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- 10 April 2002
Appropriation (Budget Variations) Bill
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Page: 1245
Second Reading
The Hon. IAN MACDONALD (Parliamentary Secretary) [8.21 p.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
The practice of seeking approval for supplementary appropriations to cover payments not provided for in the Annual Appropriation Act has now become entrenched.
This Government, in presenting further Appropriation bills, has sought, as far as possible to ensure the Parliament has the opportunity to scrutinise anticipated additional funding requirements prior to expenditures being incurred.
However, it is not always possible to seek Parliament's authority in advance for pressing expenditure needs and the Parliament has previously established procedures to provide for this eventuality.
Each year Parliament makes an advance available to the Treasurer to meet unforeseen expenditures. In addition, section 22 of the Public Finance and Audit Act 1983 enables the Governor to approve of payments to cater for the exigencies of the Government, in anticipation of appropriations by Parliament.
The introduction of the Appropriation (Budget Variations) Bill 2002 in this session enables the Government to: account to the Parliament on how the Advance to the Treasurer has been applied for recurrent and capital expenditure; seek an adjustment of the Advance prior to the end of the financial year; seek appropriation to cover expenditure approved under section 22 before year end; and seek additional appropriations for payments which are intended to be made in the current financial year, and in respect of which, no provision was made in the annual Appropriation Bill.
The Appropriation (Budget Variations) Bill 2002, in respect of the 2001-02 financial year, seeks appropriations of $288,834,000 in adjustment of the Advance to the Treasurer, $338,250,000 for services approved by the Governor under section 22 of the Public Finance and Audit Act 1983, and additional appropriations of $469,083,000.
The appropriation required for the Treasurer’s Advance is detailed in schedule 1 annexed to this bill, along with a full account of how the Advance has been applied this year.
The Treasurer’s Advance payments in 2001-02 include $5.25 million to establish the Community Solutions Crime Prevention Fund to undertake crime prevention activities in Miller, Kings Cross and Redfern/Waterloo.
Other items include $2 million to reduce the cost to some farmers of transporting grain and $5.8 million for eradicating fire ants.
The additional appropriation required under Section 22 of the Public Finance and Audit Act 1983 relates to the provision of funds to meet certain expenditures required by the exigencies of Government. This amount includes:
An appropriation required in relation to the First Home Owners Grant Scheme of $142.3 million. This amount will, however, be repaid to the State by the Commonwealth;
An appropriation of $40 million for further rail maintenance on non-metropolitan infrastructure; and
Appropriations for natural disasters, including $40 million for the February-March floods in Northern New South Wales, and $95 million for the December-January bushfires. This sum is in addition to the $11 million allocated for bushfires in the 2001-02 Budget, and makes the total cost of fighting bushfires this year $106 million.
There is also $19.95 million appropriated to cover capital expenditure for natural disaster advances.
An additional appropriation of $469,083,000 is required to allow the immediate start of important public projects in 2001-02.
The majority of these projects were originally included in the forward estimates for the period between 2002-03 to 2005-06.
The stronger than anticipated growth in the State economy has improved the estimated budget position for 2001-02. This has enabled the Government to bring forward expenditure, or fund pressing new projects.
An additional $70 million has been provided for maintenance and minor works to schools.
The Transport portfolio has been provided with $43.7 million to accelerate the acquisition of land for the Parramatta-Chatswood rail link and for some rail capital works that will improve operations efficiency and workplace and passenger safety.
The funding also allows the State Transit Authority to bring forward major Sydney ferry projects including completing the refurbishment of the Manly ferry fleet and re-engineering the Jet Cat fleet.
The program of installing closed circuit television cameras on wharves will also be undertaken more quickly.
NSW Health has been provided with $27.5 million to purchase new hospital equipment including CT scanners for rural hospitals.
The Department of Housing has been provided with an additional appropriation of $25 million for capital grants and a further $105 million to more rapidly tackle backlog maintenance in public housing.
The Rail Infrastructure Corporation will be provided with $100 million to help finance its obligations for the construction of the Parramatta Chatswood rail link.
The Ministry for the Arts will be provided $39.1 million for works on the Sydney Opera House and the acquisition of land for a performing arts centre at Eveleigh.
The bill also seeks appropriations to adjust certain payments made during the 2000-2001 financial year either from that year's Advance to the Treasurer, or approved in that financial year by the Governor under section 22 of the Public Finance and Audit Act.
Each of the payments made has been included in the 2000-2001 audited financial statements of the agencies making those payments.
The practice of introducing further appropriation bills has enhanced accountability for the expenditure of public moneys from the Consolidated Fund.
It is further evidence of the Government's commitment to transparent and full financial reporting to the Parliament and the community.
I commend the bill to the House.
The Hon. JOHN RYAN [8.21 p.m.]: The object of this bill is to appropriate additional funds from the Consolidated Fund for recurrent services for capital works for two financial years—2000-01 and the current financial year. For the current financial year the Government is seeking three additional appropriations amounting to approximately $1.1 billion.
It wants an additional $228.8 million for recurrent services relating to the Treasurer's Advance, an additional $338.3 million for capital works pursuant to section 22 of the Public Finance and Audit Act and a further appropriation of $469.1 million to be used for recurrent services and capital works. In addition, some retrospective adjustments are made to the budget for the 2000-01 financial year. For that year, the Government is seeking an extra $115.8 million relating to the Treasurer's Advance and a staggering $929.1 million for capital works and services in accordance with section 22 of the Public Finance and Audit Act.
A pattern is beginning to emerge with the way the Carr Government addresses the budget. Each year honourable members observe the Treasurer announce what appears to be a well-funded, fiscally responsible and conservative budget that will, allegedly, leave a generous budget surplus with which to retire State debt. However, about six months later another budget is delivered, usually in circumstances like this, when the Government's actions are not subject to much scrutiny, and suddenly an extra $1 billion is added to the ticket! For example, clearly, when a cash surplus of $200 million is announced, additional unexpected expenditure of $1 billion will have a significant impact on the budget bottom line.
