Budget Estimates And Related Papers

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SpeakersEgan The Hon Michael; Sham-Ho The Hon Helen

Financial Year 1993-94

Debate resumed from 7th September.

The Hon. M. R. EGAN (Leader of the Opposition) [2.47]: This is a budget of a government that has given up on jobs. The job fraud of 1992 has been replaced by the job sell-out of 1993. Last year the Premier and Treasurer promised 18,000 new jobs from the Budget boost to capital works. That was the promise held out to the jobless and school leavers of New South Wales - 18,000 new jobs as a result of the Government's capital works boost last year. The Premier and Treasurer held out this bonanza on the basis of a $650 million increase in the capital works program plus a highly imaginative multiplier effect of two indirect jobs for every direct job created. Instead, the program was underspent by $327 million, or more than half the promised increase. There were not 18,000 new jobs or anywhere near that many. In fact, New South Wales employment between the time of John Fahey becoming the Premier of New South Wales and the compilation of the latest employment statistics released last week fell by 27,000 - 27,000 jobs lost since John Fahey became -

The Hon. Dr B. P. V. Pezzutti: Take it June to June. You are not telling the truth.

The Hon. M. R. EGAN: The Hon. Dr B. P. V. Pezzutti says that I am not telling the truth. He will find that from June to June the job losses in New South Wales were not 27,000 but 40,000. I have done the honourable member and his Government a favour by using the figures from June 1992 to August 1993. Does the honourable member want me to go back to the time when Mr Greiner first became Premier, when this Government was first elected?

The Hon. Dr Marlene Goldsmith: Look at the national figures.

The Hon. M. R. EGAN: Yes, I will look at the national figures. During that time there was a national job growth of 376,000, of which New South Wales accounted for 23,000. Compared with this State's lamentable performance, South Australia - the so-called rust bucket State - had job growth of 33,300. During that same period jobs increased by 88,000 in Western Australia and in Queensland by 202,000. In other words, New South Wales came well behind Queensland, Western Australia and even South Australia. Not satisfied with that lamentable performance, the successor of the Premier as Treasurer, Mr Peter Collins, has now produced a Budget which, far from offering new jobs, will cost 10,000 more jobs.

This year's capital works program is lower than last year's - down 4.2 per cent in real terms, or $234 million. That, conservatively, will cost more than 4,000 jobs both directly and indirectly. Also, 3,500 jobs are to go from authorities like Elcom, electricity distributors, the Sydney Water Board, the Hunter Water Board, the State Rail Authority and the State Transit Authority. We are still to see the details for other authorities like the Maritime Services Board and the Public Works Department. There are job losses in departments such as the Department of Health, which alone is down 900, and the inevitable job losses from privatising the SRA's Hunter coal freight operations, its most valuable asset. The Government Cleaning Service is to be privatised.

These two decisions - the abandonment of a great public authority's most profitable asset and the abandonment of one of the neediest and most vulnerable sections of the State's work force - together encapsulate the meaning of this Budget, in all its meanness of spirit, in all its lopsided priorities, and in its mechanical pursuit of an ideological fixation now driven beyond the point of exhaustion and beyond all common sense. Where is the common sense of a Budget that cuts jobs most savagely in the very sections of the public sector work force whose participants, the victims of the Budget, are the workers least likely to find alternative employment - and this at the very time when the plight of the long-term unemployed is the most intractable problem facing this State and nation? It is without common sense; it is without common decency.

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In the case of government cleaners, the Premier says that they will have 12 months' job security with the new contractors. That promise is as worthless as last year's promise of 18,000 new jobs. For the government cleaning work force it is not a reprieve; it is a sentence of doom for the hundreds of people - widows and migrant women especially among them - for whom employment of this kind is a lifeline not only for income support but also for their sense of dignity and self-respect as active members of the working community. There is no common sense in it even on the most desiccated calculations of profit and loss. Through their union they have demonstrated that they are fully keeping costs down, and they have done so.

But this Government's approach will lead only to a decline in standards. That is already happening south of the border under Premier Kennett, with lower standards and in the end higher costs across the board - first social costs, then economic costs, and always the human cost. All up, this Premier will chop another 10,000 jobs from the New South Wales work force this year because he says he is no longer in the job-creating business. Neither he nor his predecessors ever were. The coalition's publicly announced job losses now stand at almost 57,000. So much for the Premier's much vaunted jobs freeze, and then the clarified jobs freeze, and then the reclarified jobs freeze. The clarifications did not help those employees whose jobs disappeared last financial year - the Elcom coalminers in the Hunter, the SRA workers at Chullora, or even Bruce Baird's receptionist.

The attack on public sector jobs, including the attack on some of the most productive parts of the public sector, represents the half-baked ideology fashionable enough when the coalition came to office more than five years ago. In this its sixth Budget the fraud of it all stands exposed. By all the meanness, the measures and goals which this borrowed ideology proclaims to itself, it has failed. It has failed to deliver in the public sector and, most of all, it has failed to deliver in the private sector, because the real tragedy in the last five years in New South Wales has been this Government's failure to encourage private sector development and create jobs. It has dragged down this State's economic performance with its high taxes and charges, its waste and mismanagement and its endless self-imposed internal crises. In the very area it claims as its special preserve - better management to free up private resources - it has achieved its most spectacular and damaging failures.

