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Thursday
15 March 2012
Hansard
of the Legislative Council
Premier’s
Address (Including reference to Pulp Mill)
Mr FINCH (Rosevears)
- Madam President, how do you read Tasmania's current position? We
are not in a very good state. That is the state of the State, isn't
it, we are in a bit of a mess. So we are throwing jobs out the window
faster than we are creating them. Suddenly we have a budget problem
that seemingly could not have been foreseen. Well, why not? I am not
an economist, Madam President, and thank goodness for that. But
surely a drop in GST and other revenues could have been foreseen some
years ago.
Mr
Hall - It was.
Mr
FINCH - They were, in
2008 other signals were there.
Ms
Forrest - Well, the GFC
was already hitting then; the GFC was already well known then.
Mr
FINCH - Yes, so why do
Tasmanians -
Mr
Parkinson - I didn't hear
you talking about them in 2008.
Ms
Forrest - I did, the
Treasurer did.
Mr
FINCH - When you are
ready.
Madam
PRESIDENT - Thank you,
the member for Rosevears has the Floor.
Members
interjecting.
Mr
FINCH - So the question I
have, why do Tasmanians, as taxpayers, pay for economists in Treasury
and Government if they cannot plan for an obvious future downturn in
revenue, and do it well?
Ms
Forrest - Well, they did,
but then they took the handbrake off when the election was on -
Mr
FINCH - Yes, that is
right. So you know, why has it suddenly become apparent to Treasury
and the Government that Tasmania is in a financial mess, and that
nurses and other qualified people have to be thrown on the scrap
heap? Why could not this situation have been dealt with gradually,
more gradually? Do our Treasury and government leaders go into denial
until the last minute? Surely, Madam President, we pay economic
advisers to look ahead, even if it is only for a financial year or
two, and advise government accordingly. So I know it is hard to be an
economist, and I indicated my aversion to the role earlier, but I
cannot help thinking that those highly paid economists and recipients
of their advice have let the Tasmanian people down.
Any
household, Madam President, can just look ahead for a few months or
even years. They can assess future income and expenditure, as we have
to do, and you have to plan accordingly, do not live beyond your
means. Then the normal household can reduce spending over a long
period in a sustainable way which then causes, for the family,
minimum harm. It seems our State Government cannot do that. If you
can see your income is going to be lower over the next few years,
well you immediately cut expenditure, not bury your head in the sand
until the situation is so dire that you have to start selling off the
family home. It seems the Tasmanian Government does not have that
simple domestic skill. However, Madam President, be that as it may,
we are in a situation where jobs in health and other areas are being
cut. It is a simple economic fact that when someone loses their job,
they also lose their ability to spend. This in turn further depresses
our economy and does not impress the likes of Gerry Harvey.
Madam
President, every job that is lost may save the wages bill but
ultimately that will weaken our economy. Other types of efficiencies
may be another matter.
Gross
domestic product - GDP - figures released earlier this month made for
depressing reading. Australia's economic growth in the December
quarter slowed to just 0.4 per cent. State figures indicated that
both Tasmania and South Australia were in recession and Victoria was
on the brink of one. However, this, while academic, is debatable
because State figures do not necessarily indicate the definition of a
recession. Economist Saul Eslake explained this in an article in
Tuesday morning's Examiner.
I know that others have quoted Saul Eslake and how handy it is to
have that overall assessment of how we are going in Tasmania and to
have his keen interest in what we are doing in this State. This is a
quote that I took from it; it is quite a long one but it does
explain, in his words, the situation:
'Many
commentators look, in order to determine whether an economy is in a
recession, to see whether there have been two or more consecutive
quarters of negative growth in the volume of goods and services
produced - that is, in what (for a nation as a whole) is called real
gross domestic product or GDP.
Unfortunately,
the Australian Bureau of Statistics produces state-based estimates of
real GDP (which it calls 'gross state product' or GSP) for financial
years only.'
That
is where it complicates things.
'Hence,
we can't use this rule of thumb to ascertain whether Tasmania (or any
other state) is in recession.
The
bureau does publish, along with its quarterly estimates of GDP for
Australia as a whole (such as were released last Wednesday for the
December quarter of 2011), estimates of what it calls 'state final
demand', which is the sum of spending by households, businesses and
governments (including government-owned businesses) in each state.
Although
those estimates, by definition, don't include interstate or
international trade, some commentators say that a state economy is in
recession if this measure of state final demand declines in real
terms or two or more quarters in a row.'
