Wednesday 29 May 2013

Hansard of the Legislative Council

CONSOLIDATED FUND APPROPRIATION BILL (No. 1) 2013 (No. 33)

CONSOLIDATED FUND APPROPRIATION BILL (No. 2) 2013 (No. 34)

Noting of Budget Papers

BUDGET REPLY

Mr FINCH (Rosevears) - Mr President, enter the eternal optimist. Budget deficits do not faze me and I am not obsessed with surpluses. You could argue that a budget surplus is money sitting there that should be put to work. A predicted deficit of $426 million for a population of about 500 000 is, by no means, startling. It is better than some other states and a better state debt per population than most developed countries in the world. Some economists would argue that it is not a bad time to owe money with interest rates at an historic low. Some would say it is a good time to borrow more, provided it is used to stimulate the economy and create jobs, preferably through infrastructure development.

I take any promises about a return to surplus with a grain of salt, as we have experienced over recent years. Whether it is Labor promising a surplus in 2017, or the opposition promising one a year earlier, there are too many imponderables to make such promises. If you talk to someone in the street and ask them about a date for a return to surplus that would suit them, you will find that they have many other pressing concerns.

This budget contains no new taxes and no increases in present taxes. I contrast that with Queensland where households and businesses will be hit with tax increases in next month's budget following a further write-down in revenue. The Newman government is under pressure to either raise taxes or cut services in Queensland's 4 June budget. The Queensland Treasurer, Tim Nicholls, has admitted there will be tax increases in next month's budget to make up for revenue shortfall. I have a quote from the Financial Review. He said:

The budget is being framed under tough circumstances. We are going to have to look at increasing taxes to make up for the revenue shortfall to maintain services.

So, the Sunshine State, unlike Tasmania, is planning tax increases. We are seeing drops in revenue all round. When that happens to an individual, if they are sensible, they will cut non‑essential spending but they will not sell the car which takes them to work, they will not cut the food budget so that the family's health is compromised, leading to additional medical expenses. So it is with governments - if you cut spending too far you create greater unemployment.

This leads me to what the Premier says is a key part of her government's future strategy and we have heard the term 'jobs, people, opportunities'. It is a heading that features prominently in the budget papers. No one could argue against that concept. Tasmania has the highest unemployment rate of any state and everything possible must be done to correct it. The Premier touched on a number of job initiatives and perhaps the most noteworthy is the reintroduction of a payroll tax rebate. I have always found it difficult to reconcile companies being taxed to employ people, with a need to get them to employ more workers.

Ms Forrest - If you read the history of the introduction of payroll taxes, it was supposed to be a consumption tax that was right across the board, low rate, broad based. It has been completely decimated on the way to now, a very narrow base, and the problems we have.

Mr FINCH - It is obviously a very hard one for governments to give up. Lifting the payroll tax threshold from $1 million to $1.25 million will help, but why tax jobs at all? It is obvious that if a Tasmanian does not have a job they spend less on goods and services and thus the stimulus of their spending is lost to the economy. That is why I am alarmed by the state opposition's promise to sack 500 public servants, some through attrition, but to achieve the aims that were set there would need to be people let go.

Mr Valentine - It is still putting pressure on those who remain in the workforce. That is the trouble.

Mr FINCH - Absolutely.

Mr Valentine - They need to rationalise services more than cut the numbers.

Mr FINCH - And you would have a good understanding of that circumstance in your previous experience. When Ford planned to sack not much more than twice that in 2016, it was seen as a national calamity with calls for urgent retraining and new job placements but in this strange world there seems little concern for the future of 500 Tasmanian government employees suddenly without an income to spend in our economy. Sacking people may save a salary's budget but the economy pays in the end.

New mining developments are being seen as some sort of jobs silver bullet. They will help, especially in the development phase but you can only dig up minerals once and they always run out. We must not allow utopian concepts of a mining boom to distract us from developing permanent and sustainable industries, although I might point out I am a supporter of the mining industry because I know the importance of it, particularly for young people, and the opportunities that it creates. I remember as a young person wanting to travel, not from a well comforted background, and I had to go out and work to get the money to travel. That took me to Savage River. The opportunity was there for young Tasmanians to go up to Port Latta, apply for a job and get into Savage River, and you had a job to earn the money to go where you wanted to go. That helped me to go on to the Pilbara where I worked at Dampier, Karratha, Tom Price and various other locations. The mining industry is an important part of my development, and still is and can be more so for young Tasmanians if we develop the mining industry even more.

