Budget Reply Speech: For the budget to rise, we must change the culture of waste
Can I say, Acting Speaker, that the Treasurer came into this place on 18 June and he spoke with a level of hyperbole that I think would make Homer Simpson blush. He came in here talking about this budget being a reformist budget and of this budget being a landmark budget, and I am not going to stand here and requote Simpsons Wikipedia—I think that is publicly available information that all people can see.
Can I say, for a reformist budget, this budget fails to deliver on so many different levels. The centrepiece of this budget is cuts to stamp duty, but these cuts do not fully come into effect until after the 2018 election. The Treasurer stood up here today and said we were trying to flip-flop on our decision on whether or not we support tax cuts. Of course the Liberal Party supports tax cuts; it is in our DNA. But for the Treasurer to sit there and say, 'We are going to save the economy, but we are going to save the economy after the next election, we are not going to save the economy now,' belies the fact that this government does not take the fact that we are in a jobs crisis seriously.
We have need of relief now. The jobs crisis is one that we have now. The unemployment rate is 7.6 per cent in seasonally adjusted terms and that is not in 2018, that is happening now. The job losses that we have seen at Leigh Creek, BHP, Arrium, Holden's, Santos, Caroma Industries and JBS Australia are job losses that are happening now. We heard just the other day about Tagara and the job losses that are almost certain to happen there. This is a crisis that is on our doorstep and it is here right now and the government, if it was serious about dealing with this issue, would commit to reform right now.
The second point that I would make about the stamp duty cuts is the fact that this is not a reformist agenda. In fact, this is an agenda that the government committed to be implemented in 2009-10. It was a reform that the government committed to reintroducing in 2012 and on both points the government squibbed their opportunity for reform in this area. To come in this place and re-announce for the third time that they are going to implement a reform is the same way that they come in here and talk about the infrastructure saviour of South Australia being the electrification of the Gawler rail line. It genuinely is a case of 'We will believe it when we see it.'
If this government was committed to dealing with the crisis that we have on our doorstep right now then it would commit to payroll tax reform. Payroll tax reform would hit at the heart of the disincentive that there is to employ people that is inherent in payroll tax. It would deal with payroll tax swiftly. It would deal with payroll tax in more than just a two-bit way by extending the threshold offset for a further 12 months. If this government was committed to dealing with the jobs crisis then it would not try and pass off $1.3 billion a year of infrastructure spending as being anything other than a cut, which is exactly what it is. The government would commit to building the Northern Connector straightaway. It would commit to finalising the investigation into the Strzelecki Track.
I am a little bit of a student of history in this place and it disappoints me that many in the community do not respect Sir Thomas Playford as they should. Sir Thomas Playford is unequivocally the greatest man to ever sit in this chamber. As he looks down upon us—and interestingly he looks down upon me—he judges me on a daily basis. He should judge this government on a daily basis because of their ability to denigrate and their ability to make South Australia much less of an entity than it once was.
When Sir Thomas Playford completed his term of office in 1965, South Australia was the third most populous state in Australia. South Australia was the third largest state economy in Australia. South Australia had doubled its population over the preceding 30 years. South Australia had brought hundreds of thousands of manufacturing jobs—in that time new industry jobs—to South Australia. This is a man who through his wit, tenacity and undying love for South Australia managed to cobble together what was otherwise an agricultural commodity-based economy and turn it into a manufacturing powerhouse. Ever since that time and undoubtedly over the last 13 years this government has sought to work away bit by bit at the legacy of the beautiful Sir Thomas Playford.
It is a legacy that we here should all acknowledge and it is lessons that we should all be learning. He was a great man whose legacy to South Australia should be taught fervently in year 10 Australian studies and social studies to make sure that we are aware of his remarkable history and that we give thanks for the fact that he was born in South Australia and did the good work that he did.
If the government was serious about dealing with the jobs crisis then it would deal with the waste, mismanagement and blowouts in this budget. Exhibit A is the fact that once again the government blew their own budget estimates from last year, this time to the tune of $201 million. This comes on the back of $331 million that they blew in their budget last year for a total of $4.1 billion over the time that they have been in office. This figure will stand to condemn them for many years to come and is something that we on this side of the house will continue to remind the government of because it is an absolute shame. If I look at the opportunity cost of what that $4.1 billion could deliver for South Australia, it beggars belief, not the least of which could be between $40 million to $70 million for a new Barossa hospital.
So where did the waste and the blowouts come from? We look no further than the health and ageing department which blew its budget by $118 million; the education and child development department which blew its budget by $56 million; communities and social inclusion was $39 million; Attorney-General's by $10 million; and planning, transport and infrastructure by $95 million.
I could go on but the interesting thing is that in this year's budget there are only two departments out of all the selected agencies listed in the budget that did not blow out their expenses, and they were police and primary industries. Apart from that, every single minister needs to stand condemned because of the wasteful mismanagement of their own budgets. It is really frustrating that, because they cannot get their house in order, they find an ever-increasing number of ways, whether it be ESL increases, probate fee increases, stray dog fine increases and increased collection of speeding fines, to tax South Australians to pay for the fact that they cannot manage their own budget. It is an absolute disgrace.