According to New South Wales's Treasury's latest comparison of interstate indicators, New South Wales is behind the other States in motor vehicle registrations, well behind in retail sales and behind in residential and non-residential building, private consumption, tourism accommodation revenue, and personal and housing finance. The Budget Papers show that new private investment in New South Wales fell at almost twice the national rate last year. But it is jobs where the massive failure has occurred; it is jobs where one really sees the disaster of the conservative government in this State. From the time the Greiner coalition Government took office until the August figures were released last week the number of people in work in New South Wales increased by a paltry 37,300 compared with an increase of 322,000 for the rest of Australia. Treasury has forecast New South Wales employment growth to be less again than the national rate in 1993-94. This is the sorry tale after five and a half years of coalition government: a weaker economy, a weaker budget, a weaker private sector, yet higher taxes and charges and poorer services and standards.

This Government now boasts a cut in business water rates. But the Government Pricing Tribunal pointed out in May that there was clearly enormous room for efficiency gains given the massive waste in the board under this Government. The tribunal found that the board was spending $165 million a year on consultants and contractors - double the level of four years previously. What is more, it found that for all the job cutting in the Water Board, for all the axing of jobs of ordinary people, the operating cost of the board per household grew in real terms by about 20 per cent. That waste is unforgivable while Sydney still has the highest business water rates in the world. The Government compounds the problem by raiding $200 million from the board in special dividends to pay for its waste and its mismanagement. Port charges have been cut two years after the shadow minister, Brian Langton, the honourable member for Kogarah, called for such action - two years' delay while business has moved permanently to other ports, especially to Brisbane.

Last financial year New South Wales had the highest business electricity charges of any State except Western Australia. Meanwhile, the Government continues to collect high dividends. The dividend of the Maritime Services Board is up 53.7 per cent this year - triple the level of two years ago. The total of dividends and other payments from the electricity bodies is $743 million this year - more than two-thirds of all such payments. Using the Treasurer's approach, that amounts to $371 a household each year. In other words, every household in New South Wales on average is contributing $371 in increased charges because of the massive dividend rip-off under the Greiner and Fahey governments. Included in that is the $100 million raided from Prospect Electricity on top of last year's $75 million to help the Budget instead of being used for the promised capital works in western Sydney.

Meanwhile there are two growth industries: government regulation and, of course, consultancies. Now there is another inquiry into red tape by yet another consultant, this time the failed Liberal Party apparatchik Mr Gary Sturgess. The failed Department of State Development has finally been axed, but five years too late. The New South Wales Tourism Commission has sought yet another consultant to develop yet another marketing plan after its failed New South Wales campaign. The Forestry Commission is to be restructured and supposedly will operate at reduced cost to the public purse - but, I
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point out, three years after a damning report by the Public Accounts Committee. That delay and the Government's failure to have a proper forest classification and contracts system has retarded the development of the State's forestry industry and cost jobs.

The opportunity for a burst of residential development in the central business district has stalled because, again, this Premier has missed his opportunities. In South Sydney - where the Opposition has proposed action to redevelop old industrial sites for medium-density housing - exciting opportunities still await both the vision and the decisiveness this Government lacks. In Walsh Bay - where the Opposition has proposed action for redevelopment in bite-size chunks - all action is stalled. This Government delayed the casino development by an unbelievable four years. Of course, the Government's record on taxes, entrenching New South Wales as the highest taxed State, continues to cripple our competitiveness. The evidence continues to grow. The Budget Papers show that tax revenues in New South Wales represent 7 per cent of the gross State product compared to 5.8 per cent for the other States. That means our tax revenues are $1,650 million more than if we had the same ratio of taxes to gross State product as the State average for the nation as a whole. Using the Treasurer's methodology, that equals $276 for every person in this State.

Queensland now has significantly lower payroll tax and debits tax as a result of this Government's increases. Queensland has no petrol tax and no financial institutions duty. Under this Government, both those taxes have doubled. Is it any wonder that Queensland is expecting 3.8 per cent growth this financial year compared to only 2.6 per cent for New South Wales? Or is it any wonder that last year Queensland had an economic growth rate of 6.6 per cent compared to a meagre 1 per cent in New South Wales? They are damning figures. Queensland, our next door neighbour has a growth rates six times larger than that of the premier State. Is it any wonder that more than 100,000 people have migrated to Queensland from New South Wales since 1988, voting with their feet against the sorry record of Greiner and his ill-prepared, wrong-footed successor?

Look at the record of services of this Government: new western Sydney hospitals delayed, fewer train services, delays in child sexual assault counselling, bigger class sizes, large unmet demand for TAFE courses, continued court delays and a brutalised prison system. And, of course, the list continues. This has been a government of extraordinary waste and profligacy, of disdain and contempt for the people of this State. Its legacy of waste will feature prominently on its political epitaph, alongside higher taxes and charges, the fire sale of assets, corruption, monstrous political appointments and cuts to services, the legacy of the bloated senior executive service, expensive advertising campaigns, consultancy bills of more than $150 million a year, empty buildings, elaborate office fit-outs, departmental name changes one after the other, Eastern Creek, and need I mention Neil Pickard and the hundreds of millions of dollars that the HomeFund disaster will cost the taxpayers of this State.

