacting on frontline services.
Conversely, not achieving such savings is identified by Treasury as one of the risks to the Budget outcome.
Treasury says "it will require committed action to identify and implement the savings measures".
And that's a big part of the problem - Mr Gutwein says the savings will come from "expenditure such as consultations, travel and advertising, as well as targeted vacancy control and natural employee attrition, without affecting essential services". In other words, jobs will go.
Worse, the Budget only provides for the government's previous public sector wages policy of two per cent pay rises and the Treasurer says any increases above this will also need to be funded through further savings.
Mr President, it is clear this budget has many strong headwinds and no real plan to address them. We simply are not seeing any genuine focus on the revenue side of the budget.
It really is time the Treasurer showed some leadership and called for a non-partisan approach to reviewing of the other side of the budget as the reliance on ill-defined efficiency measures, cost shifting and raiding of Government Businesses and the perennial pushing back of the so-called record infrastructure spending to make ends meet, is unsustainable.
Mr President, the other critical point here is that there is often a significant cost associated with some of the Commonwealth grants we get. This is particularly concerning around election time, particularly the recent Federal election where both parties couldn’t throw enough money at us trying to buy, or they would suggest ‘win’, votes.
This is another area the people are becoming aware of. We saw millions of dollars being promised by all sides of politics from small community organisations desperate for funds to large infrastructure projects. Some promises are actually re-announced funding commitments as we also see in the glossy budget flyers.
Mr President, I think most of us now realise that most Commonwealth grants flow to or via the State government and are taken into consideration when the Commonwealth Grants Commission decides the annual split-up of the GST pool.
Most grants act to reduce the GST to which we would otherwise be entitled and are little more than GST in advance. We know our GST grants are general purpose grants that we, as a state, spend as we wish.
If we get extra specific purpose grant in one year, unless it is fully quarantined, and most grants aren’t as that would undermine the federation and upset of neighbours to the North, it will be clawed back with reduced GST in subsequent years.
Effectively, Mr President, we swap a specific purpose grant for reduced GST in the following three years.
We eventually pay for the gift and reduce the money available to use at our discretion.
A specific grant for a particular project in a particular region inevitably leads to less GST money being spent in the rest of Tasmania. As I mentioned, a free lunch often means a neighbour has to miss a meal or two.
We should demand to be told how each grant will impact on our GST when announced. And this is something both Estimates Committees should pursue next week.
We do know that irrigation grants under the Water for the Future scheme will all be clawed back.
Some grants are only clawed back 50 per cent. These grants include major road and rail funding, for the Midland Highway for instance. So in this case, we end up paying for half the gift.
Other grants are fully quarantined such as grants under the Roads to Recovery scheme which have no impact on our GST relativity.
Full clawback also occurs with major hospital infrastructure grants like the $340 million to assist with the Royal Hobart Hospital (RHH) rebuild and Commonwealth grants for local NW hospitals.
Most of the RHH money was received years ago and has since been repaid with subsequent GST reductions. What this means in reality is that this government is now trying to fund one of the largest infrastructure projects in the state's history from current earnings.
This simply doesn't make sense.
I think we can now see why we will actually need to start borrowing funds to complete the work. What we don’t know is how these borrowings and the interest payments will be met.
We need to be informed by the Treasurer how the ordinary ongoing operations of government, funding health, education, public safety, justice, etc., can be properly funded when such a huge amount is being extracted to pay for an asset with a life of 30-plus years?
This is like trying to pay for a house from three years' earnings. There wouldn't be much left to put food on the table for those three years.
The CGC assessment of the GST split up is how the systems works in a Federation. The system of horizontal fiscal equalisation as it's called, is designed to ensure each State and Territory has the same capacity to provide the same (average) standard of services to its residents.
As Members would know, the system has recently been reviewed at the behest of Western Australia and what we got was a political fix. We face a number of challenges in coming years as a result to this outcome.
Mr President, the budget is effectively a spending plan. A spending plan that is not accompanied with a funding plan. An infrastructure grant from the Australian government is not a funding plan for a long-life asset if it's all going to be clawed back in a few years via reduced GST allocations.
