Spending Trebled,
Debt heading towards $170 billion,
another Labor Budget

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.

Mornington’s share of the State Budget – Not a whole lot!

In a welcome departure from its usual habit of ignoring the Mornington Electorate in the State Budget the Victorian Government has finally funded two desperately needed local projects.

After more than ten years of campaigning the Government has committed to re-build Mornington Special Development School, committing “at least $6.769 million” in today’s state budget. But students, parents and teachers shouldn’t be expecting immediate action as only a fraction of the funds allocated to the program will be spent in the next financial year. The budget papers show an “estimated completion date” of December 2025.

Despite the likely delay I am delighted the Government has finally seen sense. For too long this school has had to make do with sub-standard temporary accommodation, and no guarantee that the school would even remain on the current site. This announcement provides the certainty the school needs to confidently plan for the future.

The budget also provides funding for “critical works” on Mornington’s Fisherman’s Jetty which has been “temporarily closed” since 2020. The extent of the funding was not disclosed in the budget papers, so whether there will be enough money to actually re-open the jetty, or even when the works will be undertaken, remains uncertain. In spite of these misgivings I am pleased the Government has finally responded to my repeated calls for action.

These small wins are long overdue, but too many desperately needed projects were overlooked in this budget including:

  • Action to fix congestion on Bungower Road and Mornington-Tyabb Road
  • Desperately needed safety works at the intersections of Forest Drive and Uralla Road with Nepean Highway in Mount Martha
  • Long overdue and much needed investment in Mornington Park Primary School and Mount Eliza Secondary College
  • No funding to back the Shire’s commitment to the Peninsula Trail between Moorooduc and Mornington.

This year’s state budget was pretty much what we’ve come to expect in the Mornington Electorate – not a whole lot!

$83 Billion in spending, Zero accountability

Mr MORRIS (Mornington) (15:29):It is interesting to hear the member for St Albans’ enthusiasm for the Main Street level crossing removal, given that it was initiated by the Napthine Liberal government and it was funded by the—

A member: You did nothing on it.

Mr MORRIS: It was funded by the Liberal Napthine government. I was there and I was involved and I know exactly what happened. It was a Liberal project so do not try and claim things you did not pay for. Now, back to the subject, and I mean, the thing I did not say about that is of course the difference with the Main Street —

A member: It is not even called Main Street.

Mr MORRIS: Main Road, I beg your pardon. I have Main Street in Mornington and that is why I am saying that. The point about the Main Road level crossing was it was done properly. It was not stuck up on stilts over 8 metres in the air. But we did work in other seats, and we did work in Labor seats that we could never win—

The ACTING SPEAKER (Ms Richards): Through the Chair, please.

Mr MORRIS: and I will come to that in a minute.

Members interjecting.

Mr MORRIS: We are here to talk about appropriation bills. We are here to talk about bills that have already passed, and I think there are probably two things wrong with that statement.

The first is that we are talking about two bills, and the second thing is that we are debating bills that are long gone. And I will take those two points separately.

The first point is that we are dealing with the Appropriation (2021–2022) Bill 2021 and the Appropriation (Parliament 2021–2022) Bill 2021. The take-note motion deals with those two bills.

Now, it is unusual to debate two bills together, but it is certainly not unheard of to debate two bills together, particularly if they are materially related. But I think the problem I have with this process, and the process we are engaged in now, is that it conflates the debate on the government program for the year and the debate on the resources for the Parliament. 

Parliament is not and should not be beholden to the government for the resources it has available to it, and the former Treasurer, now the Leader of the Opposition, certainly recognised that fact when he determined as Treasurer that the depreciation moneys would not need to be paid to Treasury and sought for them to be returned for investment in this precinct. He made them available to the Parliament, and that initiative has allowed a huge amount of work on what, let us face it, was a building that was rapidly falling apart.

That was done so that the Parliament to that extent had control of its own destiny, and I think if we are debating the appropriation bill and the Parliament appropriation bill together, we are going to conflate them. I have not heard a lot of the debate this afternoon—not that it is been running all that long—but I do not know how many references there actually have been to the Parliament budget and in fact how many members who will speak this afternoon actually realise that the Parliament budget is part of the discussion.

The second point I wanted to make is about the process the government is following in terms of this budget and has progressively followed in the time it has been in office.

Every year we see the budget process diminished. Every year we see the opportunity for the Parliament to exert authority over the funding of the government reduced. And I think it is important to remember that with the last government, like successive governments from both sides before it, the process was: the budget was brought in on Tuesday, the Treasurer spoke, it was adjourned and the Shadow Treasurer responded on Thursday, so everything was done in the same week.

The debate at the end of that day was then adjourned for two full weeks, and that allowed the Public Accounts and Estimates Committee (PAEC) to examine the budget from one end to the other. Every minister appeared. When the budget came back on for debate, all the transcripts were available, all the ministerial presentations were available and all the questions that had been raised were able to be taken into consideration. 

