Mr VAN HOLST PELLEKAAN ( Stuart ) ( 11:03 :04 ): It is my pleasure to stand here in this place on behalf of the people of Stuart and speak on the Appropriation Bill. I indicate that I am not the lead speaker. The Leader of the Opposition will be the lead speaker on behalf of our team but, while I am not the lead speaker, I, of course, do take this very seriously, as do all my colleagues.
This is the first day of a new financial year—a key date for many organisations running financial accounts. Not everybody works on a July to June year, but most do, so it is a critical year. It is a critical year as well for South Australians who may not be running companies or other organisations. For South Australians earning wages, trying to pay the bills, trying to put food on the table, trying to pay their mortgages and trying to look after their kids, it is a key day for them too, because it is 1 July and it is the first day of another year of higher taxes, reduced services and fantasy forecasts by our state Labor government.
I have spoken many times in this place about the never-ending stream of Labor government predictions of a budget surplus in two years’ time which, of course, never materialises. We will have a $1.232 billion deficit for this 2013-14 financial year which has just finished. Mr Speaker, as I am sure you know, that was originally planned by the state Labor government to be a $480 million surplus. The surplus never came. The surplus was never likely to come and, instead of a $480 million surplus as predicted by the then treasurer, we now have a $1.232 billion deficit, so a $1.7 billion turnaround from what was predicted to what we are actually going to get.
But they tell us it is okay. They tell us not to worry because in two years’ time there will be another surplus. With every budget we get for a long time there is another surplus forecast two years down the track but we know they do not come. The public of South Australia knows they do not come and, while they will never say it, members opposite know that they will never come. In seven years of predictions that we have on the books at the moment, there has been one surplus delivered—one surplus out of seven years, and that is a fact that all South Australians are fully aware of.
We have been speaking on this issue for years. We have been highlighting for years that it just does not happen, but people are very aware of how things work now and I understand that the Treasurer got a very rude shock in the budget lockup this year when he was told very directly by experienced commentators that his assumptions about economic growth and the budget were flat out wrong, that they would not eventuate. I was not there, obviously, but I am told that he was told very directly that the assumptions of growth upon which he has based his predicted surplus in two years’ time were fantasy.
It is very much like trying to get a loan from the bank based on a predicted income increase in the next few years, trying to tell the bank that you are going to get a promotion or a pay rise or your household income is going to rise so, ‘Could I please spend this money? Could I have this loan to spend this money?’ The banker says, ‘Go away and come back once you’ve got the promotion. Once we know that that income is secure, come and see us again—that would be great—but until then we don’t want to talk to you.’
The difficulty is that the state government does not operate that way. It just keeps putting these predictions further and further out into the future and increasing its debt. This government has been warned by business, warned by the Auditor-General, warned by the public, warned by public commentators and warned by us, but it does not change its plans. In 2010, 100,000 additional jobs were promised by 2014 by this government. That promise was then extended to be delivered in 2016 and the government is still trying to pretend that it will fulfil the promise, but it is the only one who believes it.
In just over four years we have actually gone backwards in regard to jobs. We have fewer jobs now than we did in 2010. We have lost 19,600 jobs in the last 12 months alone. South Australia’s unemployment rate is now 6.8 per cent, the highest of all mainland states. We have extremely poor business and consumer confidence. No-one believes the government’s fantasy forecasts. To achieve the fantasy forecast of delivering an additional 100,000 jobs by 2016, this government would need to deliver 4,800 jobs per month every month between now and 2016 and, of course, nobody believes that is going to happen.
Only Tasmania has worse unemployment and a higher unemployment rate than South Australia, but they do now have something that we do not have. They have a newly-elected Liberal government and what has followed immediately on the heels of that newly-elected Liberal government is the highest business confidence in the nation. Tasmania has the highest business confidence in the nation right now.
They can all see that things have changed for them. They can all see that they are now on the right path. They are off the path of promise surpluses, deliver deficits and then say that it was somebody else’s fault, and then again, promise surpluses and deliver deficits and say it was somebody else’s fault. They are off that path; they are off that treadmill. They have the highest business confidence in the nation.
