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Wednesday
23 May 2012
Hansard
of the Legislative Council
BUDGET
REPLY
Mr
FINCH (Rosevears) - Madam
President, I take this opportunity to congratulate the member for
Derwent on his elevation - I will not go down the steep gravelly
track - but I will point out that in my 10 years in the House, I
think when I first came in there were five Labor members on that side
and an independent Labor member, all of whom have departed.
Mr
Hall - And yourself.
Members
laughing.
Mr
FINCH - That was one
Labor extreme left, five Labor and an independent Labor but the point
is how things change. Many people highlight the fact that we seem to
be sedentary and we do not change much, that we are the same old,
same old, when in fact there is that turnover, there is that renewal
all the time. It is interesting to see now the member for Derwent is
here and in this exalted position of Leader. I imagine it is a
coveted position and you have this wonderful opportunity to develop
experience. For how long, I am not quite sure, but I certainly wish
you well. The good nature with which you approach the job is going to
be helpful to the House in working through our legislation and trying
to make the proper decisions here. Congratulations and I wish you
well.
Madam
President, just talking about my 10 years here, I do not think I have
really felt excited at all about any of the budgets that have come
before us since I have been here. I have not really felt good about a
budget and I certainly do not feel good about this one.
Ms
Rattray - What about the
'heart of gold' one?
Mr
FINCH - That appealed to
some, and for some it will live on in their memory but not for me. It
does not stand out. We are in the same bind now as we have been for
years. We are an island state with not many more than 500 000 people.
We have a big reliance on what is really a subsidised GST payment. We
have a brain drain which occurs and has always occurred and, of
course, an ageing population.
This
year particularly, Tasmania is the victim of the so-called two-speed
economy as economist Professor Ian Harper argues. Professor Harper
says that Tasmania's economic woes are the fault of Australia's
two-speed economy and not the state government. Professor Harper was
speaking at the Tasmanian Chamber of Commerce and Industry's budget
lunch last Friday and he said that Tasmanians were part of the 80 per
cent of Australians missing out on the mining boom. He has reported
in the Examiner newspaper
that Tasmania's trade-exposed industries such as tourism, retail,
agriculture and manufacturing were further harmed by the high
Australian dollar. This is the former chairman of the Australian Fair
Pay Commission. He said that it was not all doom and gloom however,
Madam President. I will quote from that Examiner
report. He said:
What's
happening is not a result of government incompetence this is a result
of a transition of historic proportion in this country and we have to
make this work for us!
There
is a silver lining to this cloud but you have to look for it ...
You
need to be a smart economy.
That
is a glimmer of hope from Professor Ian Harper. There are some small
hopeful initiatives I saw on my recent electoral tour. As the TFGA's
chief executive, Jan Davis, wrote in Tasmanian
Country last week, the
new Midlands irrigation scheme will be a tremendous boost for
agriculture. Speaking with the member for Apsley, I think you have at
least two initiatives in your electorate and as many as four. That is
another glimmer of hope, a little bit of a silver lining. Tasmania's
wine industry has the potential to double with Tasmania seen as one
of the best opportunities for investment in wine production in the
world, not just Australia.
I
also know that many Tasmanians are having a very hard time,
particularly in those areas which depend on forestry. I have only to
speak to the members for Apsley, Murchison, Huon, Western Tiers and
Derwent - they are dramatic times. Many businesses in my electorate
are facing continuing uncertainty about the proposed pulp mill. I
remember talking through the valley at the time the debate was at its
hottest. Those businesses in my electorate that were going to be
beneficiaries of contracts if the pulp mill went ahead were very
positive and eager and looking forward to the development of the pulp
mill -
Mr
Dean - They still are.
Mr
FINCH - Yes. Well, after
nine years I can tell you that the relationship is wearing a bit
thin, and the enthusiasm has died off to a certain extent. Others
have been holding back investment in clean and green projects but
they are holding back because of the continuing uncertainty about the
situation. As I have highlighted in the House over my nine years that
the pulp mill
has been on the agenda, it has been a state of uncertainty and what
concerns me for my businesses is the lack of being able to draw up a
proper business plan of how they can progress what they are doing.
I
suppose it cannot really be a proper Tasmanian budget without the
careful analysis of a former Smithton boy, Saul Eslake. I always find
him worthy of quoting. He opens his analysis with this: 'Lara
Giddings's second budget marks a retreat from austerity that was the
defining characteristic of her first'. This was in the Tasmanian
Times on 18 May. Yes,
this budget is a retreat from austerity, just as is happening in
Europe. Governments are realising that too much austerity too quickly
causes recession and negative growth, and Tasmania's growth
predictions also show fragility.
