Tuesday 30 May 2017
Hansard of the Legislative Council


Noting of Budget Papers
Resumed from 25 May 2017


Mr FINCH (Rosevears) - Mr Deputy President, pity the people around Tasmania who become seriously ill around the time of the post-election budget.  They might have to wait until the next pre-election budget to receive the appropriately funded care.  That might be terminal.

I suppose all Tasmanians must get in tune with our budget cycle.  This is obviously a pre-election budget.

Some of the measures could have been made a year ago and would have eased the burden on some Tasmanians, some of whom were languishing in hospitals.  That is the electoral cycle, not only in Tasmania, but we have to adjust to the cycle.

The cycle goes like this.  The first budget after change of government includes those hard decisions, promises and blaming the previous opposition government.  Governments tend to blame the previous government for just about everything, right up to the next election.  Inevitably, every budget before an election is a sweetener.  It is a pity we cannot have stable and predictable monetary measures.  Unfortunately, the electoral cycle distorts orderly budgeting, including this state budget.  Chasing votes is not the best basis for managing taxpayers' money. 

Health is central to this budget and I will get to that later in more detail.  Our homegrown economist, Saul Eslake says this budget is a result of good management and good luck.  The luck includes the windfall gains, averaging more than $350 million a year over the four years to 2020‑21.  This, Mr Eslake says, includes an additional $100 million per year from the GST; an additional $110 million per annum from other Commonwealth grants; also, the generous deal by which the Mersey Hospital was returned to Tasmania, generating an additional $80 million per year by way of returns on the $730 million cash payment; an additional $40 million from GBEs; and about $40 million from stamp duty and land tax.  A lucky Treasurer indeed.

That luck is not only confined to this Treasurer.  When I came into parliament, our then treasurer, David Crean, in the Jim Bacon Government was very lucky indeed with receipts received federally from the GST.  A good time had by all with the troika of Jim Bacon, Paul Lennon and David Crean.  It was a very successful time in Tasmania, boosted by those receipts.

I want to go to Saul Eslake's credit for good management.  He says -

In particular, the upwards revisions to forecasts of state taxation revenue (which are in marked contrast to the repeated downward revisions to revenue forecasts which have undermined successive federal treasurers' promises of a return to surplus) largely reflect the improved performance of Tasmania's economy, something for which the Government can take a share of the credit.

Mr Eslake adds -

The Government is also reaping the benefits of keeping a tight rein on spending in its first three budgets, so that even with the additional initiatives funded in this year's budget, by 2019-20 total government spending will represent a smaller share of Tasmania's economy than at any time since before the onset of the global financial crisis. 

Mr Eslake does sound a cautionary note.  I will quote -

If there is a disappointment in this budget it is that, having consolidated the improvement in Tasmania's financial position over the past three years, it makes no attempt to lay out a far-reaching program of fundamental reforms of the sort required to make meaningful inroads into the large gap between Tasmania's economic performance and that of the rest of Australia, a gap which foreseeable demographic trends will otherwise tend to widen over time.

Whoever is elected to government in Tasmania at the next election, whenever it is held, needs to have a strong and wide-ranging reform mandate if these challenges are to be successfully addressed. 

That is Mr Eslake's warning.  I said earlier that the health service is central to this Budget.  A boost of $658 million to pay for, among other things, 215 nurses, 106 extra beds, 20 doctors, 115 allied health and support staff.  That is good news but cannot happen overnight.  In the meantime, we have reports of mismanagement, a suggestion that dissolving the three local health management authorities and centralising management in Hobart has been a failure, and severe criticism from the Australian Medical Association.

Yes, this Budget is a step in the right direction but much more needs to be done to cope with Tasmania's ailing health system, and the Minister for Health admits this.  This Tasmanian Government seems obsessed with surpluses, unlike the newly enlightened federal government.  I do not know how many times I have had that surplus figure of $54 million drilled into me during the past week.  Yes, surpluses are well and good but do householders with a mortgage have a surplus?  Of course not.  I am not sure, at a time of record low interest rates, that surpluses are a priority. 

It has suddenly become fashionable to talk of good and bad debt.  The federal Treasurer has discovered this is a good way to get away from the talk of budget deficits.  Apparently good debt is borrowing for infrastructure, while bad debt is borrowing for recurrent funding.  First, all government spending comes out of the same bucket, containing taxpayers' money and money from government bonds.  It all swills together.  My argument is that surely investing borrowed or other money in educating the next generation and keeping people healthy enough to work and contribute is just as good a borrowing as borrowing to build a road.  A government that refuses to borrow at record low interest rates to fund a health system, to fund the best education system we can build, and to look after older people, I would argue is morally deficient.  I am therefore not very impressed with surpluses.  I am not sure whether they deserve to win votes in our notoriously manipulated budgetary electoral cycle.