As we have recently been reminded, that is exactly the process the commonwealth follows, except of course they have Senate estimates, which is an even higher hurdle in terms of transparency.

But under this government we have a one-day budget sitting and then we all go home. The following week we have a two-day sitting where the document is debated, it is guillotined, it is through and that is it. And the point I think is that there is absolutely no scrutiny.

At some point in the future, the Public Accounts and Estimates Committee gets to have a look at the budget, but it is an academic question. The budget has passed. 

The budget has passed without any consideration in detail, with no committee stage, and as we now know, it does not need to pass the upper house either. So it is done and dusted—through the guillotine without any examination at all. Nothing that is uncovered in terms of the PAEC examination of the budget can be introduced into the debate before the bill is passed. 

Now, I know there are some who argue, ‘Well, why does the Parliament need to get involved anyway because it is the government that is spending the money?’. It is called accountability. It is about accountability.

The budget, those two bills, the Appropriation (2021–2022) Bill and the Appropriation (Parliament 2021–2022) Bill, authorised expenditure of $83 billion of taxpayers money and, as I said, the only Parliamentary authority required was a second-reading, superficial debate to cover the issues in the broad—no consideration in detail, no committee stage, zero scrutiny and zero accountability.

I do not care how good a job PAEC does—and, frankly, with the hearings I have seen in the last couple of weeks, they are not doing much. Whatever sort of a job they do, and they are not doing much—

Members interjecting.

Mr MORRIS: And I am looking at one of the people that is not doing much now, I can tell you—absolutely no idea what it is supposed to be doing. But regardless, even if they did a good job, which is against the odds, the bills are passed. The thing is over. It is done. It is a total farce.

The process is a total farce, and I know I am talking about process, but process is important. Process is about scrutiny, process is about transparency, process is about accountability, and the fact is that with this budget there is no transparency and there is no accountability, but the government is spending $83 billion with virtually no oversight.

Now, turning to portfolios in which I have an interest as a shadow minister, I just want to touch on a few points. Firstly, with the local government portfolio—and while there are a number of issues in that portfolio that are worthy of exploring, unfortunately time does not permit—I did just want to focus on the Growing Suburbs Fund.

The Growing Suburbs Fund last year was $75 million. This year it has been slashed to $50 million. In other words it has suffered a one-third cut. Last year, and entirely appropriately, in my view, the applicability of the fund was expanded from simply the interface councils to the peri-urban councils as well, and that is entirely appropriate, I think, because they need that support.

So last year the peri-urban councils’ grants were a little over $20 million, which left around about $55 million available to the interface councils. This year of course there is only $50 million available—full stop. So the interface councils, the councils that are growing the fastest in the state, the councils that are under enormous pressure from population growth—clearly there has been a change in that in terms of COVID, but they are still growing quickly—the amount of money that is available to those councils will be significantly reduced.

Of equal concern in terms of this fund, perhaps of more concern, is the blatant pork-barrelling that has been going on with it, and it is consistent pork-barrelling. The Growing Suburbs Fund last year was two rounds. In the first round, 79 per cent of funds went to Labor seats—79 per cent of funds went to Labor seats. In the second round, not content with that, 79.5 per cent of funds went to Labor seats—79.5 per cent of funds.

Ms Ward: We do have a lot of seats.

Mr MORRIS: So almost $4 in every $5 in the fund went into Labor seats.

Ms Ward interjected.

Mr MORRIS: It may come as a surprise to the member for Eltham, but you do not have 80 per cent of the seats in this house. You would love to, I am sure, but you do not have, and you are going to have a lot fewer in 2022, I can tell you that.

The interesting point was that not only was there some very specific targeting in terms of local government areas, there was particularly specific targeting in terms of areas within local governments.

So if you take, for example, the Mornington Peninsula shire, there are three seats. Two, Hastings and Mornington, are quite a lot closer to Melbourne and experiencing pressures—nothing like the Caseys and so on that are growing as rapidly as they are, but still significant pressures.

Yet of the three seats in the Mornington Peninsula shire, one seat received grants: not Mornington, not Hastings—it was Nepean. $6.55 million—9 per cent of all the funds available in the Growing Suburbs Fund—went into one highly marginal Labor seat. So do not tell me this is not a pork-barrelling fund; it is an absolute pork-barrelling fund.

Now, a couple of points around the ageing portfolio, which while nowhere near as blatant, were of concern. Last year there was an initiative called the ‘Elder abuse primary prevention, health service response and early intervention initiative’ which, according to the Public Accounts and Estimates Committee questionnaire, is a program which was lapsing but has been continued. It has got a new name, but it is the same program.

The difference this year, though, is that last year it was $6.7 million a year and this year it has been cut to $1 million a year. Now, the minister at the hearing said, ‘Oh, no, no, it’s been split up; it’s gone to other portfolios’. There is no evidence of that in the response to the questionnaire. The department says it is the same program, but it has been cut by 85 per cent.