Our
economy is only expected to grow at 1.25 per cent in this financial
year - less than half the national rate. Unemployment is expected to
rise to 7.5 per cent in the next year, well over the national rate of
4.9 per cent. I remember clearly many years ago before I came into
parliament when our rate was up around 11 per cent for many years -
10 and 11 per cent. That is the reason for the retreat from
austerity. Saul Eslake says the state government has found room to
ease off for two reasons:
The
first is a decision to abandon the past practice of taking as given
the federal budget's forecasts for Tasmania's share of GST revenues.
Instead
a model devised by the state Treasury is used, which takes into
account future changes in states' relative fiscal capacities and in
the mix of Commonwealth specific purpose payments to the states.
Ms
Forrest - Through you,
Madam President, this is the question I have. It is quite staggering
that the commonwealth does not include that in their models.
Mr
FINCH - Yes. That is
right because this allows the government to assume $757 million more
in revenue from the GST over the forward estimates than if it had
simply used the federal budget formula.
Ms
Forrest - My point is why
doesn't the federal government use the same issues like the washout
of the Wilkie money, for example, in their models?
Mr
FINCH - That's right.
Ms
Forrest - And do we know
whether they do or they don't. You haven't read the budget paper to
see, have you?
Mr
FINCH - No.
Mr
FINCH - As I say, I take
my guidance from Saul Eslake. He goes on to say -
Ms
Forrest - Keep going then
-
Mr
FINCH - They are his
observations, so you might care to argue that with Saul Eslake.
Ms
Forrest - I will take it
up with Saul. He would probably agree with me.
Mr
FINCH - No - as Saul
Eslake explains in the Tasmanian
Times on 18 May, the
other factor is 'the vastly improved financial position of Hydro
Tasmania'.
Ms
Forrest - Projected.
Mr
FINCH - Yes.
Hydro
Tasmania will directly contribute almost $1 billion to government
revenue over the five years to 2015-16 including $288 million more in
2013-14 and 2014-15 than anticipated in last year's budget. These two
factors have allowed the government to go soft on some of last year's
saving measures, and fund a range of other hand-outs. And they have
allowed the government to give the state's economy a bit of a
breather at a time when it is, arguably, in recession.
Saul
Eslake has a talent for helping even me to understand what is
happening in the economy. His analysis is backed up by the Australian
Financial Review. They
had a view of the state budget on 18 May with a headline 'Giddings
keeps foot on the accelerator'. That tops the story which explains
the retreat from austerity to which Saul Eslake had referred. The
retreat is mainly to do with health services. I do not think anyone
could argue against that, given the dire situation we have witnessed
since the last budget. As the Australian
Financial Review puts it:
The
Budget pledges new cuts of $68 million over four years at the same
time it abandons cuts of $120 million that it said it would take from
health spending in the 2011-2012 Budget. The government decided the
cuts were too stringent and reversed the decision.
Hear,
hear, Madam President. In all fairness, it is hard to see what else
the government could have done. But then, as Saul Eslake points out,
Tasmania has a fundamental problem which must eventually be faced. I
will quote him for the last part:
The
fundamental problem that will continue to confront this, and any
future, Tasmanian government: that the cost of running government
services will absorb around 5 percentage points of gross state
product, or $650 (7 per cent) more per head, in 2012-13 than it does,
on average, on the mainland. And Tasmania's ability to keep spending
above-average amounts on below-average services is under increasing
threat from the four bigger states' push for a larger share of the
revenue from the GST.
In
other words, we cannot go on the way we are.
Ms
Forrest - Through you,
Madam President - Saul Eslake has been saying that for a number of
years and we still have not had an explanation or even an
investigation that I can see from the government, as to why it costs
us so much more per capita to provide the same services.
Mr
FINCH - A lot of it comes
back to numbers.
Ms
Forrest - That is not
what Saul says.
Mr
FINCH - Yes, my
assessment would be that the reality of the situation is that we have
500 000 people and the services we provide - if you give us a million
people, you do not need to double the number of services to service
that million people.
Ms
Forrest - Through you,
Madam President - the point he makes is that the difference cannot be
attributed purely on numbers of people alone. He said there must be
more to it than that and we should investigate that, and look at it
because he believes it is a significant difference. From commentary
in the past, particularly, that he has made on this very point, in
his view, it is not just about the size of our population.
Mr
FINCH - I get a sense
here of an investigation coming on by Committee A.
Ms
Forrest - Maybe the
governments needs to do this one.
Madam
PRESIDENT - Let us not
have it at the moment. Just continue your contribution.