Indeed, had it not been for the substantial buoyancy in the New South Wales economy, particularly in relation to additional receipts, stamp duty and so on, the Government would have been caught short. Had the Government been caught short, instead of the Treasurer ranting and raving, telling us what a terrific bloke he is to retire State debt year by year, he would have had to admit that the budget he expected to be in surplus would now have a cash debt. However, as I said, because of the enormous buoyancy in the New South Wales economy and because revenues have picked up unexpectedly in most instances to rescue the Government from a problem it would otherwise have, the Treasurer has not been in that situation. Lest honourable members think the Opposition has fabricated this view, I shall read to them an Access Economics report on the New South Wales economy. It stated:
Taxes grew more than expected (again) … (with New South Wales to) … benefit from a nearly $1.2 billion windfall in tax collections and Commonwealth grants. Stamp duties in particular are up yet again … insurance tax collections are on the rise in the wake of premium increases.
As for insurance premiums, the New South Wales Government, having cried poor about the potential impact on the budget bottom line of the collapse of HIH, is now in a position to benefit from increased stamp duty of about $40 million as a result of enhanced premiums that insurers have announced since the September 11 events and the collapse of HIH Insurance. The Access Economics report confirms the pattern of revenue windfalls, underpinning the increases in government spending that have been evident for several years now. It must be pointed out that that pattern is unsustainable. Access Economics also found that the current New South Wales fiscal reporting obligations are outdated and fall well short of the standard suggested by the International Monetary Fund's Manual on Fiscal Transparency or the discipline imposed by the Commonwealth's Charter of Budget Honesty Act.
After seven years in office the Government is clearly a high-taxing, poor service regime. This year it will rake in more than $34 billion in taxes and charges. Unfortunately, the Government takes with one hand but does not give back with the other hand. Services in our community are in a terrible state. There are complaints about services in education, police, health and roads, just to name a few. The Carr Government has sponsored substantial amounts of waste, some of which I shall point out. For example, the budget for reconstructing the Conservatorium of Music in Sydney has blown out by more than $75 million; and the electricity industry has incurred significant losses, including State-owned Pacific Power's out-of-court settlement relating to a bungled contract deal that has cost the State more than $600 million.
The Minister for Transport in another placed flagged that construction of the M5 East would cost about $530 million. However, when it was completed the total cost of the project had blown out to $800 million. The Treasurer works under the pretence that he is a conservative financial manager, but every year he manages to overspend his budget by about 4 per cent or $100 million. Although this bill has the advantage of additional transparency, it documents that fact beyond question. For seven consecutive years the Carr Government has outlaid about $1 billion more than predicted in its budgets. That equates to close to $7 billion in overexpenditure. The Carr Government is deliberately suppressing its budget so that it appears to be conservative, but it knows full well its history and pattern of expenditure—a pattern that it has sustained for seven years. The Government exceeds its budget by approximately 4 per cent every year.
The Government has been able to do that only because of the financial climate fostered by the Federal Howard Government, which has given the New South Wales Government the revenue to cover its mismanagement. For example, the amount of stamp duty collected by the Carr Government in the past year has almost exceeded the budgeted level by $500 million because property prices have increased. This year New South Wales Treasury expects stamp duty to exceed the budget by more than $600 million. It will be interesting to see exactly how much the stamp duty actually exceeds the budgeted amount. So whenever the Government has a political problem caused by its failure to manage properly, it has the luxury of being able to spend the problem away.
I draw attention to one case in point that occurred today. The announced resignation of the Commissioner of Police will result in additional expenditure of $500,000 from the police budget. If the report given to us today by the Government is true, that the police commissioner is leaving the New South Wales Police Service of his own volition and for personal reasons, why is it necessary to give him an extra $500,000 to speed him on his way? By any stretch of the imagination it could not be suggested that it is a performance bonus for his excellent achievements. When the documents are finally tabled I suspect that we will discover a confidentiality clause relating to any action taken by the commissioner. In fact, $500,000 simply buys his silence.
As the Leader of the Opposition in another place pointed out, and I agree, that is an abject waste of public resources that could well have been better used in other places. I have no objection to the Commissioner of Police leaving. I have no particular personal rancor with the service that he has given to the people of New South Wales. But he signed an agreement with the Government that stipulated that if he were dismissed he would receive an extra year's salary in lieu of the dismissal, and that if he left of his own volition he would only take his last pay packet with him. In my view that agreement ought to be observed.
This bill also contains two appropriations totalling more than $4.5 million for a police recruiting campaign and the funding of various restructures that have been announced during recent weeks and months by the Government in order to boost the flagging numbers in the Police Service and to attempt to fulfil its election promise of providing more police. Had the Police Service been managed properly it probably would not be necessary to dip into the budget for approximately $5 million for panic measures; normal recruiting procedures should have been adequate.
We are, in fact, panic-buying these police officers with a $2.5 million recruitment program. If the Police Service had been properly managed and catered for in the past three or four years, it would not have been necessary to again establish a temporary academy at the University of Western Sydney, however welcome that might be to the university. The Opposition's point is that management of this sort cannot go on, because the buoyant economic conditions we are experiencing now will not last forever. Eventually the Carr Government will be in a position of spending at one level and receiving revenues at another, and if those unexpected windfalls do not continue it will be caught short. Instead of reducing debt, the Government will be increasing it, particularly in cash terms, as a result of its mismanagement.
The Government may attempt to make the point that the expenditure provided in this bill is for unforeseen and unexpected items that are attributable to circumstances beyond its control. To a small extent the Opposition agrees. For example, the bill provides $40 million to cover the repair of rail infrastructure damaged in the February-March floods in northern New South Wales, and $106 million for costs associated with the December-January bushfires. The Opposition does not quibble that those funds should be made available, particularly in the current economic climate, under those circumstances. However, one need only closely examine the amounts that have been appended and annexed in the schedule to this bill to discover that there is expenditure that should have been included in the normal budgeting pattern, such as budget refurbishments, or that could have been accommodated in the budget by unexpected windfalls.
For example, the Public Finance and Audit Act allows Ministers to move allocations within their portfolios. One good reason for that is that on the odd occasion that a program comes in under budget, it ought to be possible to fund another program that unexpectedly goes over budget. I find it hard to believe that if government expenditure has been properly financed and managed, there are not opportunities to fund unusual expenditures in that way. This bill provides for a raft of unforeseen expenditures. We have absolutely no idea of what possibilities existed for savings or for some of these projects to be funded by unexpected windfalls. I cannot believe that there were no windfalls.