We
hear about that so often. Probably the member for Murchison goes
through that from time to time. That is not in Saul Eslake's
writings.
Members
laughing.
Ms
Forrest - I'm not
surprised it's not in his writing.
Mr
FINCH -
'By
this partial yardstick, Tasmania's economy isn't in recession,
because although Tasmania did experience two declines in state final
demand last year, they were in the June and December quarters, with a
(quite large) increase in the September quarter in between.
That
is, there haven't been consecutive quarters of negative growth in
Tasmanian state final demand.'
That
is the quote from Saul Eslake. It may not be a technical recession,
Madam President, but it feels like one.
Ms
Forrest - Through you,
Madam President - I would like to quote the next bit that he said
when he uses a measure that he has devised looking at the employment
figures and participation rates. According to that measure that he is
providing around that, he said that Tasmania is in recession. So, it
depends - whether we are or not, it is certainly very challenging.
Mr
FINCH - Yes. I would not
want to be an economist.
News
reports last week blamed the high interest rates and government
spending cuts. Yes, obviously cutting government spending slows
economic growth and, in Tasmania, it is contributing to a recession.
However, if government revenue drops, so must spending, and the
immediate future is looking grim. At the same time as the poor GDP
figures were released last week, Treasury secretary, Martin
Parkinson, revealed that Federal and State revenues are now in crisis
with tax collections down by 4 per cent of GDP, almost $60 billion a
year, and unlikely to return to former levels for many years to come,
we heard from the Premier this morning.
Ms
Rattray - Likely to be a
decade.
Mr
FINCH - Likely to be a
decade, but Mr Parkinson warned of more pain ahead, saying:
'For
both levels of government surpluses are likely to remain, at best,
razor thin without deliberate efforts to significantly increase
revenue or reduce expenditure'.
Madam
President, the State Government has now been warned if it was not
already. It may be a utopian concept and I might be economically
naive but I cannot help thinking that we are failing to manage our
economy properly.
The State Budget - let us hope
things will look better on 17 May, but things are also dire in the
private sector of course. Just looking across the Tamar from my
electorate to the member for Windermere's area, we have Temco on the
brink, Rio Tinto Alcan or Bell Bay Aluminium, as I think it has been
rebadged, looking unviable in the future and even if the pulp mill
was built it would only create a small proportion of those threatened
jobs in the long term. Of course there are construction jobs and all
that would go to boost the economy that that would bring, but in the
long term there will not be that many jobs.
Ms Forrest
- That's why we need a diverse economy, isn't it? We can't rely on
one thing. Whether it's a pulp
mill or whatever, you
can't rely on one thing.
Mr
FINCH - Absolutely. Of
course threatened job losses also apply on my side of the river. The
Beaconsfield Gold Mine is expected to lose 150 jobs by the end of
June and that mine which has been going on and off for more than 100
years is unlikely to ever open again. That is the reading, whatever
happens to the price of gold.
Ms
Forrest - The gold price
is pretty good at the moment and if the mine isn't profitable now
it's unlikely to get better.
Mr
FINCH - No, there is a
sense that all the remaining viable ore has already been extracted,
so you are fiddling around with the fiddly bits, if you know what I
mean.
Mr
Mulder - Otherwise known
as small people's gold.
Mr
FINCH - I am no economist
or miner.
Mr Hall -
Through you, Madam President - with regard to your comments on the
pulp mill,
even though I think you said it would only create a small amount of
jobs, obviously it would create a large amount of jobs in
construction, but not in the mill
itself. The actual harvesting and all the ancillary jobs would be
quite considerable.
Mr
FINCH - Yes, point taken.
I did not feel I had to say that, but thank you very much.
As
far as Temco and Bell Bay Aluminium are concerned, Madam President,
when did it make sense really to bring raw materials from thousands
of kilometres away, process them with cheap electricity and then
export them a further many thousands of kilometres away?
Mr
Hall - You said cheap
electricity?
Mr
FINCH - Cheap electricity
at the time. It does not make as much sense now, particularly with
transport logistics and increasing costs of transportation. Do not
mention the war.
Ms
Forrest - There's only
one other thing you're not allowed to mention.
Mr
FINCH - It has always
made better sense to use our electricity to value-add to our own raw
materials or to sell our power, and of course that leaves the
argument for another Bass Strait power cable. While on the subject of
selling power across Bass Strait that idea of a water pipeline to
Victoria has emerged again. I am pleased to see that the State
Government is keeping an open mind about that. Evidently, the
suggestion is that we would only be selling fresh water which would
flow into Bass Strait after power generation. That is a suggestion
at this time. It will be interesting to follow that.
