APPROPRIATION BILL 2014 Estimates Committees

Thursday 24 July, 2014

Mr TARZIA (Hartley) (17:13): I would like to sum up this latest estimates process in one word, and that would be 'anticlimax'. I was quite excited about engaging in the estimates process, having scrutinised and analysed the budget papers for a couple of weeks, running through line by line the numbers that affect the good people of South Australia. I have to say that it was very much an anticlimax to see—

Mr TARZIA (Hartley) (17:13): I would like to sum up this latest estimates process in one word, and that would be 'anticlimax'. I was quite excited about engaging in the estimates process, having scrutinised and analysed the budget papers for a couple of weeks, running through line by line the numbers that affect the good people of South Australia. I have to say that it was very much an anticlimax to see—

The Hon. P. Caica: They should have let you ask more questions; they never let you ask any questions.

Mr TARZIA: I agree, member for Colton. This is the good thing about being in opposition, member for Colton: you get to learn the ropes back here, but maybe one day. It is disappointing to see that the government could not better discharge their duty to act as a responsible government for the good people of South Australia. However, in saying that, I do want to say a big thank you to all the public servants.

I was quite surprised that the process was somewhat adversarial. It was very much us versus them, but I do not want it to be that way with the Public Service, and I want to thank them for the contribution they made across the board. I certainly do not blame the good public servants for their work, but I do blame the government ministers. There were some great Dorothy Dixers, and I would probably go so far as to say that there would be a couple of nominations for the Logie Awards coming up for some of the best acting I saw during that process, but here we are.

They promised a surplus; obviously, we saw over a billion-dollar deficit. This year we are also promised a smaller deficit. I am hoping that this government will not be trying to break the record-setting deficit again this year. The major concern for me was cuts to programs that help to stimulate our economy. We certainly need to support our businesses especially and not abandon them, and I will go into a couple of measures that just astonished me.

For some reason, there seems to be an idea that businesses should not be making a profit, that we should be taxing businesses to patch up the budget deficit. What the government obviously has not understood is that if South Australia does not prosper and grow and these businesses do not grow, these businesses will pack up and move interstate.

We have seen it time and time again, and the government refuses to take responsibility for it. We have seen that unemployment in this state is actually the highest in the nation at the moment, at 7.4 per cent, and it is time that we stopped the blame game and started looking for solutions.

In estimates, there was mention of the Olympic Dam proposal, which would have represented a project of tens of billions of dollars of investment in this state, but it was certainly stifled by the Labor mentality of taxing and taxing the economy into prosperity. I can tell you that the idea of taxing economy into prosperity and taxing our way out of this rut is simply not going to work.

I was especially astonished to see that the royalty rate on extractive minerals will be increased from 35¢ a tonne to 55¢ a tonne. That is absolutely remarkable. This is an increase in this cost alone of over 50 per cent—and it is not an increase in cost of over 50 per cent with consultation with the industry, it is an increase in cost which has been quick, fast and without consultation and it is going to hurt mining in this state.

To hear the minister—a minister who is well skilled in the area who says that he wants to promote mining, who says that he wants to promote energy in this state—say that the royalty rate on extractive minerals is going to be bumped up by so much with so little notice to business was terrible. How is a business supposed to budget for that sort of incremental increase with contracts for pricing locked in, with employee contracts locked in and with equipment prices locked in? Anyone who knows anything about the industry knows that most of these contracts are set for 12 to 18 months at least, so to have this atrocious extraction rate increased so dramatically is absolutely absurd and, quite frankly, it needs to be fixed.

I think we need to be proactive in thinking about the future. We need to deal with problems as and when they arise, and Clovelly Park is one such example of the government burying its head in the sand. The management of this issue has been appalling, and we have seen more events in the other house today in regard to this. At least the government's management style is consistent, and we know what to expect with this government: we know that it will react when something goes wrong—that is, to try to cover it up and pretend that it is not a problem—and then, when the truth comes out, blame everyone else for their failure, whether that be the federal government, to echo the words of my earlier colleague, or the higher currency rate.

