Tuesday 16 June 2009
Hansard of the Legislative Council


Noting of Budget Papers – Budget Response
Mr FINCH (Rosevears) - It is not the best of times to be a treasurer, Madam President.  We have a global financial crisis, a drop in the GST and Tasmanian State taxes are expected to be down, as you have heard, $1.56 billion over the next four years and there is only $1.2 billion in the hollow log.  Fortunately, we have a highly professional Department of Treasury and a Treasurer who is prepared to make some hard decisions, but it is very much a balancing act and I can see the Treasurer's feet firmly on the tightrope but some distance from safety.  In fact it will take him three years of budget deficits before he will reach firm ground even if all goes to forecast.  I, for one, for the sake of Tasmania, Madam President, do not want to see him stumble.

How do you make cuts during a recession without further deflating the economy?  If you reduce infrastructure spending, you jeopardise private sector jobs; if you cut too deeply into public sector jobs, you take away services that the public needs, but it is hard to make savings in the public sector without cutting jobs because salaries make up such a large portion of departmental budgets.  The Government, as we have heard, has targeted 800 jobs.  It is possible that these positions will be lost without too much pain.  The Premier has outlined a range of options for public servants and their managers to consider.  These include leave without pay, reductions in working hours, secondment to the private sector, phased-in retirement, early retirement and targeted redundancies.  If you take the Department of Health and Human Services, for example, it has 10 800 employees and there is a turnover of about 1 200 full-time equivalent positions each year.  So with a target of 250 jobs to cut in that department it should not be too hard for managers to select which vacant positions not to fill.  In other words, Madam President, in a department like DHHS, most of the necessary jobs can go through natural attrition.  Of course, this means a smaller redundancy bill.  Cutting jobs means that the remaining staff will have to cope with a bigger workload but at least they still have jobs.

Ms Forrest - Through you, Madam President - I wonder if it is going to be quite that simple in that a lot of the jobs that are unfilled vacancies are for front-line staff so they, we are told, are going to be quarantined.  It is the bureaucratic and administrative staff that are going to be cut.  So to get that number of vacancies unfilled in those positions may be a little bit more of a challenge I think.

Mr FINCH - Absolutely.  As I say, I am glossing over.  Just throwing out the numbers makes it all sound quite easy but -

Ms Forrest - I think it will be more difficult.

Mr FINCH - Absolutely.  Managers and departments will go through that process but, as I say, if you look at those figures, 1 200 jobs go each year anyway and there are 250 positions that you decide will not be filled.  So, what I am suggesting is, in that department it will be a little bit easier, perhaps, than in other departments.

One savings course the Treasurer has prudently avoided is, apart from TOTE, the sale of State-owned enterprises.  Of course, this is a time when State-owned enterprises should be maintained to grow in value rather than taking that easy option of a fire-sale approach.  History has shown us that the State can gain significantly when assets are sold in good times rather than during a fire sale when prices can be -

Mr Dean - What do you think they are targeting now?

Mr FINCH - I do not know; have you any ideas?

Mr Dean - I do not know but as long as they are saying they are not going to sell something we will be right; if they do that we are in trouble.

Mr FINCH - So long as it is not a fire sale.  To look on the bright side, Madam President, public sector wage capping and the increase in productivity.  By reducing the work force by 800 jobs it is expected to save $760 million over four years.  Add this to the $1.2 billion of State Government savings in the hollow log and you get a total of close to $2 billion which should compensate for the predicted loss of revenue of $1.56 billion.  So the State Budget position is not all that dire. 

Mr Aird - Can you just say that again?  Did you say 800 jobs are going to -

Mr FINCH - Yes.  An increase in productivity by reducing the work force by 800 jobs is expected to save $760 million over four years.

Mr Aird - No.  The savings across the budgeted forward Estimates is $760 million in total, not just the 800 jobs.

Mr FINCH - Right, okay.  As I say, the hollow log, and you have your $2 billion that compensates for that loss of revenue of $1.56 billion.  One measure that was welcomed by councils in my electorate is the $20 million loan scheme for local government infrastructure.

Ms Forrest - It was welcomed in your electorate?

Mr FINCH - Yes, it was because -

Mr Aird - It was welcomed in yours too, by the way.

Ms Forrest - Well, let's look at the devil in the detail.

Mr Aird - I have spoken to the mayor.

Ms Forrest - The mayor has a different story for me.