I should point out—because I suspect no other honourable member will—that among the cost over-runs listed in this bill is an amount of $17 million within the Department of Corrective Services, including $1 million for inmate transfers and $4.5 million to re-open Cooma gaol and convert Berrima gaol to a women's prison—all costs no doubt associated with our ever-increasing prison population. I hope that the additional money being spent on prisons is worth it, because if putting more people in gaol is supposed to reduce crime, we need to ask why crime rates are increasing at the very same time that we have recorded increases in the number of people being sent to gaol? If one is supposed to reduce the other, they cannot possibly be occurring simultaneously unless there is some sort of disaster occurring within our community that, I would suspect, is beyond the control of any Government.
Finally I refer to the Treasurer's gross and unseemly political campaign in regard to funding a recent increase in the New South Wales Social and Community Services [SACS] award. In November the people who worked under the SACS award received substantial increases from the Industrial Commission which were long overdue and much merited and justified. It is a disgrace that a person who works in a nursery earns more money than a person who looks after children with high support needs in a respite care facility. To some extent that industrial award addressed that outrageous state of affairs.
Additionally, believe it or not, the SACS award did not cater for the substantial number of people in the industry who have university qualifications. In no industry would people with those sorts of qualifications be expected to accept the sorts of salaries, which were maximum salaries, that were paid under the then SACS award. The new award attempts to address that and sets new salary levels for people who have tertiary degrees to give them an income that is perhaps close to what a schoolteacher with similar qualifications might expect to receive.
However, I am sure that honourable members are starting to receive correspondence from any of the 230 non-government agencies within our State telling them that whilst the New South Wales Government has increased funding for these services to some extent to cover the SACS award increases, it has decided for gross political purposes not to fund those services that are covered by the Commonwealth State Disability award [CSDA]. I do not quibble with the fact that I think that the Commonwealth Government is to some extent being intransigent in not funding those particularly well-justified awards. However, some complications and difficulties need to be addressed, and in this circumstance the State Government is a far greater sinner than the Commonwealth.
The sorts of organisations that are having difficulty in continuing to fund services are the Windgap Foundation, which provides services to people with disabilities in the eastern suburbs of Sydney. The new SACS award, for example, cost that organisation $350,000 to $390,000 per year after it commenced in November last year. After the organisation complained to the Treasurer about its lack of funding the Treasurer advised that he has provided adequate funding and it is up to the Commonwealth to do the same.
A number of facts ought to be made clear in this debate. First of all, unlike the States, the Commonwealth Government has provided annual consumer price index [CPI] increases to non-government organisations that have been funded under the CSDA. However, I can show that any number of non-government agencies funded from the Department of Community Services are still receiving the same level of funding they received when the service was originally set up and grants were given. Year by year they wonder how on earth they are going to continue to keep cutting the pie, given the various increases in the CPI. Every now and again they get a one-off grant, but there is no doubt that the State has not been as diligent as the Commonwealth in providing funding to cover cost of living increases. To some extent these organisations have been lucky because cost-of-living increases have not been particularly severe in recent years.
The Treasurer also failed to point out in his dishonest campaign that he is a signatory to the relevant agreement with the Commonwealth. The Commonwealth quite rightly points out that the Commonwealth-State agreement specifically provides that there will be no increases of any kind to these particular arrangements outside the annually announced cost-of-living index. For the benefit of the House I will read on to Hansard the specific clause that relates to the CSDA agreement. Clause 8 (10) reads:
Indexation of Commonwealth funds to be transferred to States will be calculated each year by reference to the Commonwealth indexation parameter called Wage Cost Index 2 and announced in the Commonwealth Budget. This parameter is composed of 90% measure of the change in wage costs (safety net adjustment) and 10% measure of changes in non-wage costs (Treasury Measure of Underlying Inflation).
Clause 8 (11) states:
Once the level of Commonwealth indexation to apply to a particular year has been announced in the Commonwealth Budget, there will be no subsequent adjustment of that level of indexation during the course of the year.
If the Treasurer is going to argue about this arrangement, he should not have signed the agreement in the first place. The Treasurer agreed to it, and I think the Commonwealth Government has a fairly strong argument that someone who signs an agreement is obliged to commit. However, further to that, these particular agencies are funded about 75 per cent by the State and 25 per cent by the Commonwealth. The Treasurer has not pointed out that this very agreement is under renegotiation at this time. Of course, it is highly likely that the amounts included in that agreement in forward years will be adjusted to take into account things such as New South Wales Social and Community Services Award increases.
This is not a problem that is going to exist for a long period of time. The Commonwealth has in fact made adjustments according to the consumer price index up until now, unlike the State Government. But, ultimately, the State Government is responsible for 75 per cent of the cost of the program. If it only funded those organisations covered by the CSDA, if it wanted to make an asinine point, why not at least fund those organisations pro rata to the level of its responsibility? Why not give them 75 per cent of the funds they need? That would tide most of those organisations over to 30 June. It is highly likely that under the new arrangements there would be funding forthcoming and the Treasurer could then honestly argue that the New South Wales Government had done absolutely the right thing, and he would be in a position to argue strongly with the Commonwealth that there ought to be some increase to cover the 25 per cent of circumstances not covered.
When I say 25 per cent, of course the whole of these projects are covered 25 per cent by the Commonwealth, but not all of those who derive incomes from these projects are covered by the New South Wales SACS award, so a level of funding even less than that might be appropriate. If the State Government funded organisations that it manages and supervises on a pro rata basis, I am more than sure that an arrangement could be reached and the New South Wales Government could strongly argue with the Commonwealth that it has responsibilities according to future agreements, which are due to start very soon. I agree with Suzanne Becker, the General Manager of Windgap, who emphasised in bold type in a letter she recently wrote to me:
It is unfair that governments constantly put Windgap and other NGOs in a position of constantly having to beg for money, especially in a situation which is completely outside of the NGO's control. This is not a fair partnership between an NGO and government, which was supposed to be engendered in the funding agreement principle and any concept of mutual obligation.