The state is being struck down by the red tape that continues to be rolled out by the government. I just gave a perfect example that is affecting the mining industry, and we have heard the recent words of BHP. What you have there is a classic South Australian Labor mentality—an increase in costs so dramatic that it is no wonder that businesses are packing up and moving interstate and overseas.

The question is also: what will the government do about our current brain drain? What will they be doing to encourage our businesses to invest and expand in South Australia? There has been some thought that remaining positive is the key to creating confidence; I disagree. I think what you have to do is make South Australia an attractive place for businesses to come to, to invest and to want to value-add and to create, and the example I gave of the mining industry is exactly the opposite of what the government should be doing. They should be creating a much better economic environment for businesses to come here and thrive.

In relation to the 'fun tax', in estimates I could not believe that departmental officials were not able to rule out the tax being applied to certain multicultural events that could be classified as not community events, which was absolutely absurd. The government talks about providing free public transport for the football season but then they talk about charging the Stadium Management Authority $2.5 million for the service. So, obviously what we have here is a clear contradiction. Look, it is creative accounting, it is certainly creative accounting by this government but, let's face it, people in South Australia going to the footy are going to be slugged extra for their football tickets.

South Australia is certainly trailing behind on key economic indicators. Their plan so far is to introduce a car park tax, cut funding for small business, and cut funding for programs which support state productivity for science technology and information technology. I am not an economist but putting local business in a headlock is not the way to stimulate the economy and reduce unemployment.

There are many economic reports out there at the moment that predict a very bad improvement in economic growth for South Australia. Of all states South Australia currently has the poorest result in retail spending, and the policies implemented and adopted, you would think, would encourage business confidence and should encourage investment but instead what they have done is quite the opposite.

Our state's output as a percentage share of the national economy will continue to fall from its current level of just over 6 per cent and our growth is expected to be at 2 per cent per year over the next 10 years, down from 3 per cent in the previous 20 years. I think it is time that the government takes an honest approach to our economic position. Stop blaming everyone else. You have had the reins here for over 12 years. It is time to get this place moving. Let's address the economy, let's address this brain drain.

Our jobless rate is up 24.2 per cent over the decade in the area that I represent and I see them every day, young people walking in off the street from the east and from the north-east of Adelaide; it is quite bad out there at the moment.

The government also seems oblivious to the rising cost of living. We saw that ESCOSA has completed an 18-month investigation into water pricing and the government has finally admitted that SA Water's income or dividends are actually used to bolster the bottom line of the budget and that stinks, quite frankly. Whilst on that topic, what about the sewerage charge? We see here that the sewerage charge has nothing to do with sewerage. It is a land tax and all it is is a transfer of revenue. What we see here are miners and businesses subsidising household water use which means that the cost of operating a business in South Australia goes up.

One has to really ask the question: does the government not realise who employs people in the state? Ultimately, it is not the government, it is business, and to increase employment you need to support business because they are the ones who actually employ the people, they are the ones with their mortgages on the line trying to value-add, trying to get this place moving. They are the ones that we need to support and you would have thought that this budget and this process would have highlighted that that was the priority and the agenda of the government, and it is simply not.

ESCOSA has also said that a very messy web of cross-charges and cross-subsidies that ultimately result in a net payment to the government is not the way to fund this state. Sewerage charges are a tax on the capital value of houses and have no relationship to water use at all. The government simply should not be revenue raising through our water usage. Let's face it, it is a tax—it is a hidden tax that the government is not being transparent about.

With regard to contamination, the government has shown its incompetence time and time again and just like the record budget blowout last year it has broken yet another record. The absolute incompetence over Clovelly Park, with ministers deflecting and dodging more than dodge ball, is absolutely unprecedented. I am actually embarrassed on behalf of the people of South Australia that this has happened. The government said there is no evidence of any adverse health effects for Mitchell Park because it had not even tested the area. Well, go and do the testing that needs to be done. This government should put the safety of residents over their own political interests.

We saw a great example where they put their political interests aside recently in regard to the issue at Families SA. They got on the front foot and they should have done exactly the same thing with this contamination issue, but no, they have not. They only acted when the opposition brought them to account. I am glad the Premier has finally apologised, but now he needs to do something to solve the problem.