That is why we cannot believe that next year there will be a $43 million surplus because, if they have on average wasted about $200 million a year in cost blowouts, that $43 million surplus does not stand a chance. In fact, the figure would probably need to be about 10 times that size in order to withstand the waste and gross mismanagement that this government reports in its budget every single year.
It is interesting to look at the budget and at the fiscal targets that the government sets for itself. Its first fiscal target, and I will read it here, is 'a net operating surplus by the end of the forward estimates'. Now if I was a cynical person, and after 15 months in this place I am becoming slightly more so, I would suggest that the government will meet its target as long as somewhere in the budget over the next four years it tells us it is going to deliver a surplus.
It does not say in this budget, 'We will deliver a surplus,' as one of its fiscal targets. All it says is, 'Across the forward estimates, somewhere off into the deep dark future, as long as we say that there is a plus sign and as long as we suggest that at some point we are going to get back into the black, we would have done our job.' The target does not say, 'We will actually have to deliver on this promise, as long as somewhere off into the future we promise we are going to do it,' and I think that is an absolute disgrace.
Having said that, I have to commend the government for achieving their target because over the last four years all they have done is predict surpluses well off into the future and none of them have been delivered—$279 million again in this financial year and none have been delivered. How do I know that none of these surpluses have been delivered? It is because the amount of waste that exists within this government knows almost no bounds.
The first cab off the rank this evening—and you will note my repeated interest in waste and mismanagement; it does seem to be a hobbyhorse of mine and I hope to be the person who penny pinches on behalf of the South Australian people for many years to come—is that this government's targeted voluntary separation package scheme has been nothing short of a disaster: $378 million has been spent for no net reduction in Public Service numbers.
The fundamental idea behind this program is the fact that we should be able to reduce the size of the Public Service and we have not been able to achieve it. In fact, the budget last year suggested that we would be 1,600 FTEs lower than this year's budget estimates for this coming 12 months—1,600 jobs.
To have spent $378 million and to end up with such a disastrous figure, on the government's own figures, makes this program an absolute waste of time. If it was going to work it would have worked by now because the government has just halved the redundancy payout from two years to one year of salary, so if people were going to take those packages they already would have and, indeed, they already have.
If I look at the budget papers, in 2013-14, 1,479 people took TVSPs and in 2014-15, with the new regime in place, only 164 people took them. I do not mind that because I would suggest that that is less government money being wasted, but the whole point of the program in the first place is now lost because they have not been able to achieve their reduction targets. As always, as with the surplus, the target reduction number is always off into the never-never and the difficulty that I have is that, the closer we get to the next election, the less likely these targets are going to be achieved. If they were going to be achieved, those figures would have been achieved last year and this year, and it seems quite obvious to me that they are never going to be achieved.
There have been instances throughout this TVSP program where people have been given a payout, only to be hired by another government department weeks later. So, we are giving someone either one or two years' salary, and that person then goes to get another job within government only a couple of months later. There was an instance of a 76-year-old man being offered a redundancy. I am sure for him and his family that was Christmas, all paid for by the taxpayers.
There was an instance where an executive payout was given to somebody who was only one year into a five-year contract, and also an instance where somebody who had only two months left to go on their contract was given an executive termination payment of four months' pay. It would have been cheaper for them to sit in the transit lounge for two months than pay out that four months. But, heaven knows, this government knows no bounds when it comes to wasting taxpayers' money.
The government wasted $226,000 building a website on STEM Australia that it took down 12 months later. This government wasted $50,000 buying 85-inch TVs for parliament to replace 55‑inch ones that were only 18 months old. The government wasted $80,000 preparing the World Design Capital bid, only to abandon the bid and not even follow through to see if we would get there in the end.
The government wasted $3 million spruiking the Transforming Health cuts instead of actually delivering better health care for South Australians; they thought they would go out there and spruik health cuts. The government wasted $550,000 on the botched emergency services reform—money wasted because the minister did such a bad job that they managed to get the entire sector off side, except for the United Firefighters Union, which was strangely silent. But, the rest of the sector were completely against the reforms, for what otherwise should have been a completely normal process aimed at getting better outcomes for the emergency services sector.
This government wastes $1.6 million a year leasing office space it does not use, office space that is sitting empty because the government cannot manage to make sure that, if they are going to lease office space, they actually have some people to fill it. The government also wastes $500,000 a year on buildings that it owns that remain empty and untenanted, that is, leasing income forgone.
This government spends $90,000 a week cleaning Housing Trust tenants' properties instead of using that money to ensure that its roughly 1,000 vacant Housing SA properties are fixed and able to be tenanted. So, instead of dealing with the 22,000 person wait list that Housing SA (Housing Trust) properties currently have, they spend $90,000 a week cleaning properties on behalf of themselves, something I do not think the private sector would countenance.