A public relations firm was engaged to soft-sell the Budget's bad news to the public - another $164,000 of taxpayers' money wasted. From this Government of deals another has emerged - the M5 deal. The Government states that the Roads and Traffic Authority is short of funds. It now transpires that the Government financed what was meant to be a private tollway to the extent of $85 million, including the recently revealed $50 million loan the Minister tried to hide. The upshot is that taxpayers and motorists are paying for the road. Of course, the $50 million helped inflate last year's capital works spending. That is typical of the waste and incompetence of this Government. This Budget's improved deficit and new initiatives in health are due to one factor and one factor alone - a massive funding boost from the Federal Labor Government.

The Hon. J. F. Ryan: And who got it for us?

The Hon. M. R. EGAN: I am glad to see the Hon. J. F. Ryan at least concedes the point I have made. Paul Keating got it for you - an extra $300 million to the State's coffers this year from the Commonwealth Government. That increase includes the welcome boost in general purpose grants, partly - and I emphasise partly - redressing the generous subsidies to other States, especially Queensland. Contrast Labor's approach with that of the Federal coalition under Dr Hewson at the last election. I am sure the Hon. J. F. Ryan will recall Mr Hewson's promise of a cut to New South Wales funding of more than $1,800 million in just the first three years of a coalition government. The Federal coalition was promising to cut funding to New South Wales by $600 million a year. Instead of Dr Hewson's proposed cut Paul Keating has given us an extra $300 million. In other words, this State is $900 million a year better off than the colleagues of the Hon. J. F. Ryan would have us believe.

A cut of $600 million against an increase of $300 million is, even for one as innumerate as the Hon. J. F. Ryan, $900 million a year. Remember also how Premier John Fahey embraced the Fightback package with its $600 million a year cuts in funding to New South Wales. None of the so-called good news in this Budget would have been possible but for the Federal Labor Government. Of course, this Government continues to blame what it calls Canberra's recession for its financial woes. While the nation - as distinct from New South Wales - is in recovery, a range of Federal achievements, including low wage increases, low inflation and low interest rates, strongly benefit this Budget.

The Opposition agrees with the need to reduce this State's deficit, but rejects entirely the Government's misplaced priorities. Our budget approach differs in relation to these key aspects: the Government's entrenchment of wrong spending priorities and high taxes by continued waste; the
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sacking of workers - the cruel forced redundancies - to achieve job reductions; the privatisation of public hospitals, the rail system and water services; and the fire sale of the State Bank. When the Opposition is elected to office in just 18 months' time, it will always ensure that its new spending programs meet the key priorities of health, education, transport and community services. It will do that by a tax on waste and mismanagement, by cutting spending on lower priority programs, and by streamlining administration.

Our approach will mean that for every extra dollar we spend on our election commitments, either recurrent or capital, an equivalent dollar will be cut elsewhere to pay for them. In other words, our proposals will be fully funded. Indeed, the Opposition will aim to reduce the deficit to protect the State's triple-A rating, which was never at risk under the 12 years of Labor Government. The Opposition announced previously that it would establish a council on the cost of government, which would seek to streamline existing review mechanisms and to utilise the best private and public sector managers to deliver better and cheaper services. That, of course, will meet another Opposition goal: not to increase the tax burden on the people and the businesses of this State. Now entrenched as the highest taxed State, New South Wales needs a government that will break with the lazy, high-taxing policies of the coalition. Other than to continue to maintain the indexed petrol levy and weight tax for road funding, Labor will not increase taxes or introduce new taxes.

The second main difference in the Opposition's approach is that it will scrap the Government's disgraceful policy of sacking and axing the ordinary wage and salary earners who make up the public sector work force in New South Wales. A policy of natural attrition and redeployment will be our approach from the very start. We will immediately implement a staff freeze so that employees in lower priority programs and departments will be fairly quickly redeployed to fill vacancies elsewhere.

This policy is in contrast with the Government's approach, which is to keep hiring while it is firing. Indeed, every week one can pick up the Saturday newspapers - the Sydney Morning Herald or the Daily Telegraph Mirror - and find that about 100 or 150, sometimes as many as 200, new jobs are being advertised. But, of course, they are always the highest paid jobs, the senior executive service jobs. The third key difference between our approach and that of the Government is our strong opposition to the Government's policy of privatisation of hospitals, the rail system and water services. I reaffirm the position I outlined in my budget reply speech last year.

The Opposition will bear down on all low-priority areas of expenditure to ensure that hospitals are built for, and managed by, the public sector. This means that the people in the Maitland, Coffs Harbour, Lithgow, Liverpool, Nepean, Wollongong, Albury and Hawkesbury districts will have an unequivocal choice - if the coalition Government is re-elected, they will either get a private hospital or have their existing public hospital privatised; if a Carr Labor Government is elected, they will receive a new extended public hospital. That is the clear and unmistakable choice the people of New South Wales will have.

Let there be no doubt that if the Fahey Government is re-elected, its secret privatisation agenda will be implemented. The Port Macquarie hospital model will be replicated across the State. On 18th October last year the Minister for Health said the Government was "planning . . . joint private-public sector development to only four hospitals". He then said it will not consider other proposals "before the next election". In other words, before the next election there will be four proposals; the remainder will come after the election. The Opposition will block the sale of the Hunter coal freight system so that this valuable State asset and thousands of jobs are protected.

This leads me to the fourth difference in the approach of the Opposition to that of the Government: the attitude of the Opposition to the Government's fire sale of the State Bank. Our party will not allow one of the State's major assets to be sold in a climate which is clearly not conducive to the State's financial interest. Given the bank's present poor financial performance and its level of bad and doubtful debts, now is clearly not the time to sell the bank or to set in train its sale. In the Budget Papers for the past two years a figure of $900 million has been earmarked from the sale of the bank. This year the forward estimates of the bank's sale revenue do not appear, despite the Treasurer's public commitment to detail the sale timetable. It is worth asking why the figure is not there. The answer, of course, is that the Government expects the sale price to be a great deal less than the $900 million it predicted last year and the year before.