Secondly, there is an output called the ‘Aged support services’ output, and that supports a range of services that enable older Victorians to continue to go about their daily lives. It is not glamorous, but it is very, very important to the people that are affected.

Last year there was $124.4 million provided, and it is on target to be pretty much all fully spent. For no reason that could be given, this has been cut to $108.8 million, so it is basically a $12 million cut. Yet we have no idea what actual services that are going to be cut will be affected.

So I do identify those two issues as of concern in that portfolio. I do not think time will permit me to talk about the housing portfolio, but of course we have the hearing for that next week, so no doubt there are a range of issues that will be able to be explored.

I just wanted to turn to the cost blowouts that we are all very much aware of, and when you look at the list, there are 33 projects that have exceeded their anticipated cost by $10 million or more, 21 of those by more than $50 million and 15 of those by $100 million or more.

There are cost blowouts of $26.678 billion, depending on where you round the numbers, on total projects of $26.2 billion. It is just complete and utter incompetence.

And that is one of the things that concerns me about this whole budget. Again and again and again we see examples of complete and utter incompetence. We have got the West Gate Tunnel, which was supposed to cost $500 million and will cost $5.5 billion—just a lazy 1000 cent blowout.

It is traditional to talk about initiatives in your own electorate and projects that are going to be undertaken in your own electorate, but unfortunately apart from a couple of sewerage installations, there is nothing in Mornington, so I do not need to worry about that.

Andrews attitude to sole traders – Unreasonable and Unfair

Mr MORRIS (Mornington) (14:42): (5925) My question is to the Minister for Industry Support and Recovery on behalf of a constituent who writes:

We are an established, non essential retail business of over 10 years, with no online trading and only a ‘bricks & mortar’ presence which was mandated to be closed for some 173 days … over the past four Victorian lockdowns. Even though no income was generated during this period, we were still required to pay commercial rental, utilities and other running costs.

I confirm we have had NO state government assistance or grants whatsoever … due to our entity status being a ‘Partnership’ even though each time a grant has been offered, we have met all the other criteria including our ANZIC Industry Classification.

She goes on to indicate that there have been at least three grants totalling $10 000—$3000, $5000 and $2000—extended to sole traders but not available to their business.

So it is clear that there has been a failure to deliver support to partnerships.

It is unreasonable and unfair, and the question to the minister is: what is he going to do about it?

State Tax Hikes – A Direct Attack on Jobs

Mr MORRIS (Mornington) (16:35): I thought I had heard it all in this chamber, but I think I have just heard a bit more.

The last contribution in particular, but many of the contributions we have heard from the government benches, just make it so clear that they have absolutely no conception about how an economy works. If there is anything more important to mental health than jobs, than having a job and having the opportunity to get up and go to work every day, I have not heard of it.

A member interjected.

Mr MORRIS: This bill, despite the claims of some, and particularly the member who has just spoken, is not a mental health bill. It is a tax bill.

It is true that extraordinary times call for extraordinary measures, and we have before us, it has to be said, an extraordinary measure—an extraordinarily bad measure. Victorians have worked incredibly hard to come back from the difficulties of the last 12 months and the economic impact of the health challenges that we have had. They worked incredibly hard and they deserve great credit for it.

Every Victorian deserves credit for what has been achieved.

It also has to be said, I think, that the policy contribution of the commonwealth, the provision of JobKeeper, which certainly lived up to its name, bought us time. It bought individuals time. It bought businesses time, and it provided that lifeline that was so desperately needed.

If it had not been for JobKeeper, the economy would have been drowning in a sea of red ink by now, but it is not. But let us not kid ourselves: the recovery is tenuous at best. Confidence is incredibly weak, and that is not surprising.

The events of this week speak for themselves, and we now this afternoon find ourselves close to what appears to be imminent lockdown. Let us hope it does not happen.

Let us hope it does not need to happen from a health point of view, and let us, for the economy’s sake, hope it does not happen, but we are on the brink again. And if it does happen, it is likely to be the end for many, many small businesses. They just will not survive a further lockdown, and that means not just the end of the businesses but the end of the jobs that go with them.

So there is a genuine risk to confidence, and unfortunately history tells us that economic events of this nature frequently have false recoveries. We hope certainly that the green shoots that we are seeing, the economic green shoots, are not a false signal. They are the fruits of the labours of all Victorians.

But it has been hard enough to survive the pandemic, which of course is still going on, without the odds being stacked against businesses, without the odds being stacked against individuals, by increasing the tax burden. Yet now, as we are seeing, as I have said, those green shoots of recovery, we are also seeing the tax burden increased under this legislation.

I think the Treasurer’s revenue plans in this budget demonstrate very, very clearly just how damn lucky he has been to be Treasurer over the period.

Yes, he has certainly primed the pump with public sector works, and you have only got to look back at the investment figures over the period of the government. Yes, he certainly primed the pump with public sector spending, and we know what the impact of that is, but he has also been, I think, assisted enormously by the recovery from the private sector from the 2013–14 slump.