The Treasurer has acknowledged that he will need to borrow and go into debt to manage over coming years.
Records are set to be broken I suspect Mr President. And each year this government will borrow…… either internal borrowings or borrowings from Tascorp…. A total of $1.22 billion over the next 4 years.
It all has to be repaid Mr President.
Take the case of the TRM Fund, There will be $313million in that a/c by the end of the FEs as insurance for the government……. The government is a self-insurer….. it retains money itself.
The government is advised by the State Actuary how much to set aside rather than pay it to an insurance company. By 2013 there’s supposed to be $ 313m in the TRM Fund. But there won’t be any. Not one brass razoo.
Imagine if you guys had done that when you were in government Mr President.
The scorn and ridicule from Mr Gutwein would have been free flowing and very vitriolic.…… and no doubt quite persistent.
Mr Gutwein was quoted in the Mercury’s editorial on the day after the Budget was handed down, as saying surpluses were “an important element of our responsible financial management” — so the government has cash on hand to deal with emergencies; to “sandbag” the economy in uncertain times.
Mr President, once again that is absolute garbage. After 2020/21 there won’t be any cash on hand to deal with emergencies; to sandbag the economy in uncertain times.
Not even to cough up in the event an insurable event occurs. If an insurance company operated like that, a period of respite and reflection at Her Majesty’s pleasure would be a likely outcome for those responsible.
Mr President whilst the infrastructure plan is indeed welcome, the government has a woeful record when it comes to infrastructure spending. In the 5 completed years since it came to office it has spent $508 m less on infrastructure than was budgeted.
The 2018 year is seared in my memory. The infrastructure underspend was $174m….. that’s just for one year. The budget was $610m. Actual as per the final accounts was $436m.
How can we be sure the government won’t cut infrastructure spending as is has done every year since 2014? Especially with demands in other areas, including health, showing no signs of slowing.
I’d bet the bookies would be keen to take bets on the government spending what it says it will on infrastructure.
Mr President you’re a betting man aren’t you? What odds do you want? 10 to 1? 20 to 1? Why not just write your own ticket Mr President? You can have 100 to 1 if you wish. In my view there’s no chance of a payout.
Mr President the only reason there’s a heap of infrastructure ready to be built is because of all the project deferrals that have occurred since 2014.
How will it possible to manage the sudden increase in work? Not just the workers Mr President, but State Growth, the responsible department. It suffered worse than any other department as a result of Mr Gutwein’s cuts after the 2014 election.
Are they ready for the task? I guess Committee B will have to ask the Minister in charge at estimates. But skilled workers are not easy to get in large numbers with other infrastructure building that is taking place. A rapid ramp up would have its own challenges.
Mr President the experience of the RHH rebuild troubles me. Not just because of the project challenges during the build and alleged stuff-ups and delays, many of which found their way into the media. My real and ongoing concerns relate to the future.
Here we have stage 2 of the rebuild almost ready but we are not ready to properly staff and run it and maximise its value.
The rebuild has been in gestation for 10 years and it appears we aren’t ready to operate it fully. I find that very troubling. I’m embarrassed for all Tasmanians.
If infrastructure is meant to grow the economy and a growing economy means more government revenue, how come there is no associated increases in revenue in the budget papers? Is there are lag? Or maybe the government has yet to organise a plan to capture some of the increased value.
If it hasn’t, how is the government supposed to keep borrowing money to fund new infrastructure when the increased returns to government are miniscule ….. they won’t even pay the interest on the borrowings.
All this talk about the pick-up and more recent performance in the Tasmanian economy being led by government policy…. I’m beginning to think it has happened despite government policy.
Correlation is not causation Mr President. Just because two events occur at the same time doesn’t mean one caused the other.
There is no doubt that had the spending in the Labor government’s last budget in May 2013 occurred, then things would have been pretty grim.
But Mr President that is exactly the same prospect we are facing now. The Government may have postponed D Day but that’s all.
Judgment Day still awaits.