That cover-up confirms the fire sale approach upon which the Government is determined. The Opposition, therefore, will oppose the legislation that will enable the sale of the bank. We believe that to sell the bank in the immediate future will result in the budget being worse off in the long run, given expected low interest rates and the potential for the bank to return to the level of budget payments it achieved a few years ago. These are the key differences in the fiscal approaches of the Opposition and the Government. The Opposition's approach will deliver fiscal restraint with social equity and opportunity. Our approach will not burden business with higher taxes, as the Government has done. Our goal will be to create a fairer community and more jobs. These are the goals that this Government completely fails to address.

The Hon. HELEN SHAM-HO [3.18]: It is with great pleasure that I support the 1993-94 New South Wales Budget, which achieves the key objectives of reducing the budget deficit and debt containment while providing for ongoing maintenance and improvement of core community activities. The Budget is responsible and equitable. It is the first
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Budget introduced by my honourable friend from another place the Hon. Peter Collins, Q. C., the Treasurer of New South Wales. I offer him my congratulations, as he had a tough task. On page 8 of the Sydney Morning Herald of 8th September Mark Coultan stated:
      . . . you have to congratulate Peter Collins for producing a Budget which will offend almost no-one and still reduces the deficit.
      With no tax increases . . .

A moment ago the Leader of the Opposition commented on Federal Government management. I also would like to speak very briefly about that. I believe the New South Wales Budget is in stark contrast with the recent Federal Budget delivered by the Keating Government, which is still not resolved after some time. The Prime Minister, of course, is now overseas.

The Hon. Franca Arena: Why do you think he has gone overseas? Do you think he should not go overseas?

The Hon. HELEN SHAM-HO: No, he should not. He should look after the country. Every section of the community has condemned that Budget, which does nothing to hasten the recovery of the national economy or to properly address key issues. The uncertainty of the inadequate, inequitable and irresponsible Federal Budget has weakened the Australian dollar and has caused our currency to fall. The Federal Budget has no real strength or plan for reducing the deficit to the much publicised objective of 1 per cent of gross domestic product by 1996-97 but instead contains only a mishmash of increases in already distortionate, inefficient taxes and only very limited expenditure cuts.

The projected reduction in the deficit in the Federal Labor Government's target relied on very optimistic, medium-term economic and employment growth. The Federal Government has admitted that there will be no significant drop in the nation's unemployment rate or increase in the rate of economic growth in the next year. Indeed, unemployment increased sharply by 0.5 per cent to 11.2 per cent in the past month. The promised income tax cuts have been negated by the raising of indirect taxes, which is not only illogical but also unfair. The Keating Government has delivered tax cuts to middle and higher income earners and to pay for them has had to increase indirect taxes which fall hardest on low-income earners.

The Hon. Franca Arena: You wanted to impose a goods and services tax, 15 per cent on everything.

The Hon. HELEN SHAM-HO: The honourable member does not know what she is talking about. She does not understand that it is the low-income earners who have been hardest hit. The Federal Budget and its effect on the New South Wales economy can be felt directly by the continuing cuts of over $700 million per annum relative to 1987-88 in Commonwealth general purpose payments to New South Wales. Further, New South Wales subsidises the smaller States and Territories by $1.2 billion a year through fiscal equalisation. Federal economic mismanagement had an indirect effect on the recession and the downturn in the property market, significantly reducing State tax revenue. Property-based revenue, real estate duties and land tax are $1,127 million lower in real terms in 1993-94 relative to their peak year values.

Notwithstanding these difficulties and in comparison with the Federal Government's irrational approach, the Fahey Government's Budget not only contains debt but maintains services and gives a helping hand to people and families in need. As stated by the Treasurer on page 1 of Budget Paper No. 1, it is a budget of "common sense and compassion", setting out the Government's priorities for continuing, responsible, financial management of New South Wales.

State debt and its reduction must be a key priority in order to free up national savings for financing private sector investment, balancing the fiscal burden between current and future generations and reducing the level of financial exposure for greater financial flexibility. This year's budget will cut the deficit by $100 million to $890 million within the limits of a reasonable and manageable debt. However, it has not been achieved by the hard, short-term approach of slashing spending and raising taxes but instead by a much more compassionate approach. As stated in the editorial in the Sydney Morning Herald on 8th September, 1993, this approach has been possible because of the "measures taken by the Greiner Government, especially the start it made towards making statutory authorities and government departments more efficient".

Undoubtedly because of the good management of the coalition Government, New South Wales has been able to stick to a steady course rather than scramble for the lifeboats. Our State economy is in a better shape than those of most other States. The key objective of the Budget is, even in periods of necessary debt reduction, to still maintain essential public services and seek to achieve better value for money. The containing of State debt and the continuing provision of quality services is based on five common steps stated on page 7 of Budget Paper No. 1. They include the reduction of the deficit and other liabilities; tax restraint; better value for money in the delivery of government services; reform of government trading enterprises; and the setting of priorities for government services. This Government is committed to keeping taxes down with only very moderate increases in user charges. That statement appears at page 9 of Budget Paper No. 1.

