General Purpose Standing Committee No. 1

Debate resumed from 5 December 2007.

Reverend the Hon. FRED NILE [3.00 p.m.]: As Chair of General Purpose Standing Committee No. 1 I am pleased to speak to the take-note debate on the committee's report relating to the Budget Estimates for 2007-08. The committee examined the expenditure of a number of very important portfolios. Included among those who appeared before the committee was the Premier, and Minister for Citizenship. The committee also questioned the President, the Hon. Peter Primrose, about the expenditure of The Legislature. He was accompanied by the Clerk, Lynn Lovelock, the Financial Controller, Greg McGill and the Manager, Security Services, Mr Morgan Andrews.

The committee also questioned Minister Barbara Perry and senior departmental officers about the expenditure of Juvenile Justice and Western Sydney. On Friday 26 October, the committee heard evidence relating to the expenditure of the portfolio areas of Treasury, Infrastructure and the Hunter, in relation to which the Hon. Michael Costa gave evidence. The Treasurer was, as always, an interesting personality. Finally, the committee examined expenditure on the portfolios of Roads and Commerce. In that regard the Hon. Eric Roozendaal appeared before the committee, accompanied by the chief executive officer of the Roads and Traffic Authority, Mr Les Weilinga, who also gave the committee valuable information.

During the examination of the portfolios of the Premier and Citizenship questions were asked relating to the economy of New South Wales, the reduction of local crime, the Government's investment in infrastructure, measures to improve the health system and the supply of adequate water in the State. Questions were asked also about the Owen inquiry, which dealt with the privatisation of the electricity industry, and the views of the Premier on the Federal citizenship test, which was introduced just prior to the budget hearing. Matters relating to casino licences and poker machines were raised when clarification of the Government's policy in that regard was sought. The role, effectiveness and future of the Independent Commission Against Corruption was also raised during that hearing. Other questions related to the restructure of New South Wales Health and front-line health services, particularly with regard to problems in the provision of emergency medicine. World Youth Day was canvassed also through questioning of the Premier about the Government's responsibility, and the State's contribution towards any costs, for that event.

Among the matters canvassed by the committee with the President were the human resources policy relating to members' staff, the Parliament House security upgrade and, more controversially, the cutback in catering services for members, to ascertain any future plans in that regard. The committee received guidance from the President about the proposed family friendly sitting hours. One matter of concern to the committee was the restructure of staffing arrangements at Parliament House and whether voluntary redundancies would ensure justice for all employees, particularly those who had given very long and faithful service to the Parliament.

With regard to Juvenile Justice, the committee obtained helpful information from Minister Perry about the Cobham Juvenile Justice Centre, the relocation of the Tweed office to the Police Community Youth Club, the restructure of the Department of Juvenile Justice, drug detection measures in those centres and the plans for the education and training of detainees in regard to numeracy and literacy levels. The committee raised issues about the number of Aboriginal or Torres Strait Islanders detained in juvenile justice centres and how the centres respond to those issues.

The Treasurer was asked questions about infrastructure investment, borrowing and debt levels and revenue from gambling. The fact that a large percentage of the Government's revenue comes from gambling activity was highlighted. Efforts were made to ascertain from the Treasurer whether there are plans to sell the electricity industry. He was questioned also about the credit ratings of public trading enterprises, the State-based emissions trading scheme and future national trading scheme, whether the State Plan will reduce emissions to 1990 levels by 2025, and the use of clean coal technology. Reference was made to the Snowy Hydro Scheme and any plans to meet the extensive capital investment requirements to upgrade its equipment.

Minister Roozendaal was asked about expenditure on our roads, about the controversy surrounding the widening of The Spit Bridge, the impact on roads of the Port Botany expansion, the safety and pollution of road tunnels, such as the M5-East, and any proposed action to make the tunnels safer for not only the drivers of motor vehicles but also for motor bike riders, who, unlike motorists, cannot escape the pollution levels by winding up a window. The pollution in the M5-East tunnel is highly visible; I have experienced it a number of times.

Questions were asked also about plans to address the ever-present congestion along Parramatta Road by extending the M4 to the city. The committee heard some positive suggestions to resolve the congestion. The Minister fielded questions about the Cross City Tunnel and its future operation. He said that signs of financial stress, caused by the lack of patronage, proved to be correct and led to the collapse of the company operating the tunnel. The committee received some positive responses to questions about the Victoria Road upgrade.

Most of the hearings were congenial and peaceful, although I recall the Treasurer, the Hon. Michael Costa, erupting, as it were, after being provoked by a Greens representative. Despite that, he was able to answer the questions that were addressed to him. I was very pleased with the way in which the committee hearings were conducted, and I thank all committee members for their cooperation. I thank also the committee staff for assisting the members of the committee to carry out their duties.

The Hon. GREG PEARCE [3.11 p.m.]: I attended General Purpose Standing Committee No. 1 estimates hearings into the expenditures of the portfolios of the Premier and the Treasurer. I cannot comment on what happened at other hearings, but I would suggest that the estimates hearings of the Premier and the Treasurer were highly unsatisfactory. The Chair of the committee, Reverend the Hon. Fred Nile, must have been at different meetings from the ones I attended. The information provided by both the Premier and the Treasurer was very limited. The Government and its Ministers—and particularly the Treasurer—made it very clear that they no longer take estimates hearings seriously, they do not want to provide information, they do not want to be accountable, and they do not want to allow the estimates process to proceed as a real measure of accountability and transparency of the budget.

