Wednesday 22 June 2011

Hansard of the Legislative Council

BUDGET RESPONSE
Mr FINCH (Rosevears) - It is certainly not often that a Tasmanian budget makes an editorial in the Financial Review. It has to be an exceptional budget to achieve that and last Thursday's is possibly the most exceptional budget since the Field Government's 1991-92 Budget. That was a suicide budget because of its austerity, Madam President. Michael Field had said that he knew it would get him and his government thrown out of office, and he was right. Mr Field said he had no option but to make the cuts that he did in 1991. He was shocked by a briefing that he got from Treasury on the State's financial situation.
I do not think our present Premier was ecstatic when she had a similar Treasury briefing and last week's Budget is the result. The Financial Review's editorial paints a pretty gloomy picture, not just for the coming financial year but right up to 2015 and beyond. The editorial says gross debt will be 42 per cent of operating revenue in fiscal 2015. At the risk of depressing everyone, I will quote a few sentences from the Financial Review of Friday 17 June:
'The operating deficit for the current fiscal year is now expected to be $31.5 million, compared with a previous estimated shortfall of $65 million. But this is more than offset by a weaker outcome next year when the deficit is projected to widen to $113.8 million from an earlier forecast of $882 million. And the State's position in the out years are also now expected to be worse than at the time of the release of the Mid-Year Financial Report prepared after Ms Giddings became Treasurer. That's got a lot to do with the anaemic economic growth that the Tasmanian Government is now forecasting for the next few years; gross state product is tipped to expand by just 1.75 per cent next year and only 2.25 per cent in the subsequent three years. Economic growth next year will be less than half the national average predicted by the Reserve Bank.'
That is the Financial Review's take on our economic situation, Madam President. Of course another factor is the predicted $343 million in lost GST revenue so the Government had little options but to take some very hard decisions and I think it deserves credit for that. However, while some voters admire courage, it rarely translates into votes. We will see eventually if this is indeed another suicide budget but Tasmania is certainly in for a tough few years. 2015 seems a long way away but then so is the next election, Madam President, in March 2014.
There may indeed be a surplus of $48.4 million in 2012-13 but it is likely to be followed by a deficit that following fiscal year of $14.5 million. Things can sometimes look worse than they are and I would suggest that some of the proposed cuts are in fact opening gambits. The public sector is to shed the equivalent of 1 700 full-time jobs over four years. I do not know what the natural attrition rate in the public sector is but I suspect it would not be far off the 1 700 jobs in four years. Of course losing those jobs means a bigger burden on those remaining, especially in Health. Ultimately that must affect services, again, particularly in Health, Madam President.
Police numbers are to drop by 50 in the next year. The member for Windermere is not here at the moment, the member for Rumney is here at the moment but I have a feeling - I do not know if you will agree with me - that police officers have to do tasks which could be carried out by civilian workers - bureaucratic jobs, the paperwork and so on. A cut of 50 jobs will no doubt be noticed but it may not translate to a disaster on the streets.
Mr Mulder - Who is going to do the paperwork if those policemen are not doing it?
Mr FINCH - Yes, and if the public service numbers need to come back.
Mr Mulder - It comes back to the basic thing, what services are we cutting that underlie what numbers we are cutting? If there are things that we no longer need to do anywhere in the public service then you are more than justified in cutting jobs, but you cannot cut jobs and expect the same level of service.
Mr FINCH - Are you not glad you have made your inaugural speech?
Mr Mulder - Yes, I am.
Mr FINCH - Thank you for that.
Mr Mulder - You asked me the question.
Mr FINCH - Thank you for that contribution.
Mr Mulder - It was not an interjection. It was an answer to a question.
Members laughing.
Mr FINCH - Proposed school closures, Madam President, of course are already hotly debated and the arguments will strengthen. Twenty schools. Well, I am prepared to bet that 20 schools will not close. Apart from some flexibility in proposed cuts there are some -
Mr Wilkinson - Be brave. How many are going to close? We all know 20 are not.
Mr FINCH - I would not take a bet on how many are but I am prepared to bet on the fact that it will not be 20. What do you predict? What would you say? What do you think?
Mr Wilkinson - I would not have a clue. I am saying it will not be 20. I think everybody realises that it will not be 20, especially when you look at the contract as well, which we looked at yesterday.
Mr FINCH - I did make this note a couple of days ago and events are unfolding and we are finding out more, are we not, as the days go by and the time goes by and as the news bulletins go by we are hearing a different take and a different sense of what is actually happening out there in the market place.
