Legislative Council, Thursday 5 May 2022

Ms FORREST (Murchison) - Mr President, unfortunately I have been unable to deliver my response to the Premier's state of the state Address until now.  What I have to say is still very relevant but this also gives me the opportunity and the chance to wish the two members of this Chamber who are facing an election in two days time all the very best with that election. 

I know it is a stressful time.  It is good for democracy to have elections but it does not take away a fairly serious level of stress from members who are doing their work in this place as well as trying to engage with their communities and encourage their support.  I wish them all the best and we will probably see you back here in no time at all.  We will hardly notice anyone is missing.

It will also be good to welcome another member from Huon because it is one fewer member we have had for some now.  It is not good for the people of Huon to not have that voice in this place so we look forward to welcoming a new member there and probably losing my seat partner again to another new member.

Mr President, I thank the Leader for keeping this debate open to allow me to emerge from COVID‑19, enforced into splendid isolation that prevented my attendance here for the last sitting week.  I was fortunate to have an experience of COVID-19 that was almost entirely symptom-free and that added to the frustration of not being able to attend parliament but I absolutely appreciate the reasons of why that is.

Since I prepared many of my comments in response to the now former Premier's state of the state, clearly a lot has changed.  We now have a new premier, and I wish the Premier well and will continue to work with him on matters of importance to our region and our State.

A Federal election has finally been called, along with all the palaver that goes with that and having marginal seats in Tasmania will mean we get a lot of attention.  An extraordinary number of promises, some of which seem to not be delivered in a timely manner, if at all.

To my response, which as I said remains relevant now, despite these changes.

When I reflected on the former premier's state of the state Address, I detected a change of approach.  For the past few years, on such occasions, we have been treated to a trumpet solo from the premier, with a tune telling us how he had managed to fix the problems left by his predecessors and that budget surpluses were just around the corner.

Not this time, there was lots of talk about all the money being spent, but nothing about how he had successfully discharged the duties as saviour by fixing our budget problems.

Also missing was any hint that every year henceforth, the Government would be spending more than it is receiving.  As a consequence there is no plan.  No discussion even as to how we will address this problem, the problem that has clearly been laid out in the last three Fiscal Sustainability Reports.

It reminds me of the climate change discussion.  For years we have been told by experts we have a climate change problem and it will be dire consequences for the future, but we have done little or nothing about it.  In Tasmania, you could say we are lucky because we have such a heavy level of renewable energy, but we heard today in our briefing, we cannot rest on that.

As recently as a couple of months ago, the Prime Minister was telling Mike Cannon‑Brookes not to be too hasty in closing down AGL's coal‑fired power stations because there was still money to be made from coal.  There is still life in those old coal fires power stations.  It would be a pity to see them wasted, was basically what he was saying.  You always ignore the cost of doing nothing.  There is always a cost of doing nothing.

A few months ago, we in this Chamber had a chance to claw back some of the dollars from the pokie industry, still leaving them with super profits, instead of super, duper profits, but we passed up an opportunity to give government coffers a much‑needed boost.  A boost certainly needed more than a major player in the industry.

So, how are we going to raise more revenue?  Or we just keep borrowing more every year as the Fiscal Sustainability Report outlines will happen under every imaginable scenario ‑ the favourable as well as the quite dire scenarios.

Some might suggest the left‑field, like the high expenditure and low revenue scenario, but all the scenarios.  Under every modelled scenario there were cash deficits in every year.  She'll be right mate.  Something will come along, as with the federal government approach.  Just like some magic undiscovered technology that will solve the climate crisis.

Something will come along to fix our budget, so we do not have to worry too much about effectively handing out money to Federal Hotels, who just posted their biggest ever profit.  Do they really need that big benefit we delivered to them in this place?  This was boosted by the federal government's $40 million bonus paid through JobKeeper, which they obviously did not need, if a record profit is anything to go by.

Here in this state, we decided instead of clawing back $30 million each year from the pokie industry, we simply borrow another $30 million a year for the next 20 years.  That is what it means.

Call me cynical if you like, and it is actually what we agreed to in this place, despite some of our best efforts.  What we agreed to has resulted in us, the state effectively having to borrow more so the pokie industry can receive their hand‑out.

I regret having to raise this again, quite frankly, but we do need to see these matters in their proper context and that is what the state of the state discussion is supposed to be about.  It is a little pointless to talk about the state issues when there are far broader issues at play.

Whilst we have record low unemployment figures, there is not much else actually going right.  One only has to read the papers, listen to the news, to understand how many ordinary Tasmanians, those who have been able to afford life's essentials with a little left over for the occasional discretionary holiday, night out, or other little luxury, no longer are able to afford this.