That is a very important statement, given that there is no Australian Securities and Investments Commission or stock exchange to keep the New South Wales budget honest and to secure the future. The only safeguard is the Parliament itself, especially through estimates committees and questions directed to Ministers. Of course, the Auditor-General has a role in this regard, but he does not investigate policy decisions. To an extent commentators keep the Government on track. The limitations of the estimates process were exposed in what I call a very worrying performance, with a complete lack of any commitment by the Premier and the Treasurer to economic management.

At the estimates hearings there was a particularly arrogant display, a lack of transparency and a lack of willingness to answer questions. Also, there was a real lack of credibility from the financial management team, that is the Premier and the Treasurer. In particular, the Treasurer continued to evade answers to economic questions and chose to play the fool and the bully. Since becoming Treasurer, the performance of the Hon. Michael Costa has been erratic and way off the mark. We have seen amazing variations in forecast revenues and results. The estimates process should have been an opportunity to pursue those variations.

I was particularly disappointed that the Chair of the committee refused to countenance supplementary hearings. I sent the Chair an email in relation to these matters, especially having regard to the fact that the State accounts were published just after the initial estimates hearing. The State accounts showed quite huge transactions that had not been part of the budget process and had not been seen before. I indicated to the Chair that I wanted to question the Treasurer in relation to those transactions and other variations that appeared in the State accounts but were not available to the committee when it met on 26 October 2007. The refusal to countenance supplementary hearings is of great concern, because the value in estimates hearings is often in the supplementary hearings, when members are able to pursue issues and to dig quite deeply in order to hold the Government accountable in relation to a budget that is now approaching $45 billion. That is a very big budget, with a lot of departments and agencies, and obviously there is a need to pursue some issues.

Given the way that the Government treats the budget process and financial management, the reporting of budget information is often inconsistent, and routinely changed to suit political exigencies. As I mentioned, billion dollar transactions occur without adequate explanation. Millions of dollars are switched between programs and paid without prior appropriations or explanations as to the variances. Debate on the budget, its management and results is perfunctory. The budget is presented and some time down the track we have a take-note debate.

I will highlight some of the issues that the Chair refused me permission to pursue. First was the $960 million grant to the Transport Infrastructure Development Corporation, which just appeared in the State's final accounts; it was never in the budget, never foreshadowed, and never explained. Also, no programs and result statements were given in Budget Paper No. 3 when the budget was first announced in June. The reason given for that information not being included was the 2007 State election. That was not a satisfactory answer. Information that ought to be disclosed in Budget Paper No. 4 in relation to capital expenditure has been routinely excluded, including the competitive government sector, which includes the electricity assets. That total expenditure of $2.944 billion was left without any explanation in the budget papers. As there were no supplementary hearings, we were unable to explore that item. Contrary to what the Chair indicated, the Treasurer's behaviour during the hearings was embarrassing. I will cite a few of his comments. The Chair lectured the Treasurer to some extent. At the beginning of the hearing the transcript states:

CHAIR: We have been lecturing Committee members about being polite to Ministers. We would like the Treasurer to be polite to the Committee also.

A few seconds later the Treasurer responded:

The Hon. MICHAEL COSTA: I have taken my pills. I hope you have taken yours.

That was the beginning of the hearing. On a number of occasions the Treasurer refused to answer questions. He said that the questions were not relevant. The transcript reports the following exchange between the Treasurer and Dr John Kaye:

Dr JOHN KAYE: Actually, the report from NEMMCO does not say that, Premier—I am sorry, Treasurer. What a horrible thought!

Dr John Kaye made a mistake. The transcript continues:

The Hon. MICHAEL COSTA: For me, too. I do not want to have to be nice to you. That is why I would never take the job. I am sorry, I should not be diverted.

In relation to electricity, the Treasurer told us that he commissioned Professor Owen to report on the way forward, and said:

we are not in a position to self-fund any future investment in generation.

It is of major concern to many people that this Government suddenly cannot fund electricity. On another occasion there was the following exchange:

The Hon. MICHAEL COSTA: Good. I now have my red cordial.

Dr JOHN KAYE: Chair, I ask you to advise the Minister not to drink that. He will just get worse if he drinks it.

The Hon. GREG PEARCE: He is trying to keep up his energy level. He is wilting and he is nervous. Is it a bit stressful?

Those are examples of the type of comments that the Treasurer made. On a number of later occasions he responded:

I don't have to answer your question.



I don't have to answer your questions. All I have to do is guide you to where that information is.

Perhaps that is right in some senses, but he was not happy to do it. Then there are the final comments from the Treasurer in relation to a question from Dr Kaye—and this was disgraceful:

Hang on, let me take my shoe off and ring Max.

He said:

What is it called? KAOS.

Later the Treasurer said:

I will ring up Max. We will have the cone of silence. I will tell you under the cone of silence.

Some people might think that that is funny, but the Treasurer has a very responsible job and he behaves like a clown and a bully. It is a disgrace to all of us and to our estimates process to have him behaving like that, and it does not behove the Chair well that he did not keep him in order.

Reverend the Hon. FRED NILE [3.21 p.m.], in reply: The Hon. Greg Pearce, the only member other than me to contribute to this debate, was very critical of the Treasurer and of me, as Chair of the committee. However, I remind him that any decision about whether any supplementary hearings should be held are made by the committee, and on this occasion the committee voted not to conduct any supplementary hearings. I will not embarrass the Hon. Greg Pearce by quoting Hansard on the occasions that I had to rebuke him for the way in which he tried to override the Premier and other witnesses, not letting them answer questions that were put to them. It is important that the behaviour by witnesses and committee members is of a high standard. I recall that at one point I felt almost provoked to ask the Hon. Greg Pearce to leave a hearing. I thank all other committee members for their support.

Question—That the House take note of the report—put and resolved in the affirmative.

Motion agreed to.