I thought it was interesting when we did our tour to the Tarkine recently to have a look at what had gone before. People who would go into the Tarkine now would look across at Mount Lindsay and say, 'Wow, how good is this wilderness'. Compare that with a photo taken in the 1890s or the early 1900s when it was being mined. It was over a century ago and here was a big photo of how that area was being mined and developed and the hillside was rampant with people, buildings and a big working mine. Nature has recovered that and today the mining methods, the ecological restraints, the environmental restraints that are on mining companies will see it treated in a more harmonious way, so I am going to be a supporter of the development of those mines. I am a glass half-full person and that is what I am working on.

I see some hope in a number of initiatives mentioned in the budget speech. In irrigation almost $39 million is to be spent in the next fiscal year on projects such as the Midlands, Lower South Esk, Kindred, North Motton, the South Esk and Upper Ringarooma. There has been money spent and there is more on the way for that irrigation scheme. This fits perfectly with a push to sell more Tasmanian produce into Asia.

It would be remiss of me if I did not talk about tourism. It is a vital industry in my electorate. There is some money in this budget, an additional $1 million for marketing, and the same amount for remote air access to Tasmania. It is welcomed but of course not nearly enough. As we have seen in the opposition's budget, there is $4 million for each of the next four years, which sounds more appropriate.

Mr President, the subject of health services does feature strongly in the budget, as it should, but a notable omission is palliative care, which is becoming a big issue in the north. Last Friday about 200 people attended a rally in Launceston to call for funds to establish a hospice, preferably on the site in Howick Street near the Launceston General Hospital. More than 2 500 people have signed a petition in support of the establishment of a purpose-built ground-floor facility in Launceston. It is an issue that has not gone away.

I remember back in the early 1990s interviewing on ABC radio Lach Hardy Wilson, who drove the establishment of The Manor. We talked about this development of the idea of the hospice facility that became Philip Oakden House at The Manor. It served a fantastic purpose in our community and people were very appreciative of that facility. Unfortunately, further development of that area and facilities has seen that close down. The people who have an understanding of how important that role was are still working to find a replacement for Philip Oakden House.

Under the heading 'People in the Budget' are details of the government's recognition of the importance of preventative health and of course it is high time that this had greater recognition. It is interesting to see in our report yesterday from the Auditor-General that they use the word 'preventive' health. I have never used that word but it plays the same role as 'preventative' so I might try the two. If I start to stumble over one I will use the other.

Preventive health is really an individual's responsibility but we could all do with some help from the government. We have far too much abuse of health in Tasmania. We only have to read the Auditor-General's report of yesterday to see our figures on smoking and obesity and other issues. We have the highest rate of smoking in the country. If the member for Windermere was here now he would be nodding away and pleased that I was discussing that particular subject because it is one of the peccadilloes that he goes on about. We have an increasingly high incidence of cardiovascular disease. Many of us are overweight. In short, it is well recognised that our health services are totally unsustainable unless we can keep more people out of them.

I remember saying here quite a few years ago, when I talked about the ever-increasing medical costs, that if we keep going the way we are going, when health had become a third of our budget, it is going to be the entire budget in the future. In the report from the Auditor-General we saw the escalation of medical services, just going off the radar.

An additional $1 million for targeted, evidence-based preventive health measures is welcome but, again, it is a fraction of what is needed. I read in this morning's or yesterday's Mercury that the Minister for Health is going to accept those recommendations from the Auditor-General's report, which is a good signal that it is not being ignored. Is it not obvious that every million dollars spent keeping people out of the health system saves much more than that amount in the system.

Mr Gaffney - Maybe we should ask the Auditor-General to do a few more reports about other things and I will accept his recommendations as well. It might be the way to go.

Mr FINCH - What are you thinking of?

Mr Gaffney - There were 15 recommendations accepted, so maybe we could get him to do some others.