The Government has also stuck to the right priorities for increased expenditure in identifying health, education and community services as areas of need. The Government will spend $3,500 for every man, woman and child in this State in current and capital payments to meet these priorities for 1993-94. The increased funding for these priority areas was
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necessary because of the greater demand for these services due to the national recession. Although the world economy remained depressed for the third year in a row in 1993 and the fiscal policy of the Federal Government is not working, the New South Wales Government, through the newly created Office of Economic Development within the Premier's Department is providing economic development leadership. This Office of Economic Development also will provide a high level of government co-ordination to ensure that existing and new major corporations are confident that New South Wales will continue to offer a competitive and stable environment for operations and investments.

Honourable members will agree that new investments can generate jobs, increase export revenue and help to improve the economy. The New South Wales economy is large by world standards. It is the third largest in Asia with a gross domestic product of $100 million. It has an increasingly international focus. I was advised that there are branches of the Office of Economic Development in Tokyo and London. However, there is nothing elsewhere, which is very disappointing. In my view, in order to attract new investment, we must have the presence of offices of economic development in many other places such as China, Indonesia, Thailand, Korea, Taiwan and Singapore, which are our major trading partners. At least, if we do not have an office we should have some resources in the offices of Austrade and co-operate with our Federal trading posts.

We all know that the recent economic growth in Asia is fantastic, particularly in China. It is not just a coincidence that China attracted $US60 billion of foreign investment last year and that Australia was China's eighth largest foreign investor. Being a Chinese Australian and special adviser to the Premier on Asia, I have a very keen interest in China trade. I know that China's 1.2 billion population provides the largest domestic market in the world. Its labour costs are still amongst the cheapest in the world. Since the renewal of Australia's diplomatic relations with China in 1972, trade has expanded rapidly.

The Hon. Franca Arena: Thanks to the Labor Government. That was the Labor Government, Helen.

The Hon. HELEN SHAM-HO: I acknowledge that. Incidentally, the pioneer in establishing Australian trade with China was the late William J. Liu, OBE. Last Friday, an exhibition of 26 narrative paintings celebrating the life of this great Australian was opened by the Governor-General, the Hon. Bill Hayden, at the State Library. Mr Liu was recognised as the pathfinder who made a tremendous contribution to Australia-China trade, cultural understanding and friendship. I also would like to pay tribute to this great Australian and put on record my respect and admiration for his foresight and effort.

Nowadays trade between Australia and China is substantial. It has grown from a base of $158 million in 1973-74 to more than $4 billion in 1992-93. In 1992-93 Australia was the eleventh largest trading partner of China, taking 1.4 per cent of China's trade. In the first five months of this year, exports from Australia to China reached $885 million, an increase of 57.8 per cent over the same period last year. Imports from China reached $1 billion, an increase of 24.7 per cent. This year, two-way trade is expected to reach $5 billion. The latest analysis on China from the Department of Foreign Affairs and Trade stated:
      With its huge infrastructure requirements, China is a promising market for Australia's manufactures and technology, as well as for the more traditional primary commodities such as wheat, barley, wool, sugar and iron ore. Areas where Australia is internationally competitive, such as transport, telecommunications, agricultural technology, power systems, mining technology and environment protection are all high priorities for development in the 1990s.

The Chinese central government is also preparing to allow some foreign involvement in retailing, transport, information technology, engineering skills, building and construction, and banking. Australia is sharing in this growth. Austrade has set up offices in Beijing, Shanghai and, recently, in Guangdong. New South Wales must also capitalise on this opportunity. After Japan, China is Australia's most important trading partner in Asia. New South Wales is more fortunate than other States because of its link with Guangdong Province, the richest and fastest growing province in China. This was done back in 1978 with a little luck and foresight, when New South Wales was the first Australian State to establish a sister-State relationship with China. My family was from Guangdong, though I was born in Hong Kong. The sister-State relationship is maintained by the Office of Economic Development, within the Premier's Department. Before the ministerial reshuffle in July this year, the Office of Economic Development was part of the former Department of State Development. The economy of Guangdong Province grew by an annual average of 13.3 per cent between 1979 and 1992, and as I said, is among the fastest growing economies in the world. It accounts for about one third of the trade between Australia and China.

According to the figures for the highest GDP per capita in 1992, three out of the top four growth cities in China were in Guangdong Province, namely Shenzhen, Zhuhai and Guangzhou. Figures supplied by Austrade show that Zhuhai City in Guangdong Province experienced an annual growth of between 35 per cent and 60 per cent in recent years. Several years ago I visited these three cities and I was amazed at their rapid development. As an extension of the city-State relationship with Guangdong Province, a joint economic committee was formed in 1983 between New South Wales and Guangdong to enhance business development. The JEC agreed to hold a joint meeting every year, alternately in Sydney and Guangzhou. Joint meetings have been held since 1983, except for 1989 following the Tiananmen Square massacre.

Former Premier Greiner's visit in 1990 with a business delegation developed a strong commercial focus for the committee. This was maintained during the visit of a New South Wales business delegation, of
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which I was a member, headed by former Deputy Premier, Mr Murray, in October last year. It was a very successful trade mission. For instance, a director of Ground Support Engineering, Mr Angus Cheung, who went with the delegation and whom I met again last month, told me that the trip had been most beneficial to his company, which secured contracts worth more than $1 million between last October and May this year.