But with this measure he clearly does not understand basic economics. If we look at budget paper 2, tabled last week, page 20:

… private demand rose by more than 9 per cent in the December quarter, although it remains well below pre-coronavirus … levels. By contrast, public demand has risen strongly to be well above where it was in early 2020, which has helped cushion the effect of the coronavirus …

Yes, it has, and I do not think anyone would argue with that, but the fact that private demand is stuck at less than 95 per cent of its level pre-COVID—doesn’t that tell you something?

Doesn’t that tell you that the recovery is weak? Doesn’t that tell you that business has minimal capacity? If they are not investing, if they are not spending, it means they have diminished capacity.

And the flow-on from that diminished capacity to invest, to employ people, is evident a couple of pages on in the same budget paper, where the unemployment rate is forecast through the forwards, a higher rate of unemployment in this state than the national average, and that equates to 113 000 people who do not have jobs—113 000 people who do not have jobs that in New South would have jobs, in Queensland would have jobs and in other places in the commonwealth would have jobs, but not in this state.

The impact of this tax is evident in the Treasurer’s own budget papers. So this is the worst possible time to increase taxes.

There is a reason investment is down. There is a reason those employment figures are down. The form of tax that has been chosen is probably the worst possible tax of all.

The sort of tax that the Treasurer is proposing even in a boom would increase prices, but under the current economic conditions, yes, it will increase prices but it will also lead to fewer jobs, because if you tax people, they can employ fewer people. They are not going to invest. Those numbers are there.

If you set out to undermine the recovery, you could not do a better job than bring in measures of this nature.

Certainly the media and the commentary from others confirm that story. We have had Saul Eslake, who I am sure is well known to all members of the house, saying:

What he—

referring to the Treasurer—

is doing is taking a tax that is universally recognised as being the worst tax in the armoury of taxes levied by Australian governments and making it worse.

Shane Oliver from AMP says:

It’s not just high-end buyers who will be affected—

and I make that point to the government members: it is not just high-end buyers who will be affected—

… it’s middle income ones as well. 

And the Grattan Institute said:

It is the most economically costly tax levied by state governments …


Increasing it takes us in the wrong direction.

The economy is incredibly fragile, and this government is imposing a tax that, according to the Grattan Institute, increasingly takes us in the wrong direction.

We certainly saw plenty of commentary in the papers in the days following the budget: the Herald Sun—‘Covid budget whack’; the Australian—‘Victoria’s greedy tax hikes will harm jobs and growth’.

I know the term ‘jobs and growth’ is much maligned, but it is jobs and growth that allow us to do all those other things. Without jobs and growth, we cannot afford mental health services, we cannot afford hospital services, we cannot afford education services.

You need those jobs; you need that growth. And, worst of all, is the impact on housing affordability, which raises the cost of taxes and local government charges to 40 per cent.

This budget is an absolute stinker.

This bill is a shocking, shocking measure. It will have a direct impact on housing affordability, it will have a direct impact on employment and it should not pass.

Estimates Committee Fails to Meet it’s Obligations to the Parliament

Mr MORRIS (Mornington) (10:34): I take the opportunity this morning to make some remarks on the Report on the 2020–21 Budget Estimates that was produced by the Public Accounts and Estimates Committee and tabled on 4 May.

Interestingly, the committee website indicates that it was completed on 1 April, and perhaps that is a more appropriate day given the absolute joke that the scrutiny process, the scrutiny of the appropriations, has become in this Parliament.

Deputy Speaker, as you know, the scrutiny of government expenditure is an absolutely central part of the Westminster system, but it is not just a central part of the Westminster system, it is an absolutely critical part of the Westminster system, because obviously government spending is funded by taxation. Taxation is not voluntary. It is an obligation imposed by law.

Taxpayers have a legal obligation to make the payments that the Parliament through the law requires of them. If they do not meet that obligation, then severe sanctions are imposed, and that is entirely appropriate. That is the way the system works.

This Parliament makes many of the laws that impose those obligations, and those that we do not make of course are made by our federal colleagues.

This Parliament therefore has an obligation to scrutinise closely the way the money is spent to make sure that the money that is raised by obligations placed on members of the public, on citizens, is spent in an appropriate way—not necessarily in a policy sense but spent certainly not in a wasteful way—and to make sure that spending is within the law. That is on the basis of the way the money is obtained.

That is why the spending is scrutinised. 

Now, traditionally scrutiny will take two forms—through the estimates process and through the outcomes process. The estimates process is obviously the Parliament’s scrutiny of the appropriation bills and the opportunity to examine those bills in the consideration-in-detail or committee stage. The outcomes traditionally have been undertaken by a public accounts committee, generally of a lower house.

Now, in this Parliament, unlike almost any other Westminster Parliament in the world, we have established a public accounts and estimates committee to do both those functions, and I think that is a good thing because it concentrates the financial knowledge of the Parliament.