Most of these organisations do not have an agreement with the Commonwealth; they have an agreement with the State Government. If the State Government has been unable to cajole the Commonwealth into providing additional funds, I believe the State Government has a responsibility to fund those organisations to some extent, at least pro rata relative to the level of its responsibility, if not more. After all, it is the State Government which made this agreement with the Commonwealth, and it ought to appropriately honour its commitments to those individual NGOs. The State Government cannot just farm off responsibility to the Commonwealth for some party political gain, because some very vulnerable individuals are involved in this game of politics that the Treasurer is dishonestly playing.
There are some wonderful servants of the community who, in many instances, manage these organisations on a volunteer basis and are losing sleep over having to make very difficult decisions as to what services they may have to cut in the short term in order to meet this disgraceful, dishonest and disreputable campaign being conducted by the Treasurer of New South Wales in relation to the funding of those organisations. This campaign ought to stop, particularly in view of the fact that the Government has benefited by $600 million in stamp duty alone. That is several times over the amount of money required to make up the shortfall in New South Wales.
If the Government can generously, easily and without question fund the frolics of the Minister for Police, with half a million dollars being spent today, how much more of an obligation does it have to fund these organisations, which provide wonderful services for people of New South Wales who are completely vulnerable? In my view, the first cheques that any government writes should be for people with disabilities. These are people who cannot help the position they are in. They are not able to find money by their own enterprise. They need these resources to give them the same quality of life that the rest of us enjoy. It is disgraceful that they are being exploited for some political purpose. Other than making those points, the Opposition supports the bill.
The Hon. RICHARD JONES [8.45 p.m.]: I was really surprised to hear the Hon. John Ryan say that the Opposition supports the bill after he had just delivered a tirade against the Treasurer and the Government for their management of the finances of this State. The net figure provided by this bill is almost exactly $1 billion, because $142.3 million will be repaid by the Federal Government. It is interesting that this budget bill has been boosted by $469 million of additional income during the year, enabling a number of projects that were to be completed or started between 2002 and 2006 to be brought forward. Bringing much of that expenditure forward will result in many of those projects becoming evident over the next few months. One of those, of course, is the new Cabramatta police station. I will go through some of the impacts of the bill, starting with the Hornsby by-election, which cost $210,000 of taxpayers money. Honourable members in the other place should be aware that if they resign, there is an enormous cost to the community.
The Hon. Patricia Forsythe: I am sure the Auburn by-election was costly too.
The Hon. RICHARD JONES: Maybe $210,000 or $215,000, that is true. What I am saying is that members who resign from the other place must realise that that is a fairly expensive exercise. Some in the community say that members who resign should pay the by-election costs from their own pockets, perhaps out of their superannuation. I note that in the schedule of payments to the Premier, Minister for the Arts, and Minister for Citizenship—Minister for Ethnic Affairs, as he previously was—there is an advance of $112,000 for "Monitoring the operation of the Drug Detection Dogs Act". It will be interesting to learn how that Act will be monitored, given the huge uproar in the community. We will just have to wait and see what happens.
Interestingly, the Minister for Agriculture, and Minister for Corrective Services has received $5.8 million from the Treasurer's Advance for the Fire Ant Eradication program. In the middle of a parliamentary inquiry into feral animal control, this was brought up as a problem in New South Wales. It is good to see that the Queensland and New South Wales governments are involved right now in trying to prevent fire ants from getting out of control. If they get out of control, many areas, many economic enterprises and many people in country areas will be devastated. I hope that $5.8 million will go a long way towards eradicating fire ants before they get out of control, as foxes and cane toads have. That is a good initiative.
The Hon. Doug Moppett: It is a tall order.
The Hon. RICHARD JONES: It is a tall order, but I just hope we can manage to eradicate fire ants. If we do not, there will be devastation. The Attorney General, Minister for the Environment, and Minister for Emergency Services is advanced $2 million for the Dunphy Wilderness Fund. That has been welcomed by the conservation movement because it will allow land to be bought to provide very important wildlife corridors.
The Minister for Education and Training receives a further appropriation of $56 million for "maintenance projects in schools". We wrote to the new Minister about this, asking whether he was aware that a number of country schools in particular have unflued gas heaters. Some years ago, under Minister Virginia Chadwick, a program was undertaken to ensure that all gas heaters in schools were flued, because unflued heaters pose health problems for schoolchildren. But this money was given to schools under global budgeting arrangements, and some schools spent the funds elsewhere, resulting in many schools in this State still having unflued heaters.
The Hon. Patricia Forsythe: Under freedom of information legislation they cannot tell you which schools they are.
The Hon. RICHARD JONES: They cannot tell you which schools?
The Hon. Patricia Forsythe: No. I have tried that avenue.
The Hon. RICHARD JONES: It is incumbent on the new Minister to ensure that every single school, particularly in rural New South Wales, has properly flued heaters, because this is a serious health problem. The Hon. John Ryan mentioned a $70 million blow-out in the cost of the Conservatorium of Music, but the amount is actually $70,000 and it is for a Stuart piano.
The Hon. John Ryan: No, that is a different item.
The Hon. RICHARD JONES: This bill says $70,000, not $70 million. That amount is for a new piano and is surely not an unreasonable amount. The Minister for Mineral Resources, and Minister for Fisheries has been allocated $4.1 million for the buy-out of commercial fishing licences and that is an interesting item. I hope that the fishers feel that the amount they are being paid is adequate compensation. Inevitably in the not-too-distant future many commercial fishers will become bankrupt unless they are bought out now, so it is good to buy them out sooner rather than later. Hopefully, the creation of new marine parks and their no-take zones will result in fish stocks being conserved for many years to come and resources being provided for those who wish to use them.
The schedule also contains an interesting allocation of $105 million to the Minister for Housing for backlog maintenance funding for the Department of Housing. That is a vast amount of money and it is obviously clearly needed. There is a backlog in the provision of housing for people who are desperate as a result of the huge increase in the cost of Sydney's housing. A number of people have fallen through the crack and desperately need help. I hope that during the next round of budget negotiations the Minister for Housing will entreat the Treasurer to allocate more funds for the provision of housing for people who have been on waiting lists for a very long time.
Earlier I mentioned the provision of a new police station at Cabramatta which will cost $4 million. In a sense, that is a political allocation as a result of the furore surrounding the inability of the Police Service to check heroin dealing in Cabramatta. The honourable member for Cabramatta and some of her comments have been receiving some very bad press in local newspapers. No doubt the Liberal Party will be examining that electorate very carefully from the point of view of the next election. The First Home Owners Grant Scheme has been allocated $142,300,000. As I mentioned earlier that amount will be repaid, so that figure is not net. This budget provides an additional $1 billion and is certainly a boom-time budget, but unfortunately we will not always have boom times.