Mr Aird - He thought it was a good idea.

Ms Thorp - That happens a lot doesn't it?

Mr FINCH - Yes, it does.  There are a lot of infrastructure projects spread around the State including Federal money for a range of projects. We can remember the days when budgets contained surprises but now just about every measure is leaked beforehand, either intentionally or illegally.

However, I do not mind the anticlimax of budgets these days.  What I do worry about is the number of times that spending programs are announced before, as well as in, budgets.  This confuses the uninitiated.  For example, much of the spending on health infrastructure announced in last week's Budget, the Launceston Integrated Care Unit, a big capital works program at the Launceston General Hospital, were detailed in March when the Premier and the Health minister visited Launceston.  There was a similar case at the Beaconsfield Child and Family Centre, funding for which was announced last year.  Much of the aforementioned spending is Federal money anyway.

While most capital infrastructure spending will be federally funded, the State Government does have significant influence on where and when it occurs.  Infrastructure spending should be on assets that will deliver a return in future years to business and industry and the public, or lift Tasmania's education and training, in our below-average education participation rates and provide positive skills outcomes through the medium and long term.

Around $100 million of capital works for health services within Tasmania over the next three years will do much to keep local people in work and that is a good demonstration of the stimulus effect of infrastructure spending.  The $100 million on capital works at the LGH fits the bill by giving the community improvements for many years to come.  For example, not only will the Department of Emergency Medicine be doubled in size but its integration with the new acute medical unit will hasten patient flow into and out of the LGH.  Planners at the LGH are hoping to set up a patient flow model for hospitals around Australia.

I want to turn to the needs of my electorate.  The West Tamar Council's biggest concern on discussing the Budget with them this week is, again, our safety on the West Tamar Highway.  We keep coming back to this.  I acknowledge that work has been done on the West Tamar Highway but there are still concerns about many sections of the highway and I hope that these can continue to be addressed.  In the council meeting being held today they will be prioritising their list of concerns.

It seems since I have been a member and long before, there have always been a number of priorities for the West Tamar Highway.  We appreciate the work that has already been done but we still have a highway that is not at the standard that the people who use it every day would like to see it.

Mr Hall - It is a shame we could not have had a dedicated cycle lane along there because it is very heavily used by cyclists.

Mr FINCH - It certainly is.  I have been talking a lot more about the West Tamar trail where we have recreation routes and bike routes right through the West Tamar.  I suppose every electorate would like to have them because as we move into the future there is going to be nothing better for recreation and for people's health than to be out on walking trails and on bike tracks.

Mr Hall - Have you a bike?

Mr FINCH - I do have a bike.  It is a rusty, old, cobwebbed bike at this stage.

Mr Aird - A Malvern Star.

Mr FINCH - Nothing quite so modern.  On the West Tamar trail I have spoken before about the need to link communities with bike and foot trails.  I know that the cost of petrol is down at the moment but that is temporary.  Bike and foot transport is as much about health as it is about cost.  I have been progressing in the House the idea of the trail. I am not suggesting that it is my idea, the community have been agitating for a trail between Beauty Point and Beaconsfield for some years.  They have worked long and hard on that unsuccessfully. There has been some encouragement from a member from another place which has given us some progression on that.  However, there has been a new committee formed to take this issue on and a plan for that trail has gone to DIER and we now await the response from DIER on the structure of that trail that will travel alongside the highway, well not so much a highway but the roadway between Beauty Point and Beaconsfield.

Mr Dean - The one from Legana into Launceston is critical, isn't it?

Mr FINCH - Yes, but this one from Beauty Point to Beaconsfield is one that to me is a no brainer because you have this community of Beauty Point developing there all the time.  It is just a wonderful place to live and a lot of people are employed in that area too. 

At Beaconsfield they have developed a skate park for kids.  Beaconsfield has a health centre and an aged care facility where people would love to be able to walk along a flat, well maintained surface rather than on the side of the road that puts you in about a metre proximity of vehicles and trucks.  The kids do not have, and I speak particularly of kids here, the mobility between Beauty Point and Beaconsfield to go and enjoy the skate park, to go backwards and forwards and see their mates from school.

We have got a lot of young mothers too and there is nothing better when you have a new baby than to take the baby out for a walk in a pram and to do it safely.

Mrs Rattray-Wagner - Don't look at me.