We are seeing our health services facing enormous pressures and some of the worst health outcomes in the country.  This includes statistics on the Australian Institute Health and Welfare datasets available on their website and also reflected on the Department of Health's own dashboard.  That is the reality.  I know the Minister for Health openly acknowledged more needs to be done and it does.  We are a service deliverer after all, but we are not meeting the health needs of fellow Tasmanians.  For example, the average - I checked these figures on the dashboard, these are the most recent of figures, I did not go back in the last little while - the average number of days waited beyond the clinically recommended time for surgery over the last 12 months to the end of February 2022 for category 1 or urgent cases requiring surgery within 30 days is between 83 and 121 days.

I will repeat, this is the category 1, most urgent cases that are expected to be operated on within 30 days, the average wait is between 83 and 121 days for category 1.  As this number excludes days awaited prior to the patient becoming overdue, this only counts once they become overdue after the 30 days.  This means the average number of days these patients have waited for urgent surgery since the decision for urgent surgery was made is 113 to 151 days or 16 to 21 weeks or approximately four to five months.  For elective surgery that was supposed to be held within a month.

Category 2 is 211 to 236 days, or, more accurately, these people have waited 301 to 326 days from when the decision for surgery was made.  That is 43 to 46 weeks or about 10 to 11 months.  When the clinically recommended time is three months.

Category 3 is 229 to 281 days average wait or 594 to 648 days from the decision from when the need for surgery was made.  That is 19 to 21 months after a clinically recommended time of 12 months.  It is not going well.  People are out there in pain, in discomfort becoming more unwell and potentially suffering other health problems as a result of these extraordinary waits.  Tasmania is not unique in this, but we are focusing on how do we fix our problems in Tasmania.  Where do we find the money to do that?  As a service deliverer we need to pay for these services.

The data tells us less than 60 per cent of patients admitted for elective surgery including urgent elective surgery were admitted within the clinically recommended time frames.  Less than 60 per cent of patients were discharged from emergency departments within the recommended times.  I could go on but you get the picture.  The data is there on the Department of Health data web dashboard. 

If we look at education, and just one measure, and we acknowledge this is an assessment at a point in time within a challenging period, our NAPLAN results continue to show a concerning downward trend.  This is not something we can assume is solely related to the impacts of COVID-19.  We are not making the gains we would hope to make. 

I could continue in this vein, but at this point I wish to return my comments related to the other real issues not addressed in the Premier's state of the state address.  That is, how are we to address the elephant in the room that is the fiscal sustainability of this state?  The reality that we will be spending more than our revenues in the foreseeable future.

For a while we were all scared into believing a debt and deficit disaster was about to strike us and then it all went quiet around the time of the pandemic.  What happened?  We occasionally hear references of a need for budget repair, but what does this actually mean and how will it affect us?  The reality is it is not just the federal government that has been running deficits.  Were all states to present their budget outcomes in the same format as the federal government, then all states will be running cash deficits with the possible exception of Western Australia.  We will not go too much there because the reason for that is a matter for another day.  As I say ad nauseum, when our state government boasts about budget surpluses, you can guarantee it refers to the narrow profit figure, not an overall cash surplus, and includes all government outlays, including infrastructure spending and capital contributions into government businesses.

If you include all outlays, as the federal government does, then all governments are running deficits, as I said, with the possible exception of Western Australia due to the extraordinary GST deal it managed to negotiate when the Prime Minister, Mr Morrison, was Treasurer and he wished to shore up his support for the government in the west. 

The situation is collectively governments are running deficits, which means the private sector are running surpluses.  Budget repair means governments running surpluses, and that implies the private sector will have to run deficits.  That in turn means the private sector borrowing more, or at least spending more of what they already have, back into the real economy.

Why do they not do this?  Because they cannot be sure they will get an adequate return.  Why not?  Because we cannot be sure people will buy the extra production.  And why is that?  Over the past 30 years, the share of the national pie going into capital and profits has doubled.  The share of wages has fallen, and wages are not keeping up with inflation.  I wrote this before the latest inflation figure.  Capital profits are dragging returns out of the real economy.  The profits are not being reinvested back into the economy, because capital owners are not sure they will get a return.  It is much easier to make money speculating in second hand assets - land, buildings and shares - and banks are willing to help because it is a much less risky way for them to make money.