The Hon. Doug Moppett: That is the worry, isn't it?
The Hon. RICHARD JONES: It is a worry because if the Government always budgets for a boom and there is a slump in the housing industry, stamp duty and other revenue will be reduced and the heightened expectations of people—in this case heightened by $1 billion—will be dashed. If expenditure is reduced by $1 billion, $2 billion or $3 billion, a lot of people will miss out. If I had been the Treasurer I would have been a bit more prudent in determining expenditure and would not have primed the economy of New South Wales by expending an additional $1 billion. It may have been preferable to allocate that amount to paying off more of the State's debt and keeping expenditure at a reasonable level, bearing in mind that over the next two or three years the State may not necessarily receive such high revenues. If the housing industry contracts, as it surely must at some point in time, the economy may also contract.
Obviously I do not oppose the legislation but I believe that the Treasurer and the Treasury should be somewhat more prudent when determining expenditure. If there is a significant amount of additional revenue at the end of the financial year, I believe that by and large it should be put aside for a rainy day, so to speak. I acknowledge that there are always items of unexpected expenditure and I must admit that some of the unforeseen expenditure items listed in the schedule to the bill have been very welcome. However I do not think that the economy should be primed to the extent that when a slowdown occurs, contraction of expenditure occurs in areas of vital importance, thereby reducing people's expectations. While I do not oppose the bill, I ask the Treasurer and the Treasury to be more prudent in the future.
The Hon. PATRICIA FORSYTHE [8.53 p.m.]: I do not wish to unnecessarily take the time of the House, but it seems prudent to comment on a bill that allocates significant amounts of money. When I examined the bill, my initial reaction was to reflect on a period when debate on the appropriation bills related to an annual budget. It seems to me now that the State budget effectively lasts for nine months and that the Appropriation (Budget Variations) Bill is designed to cover the remaining three months of the financial year. This Government perhaps cannot budget and it appears to be intent on spending money after having taxed the people of this State—New South Wales has the highest rate of taxation—to a point at which the Appropriation (Budget Variations) Bill is of great significance.
Having said that, I offer congratulations on the allocation of $70,000 for the acquisition of the Stuart piano for the Conservatorium of Music. The Government has spent $140 million on the Conservatorium of Music project and that has made the conservatorium the most expensive high school in New South Wales, probably in Australia and possibly in the world in terms of the number of students who attend it. I have never denied that the conservatorium is housed in an historical building but it is worthwhile pointing out that a great deal of the budget allocation for the Education portfolio has been absorbed by that one project.
I was pleased to attend the opening of the Conservatorium of Music, together with some other honourable members of this House. However, the Hon. Ron Dyer will acknowledge that as I looked around the conservatorium on its opening day and observed the many pianos in a variety of concert rooms, classrooms and the recital hall, I remarked that I could not see a Stuart piano anywhere. I commented on the opportunity that had been missed to utilise a perfect setting in which to showcase the only Australian-built piano—a piano that is world class and is regarded as the best modern piano.
The Stuart piano is designed and constructed in Newcastle and is a very good example of Newcastle technology and engineering and the expertise of the University of Newcastle. Given my own connections with that university, I feel enormous pride in that achievement. At the opening ceremony, it struck me that the Government had missed an opportunity. I therefore note with some pride and pleasure that provision for the purchase of a Stuart piano has been included in the Appropriation (Budget Variations) Bill, and that is a positive aspect of the legislation.
In view of the fact that a significant amount was spent on constructing the Conservatorium of Music, it is a little odd that the money for the piano had to be found from the Treasurer's Advance. I acknowledge that the Treasurer understands the worth and value of a Stuart piano and I acknowledge what he has done to promote the Stuart piano to various Australian embassies and consulates overseas. He has persuaded people of the significance of having a Stuart piano—if, indeed, they need a piano—to showcase Australia's outstanding industries.
I acknowledge also that the bill provides $500,000 for dedicated school security services. The allocation relates specifically to an amount that was earmarked for the six-week school holiday period over the Christmas break for a number of schools in high-risk areas. While I acknowledge that initiative, I hope that next year it will not require a separate appropriation. I hope that the Government now understands that some schools in some areas require extra security services and that for a little money spent, a significant amount is potentially saved.
This State cannot afford to have its schools severely damaged by vandalism, or, even worse, by fire. I would be fascinated to know the outcome of the additional security services evaluation and how much may have been saved at schools where those services are available. This is an important short-term initiative and it was the way in which the Coalition's Virginia Chadwick managed school security. Additional security always used to be in place over the Christmas vacation.
I am pleased that, given the agitation from the Opposition and others, the Government and the Minister for Education and Training have acknowledged that there is a problem. In spite of that, matters are still being handled by short-term measures. Despite seven years of this Government's administration, a proper audit of schools has not been carried out. I continuously hear of schools whose individual needs are not being met by school security measures. Last week the Government announced a long overdue audit of crime and violence in some schools and it is time that this Government took school security seriously and invested funds in an audit of school security.
The Government should also work with schools to find out the measures that may meet their needs. The requirements may be as expensive up front as an improved fence system—and I do not mean a barbed wire fence, such as might be found in gaols—or other measures that will protect school property. Although I acknowledge that the allocation of $500,000 for security measures is important because other measures will not be in place for next year's vacation periods, the Government must find a better long-term and more permanent solution to the problem of school security. An amount of $56 million has been allocated for the maintenance of schools project and I presume that is part of the $70 million that was announced approximately a month ago. Schools were informed that $70 million would be spent on various maintenance programs throughout the State by June.
I have had reports from schools in various parts of New South Wales relating to this issue. At a principals meeting a few weeks ago in an area west of the Blue Mountains—I will not be more specific than that—one principal said that he had been allocated a certain amount of money for painting the school. The principal's view was that the school did not need to be painted but that he had been told to paint the school and to spend the money before June. I have been told that the Government has been throwing money at schools in other areas to give them a facelift. It is doing other things so that people believe this budgetary allocation is being spent on schools. The budgetary allocation is not being properly used by this Government.
