The Hon. R.I. LUCAS (20:18): I rise to speak on the second reading of the Appropriation Bill, and I congratulate my colleagues on this side of the chamber for their contribution thus far to the debate. I think the Hon. Michelle Lensink’s contribution just then highlights, in part, my description on day one of this budget, that it is a landmine budget. The damage in the South Australian community will be felt over a number of years into the future.
In many budgets in the past the damage is felt immediately the decisions are announced and it is immediately apparent. Those who oppose the decisions are aware of them, and that debate is collapsed down into a few weeks or maybe a month or so.
However, this budget, as I said, is a landmine budget. The landmines have been laid and a number of them will not do their damage until the second, third and fourth years in this particular budget cycle. As the Hon. Michelle Lensink has just outlined in relation to her specific portfolio interest of the environment, that is one of a number of examples of where the key impacts of the decisions to be taken will not be felt until year 3 and year 4 of the budget cycle.
That department told the Budget and Finance Committee that they had divided their decisions up into two tranches. The first tranche: they are having to make those decisions in the next four to six weeks, as it was when they gave evidence, which was two weeks ago. Those decisions related to the remainder of this financial year, bearing in mind there are only seven or eight months left of this financial year, and year 2; that is, 2011-12.
The decisions that they have to take for the last two years of the budget cycle, which are years 2012-13 and 2013-14, they will not take until sometime through next year. In some cases, I suspect, some of them might be left until the following year as well, but they are endeavouring to take those decisions next year. As the Hon. Michelle Lensink highlighted in her portfolio, which is consistent across a number of portfolios, we have only heard the story so far of the immediate decisions and impacts of the decisions that have been taken.
There are still more significant cuts and decisions that have to be taken, announced and implemented for years 3 and 4 as a result of this budget, and in many cases they will not be announced until next year. The Hon. Ms Bressington raised an issue about anti-poverty cuts today and I think the Hon. Ms Lensink talked about park ranger cuts. They are the decisions that we know about now. Those decisions will be reflected and expanded upon next year as they relate to years 3 and 4.
So, in a traditional budget, when backbenchers in the privacy of their own home whisper behind their raised hands to their partner or spouse, ‘Whilst I applauded the Treasurer today in the caucus room, I secretly wasn’t overly enthusiastic about what was going on,’ normally you only have to put up with the brunt of attack, as I said, for a few weeks or maybe a month or two at the most. What I say to the government backbench is, ‘You ain’t seen nothing yet.’ The decisions that have been announced are the immediate ones.
There will be equally significant decisions through next year for departments like the environment department which, as the Hon. Michelle Lensink talked about, has cuts of up to $30 million a year in annual expenditure by the fourth year out of, I think, a total budget of $130 million or whatever that number happened to be. You are talking about extraordinarily large cuts in modest expenditure portfolios. A portfolio of $130 million pales into insignificance compared to a health portfolio of $4 billion plus and an education portfolio of $2 billion plus in terms of its impact.
That is the first point that I would make in relation to the ongoing impact of this budget. The second point I made briefly in the Statutes Amendment (Budget 2010) Bill is that this budget is a budget based on spin, deceit, hypocrisy and broken promises. As I said during that debate, it is a budget that cannot be sheeted home just to the Premier and the Treasurer. All of the cabinet unanimously endorsed it, as the Premier was quick to say. He is quick to make sure that ministers Weatherill, Rau, Hill and all the ministers accept their fair share of the credit for these decisions.
The Premier does not want to accept all of the credit himself in relation to these decisions. He said not one minister—minister Holloway, minister Gago, no-one—opposed any of these decisions. However they might slink around the corridors and suggest to their factional colleagues, ‘I wasn’t really happy with it,’ the Premier and the Treasurer have outed those colleagues from the left and the right: wherever they come from, they unanimously supported it in the cabinet. Then when they went to the caucus there was applause.
