26 May 2011
Mr MORRIS (Mornington) — It was great to hear a contribution from such an experienced and effective former police minister with — was it five or six weeks in the job?
An honourable member — I think it was seven.
Mr MORRIS — Yes, seven weeks. What great experience and great value he brought to the debate.
I am very pleased to have the opportunity to speak on the Appropriation (2011/2012) Bill 2011 and particularly to be able to speak on the bill from this side of the house. It is a very different experience being in government from being in opposition.
Mr Merlino — As you are finding out.
Mr MORRIS — It is very nice to have the opportunity to get a few things done rather than mindlessly throwing rocks, as we have just heard from the member for Monbulk.
Some $39.156 billion is allocated in this budget for the departmental votes, together with the amounts in schedules 2 and 3 under the Financial Management Act and the Treasurer’s advance. I congratulate the Treasurer and his team, and indeed the Premier and cabinet, for the budget they have produced in what are undoubtedly very difficult circumstances.
I made comment during the debate on the matter of public importance yesterday regarding the issue of economic growth and particularly the fading influence of productivity and particularly labour productivity in terms of that mix. I do not want to repeat all the detail, but it is certainly worth noting in the context of the budget that for at least a decade we have had a substantial, continuous drop in productivity rates to a point where the growth of productivity in 2011 is about one‑quarter of the productivity growth that was achieved in the final five years of the 20th century.
That drop has been to a large extent masked by the substantial population growth we have had so that the effect has not necessarily been evident, but certainly we have a crisis in terms of labour productivity. I am not in any way arguing that population growth is a bad thing. It is not — it is a very good thing — but you cannot simply continue to rely on that type of growth and not have the other components, particularly the labour productivity component, actively working.
I have been following the discussion on this bill with some interest, and I have been fascinated by the preoccupation of members of the opposition with the AAA credit rating. The general line seems to have been that if you are able to maintain a AAA credit rating, then everything is perfect with the budget and there are absolutely no problems at all.
That proposition is absolute and complete nonsense. The logical argument then is that it does not matter how far you get into debt as long as you can retain your credit rating and then everything is fine with the world. Over a sustained period for at least the last decade there has been a situation where expenditure has risen at a much greater rate than revenue. In the longer term that is completely unsustainable as, in an extreme example, the United States is now finding out.
Mr Merlino — Acting Speaker, I direct your attention to the state of the house.
Quorumformed.
Mr MORRIS — I was about to say that it appears the Labor Party has learnt nothing over the last decade, and nothing could have demonstrated that more accurately than that quorum call, which was clearly designed to impede the work of the house rather than facilitate sensible debate on the budget. It is quite fascinating.
As I was saying, we were clearly starting to head once again down the slippery slope. We were well and truly in an unsustainable situation. You simply cannot keep spending money that you do not have. All members on this side became aware very early in the term of this government, certainly once the budget process began, that we had a series of black holes and cost overruns to deal with.
We have known about the cost overruns on many projects for a number of years but perhaps not the extent. There were issues with lapsing programs. I sat through 11 days of hearings by the Public Accounts and Estimates Committee and the impact of lapsing programs, with the normal, ordinary, day‑to‑day, bread‑and‑butter business of government not being funded for future years by the former government, is very disturbing, as are a number of issues of mismanagement. There are any number of cost overruns that can be identified, but given the limited time I will not talk about those.
When you are talking about the inability of people to plan and implement new projects, some of the admissions are absolutely mind‑blowing. Why on earth would you build a hospital and not at the same time provide the funding to fit it out? I guess a hospital without patients is a simple place to run; there would not be too many ambulance bypass problems with a hospital like that, but it is not much use to the patients either. Also in the medical field, why would you build a children’s hospital and not provide the necessary level of IT support for that facility? This is the 21st century after all; we are not back in the 1890s now.
The funding and planning for the regional rail link — how on earth can you expect to run a rail network without signals? How can you not remember to cost in the signals?
Mr Battin interjected.
Mr MORRIS — As the member for Gembrook says, there is no extra rolling stock either. It is just completely mind‑blowing. As I said, the Treasurer faced a difficult task.