When the government took over in 2014 there was $920 million worth of hay missing from the barn. That’s right Mr President $920 million had been internally borrowed from special deposit accounts and other accounts with balances in order to fund the ordinary operations of government.
By June 2020 the internal borrowings, as I have already mentioned, will be $930 million. How can the Treasurer possibly claim to have the State’s budgetary problems under control?
By constant repetition of his bogus surplus claims, that’s why Mr President. Which a lot of people have accepted till now. But for how much longer?
The biggest unknown in the budget is the $450 million cost saving across the budget and FEs that is yet to be found but which is crucial if the government’s bottom line is to be achieved.
It is a little dishonest to characterise this as implying a mere 75 cents for every $100 spend. That’s not the way it works in practice. Change happens at the margin. 95% of spending will occur regardless. The burden of change will fall on the remaining 5%.
The necessary savings won’t be a mere 75 cents per $100. It will be $15 per $100. It’s the vulnerable and those on the margin who will suffer.
To pretend otherwise is nonsense. To pretend the burden can be spread equally is delusional.
This highlights the fate that awaits Tasmanians. It is fine to talk about debt and bottom lines and what they mean. But when change occurs it will occur at the margin. And those at the margin are the very ones who need the most help.
We can talk about spending $700 million on infrastructure in one year. That sort of money would help an awful lot of people on the margin.
Mr President we’re at the crossroads.
In order to get the economy moving the government has decided to tackle all the infrastructure projects that have banked up while it supposedly rescued the economy, only now to decide to proceed with all of those projects and take the budget to a place that we were destined to end up under the previous Labor government.
The place of ongoing deficits.
That’s where we are headed Mr President.
I have no problem with debt Mr President. I simply want to know how the government will service it. The Treasurer says we can easily deal with the level of debt he is proposing? If that’s the case tell us. Set it out for all of us.
Meanwhile all the people on the margin have been largely forgotten.
Mr President, this very real issue and concern was taken up in an article published in the Mercury by Emily Baker on May 25, she reported that
(QUOTE)
New analysis from the Tasmanian Council of Social Service lays bare what chief executive Kym Goodes has described as “the harsh reality of the ‘other’ Tasmania” — one where more and more people are falling behind.
“These numbers tell the clear story of the increased pace of division and inequality in Tasmania,” said Ms Goodes.
“They tell the story of two Tasmanias — one where some of us get to enjoy the benefits of a strong economy and the other where waiting lists, health, training and employment outcomes are getting worse at a rapid rate.”
The figures show the number of Tasmanians accessing energy concessions has risen from 88,430 people in 2013-14 to 92,863 people in 2018-19.
While the number of unemployed has dropped to 17,500 people this financial year, the number of people facing underemployment — meaning they cannot get enough work — has risen to 26,800 Tasmanians from 25,700 five years ago.
Priority public housing applicants are waiting an average 56 weeks for a home, and the public housing wait list has blown out by 1179 people since 2013-14, to 3233 this year.
“As you read these statistics, remember that each number represents a real person, their lives and families,” Ms Goodes said.
“We cannot wait for a ‘better time’ to act on these outcomes — Tasmanians have waited long enough for the ‘right’ economic conditions to permit the Government to prioritise investment in them.
“The fact our Government hasn’t yet found the capacity to invest in our people as well as our economy diminishes every one of us.”
Mr President, in a caring, inclusive and successful State, we must ensure all Tasmanians needs are considered at addressed.
I note in a report released in May this year – so very recently – by the Centre of Full Employment and Equity titled ‘Prosperity and Distress in Australia’s Cities and Regions’, Tasmania has some of the most distressed communities in Australia. The Report uses a methodology proposed by the Economic Innovation Group (EIG, 2017) in the United States, to spatially aggregate data to develop an Index of Prosperity and Distress in Australian localities (PDI).
I encourage all Members to read the report as it reminds us of the need for a non-partisan approach to addressing these issues.