Mr FINCH - I speak of past times but to go for a walk with the baby in the pram, you need a couple of kilometres, 2 or 3 kilometres, and this trail will be used I am sure by the community.  It is a safety measure as well. 

Now to a subject raised by the member for Western Tiers in his contribution - the pulp mill.  It is one of the issues that is causing a drag on my electorate over the continuing uncertainty of the Bell Bay pulp mill project which is across the river in the member for Windermere's electorate. Do we have any idea whether it will be built or not?  Are we any closer? 

Madam President, all this unsettling uncertainty could have been avoided if Gunns had looked more closely at that second option of Hampshire.  If it had, you could be pretty certain that a new pulp mill would already have been built and probably ready for commissioning without all the anguish caused to electors in Rosevears and elsewhere. 

It is interesting to hear the talk about the railways and I am not sure how I have progressed that idea in the House when we were going through the debate but I did talk with the member for Apsley about upgrading the rail line from Scottsdale through to Hampshire with Federal dollars, and looking at bringing the southern forests up through the Midlands up to Hampshire, drawing on the money from the Federal Government and trying to keep Michael Ferguson and Mark Baker well ensconced in their seats and that manoeuvre with the Federal dollars would have been a good proposition. 

We have heard in the past week about the Scandinavian Södra group's interest in a Tasmanian pulp mill operation but not apparently the type being proposed for the Tamar Valley.  Observers in the industry believe that if Södra had been the proponent from the beginning it would have chosen the Hampshire site for a totally chlorine-free pulp mill and they would have done a transport deal to bring plantation supplies if there were not enough in Tasmania from Portland in Geelong to supplement Tasmania production.

Mr Hall - That is hypothetical.

Mr FINCH - That is hypothetical, that is what I am saying.  It is all speculation.

Mr HALL - Do you really think a pulp mill would have been up and going at Hampshire if Gunns had decided to go there?

Mr FINCH - Yes.

Mr Hall - Without any opposition?

Mr FINCH - Yes.  I am suggesting to you that in the straw polls that I took, my reading - and I have heard recently a 75 per cent figure of approval if the pulp mill went in at Hampshire - was 85 per cent.

Mr Hall - Just from electors within your electorate, though?

[5.30 p.m.]
Mr FINCH - I would have thought that it would have only been the very dark greens who would have opposed the establishment of a pulp mill at Hampshire.

Mr Dean - TAP were against it wherever it was.

Mr FINCH - Yes, the dark greens, the Wilderness Society people, but I am suggesting to you that that would be 15 per cent of the Tasmanian community.  It is a small number in the community.  The talks that I had with people who are solidly green tinged all felt that Hampshire was a good proposition.  I had the argument put forward to me that they would never agree to it because just over the hill is Cradle Mountain.  Well, that was not the reading that I got.  And you might remember, Hampshire was actually designed to be the location for a pulp mill after Wesley Vale folded.  In fact, when the investigations were made it was decided to choose a site that would be cherry ripe for a pulp mill, Hampshire was chosen, in fact the chipper went in there, the plantations have gone in there -

Ms Forrest - And nobody lives there.

Mr FINCH - I am just trying to remember my speech when we went through this debate.  I may have talked about transport logistics and that is what the pulp mill industry depends on.  The forestry industry depends on transport logistics and the example that I was given by an expert in the industry was that when Wesley Vale was being proposed it was the centre of the universe for transport logistics because most of the wood supply that would come to that pulp mill was within 100 kilometres of Wesley Vale generally, so transport logistics were in place for Wesley Vale.  When that idea went off the radar, the centre of the universe for transport logistics was Hampshire, and we progressed along that way.  But then because of managed investment schemes and because of the way the State forests were freed up, in fact Long Reach became the centre of the universe for transport logistics.  So that is how come the move occurred from Hampshire to Long Reach and, dare I suggest, it was the big payday and Gunns doing the right thing by their shareholders chose that and drove that option.  That was my reading of the situation at the time and that is why I am saying I felt Hampshire still should have been on the radar.

A contractor for Gunns absolutely got into me at the Exeter RSL about the way that I progressed my vote here in the House.  He said to me, 'What a load of rubbish.  We'll do Long Reach first and we'll put the second one at Hampshire' and I said to him, 'I'll tell you what would be a better idea for all concerned, for most Tasmanians.  Why don't we build the first one at Hampshire and if that one goes well we'll put the second one at Long Reach?'.

Mr Hall - The honourable Treasurer did indicate at the time that you ought to get a new speech writer, if you recall.