Tamworth British Aerospace Ansett Flying College is seeking to establish itself in China. Like Australia, China is geographically a big country. With its recent rapid economic growth in most major cities and in the country, China needs at least 1,000 pilots every year, but supply is far below demand to make up the shortfall. It has been reported that China Southern Airlines is on the verge of buying a pilot college in Australia. Its interest has developed since the visit to Guangdong last October. Both the New South Wales and Guangdong governments regard the sister-State relationship as one of their most productive. Because of this, for the first time, I have been informed that the Governor of Guangdong, Mr Zhu Senlin, a powerful influence in China, will attend the JEC meeting in Sydney this November. He will be accompanied by the first significantly large economic and technological group from Guangdong. No doubt I will meet him when he visits.

Many New South Wales companies are chasing multimillion dollar projects in Guangdong. The November meeting may see the conclusion of some of these projects. Some New South Wales companies have used the sister-State relationship with Guangdong Province as a stepping stone to other provinces in China. For example, Utilux has established a plant in Tianjin Province with the help of the relationship. During the last financial year, the former Department of State Development assisted on average more than one visiting Chinese business delegation a week to investigate business opportunities in New South Wales. I was always invited to meet with the delegates, who were delighted to see a Chinese member of Parliament in New South Wales. Perhaps in some way my presence may add confidence to their dealings. The business delegations included two commodities investment delegations from Shanghai, as well as a series of industrial missions from Guangdong, an infrastructure delegation and a food processing delegation from Beijing. The latter resulted in the establishment of a food processing plant in Sydney in May. The plant is expected to provide employment for eight Australians.

Last month the Office of Economic Development assisted Stanilite Electronics Pty Limited, one of Australia's leading telecommunications manufacturers and exporters, in hosting a delegation from China. The chairman, my good friend John Valder, announced at a reception that the company has obtained an agreement to supply $US10 million worth of equipment to nine cities and 68 counties in Zhejiang Province, China. Trading links with China have helped the company to lift its profit by 70 per cent last year. There are many successful stories and I have every confidence that there will be many more. The New South Wales Guangdong sister-State relationship offers opportunityof enormous potential to two States. I hope that the Office of Economic Development will have sufficient resources to meet the growing need. Its current staff level of 69 appears to be a lean management team, but they must be efficient and effective in their operations. I know that the chief executive officer, Dr John Saunders, works very hard. He and his team should be commended for their work.

Tourism is of great importance to New South Wales. The New South Wales Tourism Commission has received increased funding in this year's Budget, from $8.2 million to $27.9 million - an increase of 46.4 per cent over the previous year's allocation. I make no apology for the many departments and programs that have had their funding cut. Tourism is an industry that offers hope for fast economic growth, and it has the potential to generate employment growth in city and rural areas throughout the State. Last year more than $8 billion was generated from tourism, a greater export earner than wheat and wool combined. It represents more than 10 per cent of Australia's exports and will represent more than 20 per cent of Australia's job growth over the decade.

Tourism is the fastest growing industry in New South Wales, currently employing more than 150,000 people. Statistics show that for each additional 17 international visitors or tourists, one more job is generated in the tourist industry. The tourism and hospitality trading division of TAFE provides much needed skills for the industry sectors of hospitality, food, travel and tourism. Many people working in hotels, motels, clubs, butcheries, restaurants, travel agencies, tour operations, hostels, coffee shops, bakeries and other areas in hospitality have been trained by TAFE. The TAFE tourism and hospitality courses span all levels of awards, from basic operations to qualified tradespersons, through to supervision and management. It is appropriate that courses align with the awards of a dynamic and rapidly growing industry.

The extra funding will enable the New South Wales Tourism Commission, in partnership with the tourist industry, to counter the increasing competition from other States for a larger slice of the tourism pie, and to make a major contribution to the well-being of the State's economy. The number of visitors to New South Wales in the first four months of 1993 is estimated to be 630,000. They alone injected an estimated $1.1 billion into the State's economy. More than 3,000 jobs are expected to be created in New South Wales this year as a result of this increased budget, and tourist expenditure is expected to be boosted by $74 million. In the current straitened economic climate there are not many investments that generate a similar return. This extra $8.2 million is expected to return a dividend of over 800 per cent.

The commission's innovative and aggressive marketing strategy, targeted at key markets, is aimed at making New South Wales the main destination
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within Australia and the South Pacific. The role of the New South Wales Tourism Commission is to tempt visitors to stay in this State. The backbone of the New South Wales tourism industry is domestic tourism, which contributed over 75 per cent of visitor nights in New South Wales last year, and contributed $4.7 billion in gross expenditure to the New South Wales economy. International tourism contributed $3.3 billion to the State's economy last year, or about 40 per cent of total tourism expenditure, although it accounted for only 25 per cent of visitor nights.

It can be deduced from the above that international tourists spend more than domestic tourists. However, this is not the only reason that international tourists are courted and competed for with increasing vigour. Intrastate tourism, that is residents of New South Wales holidaying in their home State, redistributes income around the State. Interstate tourism, that is residents of other States holidaying in New South Wales, imports income from other parts of Australia. But international tourism, that is foreign nationals holidaying in Australia, injects income in the form of foreign exchange earnings into the national economy and that of the State in which foreign tourists spend their time. Accordingly, increasing international tourism to New South Wales is a major priority of the commission's new marketing strategy. It is the number one foreign exchange earner.