The Report notes (QUOTE)
… it is not only this differentiation between individuals and households, in the relative constraints within which their housing choices are exercised, that is a significant issue in the social and spatial differentiation that is readily discernible across our cities and regions. Rather, it is in addition to the differences in the potential of people to engage in the labour market, influenced by (among other things) the supply of jobs and the ability of people to tap into new opportunities, that become crucial in that social and spatial differentiation.
And further:
The general message from this collection of research is that living in a distressed community or neighbourhood is likely to come with a higher probability of witnessing disadvantages that either compound existing problems and adds a new layer of disadvantage for an individual or family. It is concerns such as these that drives the discussion contained in this report.
The Index of Prosperity and Distress or PDI, is an indicator that rates areas across Australia in terms of their relative economic prosperity and distress based on a range of economic performance factors.
There are seven indicators used to determine the PDI and more detail of these measures can be found in the Report. The measures include:
1. No post school qualification;
2. Change in housing vacancy rate;
3. Adults not working;
4. Poverty rate;
5. Median income ratio;
6. Change in employment; and
7. Change in business establishments.
The report states 20 per cent of communities across the country with the highest PDI score are classified as distressed. Geographically, these communities are present in all states and territories, however in relative terms these communities are greatly overrepresented in South Australia and Tasmania.
Tasmania in particular has nearly double the number of distressed communities compared to the national average.
I think we inherently know this Mr President, but we need policies that address this issue if we are all to benefit in the economic benefit this State, the good economic times the Treasurer keeps reminding us of.
Regional cities in the top 20 most distressed across the country, include Launceston and in the capital cities, Hobart has one community in the top 20 distressed communities.
The Report states:
In Tasmania, the north-eastern suburbs of Launceston are classified as distressed, as is much of the north coast including George Town, Devonport, Ulverstone, the stretch from Burnie to Waratah and Smithton. Many of the sparsely populated areas are also in distress, such as Strahan in the west and St Marys in the east. The highest ranked communities include Gagebrook, Ravenswood and Acton in Burnie.
The Report concludes (QUOTE):
The ongoing lack of real and sustained action, and the apparent acceptance of unequal community outcomes misses the important and often negative impacts that these geographic inequalities have. Time and time again, academics and others have pointed to the link between geography and an individual’s potential.
And further:
Certainly, there seems to be little real action to address issues in the most distressed communities, a situation that may haunt those who are looking for votes, especially in marginal seats.
The clear take home message is that society, and especially the politicians that are elected to govern, need to show more concern when it comes to the large gap between prosperity and distress that has seemed to have become a settled pattern across our local communities, or be willing to live with the consequences.
It should be clear that while local communities and their residents can, and often do, provide the impetus for positive social and economic change, a key priority for government should be to establish genuine bi-partisan responses that challenges policy approaches from the past, questions the inevitability of uneven community outcomes and engages the best and brightest thinkers to provide stewardship for the way forward.
Mr President, I am not sure how many times we need to hear this before we actually respond in a non-partisan manner.
Many Tasmanians are not being provided with the services or opportunities they need and deserve.
Shelter must be at the top of the list.
Access to safe affordable housing is at crisis point and with winter upon us, and very little achieved over the last 5 years to relieve this very real issue, our fellow Tasmanians will really suffer.
Access to safe, affordable and secure housing is a fundamental need and right. Without this much of the effort and money poured into education, health, child safety, public safety and justice to name a few will not hit the mark.
We must focus on housing as a key issue.
Mr President I recently shared my vision for this beautiful State.
My vision sees a Tasmania that is inclusive, safe, productive and vibrant where all Tasmanians are prosperous across happiness, wellbeing and financial measures.
A State where we value, protect and respect our natural environment for current and future generations and care for our land, sea and air as we share in and benefit from these precious assets.
All Tasmanians must be able to share in the benefits that living in this state provides, and access to safe, secure, affordable housing is critical and must be a focus of this Government.
We must value education as the key to success, however in the absence of safe, secure, affordable housing access to education cannot be assured.
We need to focus on the elimination of poverty through job creation and a productive community with equity of access to quality food and water. We need policies that support local businesses and foster community cohesion.