Mr FINCH - Just on that subject, I cannot help but feel so much faith in the way Mike Blake and his team are functioning as the Auditor-General's office. Right from the get-go when he came here, I was very impressed with his manner and the way he went about his business. Then, to go to a briefing such as we had yesterday and to see the way the officers presented their evidence, conducted themselves unemotionally and gave us their report directly. The reports they had laid out for us were very well done and really good grist for the mill.

Mr Gaffney - It is hard to see them doing that work with decreased numbers too.

Ms Forrest - There have been significant budget cuts in the office of the Auditor-General.

Mr Gaffney - Yes.

Mr FINCH - I missed the call for notice of motion today, but I will put it on the notice paper tomorrow that I would like us to consider and note that report from the Auditor-General because I thought there were some really good indicators that will be good to get into the system and the Minister for Health can see that those recommendations need to be supported.

While on preventive health, I note the reference by the Premier in her speech about sport. I will quote:

We are also helping Tasmanians to adopt healthier lifestyles by investing in better sporting and recreational facilities. Over the next two years, for example, $1 million is being provided for the trails and bikeways program to encourage healthy, active lifestyles and better-connected communities.

Perhaps the most important factor in preventive health receives no mention. Healthy lifestyles start in school, the earlier the better. I believe there should be a greater emphasis on looking after our own health from early primary school onwards. Individual preventive health should be a school subject. We put the pressure back on parents to have an understanding of that; they have never learnt about it. It is only what they are picking up through the media, through magazines and through general chat, but a lot miss out on dealing with that subject as well, so children are developing unhealthy lifestyles right from the word go. I think there should be more focus in schools on healthy lifestyles.

Mr Gaffney - That is a really good point, but schools do a lot of that already. Where they are spending the money now is to reinforce that to the family that that needs to be reinforced in the home. Families need to support these things happening across primary schools and high schools.

Mr FINCH - While on the subject of schools, I want to mention the Gonski education reforms. Although the government has not signed up yet, there is the allocation of $83 million across the budget in forward estimates to improve educational outcomes. There is no doubt that Tasmanians are behind much of the rest of the country in education, although it is obviously the key to our future. Education needs much more support and resources and hopefully the Gonski initiative will be a start - another start.

I have read, amongst the numerous reports of the end of Ford automotive production in Australia, that a big factor in whether Ford workers will be able to find new jobs, will be their literacy skills. Almost 45 per cent of all Australian adults are said to be functionally illiterate and will find it increasingly difficult to find a job. I do not know the rate of functional illiteracy in Tasmania. It is complicated to define but whatever the rate is, it is too high and the problem must be urgently addressed.

Ms Forrest - That was a national figure you gave?

Mr FINCH - Yes.

Dr Goodwin - I think ours is higher than that - 51 per cent or something.

Ms Forrest - It is higher. The figure of 48 per cent was one I heard recently but it is higher than the national average.

Mr FINCH - That is terrible. People who have been in a job like the people at Ford Australia have been there probably all their working lives so they have been in a comfort zone in respect to the skills that they have. Now they are being challenged by having to find a new job. If they do not have those skills that are commensurate with the new employer's requirements, they are on the scrap heap.

Ms Forrest - In the briefing we had this morning about the TasTAFE reforms, one of the challenges that was described to us was with forestry. For people who lost jobs in forestry, basic literacy and numeracy is the challenge and the problem is in seeking other training opportunities. Some of the people in that situation probably lack numeracy and literacy.

Mr FINCH - A problem that must be urgently addressed.

Back to my eternal optimism, one of the problems facing Tasmania when the budget was brought down was cited as the high Australian dollar. It was above parity with the United States then and now it is down to around 95 cents. According to many economists it is heading towards 85 cents, so that is one problem, the fixed interest rate.

The problem with declining GST revenue remains and that can only improve as a result of other economic factors beyond our control. Governments around Australia are all facing the same problem, declining revenue, and that is basically a federal issue. There is no doubt that our taxation system must be reformed.

I want to finally mention a taboo subject.

Ms Forrest - Are you talking about state taxation?

Mr FINCH - No, the taboo subject is GST - federal. Should we examine more closely the increase in the GST