I am sick of going into schools and seeing power cords from a number of computers strung across a classroom ceiling and connected to the only power point in that classroom. The Government is spending some money on improving school wiring systems but in general, in the lead-up to the next election, it is wasting money on giving schools a facelift, a bit of a makeover, or a slapstick job at the end of the day. Principals from schools right across New South Wales are saying that is what they believe is happening. The Government is wasting its $56 million budgetary allocation. I refer now to the statement in the Governor's Speech about the provision of computers in schools.
The Government promised to provide an additional 90,000 computers in schools—25,000 computers by June next year and an additional 11,000 in the forthcoming budget. The Government is intent on supplying schools with computer hardware. It takes into account the requirement for additional computers but it does not take into account school wiring systems, their capacity to access the Internet, the capacity of teachers to teach information technology and the capacity of schools to undertake appropriate maintenance. This week the Government announced that it would allocate $6 million to about 181 high schools and other schools to double their wiring capacity. That might mean that eight computers as opposed to four computers at each school will access the Internet and nine schools will have access to fibre optic cables—a small step into the twenty-first century that is welcomed.
The Government said that it is moving steadily forward in the information technology area. However, it got it wrong in the first place. It undercabled schools and chose the least cost options. We are now paying the penalty. I will not quibble about and I welcome the money that has been allocated to advance and improve schools and TAFEs in New South Wales, but it is the end result of inadequate planning and an inadequate commitment by this Government in recent years to capital works. The Government is trying to catch up in the last year before an election, which will not wash well with the public of New South Wales.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [9.03 p.m.]: The Australian Democrats, who support open government, approve of the Appropriation (Budget Variations) Bill, which is open to public scrutiny. However, it is our belief that it would be better if budget variations were examined systematically by general purpose standing committees.
The Hon. Richard Jones: They are estimates committees.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: General purpose standing committees are estimates committees. It is interesting to see where the extra money is going in the run-up to the next election. The Premier's Department will receive an additional $17 million and $4.2 million will be spent on crime prevention. The Department of Corrective Services will receive $17 million.
[Interruption]
That allocation has to be compared to the $1 million that is going to health.
The Hon. Michael Egan: An amount of $8 billion or $8,000 million goes to health.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: We are really only looking at budgetary increases. Admittedly, we are not really looking at the overall picture. If someone had budgeted prudently these additional budgetary allocations would not have been required. We are looking only at increments to correct the perceptions of various departments. I have no problem with the allocation of $24 million for Internet training, $56 million for school maintenance and $14 million for minor capital works. Given the school maintenance problem alluded to earlier by the Hon. Patricia Forsythe, it is good to see these budgetary allocations.
I do not pretend that I am able to analyse these budgetary allocations in the context of the total budget, which is why I said that these things should be systematically examined by general purpose standing committees. At least this bill is a step towards the open government about which I speak in this place. I notice that police have been allocated an additional $33 million. I would like to think that would result in more money being spent on crime prevention, but as I am not looking at total spending I am not able to comment on that. It appears as though police and corrective services are getting more money than crime prevention, but one has to look at the overall picture. An amount of $100 million has been allocated for rail infrastructure increases and $42 million has been allocated to improve JetCat ferries. I said earlier that these issues should be referred to the estimates committees, but it is good that these budget variations are made public.
The Hon. JENNIFER GARDINER [9.56 p.m.]: I draw attention to a couple of line items in the Appropriation (Budget Variations) Bill.
The Hon. Richard Jones: And the fire ants.
The Hon. JENNIFER GARDINER: I noticed the budgetary allocation for fire ants. It is good to see that allocation for fire ants because they present a huge threat to primary industry in New South Wales. I note that these issues will be further debated at estimates committee hearings, which will be held shortly. I note the budgetary allocation of nearly $43 million for land maintenance, the upgrade of ferries and the re-engineering of JetCats. The so-called re-engineering of the JetCats is one of the great scandals of the Carr Labor Government and, in particular, the incompetent administration of the Minister for Transport, and Minister for Roads, Mr Scully.
The Hon. Richard Jones: They are losing $2 million a year.
The Hon. JENNIFER GARDINER: They are losing $2 million a year, but they cannot do what they are meant to be doing, so they have to be re-engineered. It is probably time that the Government was re-engineered or thrown out.
The Hon. Ian Macdonald: Fat chance.
The Hon. JENNIFER GARDINER: I want it recorded in Hansard that the Hon. Ian Macdonald said, "Fat chance."
The Hon. Ian Macdonald: Fat chance that we will be thrown out.
The Hon. JENNIFER GARDINER: What arrogance the honourable member is displaying!
Ms Lee Rhiannon: Say it again.
The Hon. JENNIFER GARDINER: It is an example of arrogance.
Ms Lee Rhiannon: He does not understand.
The Hon. JENNIFER GARDINER: He does not understand; it is a bit over his head. An amount of just over $4 million has been allocated for the buyout of commercial fishing licences. There has been some debate about the priority of the Carr Government in buying out commercial fishing licences. Some people believe that a few of the larger commercial fishing enterprises wish to be bought out. They are quite happy to leave the industry as long as they are fairly compensated, but the Carr Government has chosen to reject some of their applications and buy out smaller, peripheral and latent fishing licences.
If this Government's overall objective is to have a sustainable fishing resource, it seems to have missed the point altogether of restructuring the industry. I will pursue that matter in other forums, but I would like to mention tonight that there is a problem in particular on the far North Coast where fishers in the Richmond River area would like to be bought out. The Government has told them that it is not interested in buying out their businesses, which is very disappointing.
I think that is very disappointing, and I look forward to further examination of some of these items during estimates committee hearings. I note the CT scanners for rural hospitals and radiotherapy equipment for south-western Sydney, and I look forward to receiving more details on the break-up of where the CT scanners are to be allocated and how much of that $27.5 million is allocated to country hospitals as distinct from south-western Sydney.
Ms LEE RHIANNON [9.10 p.m.]: The Greens will support the bill. While we part company with the Government's ideological approach to economic matters, we are pleased to be able to speak to the bill. The Greens have often been critical of way in which the Government hides matters and makes it difficult for members of Parliament to play their part—
The Hon. John Ryan: There are plenty of sins hidden in it.