We need a vision that is shared across the political landscape with a much greater tolerance and respect for different opinions than is currently exhibited.
We shouldn't be pitting Tasmanians against each other, as was seen on the recent Federal election.
We need all sectors of our community to work together to create the best place in Australia to live, work and play if we are to deliver on a shared vision.
Mr President, perhaps we could look to our neighbour to the East.
New Zealand Prime Minister Jacinda Ardern is moving away from more traditional bottom-line measures like productivity and economic growth to setting its priorities in the budget to focus on goals like community and cultural connection and equity in well-being across generations.
Ms. Ardern’s budget focusses unashamedly on matters related to equity, inclusion and community well-being. In her policy settings, all new spending must advance one of five government priorities:
• improving mental health,
• reducing child poverty,
• addressing the inequalities faced by indigenous Maori and Pacific islands people,
• thriving in a digital age, and
• transitioning to a low-emission, sustainable economy.
Mr President, I am not suggesting we can just pick up this policy approach and adopt it as is, any more than we can directly replicate Finland’s ‘Housing First’ or education policies but the principles are the same.
However, the policy principles are the same. We should be looking at policy settings that give effect to the vision we have for this State.
I am not sure this Government had clarity of vision and even if they do, it is not clearly linked to budget policy and priorities in any tangible way.
Of course this doesn’t mean we don’t invest in infrastructure, rather it means the infrastructure we invest in must demonstrably create community well-being and benefit.
Creating jobs is crucial as having a job is fundamental to enhancing an individual’s self esteem, self worth and capacity to fully participate in our society. This needs to be employment opportunities that facilitate inclusion.
Our high rates of under-employment and low rates of participation need to be addressed. We need to ensure our people are job ready with the necessary skills and training to achieve this.
The catch cry of ‘jobs, jobs, jobs’ needs to flow through to providing broader community benefit beyond those who are employed.
Taking such a policy and budget priority approach requires strategic planning and not a scatter-gun approach. It is needed to break down silos and requires all government policy decisions to consider how any proposed spending will address key areas of priority.
Mr President the need for a new approach has also been called for by those working in the Community sector. I am sure the Member for Nelson will have more to say on this when she speaks having extensive experience in this area.
Mr President we’re in the middle of an inquiry into HFE so I don’t want to pre-empt and conclusions. But there was a table presented in the budget papers, based on Commonwealth Grants Commission data that we are only raising 90% of the revenue that the CGC assesses we should be raising. That is a matter we need to seriously think about.
If the $450 million in savings are found across the FEs, I’d like to know will that mean that we will be spending even less that the CGC has assessed we need to spend in order to provide services comparable with other States. If that’s the case I’m sure the people of Tasmania would be interested to learn that fact.
I know the government is proud of a tax system that is says is competitive. But are people going to come to Tassie just because we tax less than we should…… after all most people don’t pay state tax anyway…….
Or are people going to be dissuaded from moving here because we don’t raise enough and our services are sub-standard.
Talking about sub-standard services brings me to the question of health.
How long do we have to put up with the misleading spin from the government about record spending when year after year the government serves up a budget proposing to spend less than the actual spending in the year just completed or in this case, nearly completed given the budget is handed down in May?
It always compares this year’s budget with the hopelessly inadequate figure in last year’s budget that in every case needed additional funds predominantly through the now annual Supplementary Appropriations Bill.
Mr President, I think the general public now also fully appreciate that the only meaningful comparison is with actual spending.
The people are now awake to the fact that every year of this Government, the budget increase has been less than that spent the year before or only has a small increase that simply doesn’t keep up with health and general inflation.
The people know that in that regard health spending won’t be nearly enough even though it may well be more than what was budgeted the year before.
The government maintains it is spending a higher proportion of its budget on health. Next year it will be 31%. In isolation that is a meaningless statistic. Maybe the government sector should be larger?
After all the government is a service provider, we have a growing population with growing needs and health needs (in $ terms) that grow faster than the economy in general.
Without considering all the other factors…… an increased proportion of budget spending on health is not necessarily evidence of the government’s priorities….
