Appropriation (Budget Variations) Bill
Page: 9004
Second Reading
The Hon. MICHAEL EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.18 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 Appropriation (Budget Variations) Bill 2004 is a key part of the annual budget process.
Essentially it ensures that the Parliament is able to examine changes to expenditure from what is forecast as part of the Budget at the start of the financial year.
The Bill ensures that there is a transparent process for examining expenditure.
And so, this practice of seeking approval for supplementary appropriations to cover payments not provided for in the annual Appropriation Act has now become an important part of the process.
This is a process that has been endorsed by the Auditor-General as well as the Legislative Council's General Purpose Standing Committee No.1 in its report on appropriation processes.
There are four key parts to the Bill:
1. Firstly, account to Parliament on how the Treasurer's Advance has been applied for recurrent and capital expenditure;
2. Secondly, seek an adjustment of the Advance prior to the end of the current financial year;
3. Thirdly, seek appropriation to cover expenditure approved by the Governor under Section 22 of the Public Finance and Audit Act 1983; and
4. Finally, seek additional appropriations for payments which are intended to be made in the current financial year where no provision was made in the annual Appropriation Bill.
Schedule 1 of the Bill covers appropriations for 2003-04, and schedule 2 covers payments made in 2002-03. The payments from last financial year have already been brought to account in the agencies' audited financial statements and have no impact on the published Budget result for that year.
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 unforeseen expenses, in anticipation of appropriations by Parliament.
The Appropriation (Budget Variations) Bill 2004, in respect of the 2003-2004 financial year seeks:
• appropriations of $290.523 million in adjustment of the Advance to the Treasurer;
• $177.399 million for recurrent and capital works services approved by the Governor under Section 22 of the Public Finance and Audit Act 1983; and
• additional appropriations of $135.3 million.
Schedule 1 of the Bill has a full account of how the Treasurer's Advance has been applied this year.
The Treasurer's Advance payments in 2003-04 highlight the commitment the Carr Government has to ensuring appropriate services for the community, and includes:
• $60 million for increased disability services;
• $57.038 million for education.
• $32.053 million to upgrade Police computer systems;
• $6.796 million to establish the Independent Transport Safety and Reliability Regulator.
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 that were unforeseen.
This amount includes:
• Appropriations of $67.780 million for natural disasters, including $45 million for drought assistance, as well as additional aid required due to the impact from floods, storms and bushfires across significant areas of the State. This is in addition to the $15 million allocated for natural disasters in the 2003-2004 Budget. It takes the total cost of natural disaster assistance to farmers and businesses this year to $82.780 million; and
• An appropriation for the across-the-board increase of 3.5 per cent for nurses under the Public Hospital Nurses Award of $38.5 million.
An additional appropriation of $135.300 million is required:
• Towards an operating subsidy of $52 million for the recently established Rail Corporation;
• To fund $38.3 million for extra police officers;
• $25 million to meet the increased cost of services to high-needs children in Out-of-Home Care; and
• $20 million to meet a higher than expected number of First Home Owner Grants.
The Bill also seeks appropriations to adjust certain payments made during the 2002-2003 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.
Additional funding in 2002-2003 was provided for the retirement of debt, a contribution to the General Government Liability Management Fund and towards improved transport, education and disability services.
Last year Parliament approved of some $20 million being invested to provide additional funding for hospital and health capital works. Also the State's Net Debt as a per cent of Gross State Product was reduced from 6.5 to 5.1 per cent compared to the previous year.
Each of the payments made in 2002-03 has been included in the audited financial statements of the relevant agencies for that year.
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. PATRICIA FORSYTHE [6.20 p.m.]: The Opposition will not oppose the Appropriation (Budget Variations) Bill, but it is appropriate to comment on it. Every year the Treasurer introduces this type of bill to explain how he has spent the Treasurer's Advance or to seek money under section 22 of the Public Finance and Audit Act for expenditure that was unforeseen at the time the budget was introduced. That is fair and reasonable but, unlike the budget bills, general purpose standing committees, meeting as estimate committees, do not normally have an opportunity to scrutinise this legislation. This year is no exception. The Treasurer's Advance is shown in a series of line items. Some of the expenditure is self-explanatory, worthy and understandable. For example, one could not foresee natural disasters. This year money from the Treasurer's Advance has been spent on drought relief and bushfire recovery. In other years it may have been spent on storms or floods.