They were so happy with the performance of the Premier, the Treasurer and the cabinet that there was applause at these decisions. This is a shared responsibility from the whole of the Labor government. It is not something which is going to be cauterised, as some in the union movement might seek to do, by just chopping off the head, or the two heads, of the current Premier and the Treasurer. You replace those heads with a new head; whether it is a Weatherill head, or whether it is a Koutsantonis head—heaven help us—or a Snelling head, it does not matter.
They are all equally responsible, they are all culpable for the decisions that have been taken in this particular budget. I want to explain why I believe that this is a budget based on spin, deceit, hypocrisy and broken promises. To demonstrate, let us look at a handful of issues and at what the people were told prior to the election and what the reality was after the election. Prior to the election, we know the statements and the promises that were made, for example, about some infrastructure projects.
Let me refer to just a couple of projects, and Adelaide Oval is one. The government maintained all along that it was to cost $450 million. During the middle of the campaign we indicated that we had been provided with information that indicated there had been a $100 million blowout in the cost of the Adelaide Oval project. Kevin Foley and the Premier swore black and blue leading up to the election that they had not received any advice in relation to this matter.
We knew that that was untrue. We knew that what the media and the community were being told by the Premier and the Treasurer was untrue, but, of course, the Premier and the Treasurer got away with not telling the truth to the electorate prior to the election on that issue and on many others. Soon afterwards—surprise, surprise—the Treasurer fessed up that he had been told; he just happened to have forgotten about a meeting, he had forgotten about advice he had received of a $100 million blowout.
One of the major issues of dispute in the election campaign was when the shadow minister in the middle of the campaign alleged that there had been a $100 million blowout. The Treasurer takes advice and then comes out and says that he has not been given any advice at all about a particular blowout. Then, after the election, he remembers that he had been at a meeting, he had been advised and he had been told about a massive blowout,.
The Auditor-General tells us in recent days that, back in November of last year, cabinet approved a $100 million blowout in the cost of the $1.7 billion Royal Adelaide Hospital PPP project, again one of the major issues of the election campaign. All through the election campaign, and in the period leading up to the election campaign, the costings of the promises and the big infrastructure projects like the RAH and the Adelaide Oval project were matters of controversy.
All through that campaign, the Premier and the Treasurer, and the Minister for Health in particular, publicly claimed that they had thoroughly costed the RAH and that it was $1.7 billion, and yet we know that four months prior to the election cabinet had authorised and approved a $100 million blowout to $1.8 billion in the estimated cost of the RAH project. That is the point I make: it is not just the Premier and the Treasurer who are culpable in relation to these issues of broken promises.
All those cabinet ministers were part of that process. They were all aware that there been a blowout, and all of them, including minister Hill and the others, failed to tell the truth to the people of South Australia about the cost of that particular project. I spoke earlier today on the companion bill in relation to the broken promises on conditions of employment and forced redundancy for public sector workers, so I will not go over it again, but it is another example of broken promises.
Prior to the election, we were told that the budget was strong, that it was in surplus. Yes, it did need $750 million over the forward estimates in yet-to-be-established budget savings, and they had established this consultancy called the Sustainable Budget Commission to achieve those particular savings. What we now know is that both the Treasurer and Treasury were aware prior to the election—because the leaked information from both the Sustainable Budget Commission and within Treasury has confirmed this—that the $750 million was not going to be enough to produce the surplus budgets he was claiming would be produced over the forward estimates period, after initial deficit for a year or two.
What we now know is that that $750 million in unallocated and yet-to-be-established savings for departments and agencies was a figure of over $2 billion in savings which had to be established by the government, and the government used the Sustainable Budget Commission to generate a menu of savings for them. So instead of $750 million, as they had claimed, it was over $2 billion in savings.
Again, the claims that had been made prior to the election by the opposition and others that the government was not delivering the savings targets from previous budgets, that agencies were not meeting them and that the budget was in trouble in terms of its forward estimates were all denied by the Treasurer, in particular. Of course—surprise, surprise—after the election, the government was forced to acknowledge that all of its claims in relation to responsible financial management were thrown out the window. The caucus and the cabinet were confronted with the brutal reality that what they had been told was untrue as well, and it was not $750 million, it was more than $2 billion in budget savings measures, to use the government’s euphemism, that had to be found as part of this budget.