But the estimates process is a critical part of that committee’s obligations, and that of course is what this report is supposed to be about. PAEC hearings take the place of the committee stage on the bill, as they do in the commonwealth Parliament the Senate estimates. They should be completed before the bills are debated. 

The bills for this budget will go to the guillotine today. The bills referred to in this report went to the guillotine prior to the commencement of hearings.

In contrast, in 2014 in the practice of years before, the budget was introduced on 7 May, the opposition responded on the 9th and then there were three full days of debate on the budget—three full days of debate before it went to the guillotine.

That debate occurred following the hearings, which had been conducted from 9 May to 23 May, so there was a full opportunity for members participating in the debate to have either attended the committee hearings and heard the evidence or read the transcript and reviewed the minister’s presentations.

People had the opportunity to debate the bills in an informed manner. 

Now, in terms of this report, despite the best efforts of the opposition members, and I am sure despite the best efforts of the staff, this report does not go close to providing adequate scrutiny of the 2020–21 estimates.

This government-dominated committee has comprehensively failed in its obligations to the Parliament. The report does not acquit its responsibilities in any way at all.

Andrews has no idea of the pressures on small business

Mr MORRIS (Mornington) (09:45): There have been repeated claims about the support that the government has provided to assist small businesses to weather the COVID storm. Yet despite these claims we know many Victorian businesses are in trouble, and this morning we learned that the number of business collapses had doubled in February in Victoria.


Because the government has totally failed to deliver on their promises.

Angela, the proprietor of a Mornington retail outlet, applied for business support in September. The website clearly indicated that $10 000 was available for businesses in metropolitan Melbourne and Mitchell Shire and $5000 for regional businesses. On 1 October the business received $5000.

Upon making inquiries, Angela was told that Mornington was not in the metropolitan area. The department claimed the ‘program’ had told her that was the case and she was only eligible for the smaller payment.

It is a pity the program was not managing the lockdown!

Eventually in mid-October the department conceded that Mornington was part of metropolitan Melbourne and indicated they would hear back in a few days.

Needless to say, that did not happen. After the involvement of my office, the Mornington Peninsula Shire, the Mornington Chamber of Commerce and even the Victorian Ombudsman, and thanks to Angela’s tenacity, things started to move, but it was only during the last sitting week in February, more than 4½ months after the application, that the final $5000 was received. 

Clearly the government has no conception of the financial pressures faced by small business. This delay could have been terminal for that business.

No thanks to the government it was not, but how many more businesses face closure because the government just does not get it?

Ombudsman and IBAC Funding Cuts – A Blatant Attempt to Hobble the Watchdogs

Mr MORRIS (Mornington) (15:52): I rise to support the matter of public importance submitted by the member for Ripon.

Before I move to my comments I make the observation that it is a great pity that government members, and particularly the member that has just sat down, think it is necessary, in order to win the debate, to put words into the mouths of the opposition.

The charge that we are advocating a position of austerity are completely false.

If the member had listened at any point to any of the contributions last week on the budget, that message would have come out loud and clear.

As the member for Gippsland South made the point a few minutes ago, we believe absolutely in investing in the future. We believe absolutely that at the moment it is necessary to run deficits; it is just a matter of what you use the money for, whether you use it responsibly and how far you go, and that is the issue that is at question. 

The other point I would make is that the member sort of said, ‘Oh, well, we’re both AA, New South Wales and Victoria’—completely and absolutely wrong!

We were knocked down two steps, and we are AA; New South Wales was knocked down one step—AA+. It is a very different circumstance, and to suggest that ‘No, we’re all the same’, is just completely wrong.

So let us at least keep to those facts in the context of this discussion.

The year 2020, first of all, was a year of disaster, and now of course it has been the year of the pandemic, but particularly I think it has been a year of contrasts.

The particular contrast that I have noted is the contrast between the way the people of Victoria faced challenges for the past 12 months and the manner in which the government of Victoria has responded.

The people of Victoria have shown courage, they have shown discipline and they have shown determination.

They have shown courage in confronting these almost unprecedented challenges that we have faced over the last 12 months; they have shown discipline by working together under difficult circumstances to not see off the challenge—we are a long way from seeing off the challenge—but to make significant progress; and they have shown determination to win that fight and get their lives back, get our lives back.

The community has shown exactly the characteristics you would hope would be reflected in government. But sadly nothing could be further from the case, because this government have shown no courage, they have shown little discipline and they have shown a determination in only one thing, and that is to avoid blame.

What is the most effective way to avoid blame?

Well, the most effective way to avoid blame is to camouflage—to be polite about it—what you are doing, to obscure the true nature of the operations of government.

I think it is fair to say that has always been the instinct of this government, but in 2020 that instinct really has morphed into something else. It has turned into furtiveness, it has turned into secrecy.

Since the election of the government in 2014 we have seen a concerted effort to shut down debate, and where debate could not be shut down it was to be dumbed down.

