Legislative Council Thursday 25 June, 2020
Ms FORREST (Murchison) - Mr President, I move -
With regard to the COVID-19 pandemic and its impact on Tasmania, the Legislative Council acknowledges: -
(1) The significant economic impact on the State;
(2) The need for a non-partisan, inclusive approach to economic recovery in the State;
(3) The opportunity to re-think how the State budget and economy is managed and prioritised in the future; and
(4) The need to initiate a review of fiscal sustainability, to prioritise future spending and establish a funding plan to manage the State’s finances into the future.
Mr President, I will be more brief with this motion. It is a much more succinct motion. It is my intention, regardless of where we get to with this motion, to conclude the debate around 6.30 p.m even if we have to adjourn the debate until August. Other members may wish to speak on another matter before we finish up -
A member - What would that be?
Ms FORREST - The departure of the member for Rosevears!
I will move on. There is little doubt in my mind that the COVID-19 pandemic has shone a spotlight on all the problems Tasmanians are facing, but the first reality we need to acknowledge is that the pandemic has not caused most of the problems we are facing. The pandemic has simply exacerbated existing problems - problems that have slowly manifested over the years.
The state budget was never fixed, as the Government was forever telling us. The Revised Estimates Report in February this year, before the pandemic was felt, outlined how the General Government cash deficit for this year and the next three years of forward Estimates were estimated to be $1.8 billion. That was the total cash deficits for the four years, $1.8 billion, and that includes all government spending - not just the bits the Treasurer includes in this surplus calculation - but all infrastructure spending and equity contributions that go into government businesses.
Those of us on the Public Accounts Committee have been coming to grips with the problem of the state's long-term fiscal sustainability. There is not one single year beyond next year under any of the four possible scenarios modelled by Treasury through this process where we were not spending more than we were receiving. After the pandemic, it is safe to assume there will be no years in the short-to-medium term which will have cash surpluses. Treasury has pointed out that new sources of revenue were required to meet the needs of the government, whose job as a critical service deliverer at the coalface not only delivers services in areas of past underfunding, as has become manifestly obvious in the health area when the pandemic struck, but also in areas where future needs are growing faster than expected income.
We were going to have to start borrowing probably in 2020-21; that was before the pandemic. Do not get me wrong, I do not mind borrowing money, but all the scenarios have suggested that the interest on the borrowings would have to be borrowed as well, and that is a bit of a problem.
The state is like a household. The federal government is not. We do not have a bank like the federal government's Reserve Bank, which can put money into the federal government's bank account with the click of a mouse. You do not have to go to the printing press. Just click the mouse.
That is the problem we were facing prior to the pandemic. The pandemic has made a big problem a lot worse. Instead of looking at cash deficits of $1.8 billion over four years, the cash deficit for just one year, for the 2020-21 year, is estimated to be $1.7 million. That is all government spending. You may recall the Treasurer said next year's deficit will be $1 billion. That did not include all the infrastructure spending which, paradoxically, is what is going to lead us out of the wilderness. The spending we need to get to the other side is not actually included.
As all of you know, from the Premier's answer to a question on notice on 4 June this year, the Government will be borrowing between $2 billion and $2.5 billion next year. That is what the General Government will need. We are in unchartered waters and we need to understand what is happening.
Tasmanians are relying on us in this Chamber to shine a light into these dark corners. We need to be cognisant of our role, not only to review specific bills that land on our Table but also a much broader purview of government policies and processes. I know I run the risk of labouring the point about the Government's misleading spin on our financial position, but how is it possible to find a way and a path out of the wilderness if you are not clear where you are? There is no point heading south if it is going to take you over a cliff.
The federal government is so preoccupied with its own fiscal position that the problems of the states have been pushed to one side. Federal Treasurer, Josh Frydenberg, has made it clear that states cannot expect the Australian Government to bail them out. Tim Wilson, the Liberal chair of the House of Representatives' economics committee, who led the campaign against the reform of the franking credits system, said the states and territories should have moved much earlier on tax reform. He was reported in The Age on Saturday 20 June as saying -
The states have wasted the last 30 years behaving like petulant teenagers, structuring their spending on windfall gains, assuming it's a sustainable revenue base. They keep blaming Canberra for their fiscal woes but almost all solutions rest with themselves …
It is a sloppy historical analysis of our federal system, quite frankly, but it highlights the points ahead when such a prominent federal Liberal voices such sentiments.
This is why we Tasmanians need to reach a nonpartisan agreement on the path ahead. We will not get a universal agreement about every song in the songbook but we need a consensual approach if we are to progress the interests of Tasmania.
I have alluded to our precarious financial position but that really needs to be seen as just one aspect of an appropriate public policy in this state. For starters, having a place to call home is a fundamental right for everyone. In a civilised society such as ours, there is no excuse not to attend to this need. For those who wish to remind us that we cannot afford it and that money does not grow on trees, please explain where the money does come from and why there is not enough to house everybody. We know that there are record amounts of private debt in the economy. That means there must also be record amounts of cash and deposits out there as well. There are two sides to a balance sheet.