Mr President, it is not actually budget repair we need.  We need a more balanced economy where the decline in the wages share of the national pie is reversed; where investment in the real economy takes preference over speculation in real estate and financial assets.  Once we rebalance our economy, we can address the matter of government debt.  I am talking here about government debt as a whole, not just Tasmania's debt.  It has been quite staggering to see the increase in government debt around Australia.  By that, I mean the gross debt issued by the federal government and the debt issued by the states, which in our case is issued by Tascorp.

Almost all the new debt, issued since COVID-19 began two years ago, is owned by our Reserve Bank, the RBA, which means, whilst gross debt may have increased, our net debt has not - because as a nation, we owe the extra debt to ourselves.  I had a quick check of the RBA website a little while back and at the end of February 2022, the RBA owned a staggering $356 billion of government debt.  That is billions, Mr President - $356 billion.  This is debt issued by the federal and state governments which is now owned by the RBA.  Of that, $288 billion was Australian government debt.  A further $68 billion was state government debt.  The gross debt of the Australian government as at February 2022, was $858 billion according to the Australian Office of Financial Management, part of Treasury in Canberra.

In other words, one third of the Australian government's gross debt is owed to its wholly owned bank, the RBA.  One third of the federal debt is owed to itself - the Australian government.  That is why there is less talk about debt and deficit disasters.  The extra debt is owed to ourselves, and one would ask how is that going to burden future generations?  So what is the problem?  Debt is usually rolled over, or in other words, replaced with new debt.  If the Australian government ever pays back the debt owing to the RBA - say, when the debt ‑ the RBA would turn around and pay it back to the government as a dividend.  That is how it works.  In one pocket, out into the other, and 

It will be a cash neutral exercise.  So I ask again, what is the problem?  There is one reason the problem of government debt has faded from public discussion, except perhaps for maybe the United Australia Party.  It is because it is not a problem.  However, nobody will try and help ordinary punters understand this; probably because most who do understand prefer to keep the rest in the dark.  

The situation is slightly different with the state's debt of $68 billion owned by the RBA.  Of that amount, $923 million is Tascorp's debt, as at the end of February this year.  At June 2021, the Tasmanian government owed Tascorp $1.7 billion.  The revised Estimates reports suggest a further $1 billion will be borrowed during 2021- 22, making a total of $2.7 billion owed to Tascorp by June 2022. 

Hence, an amount equivalent to one third of the Tasmanian government's debt will be owned by the RBA by the end of 2022.  That is one third of our debt owned by the RBA.  It seems such an eminently sensible way to finance the state government.  It is not a criticism; it is a comment.  This is not an unreasonable thing to be doing - after all, the RBA sets the interest rates, and they can give you the best deal in town, and they have been. 

Let us not forget, that when COVID-19 first struck, the RBA immediately made available $190 billion via a term loan facility for the major banks to use at an interest rate that was a low 0.1 per cent, that is one tenth of 1 per cent.  Personally, I think they should have made the same facility available for the states.  Does anyone seriously believe the debt owed by the states to the RBA will all be repaid?  I do not.

Mr Willie - I do not think we repaid the debt after the wars.

Ms FORREST - No; and we all remember that Commonwealth Housing Debt which was eventually forgiven, with strings attached.  If our debt with the RBA, if it is not rolled over and replaced with new debt, it will be repaid by the states to the RBA, then paid by the RBA to the federal government as a dividend, and then paid back to the states as part of the federal-state grant arrangement. 

Round it goes.  A painless transaction for all concerned, so what is the problem?  The pandemic has demonstrated how we found money from nowhere to help us through the crisis.  It shows the possibilities of the federation.  All states, with the possible exception of Western Australia, will be adding to their pile of debt each year for the foreseeable future.  For the debt ever to be repaid by the states, it will require states to run cash surpluses.

Mr Valentine - Western Australia had their turn many years ago did they not, when they were in debt.

Ms FORREST - Yes, but now the reasons are different, with the distribution of the GST.  Again, for the debt ever to be repaid by the states it will require the states - Tasmania being one of them - to run cash surpluses.  That is the only way we could repay the debt.  That would inflict enormous pain, especially seeing state governments are already failing to deliver services that people need, as I described in my comments on the Health Dashboard. 

We need a new way.  The last few years have seen a large increase in money flowing from the federal government via grants to communities, more often than not in ways that are effectively to buy votes in a particular electorate.

The current federal election makes this extremely obvious.  Through this process, state governments are being bypassed.  One way to discourage such shameless pork barrelling is for the grants to be taken into account via the GST process, to effectively remove the pork from being quarantined for GST purposes, and bring back some much-needed accountability into the process. 

Mr Willie (Elwick) - This is what happened with our hospitals.  It wasn't quarantined.  It was just an upfront payment.