Mr
FINCH - Budget time is
also the time for, I suppose, the wish list for infrastructure
spending. I have used that opportunity in the past but I think it
will be without much hope, this budget. A continuing problem for me
in my electorate is the West Tamar Highway, which I have spoken about
often enough. It is dangerous in some parts -
Ms
Forrest - Especially when
you are on it.
Mr
FINCH - You have been
listening to too many people. I was hoping that the member for
Western Tiers would be here. There is a stretch of the West Tamar
Highway called Muddy Creek which is downhill. The car travelling
under the speed limit will bounce about to such an extent that you
are always fearful that you will topple over the side of the road
into his daughter's house. They have built alongside the highway.
Ms
Forrest - Doesn't he have
a bit of Armco railing to put up there to stop it?
Mr
FINCH - It is that
situation. It was so dramatic that, luckily, DIER has seen fit to
come in and improve that road that they had worked on before. It was
such a patch-up job that they have had to come in and spend another
$350 000 to $400 000 to improve that road. That work is underway at
the moment. I am thankful for that. You could say that it should have
been done properly in the first place.
I
can report that Bradys Lookout is a disgrace. The deputy mayor of
West Tamar, Christina Holmdahl, who is a great campaigner for the
highways, was able to secure good dollars over the years for spending
on the West Tamar Highway when Bryan Green was the Minster for
Infrastructure. She arranged a meeting with Lara Giddings as the
infrastructure minister and I remember that she was so pleased that
the minister would have to come to the meeting using Bradys Lookout.
She would witness, even in the government car, what the community has
to put up with - a dangerous, damaged road that you could not travel
at the speed limit because you would be bouncing all over the road.
At least that money has been allocated, that promise has been
continued - it is north of $6 million.
Mr
Harriss - Approved by a
very well meaning committee, might I say.
Mr
FINCH - Am I right, just
over $6 million?
Mr
Hall - Yes.
Mr
FINCH - It is obvious
that we cannot expect major spending from the state government with
its $283 million deficit. As the Premier put it in her budget speech,
returning the budget to a sustainable position is not something we
can do overnight or in just one budget. It will be hard enough to
achieve the hoped-for operating surplus of $53 million in 2012-14.
So, what to do? We have Dr Ernesto Sirolli working away. That was
positivity and enthusiasm for the most part.
Ms
Rattray - Through you,
Madam President - and you dare not challenge that enthusiasm or that
direction.
Mr
FINCH - No. I must say it
was interesting to hear his thoughts on community development and it
is interesting how sometimes the leaders emerge that can draw that
community development along with them. Hopefully, this is a time when
people will put their hands up and come out as the leaders of the
community, or people with the inspiration take people with them and
think about those new ideas that may garner opportunities for us in
Tasmania.
Do
we lower our expectations for services that are costing us more per
head than on the mainland? I hope that GST revenues will not be cut
further but realise that we cannot morally expect more from the other
states. But we can hope for, and indeed ask the federal government
for, more spending on infrastructure, and the type of infrastructure
that can bring Tasmania economic returns. The federal budget is in
relatively good shape and there are many avenues for applying for
federal funding - not for welfare, but for development, and
particularly the development of smart new initiatives that I have
just spoken about. How Tasmania, for instance, can reap the benefit
from the National Broadband Network for a start, and maybe niche
markets in Asia for Tasmanian food - those opportunities that might
now start to emerge or be noticed now that we are in the circumstance
that we are in. The opportunities are there and I believe it is a
matter of looking to find them.
Mr
Hall - Through you, Madam
President - before the honourable member sits down - with regard to
the statement you made about the pulp mill and the fact it has been
dragging on for nine or so years, you then commented that some of
your businesses could not move on because of the uncertainty created
by that. I am just trying to draw a nexus between that as to why.
Mr
FINCH - Look at someone
like Beams Bros which had the limestone that is critical to the
firing up of the process that develops the process for the pulp
mill. They have a
successful business anyway but that will be the icing on the cake for
them. They have been waiting and waiting for that to happen. How do
they gear up their business, change their business model and set up
their business plan to include that when they are virtually on hold?
Have
a look at someone like Tyco Tamar at Exeter, which I have spoken
about in the House before. When I came into the electorate it was a
small engineering firm employing 26 and now it has 75 employees - and
that is without the pulp mill. Imagine if the pulp mill was to go
ahead. Some of the contracts that would flow to Tyco Tamar for their
construction work would give a huge boost to their business. They are
waiting and waiting, and encouraged to wait and wait, and in the
meantime they are getting on with business, but still with
uncertainty.
Mr
Dean - Blenkhorn Plumbing
is another one.
Mr
FINCH - We have them up
and down the valley. Thanks, Madam President.
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