If most people do not get to see much of it, that is because it is pretty unevenly spread. The inequities are growing: wages were slowing before the pandemic, and increased unemployment and underemployment and opting out altogether leading to lower participation rates are features of the latest jobs statistics.
It was always going to happen when the seriousness of COVID-19 became apparent. That is why I was a little flummoxed when one of the earliest assistance measures was to raise the level for instant asset write-off to $150 000. Why would anyone buy new equipment when they are in the midst of losing income at the greatest rate of knots we have seen in our lifetime? Why would they buy new gear when the current stuff is underutilised? Why would they borrow more money when they have lost a heap of customers?
Then came the home build top-up. There is no doubt the building industry is an important contributor to the economy. At a time of increasing demand for social housing due to the prolonged rises in house prices at a much faster rate than real wages, what does the federal government do? It offered $25 000 for people wanting to spend $150 000 on a new kitchen or bathroom upgrade, or some other substantial improvement, or to spend up to $750 000 on a new house. One catch: the time frame is so tight that the only people who will end up qualifying are those who plan to spend the money anyway - people who have jobs and have the necessary bank finance in place.
Is that where we should be directing government assistance? I realise some of the policy matters I have referred to are the responsibility of the federal government, but as with much of the public policy these days, the state government is inevitably involved. The federal government gets involved in the big announcements but is happy to leave the states to sort out the mess. The states are left to deal with the fallout from the imbalances and inequities the federal policies promote.
Just as housing is fundamental to a modern, equitable, just and fair society, so too is access to publicly afforded early education. I do not know whether you saw the recent media reports about gender diversity leading to more productive workplaces. I often say to people when the subject arises, look at the Legislative Council, for instance. There are now a majority of women in this place. We did not get there by accident, the voters chose to put us here. Personally, I think we are more productive than we used to be - voters are not stupid, Mr President.
Ms Rattray - I will reserve my judgment on that, given that my dad was the former member. I will be mindful.
Ms FORREST - Yes, but we are talking about the overall numbers. I will not earbash you about gender issues; I have done a bit of that lately. They concern me, as I think you all know.
Childcare workers are predominantly women, as are those at the margin - requiring child care before going back to work. Yet child care is not about somewhere to park the kids while parents go off to work. Child care is about early education for our most precious asset - our children and grandchildren. The free child care announced in April immediately aimed at helping parents and essential workers who were desperately needed to help the economy working was welcome, but it has been withdrawn before anyone has had a chance to assess efficacy or flaws in the policy. Back to the old dysfunctional, poorly designed system.
The JobKeeper payment is sectioned, and for some unfathomable reason will cease two months before other sectors, predominantly disadvantaging women. Many small regional centres will find it hard to keep operating, with many families who use their services having lost employment or income. The risk of further job losses in this sector is real without consideration of the longer term benefits of public funding. Children from vulnerable households, many in regional areas, will be further disadvantaged, falling further behind if these centres close and no other options exist. I know I am repeating some of this stuff, but it is important. This is the economic impact we are particularly looking at here. We should not be letting the opportunity to overhaul the childcare system slip by. As I said, it should certainly take precedence over providing middle class welfare of $25 000 per family to those in positions to spend $150 000 on a new kitchen or bathroom.
My third area of public policy exacerbated by the pandemic is youth unemployment. The latest employment statistics make very sober reading. There has been a massive fall in the participation rate for teenagers aged from 15 to 19 years. This means many unemployed are not counted as such because they have given up searching because there are no jobs and they have decided to go back to study. Even with the reduced participation rate, youth unemployment is still 20 per cent. Add back all those who have dropped out since the pandemic and the rate is 40 per cent. This is horrifying.
Ms Rattray - Mr President, I am just reading a post from 28 minutes ago that says there is a 47 per cent decrease in job vacancies in Tasmania.
Ms FORREST -Yes, it is frightening. We have to be really cognisant of young people's mental health around this. There is evidence of the increase of self-harm and suicide around such significant economic downturns and we have to be really cognisant of that and watchful of the young people who simply cannot get a job. When I heard a federal member say on the radio that they all should get a job - well, they could not get a job before - I just wanted to bash my head against the wall.
Even with the reduced participation rate, youth unemployment is still 20 per cent; for those who have dropped out since the pandemic, the rate is 40 per cent. We simply cannot turn a blind eye to this at the same time as handing over $25 000 to a few lucky enough to have a kitchen or bathroom renovation ready to roll. It is about priorities.
I will not even bother to mention health. It is no news to anyone with clear eyes who is willing to look at the evidence that we have had an underfunded health system and there is a lot of catching up to do.