Mr
Mulder - We already have
a pipeline that is supposed to be having gas and there's not much of
that coming down.
Ms
Rattray - Stop the gas
and use the water.
Mr
FINCH - There is another
idea, Madam President. The ideas just flow. Throw one out there and
see what comes back.
Ms
Forrest - Through you,
Madam President - I would suggest that before we put water over the
other side of the water we are talking about we should get a second
Basslink cable first.
Mr
FINCH - Yes. I did not
realise I was going to workshop this speech but it is good. I like
it.
Mr
Mulder - This is
innovative thinking.
Mr
FINCH - Yes, you can send
a lot of water through a 6 metre diameter water pipe that goes across
to the mainland. From my reading of it, I have not researched -
Ms
Forrest - Six metre?
Mr
FINCH - Or was it six
millimetres?
Members
laughing.
Mr
FINCH - I know you have
told me a million times not to exaggerate, but please. A big pipe can
send a lot of water across to the mainland. I have not done extensive
research -
Mr
Mulder - That is obvious.
Mr
FINCH - What we hear and
what we see with scant viewing on television about water generally
the issues are getting, I suppose, worse on the mainland.
Mrs
Taylor - By crikey there
is no shortage of water on the mainland at the moment.
Mr
FINCH - Not at the
moment, no, but the peaks and troughs, and as we move further into
climate change and the effects of that we do not know what is going
to happen. We have a fair idea that water is going to be - like we
used to hear when we were young people - it is liquid gold and it is
becoming more so.
Just
looking further into our present economic situation, it worries me
greatly and I am sure it worries all honourable members of the House,
that about one-third of all Tasmanians are on some form of welfare.
It is also worrying that other States resent the fact that Tasmania
receives back considerably more GST revenue that we actually
generate. I was really taken aback by the Western Australian Premier.
Ms
Forrest - They have short
memories.
Mr
FINCH - Absolutely. I
won't go down that path too far, but I just thought that that was
unnecessary and it did not help our relations at all.
Mr
Mulder - Another thing is
that the subsidies that their manufacturing industries get in those
States is a subsidy to those States that non-manufacturing States
like us don't.
Mr
FINCH - It would have
been much better if he just sat on top of the totem pole and kept his
mouth shut. I will look on the bright side of things now.
The
Premier's Address last Tuesday was worthy, but for me not very
inspiring. There was not a great deal about concrete job creation
policies and as T.S. Eliot once said, 'If you have a big problem set
up a committee,' but in this case there will be a white paper. I am
not knocking that idea but most Tasmanians would prefer something a
little more concrete than a white paper.
Mr
Mulder -
Chlorine-bleached white paper.
Mr
FINCH - Thank you. There
wasn't really anything new in the talk of the Asian century. That
started in 2000 or even earlier.
Mr
Hall - That was Paul
Keating.
Mr
FINCH - It has been
around a long time.
Mrs
Taylor - But the century
started in 2000.
Mr
FINCH - Mind you, I did
make a point earlier by way of interjection when I said that in
listening to the discussion with Simon Crean, Bill Kelty and Lindsay
Fox we were hearing about the projections for the future, only scant
details, but one of those that resonated with me was the growth in
people who want to have middle-class values, or were going to develop
middle-class values and there will be three billion extra by 2030.
Ms
Forrest - In China.
Mr
FINCH - It is actually
China-India, that area. But three billion with middle-class values.
Ms
Forrest - They will want
more protein to eat, so we need more milk, more meat and everything
else.
Mr
FINCH - Let us keep an
open mind on it. The markets are there for some of Tasmania's great
products, but there are tremendous difficulties, the main one appears
to be freight. If you can land a shipping container in Sydney from
almost anywhere in the world for much less than one from Tasmania
there is a problem that has to be addressed now. But the Premier's
September trade mission is encouraging and is a good idea. Tasmania
has a lot going for it, as the Premier said, in dairy, aquaculture,
wine, mining and more, and of course forestry as well.
[5.00
p.m.]
A
few weeks ago I had a meeting with a couple of stalwarts of the
sawmilling and transport industries, Fred Ralph and Ed Vincent. They
were optimistic about the new products from plantation timber like
the laminated structural beams, but they were pessimistic about the
resources for smaller sawmillers from State forests. They both agreed
that the industry needed drastically restructuring although they both
said not along the lines of the present IGA. That is economics.
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