Mr FINCH - Yes, that is right.  Well, I haven't.

Members laughing.

Mr FINCH - I have a new one but I am finding it hard to remember what the old one said.

Mr Martin - The member for Western Tiers is very sorry he spoke first.

Mr FINCH - Anyway, it is all speculation.  As we said, it is all hypothetical but Sodra, with its excellent public reputation and I am saying a Hampshire site, would have received the support, I am suggesting, from the vast majority of Tasmanians but it was not to be.  We will just see what unfolds.  I am being critical of the uncertainty that it has given to our Tamar Valley.  We have had five years of this and we are fed up to here with it.

Mr Wilkinson - You've got a bit of a way to go there - only up to your chin.

Mr FINCH - I know nobody else is.

I just wanted to highlight a story from the paper today.  I mentioned that we had a council meeting today and it is suggested that West Tamar ratepayers stand to save hundreds of dollars if the council adopts the rating structure for 2009-10 and this all comes back to the regional takeover of the local government water and sewerage assets from 1 July.  It will mean in my community - and I am not sure how it is being reflected in other electorates - $439 a year will come off some rates bills.

Mr Dean - But they'll pay that for the water and sewerage.

Mr FINCH - Yes, that is right.  This is the good news.  Just in my area at Legana there will be a drop of $439, and others will have that savings.  But then I have others such as ratepayers with properties in Bridgenorth, Greens Beach, Selbourne and Winkleigh who will face hikes of up to $146.  It is a bit of a balancing act, but those figures are being reflected now and we will see what the council makes of that today.

Mrs Rattray-Wagner - And that is only if there is a rate remission by either the local government for some people or the Treasurer.  That's still to be decided.

Mr FINCH - It is unfolding as we speak.

Councillors today are expected to endorse Mayor Barry Easther's nomination for president of the Local Government Association of Tasmania.  I wish him well in that nomination and in progressing his nomination for the organisation.  He became the acting president with the resignation of our new member, the member for Mersey.

Back to last week's Budget, in the circumstances I think the Treasurer has delivered a balanced and responsible budget.


Mr Harriss - Do you want to start off with the pulp mill?

[5.37 p.m.]
Mr DEAN (Windermere) - We can start off with the pulp mill, if you wish.  There are a number of issues I want to refer to but I will make a couple of comments on the mill.  It was interesting when we received an address from Pitt & Sherry that said the problem is we are currently talking about two mills at Long Reach, the real mill and the fallacy mill.  I thought that was a very good lecture and I think it put it into perspective very well.  I use this word and I have heard others use it to day, the word 'misinformation' - and people remember when I used that word, or some would, in front of about a 5 000-strong crowd.  Some reckon there were 10 000, but I did not think it was anywhere near that.  I had 'misinformation' shoved down my neck, and it is still being shoved down my neck to some degree, in relation to this mill.  Very clearly there is a huge amount of misinformation out there.  A lot of the things that are being said about it are not right.  What I have said is, and I say it again here now, if the mill is not right to be built in the Tamar Valley it is not right to be built anywhere.  I have a concern and issues with those who say, 'It is not right for the Tamar Valley, but it is right for Hampshire'.  If it is going to pollute the Tamar Valley, it will pollute in exactly the same way at Hampshire.  Then there are all the other issues that come with that, the truck movements and the transportation of the pulp down to Burnie.  In Launceston it is right on the port and is handled by loaders and so on.  There are lots of issues as to why it fits into the position of the Tamar Valley very well.

Mrs Rattray-Wagner - The Bell Bay industrial area, you mean?

Mr DEAN - Yes, the Bell Bay industrial area.  There are lots of issues and misinformation there.  I had a telephone call - and the member for Western Tiers was aware of this - from members of parliament from the Northern Territory who said, 'Why would you ever support a mill being built in your electorate in a pristine area?'

Mr Finch - That's my favourite word, 'pristine'.

Mr DEAN - I said, 'That's wrong.  It's an industrial area', and I started to go through everything that was already in place in that location.  They said, 'Well, why isn't that being promoted?'  It is being promoted but there are many people out there who do not want to hear that.  They want to cut it off and they want to see it differently for whatever reasons.

Mr Finch - It'll be interesting to see how this opportunity for Sodra unfolds.  They'll be doing an evaluation in the current climate and then seeing if it stacks up with their evaluation and what they want to be involved in.