Business confidence is vitally important. We in the opposition do not support businesses just because we want business operators to be successful—it is not about that. If they are successful, that is fantastic and good luck to them. We support businesses so that businesses can create jobs. That is why it is important to support businesses—particularly small and medium-size businesses—because they create jobs.
Labor keeps mismanaging our state’s finances; it keeps breaking promises, and is now trying to blame the federal government for its own problems. The federal government is actually increasing funding contributions to our state but not at the fantasy levels offered by the former Labor federal government. The Victorian government did not believe the former federal Labor government, so it did not factor the fantasy forecasts into the forward estimates and so it is now not having to try to make the excuses that our state Labor government is making because it wanted to believe them. If they reached into the depths of their hearts they would have known it was not possible. They would have known that they would not have eventuated, but they just wanted to believe them and now they are trying to blame somebody else.
State Labor chose to accept the fantasy, just as it still holds to its own fantasies of surpluses in two years’ time and 100,000 extra jobs in two years’ time. Victoria knew this promise from the former federal Labor government could never be delivered regardless of who happened to win the last federal election. Whether it was Liberal or Labor that won the last federal election, those fantasy promises from the former federal government would never have been delivered. The Victorians did not count on them and our government should not have counted on them either.
Our state Labor government now tries to blame all its deficiencies on the federal government: the deficiency of poor financial management perpetually spending more than is available, the deficiency of predicting fantasy growth rates within our economy, the deficiency of not reigning in spending when it is clear that these growth rates will not be achieved, and the deficiency of broken promises and cost blowouts identified by the Leader of the Opposition and the shadow treasurer in our response to the budget.
We have identified 37 broken promises and cost blowouts from this government which are obvious from the budget which has just been released. There are too many in the time that is available to me to name, but I will touch on a couple. The promise of no privatisation is one which this government has made for a very long time, yet it sold the Lotteries Commission, the forward offtakes for over 100 years for the forests in the South-East, and this year, having promised no privatisation, the government is going to sell the Motor Accident Commission.
Another promise which I fear will be broken is that of no privatisation in our Correctional Services system. As a former shadow minister for correctional services this is particularly important. As a person who represents the electorate of Stuart with two prisons and an enormous number of people working in community corrections in our electorate, I asked the Minister for Correctional Services in question time whether he could confirm what I had been told on good authority: that services within the correctional services system would be privatised. He was not allowed to answer—the Treasurer answered saying that no facilities would be privatised.
However, I fear that we have another broken promise on the horizon: the privatisation of some services within our correctional services within this state and that concerns me, and members on this side of the house, very much.
Let me put it in context. Two years ago, when former treasurer Snelling was in office, he started his budget speech in this house by saying that South Australia would be in a very different place in a year’s time—
The Hon. J.J. Snelling: Ten years’ time.
Mr VAN HOLST PELLEKAAN: In 10 years’ time.
An honourable member: No, it was a few years’ time.
Mr VAN HOLST PELLEKAAN: I do not think it was 10 years, former treasurer. We can check the Hansard, but suffice to say that the former treasurer said that South Australia would be a very different place because BHP’s Olympic Dam project would be up and running. It is a shame that that project is not up and running, but to base budget estimates on those sorts of predictions before they are confirmed is just symptomatic of what is going on, and current Treasurer Koutsantonis is doing exactly the same thing. The government knows that it is doing the wrong thing, but it continues to do it.
Another deficiency is their being addicted to the belief that more and more debt will solve the government’s problems; I think that is probably one of the worst. Broken promises are right up there, but trying to tell people that you can borrow more and more and everything will be okay is not going to cut it.
Another very serious deficiency of this government’s financial management of our state is that they genuinely believe that it does not matter how much damage they do to our economy, that as long as they are re-elected it is worth it, even when they know that each and every South Australian will eventually have to pay the very high price attached to Labor doing whatever it has to do to stay in power, to look after itself rather than the state. How sad that is for the people of South Australia because the reality is that a lower price up-front is much better than a much higher price later, and that is what Labor is doing to the people of South Australia.