The deceit, hypocrisy and broken promises on the public sector do not just relate to the issue of forced redundancies and entitlements; it also relates to the whole issue of public sector job cuts. Anyone involved in politics during the 2006 election will recall that a feature of that particular campaign was the Labor government’s commitment that they did not need to cut numbers in the public sector. The Treasurer went so far as to say that they had offered TVSPs and they were all ‘TVSP’d out’, if I can use a phrase, that there would not be anyone prepared to take TVSPs.
The Liberal Party in 2006 under Rob Kerin said, if we are going to spend additional money on priorities like hospitals, schools, new infrastructure projects and tax relief, we need to make savings by reducing the number of Public Service jobs. A key issue of that election was the issue of whether or not there needed to be a reduction of 4,000 in job numbers in the public sector. The government said no; the opposition said to be sustainable you have to.
So what happened during 2006 to 2010? Having promised no job cuts, the government in three separate budget cycles cut more than 4,000 jobs from the public sector. In the very first budget after the election in 2006-07, they made 1,600 job cuts having promised no job cuts at all, then in 2008-09 they made further massive job cuts, which are estimated by Treasury officers to be up to 1,000 full-time equivalent jobs, and then in the Mid-Year Budget Review in 2009 another 1,700 job cuts. So that was 1,600, 1,700 and 1,000—more than 4,000 full-time equivalent job cuts in three separate budget decisions in the period 2006 to 2010—when they had gone to the 2006 election saying ‘No public sector job cuts at all; we do not need that to sustain our budget.’ That is what actually occurred, as opposed to the promise, during the period 2006-10.
Coming into the 2010 election, of course the Premier and the Treasurer again said everything was hunky-dory in the public sector: ‘The budget is sustainable. Yes, we’re going through some problems with the GFC but after a year or two in deficit things will be sustainable and we don’t see the need for significant job cuts in the public sector.’ Of course, they made the promises about no forced redundancy, and of course they made the promises about job conditions and entitlements.
That was the promise prior to 2010, and bang—straight after the election, what happens? This government comes in, and surprise, surprise, shock, horror, up to 4,000 (3,700 full-time equivalent) job cuts in the public sector. Who on earth—and certainly the finger cannot be pointed at me—would be foolish enough ever to believe anything that the Premier, the Treasurer or anyone from the Rann government says? Clearly, around 48 to 49 per cent of the people of South Australia did prior to the last election.
The reality is that you just cannot believe anything these people say in relation to their promises and commitments. You look at what they promise at election time, and particularly we are talking now about the public sector; what they then do to the public sector straight afterwards is completely opposite to what they promised. Sooner or later those who represent the public sector in South Australia may well wake up to themselves on behalf of their members. Why on earth would you believe anything that Mr Rann, Mr Foley, Mr Weatherill or any of these ministers promise you prior to an election period?
It has as much validity as the letter written by treasurer Foley to the Australian Hotels Association prior to the 2002 election promising not to increase taxes on gaming. Of course, they got a $100,000 donation into their coffers as a result of that commitment and then the commitment was broken in the very first budget after the 2002 election. Why would you believe this Premier, this Treasurer, or any future premier or treasurer, whether it is minister Weatherill, minister Snelling, minister Koutsantonis or minister Hill, in terms of a promise or a commitment that they give you in the lead-up to the next election in 2014?
The record is clear: they will say, they will do and they will promise anything prior to an election to be elected and then, after that, as treasurer Foley proudly boasted in the parliament in the Hansard in 2002, as he sneered across the chamber to then leader of the opposition, Rob Kerin, ‘You don’t have the moral fibre to break your promises. I do.’ That was the boast from treasurer Foley when he was asked to explain why he had broken his promise in a letter to the Australian Hotels Association promising no increases in the gaming machine tax. He was asked how he broke his promise, why he broke his promise and he sneered across the chamber and boasted, ‘You don’t have the moral fibre to break your promises. I do.’
