Legislative Assembly 25 May 2022
Mr MORRIS (Mornington) (18:19): It is great to have the opportunity to join this debate on the Appropriation (2022–2023) Bill 2022 and Appropriation (Parliament 2022–2023) Bill 2022. This is my 16th budget, and it most certainly will be my last.
Of course for eight of those budgets I was associated with the Public Accounts and Estimates Committee (PAEC), along with the minister who spoke just a minute ago for four of those years. Six of those years were either as chair of the committee or as deputy chair of the committee. And frankly I think that is probably enough exposure to the budget and the budget process for anyone. Probably Treasurers and Assistant Treasurers have more exposure, but for ordinary members of the Assembly that is more than enough.
I think it also needs to be said, though, that the landscape has changed enormously since 2006.
2007 was of course John Brumby’s final budget as Treasurer before he was moved up the ladder and became Premier later on that year. It was probably one of the last, if not the last, responsible Labor budgets that we saw.
I will come back to the numbers because clearly those numbers have changed enormously, but it is not only the numbers that have changed. Transparency in the budget process has been significantly diminished.
When Steve Bracks was Premier he had a very strong commitment to the PAEC process. He put extra money in; he felt that there was not enough money going in under the Kennett government, and he was probably right, frankly. He put extra money in, he made sure the committee was resourced and he was very, very keen to facilitate the process. Unfortunately what we see now is that while the number of hours of hearings may be the same, the schedule is very much curtailed—so early morning starts, late evening finishes. In terms of work, there is nothing wrong with starting early in the morning or finishing late at night, but when you have these sorts of hearings back to back, one after the other, you have got fresh ministers coming in, you have got tired and at the end of the time exhausted committee members, it is not a reasonable match.
You also have a situation where hearings are occurring at hours that are not convenient to the media, and that again minimises the coverage, so we have far less coverage at PAEC now than we have had in the past. I know people will say, ‘Who cares? It’s another committee hearing’. But the reality is the PAEC process is intended to take the place of consideration of the committee of the whole, or consideration in detail, as we now call it.
That is what PAEC is about. I know we do not do a lot of consideration in detail, but surely if there is one bill a year that you want to consider forensically and examine in detail, it is the appropriation bill. It is happening, but it is not happening to anywhere near the extent that it used to.
The second change that does concern me in terms of transparency or in terms of opportunity to examine these important documents is the fact that we are now conflating the debate—and I know that is not the technical term—we are now conflating the issues of the appropriation bill and the appropriation parliament bill.
Frankly, I have a problem with that for two reasons. The first is we are now forced to consider the appropriation of the Parliament in the same breath as the executive. That is not appropriate. The second point is I doubt if I have heard anyone mention the Parliament in this whole debate. You do not need to be debating the appropriation parliament bill for weeks, but it deserves to be examined separately and it deserves to be considered separately.
The practice now diminishes the role of the Parliament and effectively places it in this debate in a subsidiary position to the executive, and that, in my view, is not appropriate.
I think all members—it does not matter which party they belong to or to no party at all—need to be aware of the need to protect the position of the Parliament. And okay, if you are a member of the government, you do not need to go out and argue the case in public, but at least have a voice inside your own party and protect the position of the Parliament, because under the current arrangements it is being eroded. Democracy is multifaceted and the parliamentary process is an important part of it, but the reality is that unless we keep pressure on all facets of democracy—and the lesson of Saturday is our system is working, but we need to make sure we keep it working—unless we make sure we safeguard the democratic process, it is very easily diminished.
I want to give a recent example of how transparency can be diminished and democracy potentially threatened, and that is in the United States. A few days ago Jen Psaki, who was President Biden’s first press secretary, doing the briefings, stood down after 16 months. During the course of those 16 months she had given 224 briefings. In contrast, the however many press secretaries Donald Trump had had in total over four years given 205 briefings. So in 16 months Jen Psaki has given 224 briefings compared with 205 for the whole four years. That is about transparency and that is about access.
Now, I know they have a different system to us, clearly, but my point is in the United States they have taken action to repair the damage to the democratic process that was done under Trump. I am not suggesting that what is happening here is anywhere near as dramatic, but the point is we need to be vigilant. We need to be on guard to protect the process.