Mr Dean - They are better than massive deficits where we are paying millions of dollars of interest.  I would have thought a surplus would be better than a massive deficit.

Ms Forrest - Is it a cash or proper surplus though?  You can't cash a surplus.

Mr Dean - You are right.

Mr FINCH - I have made my point.  The state Treasurer has been quoted as saying that the Government will not be spending money it does not have.  That sounds good, but can you name anyone who has not done that when needed and caught up later?  Member for Windermere, I have always been a promoter of that.  Have a look at that situation of borrowing for the future.  It was an argument I promulgated with the former treasurer, Mr Aird.  It has been a long-term view of mine.

Mr Dean - It has to be done with good control, I agree.

Mr FINCH - Many Tasmanian hospital patients would prefer to be looked after now rather than when it is too late.  Now is when we need to give the next generation of Tasmanians the best possible education rather than when the state budget is in surplus.  It is a balancing act but that is the way I view it. 

Behind any state budget is what is going on in the private economy.  Let us not talk about native forestry, which has been a long-time drain.  Plantation forestry is another matter.

What is working?  Horticulture, agriculture and numerous smart small businesses.  The stand‑out is tourism.  It gets better and better and will continue to do as long as we do not destroy the reasons for the visitors coming. 

That does not only involve native forest harvesting and the way it is seen overseas.  Who would have thought that the shape of this island - a heart shape - would be a selling point?  The shape of our island is making us millions and is going to make more in the future.  Beijing-based Chinese investor William Wei, who has bought three luxury bed and breakfasts in Tasmania for $20 million, with plans to turn them into wedding retreats, says the shape of Tasmania resembles the shape of a heart.  He plans to buy 10 to 15 similar bed and breakfasts in Tasmania, Melbourne and Sydney. 

Chinese visitors to Tasmania have been growing at an annual rate of close to 30 per cent for the past five years.  According to an article in the Financial Review, Tasmania became a hit with Chinese holiday‑makers after Chinese celebrities endorsed the Bridestowe Estate's lavender bear -

Ms Rattray - Bobbie the Bear.

Mr FINCH - On Chinese social media in 2014, and the member for Apsley certainly has not forgotten that.

Ms Rattray - Interestingly, there is still a limit on how many bears you can buy at one time at the store because there is still such a huge market for them.  You can only buy two. 

Mr FINCH - Is that right?  So if people want to buy the lot and take them home -

Ms Rattray - And try to make money out of it - two at a time.

Mr FINCH - It is interesting how that has caught on, yet still flourished with putting those limitations on them.  If we want a viable economy, we need to look to - among other things - Chinese weddings and lavender bears. 

I cannot respond to the state Budget without looking at it in the context of my Rosevears electorate on the West Tamar.  Of course, the increase in funding for frontline hospital, ambulance, education and training of young people, as well as the continuation of the first homebuyer grants helps my electorate indirectly.  They are all good things.  So funding for tourism is an important part of the West Tamar economy. 

The Budget did not allocate any direct funding for projects on the West Tamar but before the Budget, the Government committed extra funding for the repair of the Beaconsfield mine shaft.  The total for the remediation work is $1.5 million, with the federal government contributing 50 per cent, the state Government 25 per cent, and the West Tamar Council also 25 per cent.  The West Tamar Council mayor, Christina Holmdahl, says this is a good example of the three tiers of government working together to address a problem.  This commitment will ensure that the Beaconsfield Mine and Heritage Centre will continue to be an economic driver for the region.  What do you mean by an economic driver ?  Nearly 45 000 visitors come to the mine every year.  There is no doubt that it underpins the tourism industry in the Tamar Valley.  It is hoped that remediation will have both the shaft and the mine yard sinkhole ready for the start of the tourism season in October.

The other issue for the West Tamar at the moment is the consideration of a possible merger with the George Town Council.  Member for Windermere, you are watching this with a great deal of interest to see whether your electorate will be subsumed into Rosevears.

Mr Dean - And Rosevears will be subsumed into George Town.

Mr FINCH - I had not thought about that.

Mr Dean - That is what I thought.

Mr FINCH - Right, so I could be the member for Windermere.  Both councils have endorsed the undertaking of the feasibility study about the merger possibility, and this process has already begun.  The member for Windermere and I will watch that with interest.

We have a good Budget though, as Saul Eslake puts it, good management and a lot of luck involved.  It is a pity how the electoral cycle that I mentioned before distorts decisions, but that is something we need to tolerate, although it could be better and less cynically managed.  Thank you.