In the 1992-93 financial year, almost 2.8 million international visitors arrived in Australia, 11 per cent more than in the previous year. Growth was stronger in the second half of the year, at 15 per cent from January to June this calendar year. The number of international visitors to New South Wales continues to grow, and grew by 7.1 per cent from 1991 to 1992. Healthy growth in the number of visitors is not matched by visitor nights, which fell Australia-wide by nearly 5 per cent from 1991 to 1992. In other words, although more international visitors are coming to Australia, they are staying for a shorter time.

A simple comparison with other States reveals that we are losing market share to other States. In 1988 New South Wales was host to 73.1 per cent of international visitors, but this declined to 65 per cent by 1992 - falling by 1.7 per cent from 1991 to 1992. After growing at a healthy rate from 1987 to 1991, the New South Wales share of international visitor nights fell from 36 per cent in 1991 to 32.7 per cent in 1992. A more alarming way to look at this is that New South Wales lost 3.4 million visitor nights from 1991 to 1992. According to the Bureau of Tourism Research international visitor survey 1992, international visitors spend an average of just over $69 a day. This loss of visitor nights has cost the State's economy a conservative $235 million.

Initiatives announced in the Budget to reverse this trend and increase the New South Wales share of the international visitors include the formation of a Sydney-based international marketing unit to identify international marketing needs, opportunities for co-operative marketing and products with high appeal to particular international market segments; an $800,000 commitment to Partnership Australia, an Australian Tourist Commission program, which will maximise the energy between the ATC's efforts to market Australia and the New South Wales Tourism Commission's expertise in marketing this State; mounting of regular trade missions to tour operators and wholesalers in key overseas markets; extension of co-operative advertising campaigns in overseas travel trade publications; development of an overseas tour operators manual that will bring together information on attractions, accommodation, touring modules, hire facilities, active retailers within New South Wales and other facilities for tourists; and the expansion of the commission's familiarisation programs for key industry personnel, including travel writers, journalists, inbound tour operators and overseas retail travel staff.

The above programs will be monitored and evaluated to ensure that they deliver the increase in international tourism to New South Wales, at which they are directed. Efficient and effective implementation of the above programs should see New South Wales secure an increasing share of greater numbers of international visitors. Those markets that hold the greatest potential for New South Wales are the relatively new markets of Asia. Whilst growth from Japan has stabilised, tourism growth from the remainder of Asia is of staggering proportions. According to Paul Crombie, General Manager of the New South Wales Tourism Commission, a big jump of 39 per cent of tourists from Asian countries is spearheading a boom in international tourists.

By the year 2000 Asia, including Japan, will provide nearly twice as many visitors to Australia as any other source market, according to the estimates of the Bureau of Tourism Research. Taiwan and Korea lead the way with growth rates of 60 per cent and 55 per cent for the first half of this year compared with last year, albeit from a low base. Direct air services between Taiwan and Australia commenced in 1991. Traffic has doubled since then to 63,500 visitors in 1992. The Australian Tourist Commission's target is for 315,000 visitors from Taiwan by the year 2000. The Australian Tourist Commission is targeting 270,000 visitors from Korea by the year 2000, an eightfold increase compared with 1992. Looking at other major Asian markets, visitors from Malaysia and Thailand are expected to triple in this period, and visitors from Hong Kong, Indonesia and Singapore are expected to almost double.

In addition, Chinese tourists are set to outnumber Japanese tourists within five years, according to the manager of China's biggest management company, the China International Travel Service Group. It was stated that the changes in the country's economy and a more open government attitude meant that a growing number of Chinese had cash to spend on holiday or business travel. The growth of private enterprise, particularly in southern China, as previously alluded to, has given rise to a cash-rich population.
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Australia's position as the closest western nation to China puts it in a position in which it is able to seize the lion's share of the tourism market. However, the Australian Government may have to relax its laws about tourists from China, particularly in the light of the surging economic growth in China. China could be Australia's largest single market by the year 2000.

Without a doubt the greatest promise that the future holds for tourism in this country is the Sydney 2000 Olympic Games. The success of the Sydney bid will be announced in a week's time. The Sydney Olympic Games Bid Committee and the Hon. Bruce Baird as the Minister responsible have worked long and hard to ensure the bid is a success. I certainly hope that Sydney gets the games. Tourism growth of the magnitude promised presents challenges not only to the tourism industry within New South Wales but also to the residents of the State. The major challenge will be to ensure that the welfare of the people of New South Wales remains paramount and is enhanced to the maximum by the development of this industry that is already the major exporter earner for Australia and New South Wales.

The Federal Department of Tourism, using forecasts rather than targets of tourism growths, has predicted that 200,000 new jobs will be created within Australia before the turn of the century, and the maintenance of the profile of New South Wales as Australia's number one tourist destination will ensure that we secure a fair share of this employment growth and the economic benefits that will go hand in hand with it. Our multicultural society is a definite plus in this regard, as are the friendliness and tolerance that are Australian hallmarks. I commend the increased funding of the New South Wales Tourism Commission as being in the best interests of the future of New South Wales.

In regard to the future of New South Wales, almost 22 per cent of the total 1993-94 Budget will be invested in education, training and youth affairs activities, reinforcing the Government's ongoing commitment to the young people of New South Wales - those who are the future of New South Wales. The Government's commitment to the young people of New South Wales has been reaffirmed in the 1993-94 Budget. The funding allocations earmarked for education and training programs are a testament to the high priority this Government attaches to preparing our youth for fulfilled and successful lives as adult members of society. The Government, through the education department, provides more than 750,000 core students with education in more than 2,200 schools. In 1993-94 total recurrent and capital expenditure is budgeted at $4.895 million, 3.7 per cent more than last year's payments. Nearly $400 million has been allocated for programs for the disadvantaged, including special education, multicultural education and rural education.