Ms LEE RHIANNON: I agree with the Hon. John Ryan that there are plenty of sins hidden in the bill, but at least it is a start and the Greens are always willing to pay a compliment where it is due. The bill gives us the opportunity to scrutinise the Government's expenditure to some extent. It provides for additional expenditure in areas where it is needed. I believe that in any budgetary process it is important to have a mechanism to provide for the flexibility of additional expenditure that might be required. With regard to public education, the Greens particularly welcome the allocation of $56 million for urgent maintenance measures. The Government should allocate funding for such measures rather than selling off public assets to pay for maintenance in schools. Public education appears to do quite well in this bill.
Funding of $23 million has been allocated for better Internet access in public schools, which is vitally important. As we all know, technology is galloping ahead at a great rate. Our children simply must have the Internet at their fingertips, and if they do not have the equipment they need it simply cannot occur. However, the poor cousin of our public school system, the TAFE system, is still well and truly left out. There is a lack of funding for TAFE teacher salary increases. As the years go by, it is becoming increasingly apparent under this Government that it plans to fund salary increases by so-called efficiency measures. However, this translates into a massive load on the teachers who remain in the system.
The ultimate effect of the reductions that are put in place to supposedly run these institutions more effectively is that the quality of teaching is reduced. That is not a reflection on the teachers who remain, but there is only so much one can do. The load that teachers carry is simply unacceptable. The Greens are also pleased to see funding of almost $144 million for the Parramatta to Chatswood rail link, which is a favourite of the Greens. I imagine that the rail link will be the last major public transport project we will see. However, we welcome it very much and we are pleased to have been able to support the project.
While the Greens support the bill and many of the projects and activities that have been funded under it, we remain opposed to the underlying economic and political philosophy of the Government. Because of the way that approach plays out, we are seeing a roll-down in public infrastructure. It is an issue of real concern. I believe one of the chief responsibilities of any government should be that it keeps public infrastructure well maintained, constantly improved and upgraded. But we are seeing the reverse of that; we are seeing a downgrading of so much of our infrastructure. Future generations will the pay the price for that. At times this leads to a crisis in public confidence.
People simply do not feel confident about going out when they cannot be sure about trains reaching their destination, a lack of lighting in public places, and matters of that nature. There can be negative impacts in a number of ways when the Government does not carry out its responsibilities in this area. The Greens believe it is time to reconsider our economy, to ensure that the distribution of economic resources is fairer and more just. We believe it is time for wealth to be redistributed. They are words that one does not hear much these days. The Greens have a deep commitment to social justice, and wealth redistribution is something that is clearly needed—and we can achieve it. Clearly the Government has the powers through taxation and government charges to ensure wealth distribution, so that public services and infrastructure are no longer the poor cousins of the private sector.
The Hon. Michael Egan: Which taxes do the Greens want us to put up?
Ms LEE RHIANNON: I will give you a list of them. We have some very impressive ones, particularly some eco-taxes. A topic of discussion over the Treasurer's dinner on Thursday night with some of his friends could be increasing taxes on the big spenders in this place. That would be an easy way to even things out.
The Hon. Michael Egan: They would probably only thank me for the premium property tax.
Ms LEE RHIANNON: Perhaps some of them will rethink whether they will come to dinner, because they may not be too sure whether they will get such a warm welcome. I urge the Treasurer to look at the Sydney Morning Herald web site, which has an interesting story about his dinner tomorrow night. The Greens will be pleased to support the bill.
The Hon. DOUG MOPPETT [9.16 p.m.]: On previous occasions when the Appropriation Bill has been introduced in the House I have spoken in favour of the current practices that surround the introduction of the bill. I can recall former practices when appropriation bills were introduced at a time when it could be argued that if they were not passed on that night the salaries of public service employees would be stopped the next morning and it was all retrospective. Along with other reforms that are being introduced, we should at least be thankful that departments are now required to review their expenditure and to bring forward recalculated estimates so that an appropriation can be made. The extra appropriations form a significant part of this bill. I have no problem with that in principle; in fact, I applaud the fact that it takes place.
I am also on record as saying that the exercise of the prerogative of the Treasurer to make advances and also of the Government to make appropriations subject to approval by Parliament under section 22 is a good, flexible way of dealing with the day-to-day problems of managing community expectations against available resources. Once again I wish to say how much I appreciate the improvement that has been made to public accountability through these measures. I would like to draw attention to an item that members have not yet addressed, perhaps because of its obscurity. The explanatory note on page 2 of the bill refers to an amount of $929,149,000 for capital works and services, in accordance with section 22 (1) of the Public Finance and Audit Act 1983. If one were to read that literally, one would raise one's eyebrow and say it is a little strange, taken together with a section 22 appropriation of $1 billion for capital works.
However, more assiduous members would have looked to schedule 2 and recognised that it is virtually one item, which is the appropriation of money to debt retirement. All the citizens of New South Wales should be thankful that the current prosperity that has been engendered by sound Commonwealth fiscal management has enabled the people of New South Wales to enjoy an almost unprecedented surge in business activity, the result of which has been strong positive flows to Treasury. We have to give credit where it is due. The opportunity has been taken in this bill to retire State debt by a substantial amount. Everyone voting on this bill tonight ought to be aware of that as it is very significant.
I said I would return to some remarks about the Treasurer's Advance and section 22 appropriations. I approve of them in principle but I do not think it can be said to be an unqualified approval. The exercise should not be unmitigated. It should not develop into expectations that the State's needs will be met on the run with hip shots at whatever turns up whenever it turns up. There has been considerable debate in other places. General Purpose Standing Committee No. 1, which Reverend the Hon. Fred Nile chaired in its inquiry into appropriations and expenditure, pointed to a comfortable level that should be struck in relation to the gross turnover in the budget. One cannot take figures out of the context of the total budget and say that $500 million is a lot of money. Yes, it is a lot of money but in State expenditure terms it remains inside the comfort zone that the Auditor-General should say is a substantial sum of money that was not included in the original budget, but which does not breach the safety standards that should be applied.