We have seen that in the way the Parliament operates. With no disrespect at all to you, Speaker—I am not suggesting that the source is the administration of the Parliament. It is the way it is operating. It has almost turned into a mere rubber stamp.

But sadly so has the committee system. The Public Accounts and Estimates Committee, which is an institution that I have a fair knowledge of, was once a forum to investigate the budget before it passed.

The hearings were conducted, it reported back and then the house considered its position on the budget. That was a forum that was strongly supported by Premier Bracks. He put a lot of money into making sure it could do the job properly because he understood the necessity for a robust assessment of the budget before it passed.

That committee has now evolved, thanks to government control—and despite, I hasten to say, the best efforts of the opposition members—into what is basically a PR opportunity for ministers.

Those hearings will be completed hopefully before Christmas. The report will be done some time in January and I expect tabled in February. The budget passed last week. What is the point of going through the charade?

This year we saw an attempt to force the closure of electorate offices. Thankfully that went away after about 12 hours.

We saw attempts to prevent members from attending this Parliament. Finally we saw an attempt for the Parliament not to sit at all.

In the end, the government backed off. The Parliament has sat, thankfully. But they tried damn hard to prevent it.

The Liberal and National parties take accountability seriously. We take transparency seriously.

That is why it was a Liberal government that established the Ombudsman’s position in the state of Victoria. That is why it was a Liberal and Nationals government that established the IBAC in Victoria.

That is why it was a Liberal and Nationals government that established a freedom of information commissioner, which has now morphed, under this government, into something very different.

The fact is Labor love to talk about accountability. They like to talk about transparency. But all we get on their watch is more secrecy, more cover-ups, more whitewash.

Mr Rowswell: More cuts.

Mr MORRIS: And more cuts too, as the member for Sandringham says.

Victorians should be able to have confidence in the Ombudsman’s office and they should have confidence in IBAC. They have got to have confidence because they are critical agencies in the fight against corruption in this state.

I certainly have total confidence in the IBAC commissioner, I have total confidence in the Ombudsman. Both are people of the highest integrity. But they cannot do their job unless they get the resources that they need. And both of those people, both independent watchdogs, have expressed their concern at the funding that has been provided.

If we look at the annual report of the IBAC commissioner, and I am quoting, he says:

A strong anti-corruption agency must be independent, accountable and adequately resourced. The ability of IBAC to meet the growing demands and expectations of Parliament and the people of Victoria depends upon the resources, as well as the powers, at our disposal.

IBAC is committed to deliver what is required for the Victorian community; however, without additional funding, we will not be able to maintain current services. This will significantly impact our capacity to independently and robustly expose and prevent corruption.

The Ombudsman in her annual report says:

Most of the new functions and powers recently bestowed by Parliament came into effect on 1 January …

Whether I can make meaningful use of them, however, and indeed to continue to respond effectively to the increasing demands on my office, remains doubtful … and once again my ongoing funding has fallen substantially short of what is needed to respond to public expectations of my office.

… the apparent reluctance to fund my office could risk looking like an attempt to undermine it.

The government of course denies absolutely that the resources are inadequate, and particularly the Premier has been very voluble on that point.

But it is interesting; when the Ombudsman appeared on the Neil Mitchell show on 2 December, Mitchell asked her, ‘Could she do the job properly?’. And she said, ‘On that budget, no, I can’t’.

Neil then went on to say, ‘Well, the spin is actually you have got an increase. Have you got an increase?’. The response: ‘It looks like an increase when you look at it in the budget papers, but because I didn’t get enough last year I was obliged to run a deficit, so if you look at the total amount I spent to do my job, it’s a decrease’.

The same day, when the Premier was asked about that, he effectively called the Victorian Ombudsman a liar—effectively called an independent watchdog a liar. He said, ‘It’s not based on fact’, and that is a response he repeated in this Parliament this afternoon. 

You have got to wonder what is going on when the Premier of the state goes as far as he has on that point.

So is this just a cynical attempt to hamstring the operations of two very effective and principled watchdogs? I think it is. I think that is exactly what is behind this disgraceful campaign from the Premier to nobble and discredit two key agencies fighting corruption in this state, and I think this house should express its deep concern at the behaviour of the government.

No joy for Mornington in this Budget!

Mr MORRIS (Mornington) (13:45): During the last sitting week the Andrews government belatedly delivered its 2020 budget, and unfortunately there was not much, if anything, to say about the Mornington electorate.

Apart from a small amount of money for planning and redevelopment of Mornington Special Developmental School, which is very welcome although long overdue, there is not a single cent in the budget for my electorate.

But in many ways that budget was no surprise, because the Australian Labor Party has been in power for 17 of the last 21 years.

In 2001 the population in my district was a little over 47 000. By 2019 that figure had increased to almost 67 000, a 42 per cent increase, yet investment in local physical and social infrastructure by Labor has been negligible.

Bungower Road, the main access road to the Peninsula Link, remains choked at peak hour, as does the parallel road, Mornington-Tyabb Road.