It could be evidence that the government is not growing its budget as it should in a growing economy crying out for more services….. in a climate where they couldn’t restrain health spending any further for fear of a revolt.
Mr President, the Treasurer seems to be unaware of his predicament if his rhetoric is anything to go by. He has even titles this budget “Maintaining the Momentum – Investing for Growth”.
The momentum is downwards – we continue to spend more than we receive and unless some serious corrective actions are taken this will continue.
Back to health, the members who were able to attend the Auditor General's briefing would have had a chance to look at his report. His latest report into the performance of Tasmania's four major hospitals and delivery of emergency department services is damning.
I want to read some of this report even though this information has been repeated by a number of reviews over the years. I encourage members and I am sure everyone will read the full report. In part of the findings and recommendations section, it said:
Agency and hospital staff consistently referred to the impacts of recent governments …in the sector as a factor, but also to the absence of effective leadership and accountability as major impediments in tackling long standing culture barriers for change, and the dysfunctional silo mentality within hospitals contributing to bed block and ineffective discharge planning and bed management.
These significant culture challenges were similarly noted in 2014 by the Australian Grants Commission on delivery of health services in Tasmania, which reported it had observed a deeply ingrained culture of resistance to change, evidence by systems inertia in the face of several reviews recommending reform.
The 2017 Clinical Utilisation Study by the Tasmanian Health Service - THS - of 1013 hospital admissions confirms significant scope exists across Tasmanian hospitals to free up existing bed capacity by improving bed management, including admission, patient management and discharge practices.
The THS estimates improvements to these practices alone could create an additional 3000 bed days per year. That is only a small section of it.
In his conclusion he says -
It is my conclusion that the Australian health system is not working effectively to meet the growing demand for ED care, inpatient beds and its associated performance obligations for easy access and patient flow within the THS service plan.
This is partly due to capacity constraints, particularly at the Royal Hobart Hospital, which is undergoing extensive redevelopment works, but also because of long-standing cultural and process weaknesses within hospitals are impeding effective discharge planning, bed management and co-ordination between ED and inpatient areas.
These challenges have heightened the risks for patients and staff and preventing the Emergency Departments of Tasmania's four major hospitals from operating efficiently and effectively.
He also covers the outcomes for patients once they arrive in the emergency departments, and the adverse outcomes have increased enormously. We cannot allow this to continue. The reports have been done - this one, and many others before. The Auditor-General mentioned that the 2014 report had 52 recommendations, and most of them have not been implemented. I am not sure if this minister is up for it, or whether we need to see a change- someone who is willing to take it on and do it. He has been there since 2014 when that report was done, and most of the 52 recommendations have not been implemented. No wonder he did not want to give us the KPMG report.
There is a real problem in our health service. The minister knows that. The Government knows that. It is going to take some real leadership to deal with it. On the matter of investing for growth - the title of the Treasurer's Budget - unless we can capture some of the value of this investment to enable us to have money available to fund the services the people of Tasmania need, this means nothing more than a continuation of the downhill momentum. It is especially the case for those who are not sharing the benefits of our recent and currently ongoing economic growth and activity.
I hope the Treasurer will be a little more honest and accepting of the reality that the state is facing. While he seems content to avoid full acknowledgement of our reality, it is almost impossible for him to take the first step on the road to recovery.
I conclude with a few specific matters related to the Budget I am personally not able to follow up during Estimates next week because they fall under the purview of Committee B. Can the Leader answer these questions in her reply?
I note the provision for access to parliamentary drafters outside the Office of the Parliamentary Council for the members. I commend the Government on providing that. I note it is under the output group under Parliamentary Library, which Committee B will be looking at. There is no specific detail about the amount of money for that or how it is going to be accessed. I am sure more detail will follow. There is an opportunity for Committee B to follow that one up. It will make a big difference to the members of this parliament who are not in the Government. I thank the Government for taking that seriously.