However, I am concerned that this is developing into a pattern. Each time we have debated this bill, Treasurer's Advances and section 22 appropriations have been close to the limit. This is something that honourable members on both sites should be alarmed at, because if it becomes part of the settled way of financing the activities of the State, sooner or later the flexibility that is intended by these two facilities will be gone, because there will be an assumption that they will be used up by sloppy forward budgeting in the expectation that all one has to do is knock on the Treasurer's door and he will make an advance or prepare a slightly more significant submission through Cabinet to the Governor-in-Council to sign off under section 22. It would be a great shame if every year it was fully extended to the limits of probity and fiduciary responsibility.
There should be years when the Treasurer's Advance is very small, when those exigencies have not turned up. After all, that is what it is there for—bushfires or something totally unanticipated. It is a great shame to think that it has become part of the normal pattern of financing government operations. Nevertheless, despite the enormous total of these figures, I tend to agree with the sentiment that the Hon. Dr Arthur Chesterfield-Evans mooted, which I was not able to hear in full, that greater detail of the nature of these advances and section 22 appropriations should be provided for closer perusal if the general purpose standing committee so chooses. For some advances the committee might say that is sufficient explanation; others would be worthy of scrutiny as we do the budget appropriations later in the year. When one is looking at weighty sums of money like this there is good reason to raise questions. It is all very well to point out, as the Hon. Richard Jones did, the enormous importance of responding instantaneously to the challenge of fire ants and to the banana sigatoka threat.
The Hon. Michael Egan: We are very good to Queensland.
The Hon. DOUG MOPPETT: I agree with you. Both of those are of enormous benefit. It is good neighbour stuff.
The Hon. Michael Egan: I am not sure they reciprocate.
The Hon. DOUG MOPPETT: No, but I think we have to recognise that these are bread and butter responsibilities. We should not look at the control of noxious animals, particularly insects on the scale of fire ants, and the protection of an industry like the banana industry as benevolent acts but part of the core responsibilities of government. I believe some closer scrutiny is needed of what that money will amount to, what is going to be done in this fire ant program, and what is the nature of the sigatoka banana campaign.
The Hon. Ian Macdonald: You certainly will not find out from me tonight.
The Hon. DOUG MOPPETT: No. If I had that forlorn hope, it has now comprehensively been dashed.
The Hon. Michael Egan: And I could have helped you once but I have forgotten. I will have to reacquaint myself.
The Hon. DOUG MOPPETT: Right. The point I was making was not that I sought the information now but that I am sure members of this House would like the opportunity to do so. They are probably aspects of this large sum of money that would be less likely to be questioned, but other items would bear some greater scrutiny by an appropriate committee, and we have the committees with their various standing responsibilities. I think the Treasurer could give a fuller explanation than is contained here and we would not have to barney about it when debating the bill at its second reading.
The Hon. IAN MACDONALD (Parliamentary Secretary) [9.26 p.m.], in reply: I thank all honourable members for their contributions to this debate. They have all made some very sensible comments.
The Hon. Michael Egan: They made a lot more sense than Mr Souris in the other place.
The Hon. IAN MACDONALD: Yes, I was intending to talk about Mr Souris but I want to comment on a couple of remarks made by the Hon. John Ryan. He said—something that was contradicted very clearly by the Hon. Doug Moppett in his praise for the Government for its debt reduction strategies—that if expenditure continued at this rate, talking about this particular appropriation, it would definitely lead to an increase in debt. However, this year the budget is still in surplus and underlying net debt within general government has gone from $12 billion in 1995, the last year of the Coalition Government, to this year's figure of $5.3 billion and a projected figure for 2005 of $4.8 billion. So there has been quite a cutback in debt over the past few years. The Hon. Doug Moppett saw through the arcaneness of various economic figures and came to the conclusion that it was a good thing that we have been moving towards greater debt reduction.
The Hon. John Ryan is again a little confused. Some extra income is being reflected in these appropriations due to the strong nature of the economy, and this was referred to again in the excellent contribution of the Hon. Doug Moppett. What the Hon. John Ryan failed to mention was that whilst the economy has been wheeling along, creating this extra revenue for the Government, at the same time the Government has taken policy decisions that have led to cuts in various taxes. For instance, the payroll tax rate has been cut from 6.4 per cent to 6.2 per cent, effective from 1 January 2001. On 1 July 2000 the Government completed phasing out the $43 third party motor vehicle registration levy. We have removed the surcharge on motor vehicle registration fees and transfer fees. We have introduced first home plus stamp duty concessions for home buyers, effective from 1 July 2000. We have decreased the insurance stamp duty rate from 11.5 per cent to 10 per cent, effective from 1 October 2000. With the exception of some minor changes to parking space levies there were no tax rate increases or new taxes in 2000-01. In fact, the Government has been reducing taxation.
[Interruption]
Obviously the Hon. John Ryan is a little embarrassed about this, because he is starting to get a little aggressive. He knows that when the Coalition was in Government a member in another place, Mr George Souris, increased taxation dramatically. Indeed, many of the tax rate increases were more than 100 per cent. I will not detail those increases now because it is getting late in the evening and I do not want to overburden members opposite. Honourable members must remember that this bill provides for an increase of $142.3 million in funding for the home owners grant, $135 million for natural disasters and $70 million for education maintenance. These are legitimate extra expenditures. I note that most honourable members are content with what the Government is doing in these areas.
The Hon. Dr Arthur Chesterfield-Evans referred to the health budget. He correctly said that health funding has increased, but the increase is far in excess of the figure he mentioned. In fact, the increase was something like $27 million, and included an allocation for CT scanners for rural hospitals. That was a great victory for Country Labor. Members opposite always get upset when Country Labor is mentioned. Honourable members should not get too caught up in the rhetoric about the Treasurer's Advance, which represents only about 1 per cent—
The Hon. Richard Jones: No, it's 3 per cent.
The Hon. IAN MACDONALD: No. It is $250 million over $30 billion. In fact, the Treasurer's Advance is a very small percentage of overall expenditure, so it is a bit inordinate for members opposite to get a little carried away with it. They are clutching at straws. They always get a bit upset about the budget until it is explained to them. I simply refer them to the contribution to this debate of the Hon. Doug Moppett. In his speech—it was probably the best speech this evening—the honourable member wholesomely praised the Government for its debt reduction strategy and its thriving use of policies and initiatives to get the economy moving. The extra revenue is being devoted to important social justice areas.
Motion agreed to.
Bill read a second time and passed through remaining stages.
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