Despite government claims, there has not been significant investment in public transport for the Mornington Peninsula. In fact there was significant investment in the marginal Labor seat of Nepean but not anywhere else.

In Mornington not a single new bus service was added, and not a single bus route extension benefits the electorate.

Despite the best efforts of the provider, we have a Third World public transport system in the Mornington electorate, and the government is doing nothing to improve it.

In education the recently released minor capital works program reveals not a single cent for works has been allocated to local schools.

The track record of this government is very clear: if you do not vote Labor, you are forgotten.

Budget does little to solve the Jobs Crisis

Mr MORRIS (Mornington) (14:59): I think it is fair to say that I do not share the excitement of the member for Bayswater in this budget—or apparent excitement anyway.

The debate this afternoon is about the Appropriation (2020–2021) Bill 2020, but it is also unusually about the Appropriation (Parliament 2020–2021) Bill 2020. It is interesting that for many years now the Parliament has been pursuing a course of seeking further financial independence from the government, but here we are, apparently, the Parliament has even lost the right to have a debate on its own appropriation bill, which I must say I find rather disappointing. It is simply subsumed into the broader discussion.

Both bills go to the guillotine today, but we know that there will be no consideration-in-detail stage and there will be no Public Accounts and Estimates Committee hearings before the budget is effectively dealt with.

It is unclear even whether the Legislative Council will actually have the opportunity to consider the bills before they go to the Governor for royal assent, because of course their consent is not required. I think it would be reasonable, though, if they had the opportunity to have some input into the two bills.

What are we being asked to approve today, to agree to today?

Last year, schedule 1, ‘Departmental votes’ was $65 billion in round terms; this year, $88.4 billion—so a bit more than a one-third increase in that schedule. Schedule 3 is much more modest, $287 million; schedule 4, the Treasurer’s advances from 2018–19, $1.8 billion; schedule 5, Treasurer’s advances 2019–20, $2.5 billion; schedule 6, the interim appropriation, $2.4 billion. So all up in the appropriation bill, it is $95.38 billion—not far shy of $100 billion. Then, of course, we have the appropriation for the Parliament as well.

The year 2020, I think everyone would agree, has been a year like no other in living memory. First, we had the bushfires that began in December last year that ravaged the south-east of Australia, and then COVID shattered the state, and particularly shattered the economy.

The member for Frankston yesterday, when he was talking about the State Taxation Acts Amendment Bill 2020—and certainly I heard others make similar comments; I am not singling out the member for Frankston—talked about the worldwide pandemic.

You need to compare what has happened to Victoria with the rest of the nation. That is the only valid comparison. You cannot talk about what happened in the United Kingdom, what is happening in Europe or what is happening in the United States. The circumstances are very, very different.

But in Victoria we have had 20 345 cases as of this morning. That is out of a total of 27 857 cases nationally. So three-quarters of all cases of COVID have happened in this state. We have got over 800 people dead in Victoria out of 907 in total, and that has all happened on this government’s watch.

The budget before us today begins to reveal the extent of the impact of the government’s incompetence, the unimaginable human impact of the government’s incompetence, and this catastrophic public policy failure, because the effects of this public policy failure are not going to simply finish with the emergency; the effects are going to be felt for years and years and years to come.

The immediate outlook for the Victorian economy quite frankly is dire. Some of the measures in this budget will assist, certainly, but not too many.

It is interesting: it is two days after the release of the budget and the dust is starting to settle and people are beginning to see the reality behind these measures, and that reality is starkly different to the spin that was put on the announcements from the Treasurer and the Premier on budget day.

When you look at the Australian Financial Review this morning:

Business groups have questioned the level of private sector stimulus unleashed in Victoria’s record $49 billion budget spend …

It goes on to talk about KPMG analysis and issues with the $250 million to support business. The chief economist of KPMG is quoted as saying that:

Victoria’s stimulus stood in stark contrast to the more business-friendly budgets of the federal and NSW governments, which returned more to the private sector to lead the recovery.

I think this is a very important point, because it is not just KPMG saying that we are in trouble in Victoria. The Reserve Bank of Australia said in the Statement on Monetary Policy that came out earlier this month, and I quoted this yesterday but I think it is worth repeating:

… 200,000 people who left the labour force early in the pandemic … are yet to return, most of whom are in Victoria.

And when you look at the government’s own figures, we are talking about unemployment projections of 8.25 per cent, and that is just beyond anything in recent history.

I would suggest that the priorities in this budget are wrong. We have a jobs crisis in this state, but instead of deciding to work with the private sector, to use government funding as leverage to generate jobs, to get people back to work, this so-called recovery spending is being used, in my view, to conceal what is apparently now a structural deficit, to conceal an expansion of the public sector, and that, frankly, is a recipe for economic disaster.

In a couple of minutes I will reflect on the $100 billion or so of new debt—I think it is closer to $110 billion—that is built into this budget. But I first want to talk about the issues of deficits and debt.