The Ombudsman's Office, another area covered by Committee B, is getting two more right to information officers. There is a huge backlog in RTI requests. They even deal with parliamentary committee requests, which is completely inappropriate. However, the Health Complaints Commissioner has an even greater need. An inquiry is going on in the Ombudsman's Office, but Committee B needs to get a good understanding of what pressures the Ombudsman's Office is under, particularly in the health complaints area.
We were told by our health community - this is on the record in our second interim report - about the shortfall of staffing in the Ombudsman's Office, particularly in the health area.
It is good to have two more RTI officers to say, 'No, you cannot have the information', or maybe, 'Yes, you can'. However, what about people with genuine health complaints and other complaints about access to services?
That is where there is a real backlog and as much need as much as there is for RTI officers.
I am pleased to see the Government's ongoing commitment to Project O, in the north-west, our Big Heart initiative from some years ago. This has been rolled out from Wynyard to Smithton. It is also on the mainland, and it is making a real difference in the lives of young women who have exposure or experience of family violence. It provides a strategic focus for those young women, it has measurable outcomes in terms of community and individual wellbeing, and I commend the Government continuing that as part of its family violence policy framework.
The Leader spoke about the Burnie Port expansion. That needs to be looked at further as to what is actually proposed. Both federal parties during the election made significant commitments to the expansion and upgrade of that port. It would be good if one of the members on Committee B would take that up and get more detail on that.
One school that is not on the list for work is the Montello Primary School.
This school is a disgrace. Not the people in it, the physical infrastructure. It was built in the 1950s. It had a little facelift during the BER or one other round of funding. It is not a contemporary learning space. It is the most unsuitable learning space. Back in the 1950s, it was probably all right.
The new toilets are so inappropriately located it is breathtaking. You walk into the new toilet block and into a little corridor with separate unisex cubicles on the left. On the right is a big window along the front so you are out of the weather.
The window is right on the main road, where everyone walks up and down to the school's main entrance. How could that have happened? I asked if it was built around the wrong way. If the windows and cubicles were on the opposite side, it would have looked over a play area where teachers are supervising.
Did the builders not think it was a bit odd with people walking past only 20 metres away?
Ms Rattray - I suggest that in the BER funding there was a fair bit of haste. Perhaps because it was not thoroughly thought through, this was the result.
Ms FORREST - This is the new part of the school, the best bit, the facelift. The old school has two long corridors with classrooms off the side. The other toilets are at the end of this long corridor down two flights of concrete stairs. They are at least as archaic as the old Ulverstone High School ones when I went there. There is changeroom that is not used. It is a bully's haven. Any child with a mobility issue has to go around the outside of the school in the rain and wind and then in the door from where you can access it from outside.
A teacher who worked there for a short while contacted me. She had injured her knee and she could not get to most parts of the school. There are stairs everywhere. It needs bulldozing and building on the flat oval below. You can then create a lovely playing space up on the hill. I have raised this with the minister. It is in his electorate. I am sure he is keen to talk to me more about.
Penguin primary school and high school has had millions of dollars spent on it already and it is getting a bit more. That is fine, but what about Montello? What about some of the schools that have not had any money spent on them? I am sure we all have them in our electorates. I am not complaining about the other schools in my electorate. There are some that need some work, but this one is in a low socio-economic area.
It is an area where kids need a reason to come to school. We need to give them an environment that encourages them to be there. The staff do a fabulous job in really difficult conditions but we are not going to get some of these tough families to engage with this school while it is in this condition. That is my whinge about Montello Primary School.
The other thing that bothered me was the withdrawal of the public bus from Strahan to Hobart. There were not a lot of people on it but as tourism increases and we have a resurgence in art-based tourism in Queenstown through Raymond Arnold's LARQ Gallery, the Q Bank Gallery built by Stephen Brockway and his partner. They have an artist-in-residence all the time. These artists often are not very wealthy and they rely on public transport to get to Queenstown.
They cannot afford to fly to Strahan then get a lift to Queenstown; they relied on that bus.
The Government needs to look at a more flexible arrangement. There are public transport tourism operators down in Strahan and Queenstown. We need to look at different models. Just because it might not fit the Metro model or something like that does not mean you say it is all too hard. You look at other ways to increase access to that community.