State Labor is now trying to blame all of its deficiencies on the federal government. An example of this is the Minister for Education, who recently visited the electorate of Stuart. I welcome all ministers to the electorate of Stuart. I genuinely try to help them; I make my office, my staff, anything I have, available to them so that their time in the electorate can be productive and useful. But instead of trying to be productive and useful, unfortunately on this occasion the Minister for Education continued this rhetoric of blaming federal funding decreases for the current government’s situation with regard to the budget.
The reality is that, over the next five years, the federal government will actually increase its contribution to South Australian state government schools by 37 per cent. It will go from $334 million in the 2013-14 year up to $558 million in the 2017-18 year, a 37 per cent increase. That is very significant and very important, but still the government tries to paint it as if it is decreasing. The state government had already announced $240 million of its own cuts to education before the federal budget was handed down.
The Minister for Education, who, no doubt, has done this in other electorates too, came to Stuart identifying specific amounts of money that would be taken away from every single school in the electorate of Stuart as if that was the federal government’s doing. Every member of this house knows that it is the government, the minister and the education department that identify how much money will be taken away from every school. So, to try to put a dollar value to school A, school B and school C as if Tony Abbott has somehow come in and wielded the axe in that school is deliberately misleading. It is the state government that makes that decision; it is the state government that has that control.
This type of rhetoric is just not credible, given the existing track record of financial mismanagement this government has: predicting surpluses that do not eventuate; the $1.2 billion deficit for the 2013-14 year, with no impact whatsoever from the federal budget on that 2013-14 year; predicting a fantasy $248 million surplus for the same year but delivering that $1.2 billion deficit—and that is after receiving $1 billion of extra GST top-up money from other states. The government actually spent well in excess of $2 billion more in the financial year that closed just yesterday than it had in income.
Nobody believes this government when they try to blame the federal government for their financial mismanagement. We are heading to over $14 billion of state debt, plus unfunded liabilities, which are real liabilities which the public of South Australia have to deal with. We are going to be well in excess of $20 billion when you add up all the exposure South Australians have to the excesses, the poor management and the broken promises of this government. It is actually South Australians who have to pay it. It is not the government doing whatever it can do and saying whatever it has to say, pretending to be all things to all people and not caring about the realities of financial management just so that they can get re-elected. Eventually, South Australians have to pay.
This goes straight to the cost of living for every South Australian household and every single person. In the last 12 years of this state Labor government, there has been a cumulative 40 per cent inflation—a 40 per cent CPI increase—yet housing rental has gone up 54 per cent, property charges have gone up 87 per cent, state taxes have gone up 92 per cent, gas bills have gone up 136 per cent, electricity bills have gone up 160 per cent (four times inflation) and water bills have gone up 227 per cent.
I started by saying that this day, 1 July 2014, is a very sad day, for many reasons. This budget comes into effect today. But guess what? So does another 4.4 per cent increase in our electricity prices. This is after the Treasurer forecast, only a few months ago, that South Australians would have a 0.9 per cent decrease in their electricity prices every year for the next three years. The Treasurer said electricity prices would go down by 0.9 per cent every year for the next three years, but they have actually gone up 4.4 per cent just for this year. That is the type of financial mismanagement that concerns me enormously.
The increase in the emergency services levy impacts on all people who pay the emergency services levy in our state and it is an absolutely disgraceful thing to do under the guise of emergency services. It is as if our emergency services professionals and volunteers are somehow at fault. It is just an increase in tax. It is an increase in tax right across the board. It is an increase in property tax: it is essentially the same as a land tax increase.
The emergency services levy increase, which is attracted by the ownership of property, goes to every household that owns a property, every landlord who owns a property, and every person who rents a property (because, eventually, the landlord will have to pass it on). It goes to every small business. It is a tax on small business and a tax on employment. Every business in our state that works out of owned premises is going to pay this extra tax. Every business that works out of rented premises is going to pay that tax, because the landlord will pass it on eventually through the rent.
The business will get this increase in the emergency services levy through its outgoings and commercial tenancy agreement. It will directly pay it straightaway, and it will add costs to that business so that that business is unable to employ people, which is what we really need. We need to be supporting businesses, not dragging them down, so that businesses can employ more people so our economy can grow. Take the handbrake off our economy so that people can have jobs in our state.