However, underlying this bill is the Government's waste and mismanagement of the economy. For example, the Government has spent $17.4 million on displaced public servants. If ever a Government bill came home to roost it is this one—and it relates to unfair dismissal. That amount has been expended on displaced public servants because the Government is not prepared to sack those it believes are not doing an adequate job, yet it makes extensive payouts resulting from contracts. What has the State to show for $17 million spent on the failed Austeel project in Newcastle? Sadly, there is absolutely nothing to show: no new jobs or investment creation in Newcastle. That is another example of botched management by the Carr Government.
In the debate on the State Revenue Legislation Amendment Bill the Treasurer spoke about the Commonwealth Grants Commission and the Government's attitude to it. That has been the subject of comment many times. In the past couple of years the Government has conducted a nonsensical political advertising campaign costing $875,000 to highlight the activities of the Commonwealth Grants Commission. In March 2001 the Treasurer went to great length to tell us that he was about to embark on an advertising campaign that would feature a toad. I believe it was supposed to represent the Queensland Government, or perhaps the Queensland Premier or Treasurer. Certainly it was an insult to the people of Queensland. The Government tries to justify seeking additional money because it has not lived within its budget. We accept that the Government cannot plan for drought and bushfire recovery. Each year the Treasurer's Advance contains a significant amount, but the Treasurer is here again with his begging bowl. The purpose of this bill is to provide an account to the Parliament on how the Treasurer's Advance has been spent.
The Hon. Duncan Gay: Most of it is for the Premier, Minister for the Arts, and Minister for Citizenship.
The Hon. PATRICIA FORSYTHE: I will come to both recurrent and capital expenditure. The bill seeks an adjustment of $290.5 million in the Treasurer's Advance. The Treasurer is given an Advance for the unforeseen: the drought, floods and unforeseen matters that cannot be budgeted for. But over and above that the Treasurer is seeking an additional $290.5 million. An appropriation of $177.4 million is sought under section 22 of the Public Sector Finance and Audit Act for departments that have overspent their budgets in 2003-04. In addition, $135.3 million is sought for recurrent services and capital works and services for 2002-03. For a variety of reasons, some good, the Government has been living beyond its means, as it has on other occasions.
Unlike the budget bills, we have not taken the opportunity to appropriately scrutinise budget variation bills by estimates committees. However, the time is now approaching when the Government must place budget variation bills, which involve significant amounts of money, on the table for appropriate scrutiny by estimates committees. We are failing the people of New South Wales if we do not adequately scrutinise the legislation. Some of the expenditure is acceptable, but some of it highlights matters that the Government should have foreseen. We certainly do not begrudge the additional money spent on security for the World Cup, the Opera House or even the additional stabilisation of the Kosciuszko road in the national park.
However, at a time when the Government has cried poor and spoken about the need for additional money and the need for new taxes to provide education and hospital services, part of the Treasurer's Advance is an additional $1 million for the purchase of four elephants from Thailand. I accept that Taronga Park Zoo is an important icon and tourist attraction for New South Wales. The possibility of purchasing those four elephants this financial year may not have been foreseen, but the zoo's budget surely must include an amount for the acquisition of new animals. Obviously it was not sufficient for the purchase of the elephants. That is an unusual priority at a time when the Government has had to impose new taxes. Indeed, we have just dealt with a taxing bill because the Government did not have sufficient funds to meet its core obligations in education and health.