Mr Valentine - Unless you want your towns to become ghost towns.
Ms FORREST - Yes, but they are not. A lot of properties in Queenstown have been bought and are being done up; it is fantastic.
Mr Valentine - Yes, I am just saying if you do not provide the transport, people move out.
Ms FORREST - That is right. Many people coming to these artists-in-residence are international or from the mainland; they do not all have the capacity to hire a car. For some of them you would think it is not best to drive on that road from Hobart to Queenstown. It is not the easiest drive. They are much happier to use public transport. I am very disappointed it has been taken away. The only option now, if you are going to use a bus, is to bus from Hobart up to Burnie, stay overnight, and then travel from Burnie down to Queenstown - two days to get from Hobart to Queenstown. I know it is a long way - I travel it all the time - but that is ridiculous. I would like the Government to have a better look at that.
The Leader spoke about the rail trail funding. We are waiting for that funding from the state for the erosion management on Ocean Vista because the bike trail cannot go ahead until it is fixed. I do not think that is in the Budget, not according to what you said. That is another matter for Committee B if it is able to follow that up on the Ocean Vista erosion for the rail trail to go ahead. That is what I have been told: that it cannot proceed until that is fixed. Obviously, you do not want cyclists falling into Bass Strait.
Mrs Hiscutt - I did not say either way, honourable member.
Ms FORREST - You said there was the funding for the other end, not for that end.
Mrs Hiscutt - Yes, I did not say either way about what you are discussing.
Ms FORREST - I am just asking you if you could find out if it is there as it was not apparent to me.
I thank the Leader for facilitating a briefing with State Growth yesterday on the Cooee to Wynyard road, the old 'Cooee crawl', as it is affectionately known. There is a number of pinch points along that section. It does get very congested for a short period in the morning and at night. You just hope you are going the right way. When I am going into Burnie in the morning, that is the wrong way; if I am coming from Burnie to Wynyard in the afternoon, that is the wrong way. It just gets so congested and backed up.
A bit of work could be done immediately, such as synchronising the traffic lights to improve the flow and putting in a set of traffic lights at the Cam River bridge to prevent the rat run, as they call it. I do not know if anyone knows what a rat run is - it is where you go around the back streets to come in at another entry, which moves the congestion and the problem. It does reduce people taking a risk pulling out into the smallest of gaps hoping for the best at the Cam River turnoff to the
Murchison Highway.
There was some funding announced for the Cam River bridge by the federal Liberal government so it will be interesting to know when and how that is going to flow to give effect to some of these changes. There is also funding for the Bass Highway west of Wynyard to Marrawah. There is a significant amount of money being committed to that and that money is quarantined. There is a big bucket of money and every state has its little bit of a dib into it so it is quarantined.
In closing, I am looking forward to getting more detail on where we are headed next week in budget Estimates. I reiterate: it is clear this Budget has many strong headwinds and no real plan to address them. Steady as you go is not good enough, and I have heard that a few times. We simply are not seeing any genuine focus on the revenue side of the Budget and no clear plan for or indication of how the Government will repay borrowings and interest payments of the inevitable debt we will be taking on. Clearly we cannot rely on a major surge in the national economy as housing prices in Victoria and New South Wales are having an impact there and forcing at least the Victorian government to look at the revenue side of its budget to deal with its $500 million write-down in stamp duty revenues and a $200 million fall in GST revenues. The Andrews Government says it is going to look at the revenue side. We need to as well.
We also cannot expect the Commonwealth to continue to bail us out if we are not doing our bit to raise our own source revenues, as the Victorians said they are already having to look at. We already have a 62 per cent reliance on the Commonwealth for our revenue. It really is time the Treasurer showed some leadership and called for a nonpartisan approach to reviewing the revenue side of the Budget as the reliance on ill-defined efficiency measures, cost-shifting and raiding of government businesses, backed up by the perennial pushing out of the so-called record infrastructure spending to make ends meet, is unsustainable.
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