The Public Accounts and Estimates Committee, as others have mentioned, sat for 11 days. It is certainly a useful process. It allows both sides to drill down to the detail beyond the headline amounts in schedule 1 of the bill. No doubt the process can be improved, and I would hope we can perhaps in a bipartisan way have a look at making that work a little bit better, particularly with a view to preparing a report that is of greater utility to the house. It will be an excellent report that will be tabled next week. Many members will have made a contribution to the budget already, so I am hopeful that in future years at some point we can increase the utility of that report.
I also mentioned during the debate on the matter of public importance yesterday the issue of the financial sustainability of the states. It is certainly a personal hobbyhorse of mine, because the fact is we do not have the capacity — nor does any other state in Australia have the capacity — to do the things we need to do.
Clearly there are two ways that can move. One is for the federal government to take over more and more responsibilities and for the significance of the states to become less and less. I would suggest with that we would probably finish up as a state that gets the rough end of the pineapple; we have been subsidising the rest of the country for a long time. That has been a fair and reasonable thing to do, but I doubt on the basis of the form we have seen in recent years — both sides of politics have been guilty of this — that we would get the support we need.
It is easy to characterise this as a squabble between governments. Certainly some of the commentary on the flood funding related to that as well. Rightly, our citizens just want us to get on and do it. That is completely understandable, but I am a strong believer in the principle of subsidiarity.
Many members have heard me talk about local government in this respect. We need to allow local government to get on and do what it needs to do, and I think the same applies to the states. We should not have the current revenue imbalance that we all struggle with. I think it is disappointing that the Henry review failed to grasp the nettle in any meaningful way at all and effectively said the issue of state revenue is a matter for the states. Clearly it is not; Australia is a federation, and this needs to be a subject of national debate.
That is also why the GST debate is so important. It is easy to take a partisan view, and so far the silence of the opposition on the GST debate suggests that that is the approach it has opted for, but I suggest that as a state we are going to continue to be a loser unless we band together with our fellow states and take on the government in Canberra, whatever flavour it is. If we do not work with our fellow states to do that, we will very quickly become irrelevant.
The way the debate is being played out at the moment is short‑term politics; it is today’s politics and tomorrow’s politics, it is not next week’s, next month’s or next year’s. We need to be looking at the next 10 and 20 years in that context.
There have been some significant developments in terms of the budget for the Mornington electorate. I am delighted to see some investment occurring in my community after a pretty long drought. It is fair to acknowledge that we have had the Peninsula Link under construction for some time. That is just a tad over cost as well. The promised cost was $250 million, but the final cost looks like being $849 million, almost a lazy $600 million shortfall. But it is good to see it being built, and it is going to ease a lot of the pressure on particularly the Moorooduc Highway, which is very rapidly approaching capacity at the moment.
We also have a number of public transport initiatives in this budget, including the long‑delayed construction of a bus interchange at Mornington, which was recommended some years ago but sadly was not funded. In addition we also have what is an exciting project, a rail pre‑feasibility study to extend heavy rail to Baxter. It is very much in its infancy, but basically the eastern side of the Peninsula is well served by heavy rail but the western side is not.
I would certainly flag that I am not looking for heavy rail right along the Mornington Peninsula, because that would probably bring with it a substantial pressure for subdivision, and I do not think anyone in my community would be keen to have that occur, but we do need light rail or something else. Hopefully this will lead to better things over what will necessarily be a substantial period.
We also have funding for an important pedestrian crossing at Mount Martha.
In portfolio terms, there are a number of significant advances in the local government portfolio, but unfortunately I am not going to have sufficient time to address them. Of course the Minister for Local Government did that pretty well yesterday in any case, so the house is aware of those issues.
I congratulate the Premier and the Treasurer on a decisive start to their government. We made a pact with the community, and we intend to keep our commitments. The budget sends a very strong signal that we are going to keep those commitments. It has been decisive action to put the budget on a solid footing, and I welcome it.
Legislative Assembly 26 May 2011
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