The starting point, I would suggest, is that you should not be using debt, as a general principle, to fund ongoing recurrent expenditure because debt is a charge on future generations.

Now, if you are borrowing to procure assets that are going to be used over decades or even potentially longer than that, in my view that is entirely sensible. But borrowing for recurrent expenditure, borrowing to run a deficit—except in the most exceptional and limited circumstances—simply adds to that generational inequity. We are passing our bills on to future generations.

Under the current circumstances a deficit is necessary—I am not going to argue that—and you might even make a case for a deficit being desirable, because history does make it abundantly clear that when we are in a situation like we are at the moment in Victoria austerity is not an option. It did not work in the days of the Great Depression—it probably aggravated it significantly—and it will not work now.

But if we are going to have fiscal stimulus, it has got to be directed to measures that will rapidly revive the economy. It has got to be directed to measures that are not structural in the budgetary sense, measures that are not going to add to the ongoing budget. Again, I think with this budget that is a significant concern, because far too many of the measures announced appear to be of a structural nature. 

By way of example, in the financial year that has just concluded the wages bill for the state is $27 billion in round terms. By the end of the forwards in 2023–24 that will have risen by $6.3 billion annually to $33.3 billion. That is a structural addition of $6.3 billion.

So that is $6.3 billion extra that has got to be paid out year in, year out, on an ongoing basis. If a fraction of that money that is being spent on the wages bill was being spent with the intention of supporting Victorian businesses to generate jobs, there would be a big jobs dividend. And you would get that dividend without the attendant additional structural costs.

Now, I know the Premier, when he is challenged on this, always says, ‘Don’t you want more police? Don’t you want more paramedics?’. Of course we do. But the reality is, as we know, it is not about police, it is not about paramedics. Overwhelmingly it is not about frontline service positions. It is simply building out the public sector, and it does not work.

The other major concern is that the government does not appear to know to a certain extent what these enormous sums of money are being spent on.

When you look at the annual financial report of the state of Victoria for 2019–20 it attributes the whole of the $6.5 billion deficit from that year to the impact of the pandemic, but when the Auditor-General had a look at the accounts he said he could only identify costs of around $4 billion that are attributable to the pandemic. So despite the government’s assertions, there are $2.5 billion of deficit that are not part of the pandemic, and apparently the Treasurer cannot tell the Auditor-General why it has been spent.

Now, I said I wanted to make some comments about debt, and as I have said, I have no issue at all with borrowing for long-term infrastructure investment.

I have no issue with deficit budgeting under exceptional circumstances, provided it is for non-structural spending. But we have got to watch that level of debt. We have got to watch it very, very closely.

When I entered the Parliament at the end of 2006 net debt was $2 billion. When the government took office in 2014, after the desal plant and a few major things like that, debt was around $22 billion. By the end of June it had doubled to $44 billion. By June 2024 that $44 billion will to the best part have quadrupled to $154 billion. So in my time in the Parliament we have gone from $2 billion to $154 billion.

We are currently enjoying record low interest rates, and of course if you are a government borrower, you do even better than that. But by the end of the forwards we will be paying in interest alone—not principal repayment; interest alone—$4 billion a year. Not paying it back, as I say—not paying the principal—simply paying the interest.

That is $4 billion that you cannot spend on health services. That is $4 billion that you cannot spend on education. That is $4 billion you cannot spend on the myriad other services the government provides. So the enormous debt burden that comes out of this budget I think is cause for very serious concern. It is manageable at the moment but who knows what will happen from here on in.

I think it is cause for even greater concern if the money that is borrowed by the government is used to cover up blowouts on infrastructure projects.

There is the government’s decision to conceal the state capital program instead of publishing it as budget paper 4. And the intention, as the Treasurer made clear yesterday, is that it is not just delayed; it is not going to be produced this year. That means the puzzle is incomplete. The Parliament is being asked to authorise through this appropriation measure and the budget the cost of the government’s plan without a full picture.

If you believe what you hear on the radio, apparently it is not just the Parliament; it is also the Treasurer, because when he was asked, I believe yesterday on 3AW, how far over budget key infrastructure projects had gone he said, ‘I don’t know’.

Seriously! The Treasurer of the state of Victoria says he does not know how far over these budgets have gone. No wonder they were not publishing the figures in budget paper 4—or the former budget paper 4.

Normally I would talk a little bit about the electorate. As has been the case many times in my 14 years in this house, that is not going to take long, because there is one item, and that is the opportunity for the Mornington Special Developmental School to do some planning to refurbish a school that should have been refurbished 10 or 12 years ago at least.

I am delighted for David Newport, the principal, and the school community, who have been pushing hard on this for very long time. They have finally got the planning money. Hopefully there will be a little more money to actually do the job next year.

But I just make the point that Victoria finds itself in crisis. It is a jobs crisis, it is a debt crisis and it is a crisis that has developed largely as a result of the incompetence of the government in managing the pandemic.

Unfortunately it is a crisis that this budget will do precious little to solve.