The Government has strange priorities. The Opposition has no opportunity to scrutinise this bill. We have to accept at face value that the money has been spent, and we have to legitimise the spending. I do not understand why the Royal Botanic Gardens, which has adequately managed New Year's Eve celebrations for many years, needed an extra $198,000 to manage the 2002 New Year's Eve celebrations. Those celebrations were only months before the last State election and I wonder whether an additional splash was made that night. The Romans used to understand how to win the citizens. Sometimes it was with bread and sometimes with circuses. That is what the Government is about. It seems odd that just months before the State election more money than normal was spent on the 2002 New Year's Eve celebrations. After all, the Royal Botanic Gardens is involved in those celebrations each year.
Another unusual item of expenditure under the heading "The Legislature" is a former member's ex gratia legal fee of $47,000. I do not know what that was for, but at some stage I may be enlightened about it. Another interesting item is the need to spend money on the replacement of what is described as failing equipment in ministerial offices. When I read that item I thought it might have been better if the Government replaced a few failing Ministers rather than just the equipment in their offices. It is not an insignificant amount of money that has been allocated—$850,000—for corporate services to Ministers and to replace failing equipment. One can buy a lot of equipment for $850,000.
The Hon. Duncan Gay: That may be to put a new title on the door of the Hon. Ian Macdonald's office.
The Hon. PATRICIA FORSYTHE: This is in addition; it is corporate services. This is the Treasurer's Advance. He is now seeking money that has been spent over and above what was planned for.
The Hon. Duncan Gay: It is a big title.
The Hon. PATRICIA FORSYTHE: It may be a big title. I do not know whether it has anything to do with relocation of offices or new head offices. We are not given an explanation. The item I am most interested in relates to 2002-03. It seems that the Department of Women needed an additional $500,000 in operational funding. I do not believe the community of New South Wales—certainly not the women of New South Wales—gained a $500,000 benefit from the additional operational funding of the Department of Women. It seems to me that the Government, in looking retrospectively at that spending, would agree with the Opposition. It has now abolished the Department of Women. It will now be an adjunct to the Premier's Department.
How and on what that additional $500,000 was spent is something about which we have not been enlightened. Another item refers to a shortfall in grant funding to the Heritage Office of $1.4 million in 2002-03. I wonder whether somebody had a white board when the Government was giving out grants prior to the last election and whether there was a need for additional funding. We do not have explanations. We are taking these on face value. I should acknowledge some important items. Only minutes ago in debate on other legislation the Treasurer was talking about the Federal Government being a mean government. In this regard I refer to three items in this bill, two relating to education and one relating to the Department of Ageing, Disability and Home Care.
In the Treasurer's Advance for the Department of Ageing, Disability and Home Care there is an additional $9.17 million. Why? Because there was an increase in Commonwealth funding under the disability agreement and that required the State to match it. In education it is even more significant. In 2002-03 there was additional Commonwealth funding of $21.4 million, and in 2003-04 an additional $20.1 million in Commonwealth funding. This funding had to be matched by the State. One may ask where that money went. I suspect it is the end result of more students than the Government had anticipated exiting the public system and going to non-government schools.
The chickens are coming home to roost for this Government in many ways. There is the allocation of money for special inquiries as a result of the fundamental mismanagement of the Government. I could not miss the $2 million that has been allocated for the commission of inquiry into Campbelltown and Camden hospitals. That inquiry was brought about because of the exposure of problems and mismanagement within the hospital system, the cover-up that Bret Walker, SC, is now required to investigate. That is $2 million that would not have had to be spent if the Government properly managed the health system, and particularly the Southern Western Sydney Area Health Service and Campbelltown and Camden hospitals. There are other inquiries that some of my colleagues may want too. As I said, the Opposition will accept them but the Government is beholden, particularly in this House, to be more open and explain some of these line items.
The Hon. GREG PEARCE [6.36 p.m.]: I support the comments of the Hon. Patricia Forsythe and want I to point out a couple of other examples of the gross waste and mismanagement of this Government, and the fact that this appropriation variations bill is being used to clean up some of its worst mistakes so it can continue on its way of cover-up and spin. I note first that $550,000 has been allocated for office accommodation for the Minister for Police. I find that quite extraordinary given that the police have just occupied a new building at Parramatta. I recommend that honourable members have a look at his new office. There has also been additional expenditure for accommodation and staffing for ministerial offices in the Hunter, Central Coast and Illawarra—recurrent expenditure of $833,000 and another $180,000 capital expenditure. That seems quite out of kilter with what those ministries achieve.