Ms FORREST (Murchison) - Yes.  It was not quarantined so it was all paid back.  All Tasmanians paid that by clawback GST.  I believe, and so I think does the Government; or at least the former premier and treasurer did, I have not had a chance to interrogate the new Treasurer - that the old system of horizontal fiscal equalisation - which Committee A had a good look at a couple of years ago - is a fair system, one we should be trying to strengthen at every opportunity.  Treasury has released some very good discussion papers on this and I have spoken about some of those in this place.  The Treasury officials have not changed even if the minister has and believe the Government would still hold that same position. 

If we are looking at the proposition that we consider how we treat these big lumps of pork that arrive in many of our electorates.  If in my electorate of Braddon, which is the area that it merges and sits within, receives a large amount of pork when one of the major parties is trying to win the seat at the election, then Tasmania's GST share will be directly impacted.  Does that make it fair for the rest of you?  You see?  I might start whinging but the principle is what I am talking about here - the absolute principle.

If state governments were to have a meaningful role to look after everyone in their state they should insist that the federal government scales back its pork barrelling and instead allows state governments to decide what is best for their state, rather than allowing public policy to be determined by the career ambitions of some party hack, which is essentially what is happening in the federal election.

We need to reflect on the sober reality we will be spending more as a state than we are receiving.  I have banged on about this for many years, but we continue to do that and we just seem to ignore that massive elephant in the room, that everyone could really see if they looked.

We need to work on what is going to happen as we accrue more debt every year.  We need to look at how we manage to finance our way through the last two years of the COVID- 19 bedlam and understand how the system works - actually look at how it works, not how we imagine it used to work.  We need to stop pretending we can go back to life as it used to be pre‑COVID-19.

COVID-19 has shown us how things can and in many ways, should work.

There have been many positive learnings from our response to COVID-19 - ours and the federal government's response.  We should ensure we do not lose the benefits by trying to get back to normal.  It has forced us to face the reality of how a federation can and should work.

I am as optimistic about the future as the former Premier was at the time when he delivered his state of the state speech, it is just that I do not believe he was telling the full story.

I hope as we progress through the so-called 'new normal' we will see some courageous leadership from our new Premier and I also hope other state premiers and territories' first ministers can accept the reality of what I and others have described.  Even Alan Kohler gets it now.

We are now in the middle of a federal election campaign, making it almost impossible to have these challenging conversations looking at the longer term, focusing on the common good and the welfare and wellbeing of our citizens.  In fact, some days I feel almost despairing about how this election campaign has been rolling out.  I know it has been rolling out much longer than the so-called 'called' election and it was nice to actually have ten days away from any of the rubbish, and most of it is rubbish during Easter when I managed to have a break, but it is disheartening to say the least.

We need to have open, honest and frank discussions about the very real challenges associated with the lack of wages growth and the very real falling behind workers are facing.

We see stories in the media and in our electorates every day about professional people, nurses, teachers, et cetera, finding their wages are not enough to secure a home loan and are not enough to manage all the other cost of living increases.  I made this comment before the interest rate rise.

We see many facing homelessness who are actually employed but unable to meet rent rises, fuel, energy, food and medical costs.  They are in every electorate.  They are not just in mine.  They are everywhere.  They are right across Australia.

I will have more to say on the housing crisis at other times and I made some comment in my contribution on the land tax bill we dealt with as this is a clear pressure point for so many.  The member for Nelson raised issues about who is actually benefiting from that.  It is not the people who own and live in their own homes.

The basic underlying cause of all our woes is our hopelessly unbalanced economy.  We have lost sight of the need for the economy to serve all the people, not just to enrich those who are already well off and that is what that land tax bill was doing.

I know our role is a House of review and some say we should not become involved in policy formulation.  I disagree.

We here are in a unique position to be able to independently review and assess how our system is performing and we do that well, particularly through our committee work, as well as the work in this Chamber.  The major players have side‑stepped the serious policy discussions in this parliament needed to confront our many challenges.

We have failed to learn from and heed many of the lessons learnt from the COVID-19 pandemic.  Without a new approach we will continue to delude ourselves into thinking we can make the system work again without having to make any major change.  If the COVID-19 pandemic taught us anything, there is no going back to the past.  We have to work to the future.

It is up to us to keep reminding the major parties, particularly in the federal election contest at the moment, of the challenges we face and engage in the public discourse to bring about change.  We have to talk to the community.  We have to bring them with us.  We have to help them understand how it can be different.

Having said those things, again, I thank the Leader for keeping the debate open so I could make my comments.  I note the Premier state of state Address and I will start preparing for my Budget reply.

 

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