Each of these figures seems quite small in the context of a $16 billion budget. Each of these figures I will admit will not, in and of themselves, help to deal with the $201 million blowout, or deal with the incompetent waste and mismanagement that this government undertakes over a $16 billion budget. But, all of these figures add up. These figures in the hundreds of thousands, the tens of thousands, the few millions, all add up. They add up to hundred of millions of dollars.
We sit in this place squabbling about the ESL increase of $90 million a year or about the removal of remissions. We sit here talking about the northern connector project, we talk about the Paradise Interchange project, we talk about the Oaklands Park overpass project. All of these things could be paid if the government just took a different attitude and dealt with the culture of waste that exists, the culture that says that it is okay for a government department to spend $6.50 on a cup of coffee, as opposed to the $3.50 to $4 that normal people would expect to pay.
It is endemic, and the more I look at this and the more information that is given to me, it says to me that there is a culture that, because it is somebody else's money and not the hard-earned money I put in my own packet, somehow the government as a quantum and as a whole have a different decision-making process than what I would do with my own money. That is why we on this side of the house call for smaller government: because we do not trust governments to be able to spend money properly and appropriately. We believe individuals are much better able, because they have a personal financial interest, to make sure that money is spent properly.
So, when a public servant, walking to their office, goes past a coffee shop in the morning and decides that $3.50 is a good value proposition to buy a decent cup of coffee, they are right. But, if that same government employee then sits in their office and decides that spending $6.50 on a cup of coffee is okay, that is the type of thing I have a problem with. I have a problem with so many different examples where it is deemed okay for the government to spend over the odds for different projects, and it is cultural and it is something we need to grapple with, and it is something the government needs to grapple with in order to be able to change the culture so that we do get a spend for South Australia.
I am going to tell you that on that score there is one man, whose painting hangs in this chamber, who was an extremely frugal man: Sir Thomas Playford. Sir Thomas Playford was a bloke who was so tight that he would not allow the public servants to put a telephone in his house because he considered it a waste of time. This is the same man who retired with an FJ Holden, which is the same car that he had had and been servicing himself for 20 years. This is the same man who, instead of buying fancy new bits of kit that he knew South Australia could not afford, would buy second-hand bits of kit and make sure that they worked properly.
Sir Thomas Playford was a man who made sure that every cent of South Australian taxpayers' money was used to the best example as it could be. This is a man who had one secretary, a sergeant standing at the door and one office adviser. We now have a Department of the Premier and Cabinet that has over 100 staff, where Tom Playford decided that he could do it by himself with three staff. The reason is that he trusted his department to be able to do their job properly, and if he had an issue he would call them up on the phone. Nowadays we have a public sector that has blown out way above inflation and way above what the broader population growth has been, and it is an absolute shame.
The difficulty I have is that we need to change this culture, because otherwise we are not going to be able to put our budget back on track. As a last question before I wrap up, I was reading the Appropriation Bill, which is a short bill. It is a short bill that says that the government should have the authority to spend $12 billion, but it is only two pages long, and that is okay. There is a question that I would like to explore in committee relating to part 4(2) of the bill, which provides:
The aggregate of the amounts issued and applied by the Treasurer under subsection (1) and under the Supply Act 2015 for each of the purposes listed in Schedule 1 must not exceed the amount set out opposite each of those purposes in that Schedule.
In the schedule it lists all the departments and all the administered items for each of the departments. For instance, the Attorney-General's Department gets to spend $109,678,000. What I want to know is, if this bill suggests that the government 'must not exceed the amount set out opposite', what happens when they blow the budget? Does that figure come out of this figure? I may only be a naïve first-term MP, I may only be a simple, humble sausage maker—
The DEPUTY SPEAKER: You are not humble.
Mr KNOLL: Unfortunately, machines have replaced the job that I used to do with my younger brother.
The DEPUTY SPEAKER: That is what has happened everywhere.
Mr KNOLL: In fact, my brother and I could only get about 100 or 150 kilos an hour, but these new machines that have replaced us can get up to about 400 kilos an hour. Nevertheless, if I was to metaphorically be standing there at my sausage-making machine linking my sausages at 75 kilos per person per hour, I might be wondering to the Treasurer, 'How is it that in the Appropriation Bill it says that you must not exceed the budget that you set for yourself, yet the government is able to exceed the budget that it sets for itself?' It is a question that I look forward to exploring with smarter people than I in committee, and I am looking forward to a satisfactory answer from the government.
With those few words, can I remind everybody to go home and read Playford, Benevolent Despot, written by Mr Cockburn. I will be distributing exams into the pigeonholes of lower house members later this week and I expect 100 per cent pass marks by all members involved.
The DEPUTY SPEAKER: We will abstain. Sadly, your time has expired. We will have to wait for committee.