The Hon. Patricia Forsythe has already mentioned the Austeel project. That is an extraordinary example of waste and mismanagement by the Government, and the indulgence of the Premier and the Treasurer, who are inclined to make announcements, get the State into trouble and expect us to pay for it. The $2 million to pay for the inquiry into Campbelltown and Camden hospitals is just one of the disgraceful examples in this bill of money the Government has had to spend to deal with some of the outcomes of its mismanagement and cover-ups. Another example is the public inquiry into the Liverpool City Council, which is costing another $600,000. Liverpool City Council is infamous because of the involvement of numerous Labor Party hacks, including Mr Latham himself, and the disastrous Bulldogs investment.
Another example of the Government's mismanagement is the payment of an extra $1,012,000 to the Department of Local Government for the implementation of structural reform of local government. The Minister often proclaims the savings that are supposedly being made from local government amalgamations that were forced on various councils despite the many promises that that would not be the case. Here we see $1 million being spent to deal with that. In a similar vein, the creation of the Independent Transport Safety and Reliability Regulator cost $6,796,000 because this Government has for years not managed or invested in the rail system and allowed it to become unsafe and a real disgrace. Large amounts are included for the Treasurer and Minister for State Development, particularly in relation to the catastrophe at the Infringement Processing Bureau. We have had the figures on this before, but in this bill there are three separate amounts to deal with the problem of processing delays: $4,341,000, $12.5 million and $5,149,000.
The last item I want to mention is the $304,000 Cabinet Office expense for the Albury-Wodonga project. This was a so-called initiative dreamed up by the Premier on the plane to Albury one day. He realised he did not have an announcement or press release and he came up with an indulgent, nonsensical proposal that ultimately cost the people of New South Wales $304,000. I endorse the comments of the Hon. Patricia Forsythe that we need to improve our scrutiny of these bills. They have been used to allow the Government to continue its policy of spin, cover-up and lack of accountability. As examples such as the Albury-Wodonga project show, it is an indulgence that is completely out of place when the Government has such a terrible record of waste and mismanagement.
The Hon. JOHN RYAN [6.42 p.m.]: Two things need to be said about some expenditure relating to the Minister for Community Services. The first relates to an item noted as $60 million for additional funding for increased disability services. I had not noticed the Minister for Community Services, Minister for Ageing, Minister for Disability Services, and Minister for Youth running round the country explaining where these new services are. I need to point out to the House and to the disability sector generally that this is not expenditure for additional services; it is to plug a black hole that has existed for some time in the budget of the Department of Ageing, Disability and Home Care. It is an allocation for services that the department has been used to providing.
The department is significantly stressed because each year it has been trying to claw back some of that black hole, but year after year it has been getting larger. This is an attempt to put a line under the black hole but perhaps it is expenditure that will be carried through to next year's budget. However, as I have said, it is farcical to describe this as additional funding for increased disability services. It is certainly additional funding, but it does not result in any increase in services. The actual number of services being delivered by the Department of Ageing, Disability and Home Care is exactly the same as it has been in previous years. The Government is simply being more honest about how that is being paid for.
The other matter to which I will draw attention is an allocation of $25 million for the increased cost of services to high-needs children in out-of-home care. This matter got some media attention a little while ago, and it deserves further inquiry. I recall that immediately after the election I had a meeting with Mr Shepherd, the Director-General of the Department of Community Services, in which he explained the department was aware that the cost of high-needs children in out-of-home care was a problem that needed to be addressed. I notice that not only has that problem not been addressed, but we need to add another $25 million to that bonfire. Clearly, something needs to be done to examine how this money is being spent, and to make sure that the funds are being spent appropriately, because this also seems to be an area where we are simply spending more money but not necessarily getting a better outcome.
The Hon. HENRY TSANG [Parliamentary Secretary] [6.45 p.m.], in reply: I commend the bill to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.