We finally saw a backflip from the Premier on providing free health checks to people in the surrounding area, but we need to know more detail. In my opinion, the government needs to be proactive in making sure that testing is done and anticipate the homes which may be, and will be, affected in the future. I am certainly interested to see what this new engagement paradigm will consist of. Apparently 'new engagement paradigm' means they will talk clearly to residents. I am glad to see that we are off to a good start, but I am hoping that dodging half of the allocated questions is not a feature of this new paradigm.

In regard to naval shipbuilding, a Labor government again seems to be very quick to pass the buck to the feds, yet what has been done to support investment in this state over the 12 years they have been in government? That question seriously needs to be asked. South Australia is set to lose multiple jobs directly, indirectly maybe thousands, in the shipbuilding industry and several more related to it. What people do not understand, and they need to, is that what this government has done is create a hostile environment for investment in this state. It has created a high cost environment for businesses to do business in this state. It is called sovereign risk.

Companies, be they interstate or overseas, look at these things. They look at who is in charge. They think, 'Can I get on with these people? Can I have some certainty when I am going into debt, when I am investing in the future? When I am looking on a world map, do I invest in South Australia?'

When you have a government that just does not understand business, when you have a government that does things like increase that mining extraction royalty rate, it just goes to show that they have not learnt their lesson. You would think that after the mothballed Olympic Dam expansion they would have learnt their lesson, but no. They have not learnt their lesson. Unfortunately, this is the way it is at the moment and it needs to change.

Then we go to police. In relation to police, we know that the government is cutting multiple full-time jobs from the prison system down the track. We also heard from the relevant minister that we may not even have enough beds in our prison system in years to come. Peter Christopher from the Public Service Association is saying that the correctional services department is having to use cells in police stations which were never intended for long-term use.

This has massive implications across the state, and the government needs to take this on board and do something about it because it is related to our law enforcement and our courts. What are we going to do with these people? These issues are quite serious. The government needs to stop having a look, stop just making plans about plans, and get additional beds in our prison system. They need to do something in this regard.

We know, we have been told now, and the government has been told that they will not have enough beds, so the time for procrastinating and time-wasting is over. The government needs a solution now so that we do not have prisoners incarcerated for long periods of time at police stations. We have already heard about the toil and the pressures that these good police officers already have. Building in existing prisons is certainly not something you can do overnight and it is certainly something that the government tends to shy away from because it is expensive. Planning for these major building programs needs to begin immediately.

The biggest problem that came out during estimates, and the government shows it time and time again, was that they are not proactive but reactive. What I would like to see from this government in future estimates is to see that they are getting on the front foot, to see that they are not using estimates as a way—and we all saw examples of it—to shy away from accountability. Government ministers are here to do a job. They are here to provide responsible government to the good people of South Australia. We saw the better ministers do that, but some need to have a good hard look at themselves, let's face it.

I draw the attention of the house to one tick of approval, and that is in regard to multicultural grants. I am pleased to say that in 2014-15 Multicultural SA will allocate approximately $1.274 million in grants and contributions, which I am led to believe represents an increase in the amount of grant funding allocated as a result of commitment by the government to provide that extra $350,000 during the election to our multicultural communities.

I represent the electorate of Hartley, and we have an array of multicultural communities, specifically but not limited to the Italian community, the Greek community, the Chinese community and the Indian community. I talk to these community groups regularly, and I am pleased that they will be allocated this extra grant money. These groups, and the various community organisations they are part of, will certainly be pitching for this funding.

It is good to see in particular that Italian community groups and Italian festas are being supported by the government in this multicultural funding this year. I represent many Italian constituents in the area—about 18 per cent of my constituents—and I am delighted to see that extra funding. I can say that these community groups will certainly be applying for this funding, and I would like to see funding in this area maintained and supported.

These community groups do fantastic work for the local community through passing on language skills. There is also a cultural element, and any community group that supports the family unit is also commendable, and many of these do that. You often see many hundreds, sometimes thousands, of people attending these community groups in the electorate, so I am very happy to see the support in Multicultural SA's funding and its commitment there.