Ms Forrest - The goalposts move every day.
Mr FINCH - The goalposts move every day.
Ms Forrest - It will be on a new playing field next week, I reckon, as well.
Mr FINCH - Which schools?
Ms Forrest - It could be one of the schools that are not even on the list.
Mr FINCH - Yes, so that was not really a bold statement of gambling, was it? No. I will talk a little bit more about that just in a moment.
Apart from some flexibility in proposed cuts there are some silver linings in the economic cloud. A business cannot complain about the cut in payroll tax and this may have something to do with employment predictions of 5.75 per cent next fiscal year and the following one - worse than the present 5.6 per cent but it hardly could be considered an employment disaster except for perhaps unskilled young people and maybe the long-term unemployed.
Of course, Madam President, it would be a dull State budget without Saul Eslake. He was relatively optimistic in an ABC television interview on the night of the Budget last Thursday. He did point out that the State Government's past record of delivering on savings was not all that good. In fact that was Mr Eslake's main point. Can the Government deliver on its proposed savings? Not just this coming fiscal year but in subsequent years. Mr Eslake said that for several reasons Tasmania was inefficient in delivering services. We have already heard about that in the debate this morning. Although he has been critical of Tasmanian education outcomes in the past, Mr Eslake was not too concerned about the closure of some smaller schools. He maintained that bigger schools give a better education although this might result in more time on school buses for some students.
Overall, Madam President, Mr Eslake's opinion of the Budget was upbeat and really so is mine. I do not see what other options the Premier could have found. It is always more effective to act early rather than let a poor situation slide, as we heard from the member for Huon quite strongly, pointing out that perhaps that action should have been taken quite some time ago. I would not dispute that at all but at least we have a situation where action is being taken.
Mr Hall - There is no choice.
Mr FINCH - There is no choice. There is no room to manoeuvre, room to move and maybe put a bit away for a rainy day. What is the saying? When the barn is empty you have no hay in it? Come on, you are the man from the country.
Ms Rattray - I heard the barn has burnt down.
Mr FINCH - Your barn has gone, has it? What is the saying? There is no hay in the barn.
Members interjecting.
Mr FINCH - Thanks everybody for your help. I am sorry I started this.
Mr Wilkinson - Even the rats are going out when the hay isn't there.
Mr FINCH - Even the rats are sinking. Please stop; let me go on.
Ms Forrest - You started it.
Mr FINCH - I know, I apologise for that.
The Financial Review editorial spoke of 'anaemic growth' in Tasmania. That has been the situation really, on and off, for the past 200 years and I would argue that there is no miracle in store for us. It would be remiss of me in a grievance debate not to mention the silt. Now I have your attention. I will refer to a conversation that I had with the minister who is responsible for the silt in the dining room.
Members laughing.
Mr FINCH - Can I advance the discussion about that? He was eating a bowl of silt at the time, which I had brought from Launceston especially for him, but he did break the news to me that there was, in fact, nothing for silt in the budget. When I picked myself up off the floor he said he was only joking. He said, 'But you will be disappointed, I have just called the Mayor, Albert van Zetten, and there is $250 000 for silt for the next year'. So I picked up the spoon out of the sugar container and I said, 'Will the dredge be a little bit bigger than this?'
Ms Rattray - The dredge?
Mr FINCH - The dredge that has to take out $250 000 worth of silt. It is like using a teaspoon. It will go absolutely nowhere.
Ms Forrest - Use a tablespoon; that would be better.
Mr FINCH - The tablespoon; I picked up the wrong spoon. Suffice to say, and I did say to Minister Green at the time, and I did not get hot under the collar -
Ms Rattray - You did so. I was sitting beside you.
Mr FINCH - No, no, I know the steam coming out of my ears was a dead giveaway but I did say to him that in future, as we reflect on the years of this Government, probably their biggest embarrassment will be that they have not grasped the nettle and taken on the challenge of supporting the people of northern Tasmania and Australia and, if not setting up a statutory management authority as was recommended in our report, at least taking on the challenge of doing the right thing by the people of northern Tasmania, the people who love that river, and sorting out the priorities, getting a handle on the problem and working to solve it. As I say, that is a speech for the future and history will not judge this Government well on this issue.
Let us look on the bright side. We have to think about the wonderful benefits of being able to live here in Tasmania. We may not have the most dynamic economy but we are not Greece. I think it calls for us to tighten our belts. But always be mindful that we live in a place that borders pretty closely on paradise.