There are plenty of challenges and, as I said at the outset, there always have been. The pandemic has made the problems a whole lot bigger and, I would argue, a lot clearer. What can we do? We have to show a willingness to get our own house in order. We have to be willing to set out the problems we face without any finger-pointing as to who may be to blame. We need to reach a consensual Tasmanian view of the changes we need to make to the federal system. We need to review the tired, old process of once a year theatre with the budget and Estimates crammed into a couple of weeks and then largely forgotten for the rest of the year. We need better and more frequent reviews of government budgetary plans and those of significant government businesses. We need a significant government business to report earlier and more regularly and, say, biannual parliamentary scrutiny. We need to monitor and report on fiscal sustainability matters at least once a year, not the currently mandated five-year review, particularly with the challenges we are facing.
We all need to be aware of what is going on. We need to monitor and report Grants Commission crucial findings on the state's needs and performance at least once a year, so we can have a better informed policy discussion. I have mentioned many times in the past that we need a parliamentary budget office, independent of the executive arm, to assist the parliament to understand. We need a well-resourced parliamentary budget office to address the imbalances between the executive and the parliament. I would even suggest that some of the resources currently appropriated to ministers for economic advice and so on could be allocated to this office. The parliament needs that support and advice. None of us is a financial expert in this place as far as I am aware. I am certainly not and I do not believe that anyone else has a finance and economics degree in this place.
There is occasional talk of a snapback or a V-shape recovery. I strongly feel this is wishful thinking at best. For me, the day of reckoning has arrived. The chickens, in fact the whole flock, have come home to roost.
I always thought that we as a state have been constantly deferring important decisions, putting off until tomorrow what we can avoid doing today. We cannot keep putting off things any longer; change is needed.
We also need to look at the assets we have and what we can do more of and do better. We need to look at enhanced evaluation of our locally produced foods and other primary products. We need to invest in and support workers in our healthcare, social assistance and service sectors to ensure economic and social opportunity and value. We need to support and resource innovation that captures the natural values and benefits of the state. In doing this, we must prioritise investment to promote and enhance diversity across all sectors.
If done well, we will see progress in gender equality, but we have to run the gender lens across every decision being made because at the moment we fail comprehensively when we do that.
Many may be aware of the Stepping In program I have been involved with, establishing it in the north west. It was on the front page of The Advocate on Monday this week. It is a great program that was established by a guy in my electorate, Shannon Bakes. I will not tell you the whole story of how he got to this point, but Shannon realised that he perhaps needed to focus on getting women involved in some of these very male-dominated workplaces.
I would like to read from an Advocate article that talked about this program. We established it late last year and early this year had some funding, then COVID-19 happened and we could not progress it at the time. It required on-site visits to Elphinstone and Grange, Savage River mine and places like that, which obviously could not have visitors at the time. The article noted that -
Up to 30 women have applied for 20 positions in a new 'taster' program in South Burnie, aimed at giving them the confidence and skills to apply for roles in the mining, engineering and energy sectors.
Shannon Bakes of labour hire firm Protech Group said he could see a problem looming with workers needed for the big projects starting or under way.
'They're looking for up to 5000 more employees across the North-West Coast like the Marinus (Bass Strait link) and the big windfarms and we've already got gaps in the market.
Let us hope that these jobs do come to fruition. The article goes on -
'There's a real gap in the quality of candidates coming through. You get a lot of the same people applying for and getting jobs even though they're not suitable.
'We realised there was 50 per cent of talent in the other sex, and if we opened up that group we could offer better quality candidates.'
He spoke to me, he says in here, and after other talks with industry groups they decided to put on a course for the women. He goes on -
Mr Bakes said there were young applicants and a group of older women who had finished raising their families and wanted to do something for themselves.
'We've called the course 'Stepping In' because that's what women had to do in World War II when the men went off to fight.
'There are many roles they can have: road workers, confined space watchers, the trades, boilermakers, fitters, electricians. Hydraulics is another big one, given all the wind turbines.'
The women will get real qualifications during the course, including a confined space ticket, a gas detection ticket, working at heights tickets, practise at rescues in harness and entry level welding.
They will tour Elphinstones at Wivenhoe and look at electrical harness building and hydraulics.
'Women are rightfully part of these generational infrastructure projects that are out there,' Mr Bakes said.
I could not agree with him more, so I commend Shannon for his work in progressing that. He is the only man among a number of women who are progressing this. It will take a while for these women to get into the workplaces but this is where we have to start.
We must build on our skills, including advanced manufacturing, engineering and innovative agricultural and land management practices that we have already been leaders of in many areas, particularly on the north-west coast.
We must capture the value of our energy security. There is much to be done, but we must take a considered and inclusive approach. None of the areas I have mentioned are any more important than the others. We need a diversified economy. We need to value the contribution of our health, social assistance and education sectors, and recognise the positive contribution these sectors make to the economy. They do not just take from the economy, they give to the economy - and we need to make sure people see it that way.
I welcome other members' comments on this important motion and I look forward to the Government's response, and hope for a desire of Government, opposition and other members for a nonpartisan response and approach to the economic recovery of the state.