The Government is implementing programs in a diverse range of areas to meet the needs of all young people. These programs are already yielding results. Apparent retention rates in New South Wales schools from year 7 to year 12 have increased from 33.7 per cent in 1981 to 68.5 per cent in 1982. The Government is developing a major equity strategy across schools, TAFE colleges and youth programs. This strategy will ensure that disadvantaged groups such as Aboriginal and Torres Strait Island people, people with disabilities and behavioural disorders, and people from non-English speaking backgrounds are provided with equity of opportunity in education. This will ensure support and assistance for New South Wales students who need special support. More than $395.1 million has been allocated under the equity programs in addition to the funding of the core education programs. These programs cover special education, rural education, support for socioeconomically disadvantaged students, Aboriginal education and languages other than English as well as a range of other minor equity programs.

The commitment of the Fahey Government to the people of New South Wales from non-English speaking backgrounds is evidenced by the establishment of the portfolio of multicultural and ethnic affairs as a stand-alone portfolio in May this year. This Government is the first government in Australia to undertake such a significant step. I congratulate the Hon. Michael Photios, from the other place, on his appointment to the ministry. I have every confidence that he will do a good job for our culturally diverse society. Our commitment to multicultural education is reflected in the 1993-1994 Budget. Almost 20 per cent of children enrolled in New South Wales government schools are from non-English speaking backgrounds. In 1993-1994 more than $56.7 million will be spent on programs to provide support for students from non-English speaking backgrounds. These programs will provide intensive English and community languages tuition, and training and other general language support programs to assist migrant families.

Programs in this area include the community languages program - $1.661 million to fund teaching of 11 community languages other than English, and students being encouraged to maintain and develop their home languages; the Saturday school of community languages - $2.459 million to provide opportunities for students to study their first language, the program covering 22 languages; the new arrivals program - a joint State-Commonwealth program that provides $14.448 million to develop the English competency of newly arrived students, which is important if they are to be able to join the major mainstream education process; the English as a second language program - another joint State-Commonwealth program which allocates funds to provide for the employment of trained English as a second language consultants in schools; regional English as a second language consultants and training for mainstream teachers to respond to the background needs of students from non-English speaking backgrounds; and the multicultural education plan - under which funding is provided for translations, interpreting, teacher education and the development of a multicultural perspective in the curriculum.

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Last year, with the co-operation of the Ethnic Affairs Commission and the Women's Co-ordination Unit, I chaired the consultative committee of non-English background women, which sought to ascertain the needs and concerns of the community. One of the major concerns is the provision of English language services. I am pleased that the importance of language study is recognised by this Government as an essential part of the school curriculum. One of the key objectives of the Government is that by 1996 all government school students in years 7 to 10 will study a language other than English for 100 hours. In particular, the importance of increasing the number of students studying Asian languages is recognised. This reflects the increasing recognition given to the role Australia has to play in the Asia-Pacific region. I congratulate the Government on its foresight.

The 1993-94 Budget allocates $150,000 and $400,000 on a recurrent basis to an Asian languages initiative. This initiative involves the training of teachers in Asian languages. The Government has as one of its goals for education that "by the year 2010, every New South Wales government school student from kindergarten to year 12 will be studying a language other than English". In order to oversee this initiative a ministerial committee has been established. The committee will monitor the development and augmentation of language studies in schools. The Fahey Government must be commended for leading the nation in this vital area. A total budget of $1.560 million has been allocated to the multicultural education unit. This unit aims to improve equity in TAFE, especially for people of non-English speaking background, and also to develop multicultural education and training across technical and further education. The unit is responsible for providing policy advice, co-ordinating TAFE's ethnic affairs policy statement, providing specialised information, conducting staff development, and undertaking research, community consultation and co-ordination.

The New South Wales Government's achievements have been recognised and praised by the International Advisory Council, which applauded the system for meeting the challenges presented in a multicultural, multiethnic and multilingual society. Another commitment of this Government is Aboriginal education. As a member of the Council for Aboriginal Reconciliation I wholeheartedly support the vision of the council, which is "A united Australia which respects this land of ours; values the Aboriginal and Torres Strait Islander heritage; and provides justice and equity for all".

The Government recognises the special needs of Aboriginal and Torres Strait Islander students and has taken these into account in initiatives in the 1993-94 Budget. The Government has allocated $6.114 million to deliver appropriate educational courses in primary, secondary and high schools as well as TAFE initiatives. These programs are aimed at increasing Aboriginal participation in attainment of educational levels. They are also aimed at increasing the knowledge and understanding by non-Aboriginal Australians of Aboriginal culture and history. Although Aboriginal retention rates remain below those of the community generally, they have already increased dramatically under this Government - from 7.8 per cent in 1981 to 23.1 per cent in 1991, and they are approaching 30 per cent. An amount of $8.7 million will be spent on Aboriginal education to provide services to Aboriginal students, on top of core education services already provided. Priority areas include curriculum development, which will improve educational outcomes for Aboriginal students and will bring with it improved appreciation of and respect for Aboriginal history, culture and identity among all students.

The PRESIDENT: Order! Pursuant to sessional orders, business is interrupted for the taking of questions.