You cannot have a discussion about a budget without talking about debt, without talking about deficits, because debt is an ever-present part of every public budget, and of course deficits are a part of some budgets.
But this year, for the current financial year, the government forecast a deficit of $11.6 billion. The deficit at the end of this financial year will be $17.6 billion—just a lazy $6 billion variance. Yet the Treasurer a few weeks ago stood up and said, ‘Oh, we’ll be back in surplus in four years. We’ll deliver a modest surplus in four years’.
I think that has got a touch of the Wayne Swans about it, because it simply cannot be done.
In saying that, I want to make my position on debt very, very clear. You need to borrow money to build infrastructure, but you do not need to borrow money to fund cost blowouts that should not occur. You need to borrow money to support a budget in an emergency, and the deficits that have been run over the last couple of years I have no problem with when the money has legitimately been used for the emergency. But in many cases it has not been, and I will come back to that as well.
So I have no problem with the legitimate COVID expenditure, and I have no problem with sensible infrastructure provision, but unfortunately that is not the total story in this budget.
Coming back to the comparison with 2007, in 2007, when I came into the Parliament, the budget surplus was $324 million. We had net debt of $3 billion. The budget deficit for 2022 is expected to be $7.9 billion. Given the performance last year, who knows what it will actually be—who knows?
Net debt will be almost $119 billion; by the end of the forwards, $168 billion—21 per cent of gross state product at the end of the next financial year and 26.5 per cent of gross state product at the end of the forwards.
Now, to put that growth in perspective, the CPI index in December 2006 was 86.7; it had risen to 124.2 at the end of March this year. That is a 43 per cent increase in the CPI over that period. The appropriation bill, when you look at the amounts to be issued from the Consolidated Fund, totals $85.1 billion.
The corresponding figure in 2006 was $26.8 billion, in round terms. So in other words, in those 16 years notional spending has trebled.
Now, I know the CPI has gone up by, as I said, 43 per cent. The population has obviously grown significantly over that time as well. It has gone from 5.1 million to 6.6 million, but the government was spending back then $5188 per capita. If you index that by the 43 per cent, that comes to $7400 per capita in round terms.
But the actual spend per capita in this budget is $12 800, so over that 16 years real spending has grown by 73 per cent, and that is not sustainable. The government knows it is not sustainable. It cannot be sustainable.
Okay, interest rates are at historic lows, and we can probably support the sort of debt that that generates as long as interest rates do not move. But we know they are going to, so I think there are some concerns there.
I want to delve a little further into the detail, and that is to briefly talk about the Treasurer’s advances. Page 15 of the appropriation bill provides a $14 billion allocation as an advance to the Treasurer—$14 billion—and actually it is down a little bit. Last budget it was $16 billion. So what we are proposing in this budget is to allow the Treasurer basically to spend $14 billion on whatever he deems necessary. We are handing over $14 billion.
Now, during an emergency that is a reasonable thing to do. It is not desirable, but it is a reasonable thing to do. But we are coming out of that emergency now, and that approach should not be business as usual. We should not be allowing that sort of funding to be allocated and then simply signed off by the Parliament in a couple of years time.
Again, I go back to the figures from when I first entered this place. The amount provided for the Treasurer’s advance in 2006 was $482 million.
In other words, the amount provided in this budget compared with 16 years ago is 29 times higher. As I said, yes, it is reported back; yes, it appears in the Annual Financial Report; yes, we get to sign off on it two years down the track—but there is no oversight from Parliament. There is no veto. We only get to approve it when the money is spent.
And just in case there is a claim that it has all been spent on COVID, when you have a look at the figures in the budget papers nearly $8 billion was spent by way of Treasurer’s advance in 2020–21, which are the numbers that are reported, and $3.4 billion of that was COVID but $4.16 of that was not COVID, just simply extra spending not of an emergency nature.
Just very briefly in terms of the Mornington electorate, normally I stand up and say, ‘We got nothing, so thanks for nothing’. In this case I am delighted to say, after a 10-year campaign, Mornington Special Developmental School was funded for a rebuild. It has been a 10-year campaign. It is going to be a great development for the kids at the school. It is going to be a great development for the teachers, who do a fantastic job. It is very, very welcome news.
Unfortunately there is a long list of infrastructure works that have not been funded, but there is one funded, and for that I am very, very excited.