That is the moral substance; that is the moral fibre; that is the morality of this government whether it is led by the current Premier or any future premier. That is the moral fibre that they boast of in terms of their honesty, their integrity, in terms of whether or not a commitment and a promise is there to be kept or whether it is there to be broken from their viewpoint. The reality is that there is not a promise made that they are not prepared to break if they believe it is in their interest so to do.
We have seen the record, and we are going to see over the coming months and years further promises broken as this landmine budget does its damage and partners and agencies have to announce decisions which will have impact in years 2, 3 and 4 of this budget cycle. That is why we the opposition describe this as a budget of spin, deceit, hypocrisy and broken promises.
There are a number of issues that I now want to address in terms of the specifics of the budget papers. The first thing I will say is that, through the work of the Budget and Finance Committee, we have actually established that the budget papers themselves are not accurate. We were all told that new Budget Paper 6, Budget Measures Statement, was the definitive statement to outline all the budget cuts, all the budget savings or, to use the government’s euphemism, all budget improvement measures.
In terms of what we have already established through some of the early meetings of the Budget and Finance Committee, let us just look at some of the evidence given by the Department for Environment and Heritage. Mr Allan Holmes indicated clearly that some of the budget cuts, which had been recommended by the Sustainable Budget Commission and approved by the cabinet to be implemented on the department, had not been included in the budget papers.
Let me give two examples that we were able to find. One of them was that there had been a $1.8 million cut over four years in the funding for the Million Trees Program, quite a popular program. That will continue to be funded by robbing $1.8 million over four years from the planning and development fund, which is used to save open spaces in developments. So, what we are going to see from that $1.8 million cut in funding for the Million Trees Program is a $1.8 million cut over the next four years in the purchasing and saving of open spaces as part of developments, because the money has been robbed from that particular fund. That cut has not been included in the budget documents.
The second one was a $10.3 million budget savings measure, which was labelled ‘depreciation savings through asset rationalisation and other measures’. Again, DENR indicated that had not been included in the budget documents. We put the question to the CEO of the department as to why these cuts had not been included in the budget documents. Members had been told, the community was told, and anyone interested would be able to see what cuts were made in those particular departments. The department basically said that they do not know, that they do not understand why Treasury had not included those particular cuts in the budget documents.
It raises questions, as we look at this budget. The Budget and Finance Committee will meet these departments and agencies, as the Hon. Mr Darley knows as a new member of the committee, over a 12-month period, and we will be asking questions. One of only three questions I want to put to the government today, through minister Holloway, as part of this debate is: can the government and the Treasurer explain what other budget cuts, similar to the ones that I have just highlighted, have not been included in the budget measures document? So, what other cuts have not been included? Secondly, can the minister explain why those cuts were not included in the budget documents? What was the reason for excluding them from the budget documents?
To that end, the evidence from the Department of the Premier and Cabinet is illuminating, because they indicated that again there were cuts and savings measures for their department which were not detailed in the budget documents.
What was indicated in the evidence was that there were further cuts of $18.3 million, in addition to the $50 million in cuts detailed in the budget papers, that were to impact on Mr Eccles’ department (he is the CEO of the Premier’s own department) which had not been detailed in the budget documents. Mr Eccles did give the Budget and Finance Committee the breakdown of that $18.3 million over each of the forward estimate years.
Obviously, we will be able to pursue this with the department through the Budget and Finance Committee over the next 12 months. However, I think it is important for members in this chamber, as we debate this budget now, that the Treasurer, through the minister, provides advice to the parliament as to the equivalent numbers for each of the other government departments and agencies. That is, Mr Eccles says there are a further $18.3 million in cuts over the $50 million detailed in the budget papers for his department: what are the equivalent numbers for each of the other government departments and agencies?
The next issue is one that a number of members in another chamber partially addressed and that is that the Treasurer, during the estimates committee, was forced by the shadow treasurer to acknowledge that the problem he is confronting at the moment is not about revenue or income but it is an expenditure problem. That is, for a period of eight years now this Treasurer has not been able to manage his expenditure, there has been massive over-expenditure and he has been unable to manage it. As the Hon. Michelle Lensink and others referred to, for the last few years we have enjoyed the rivers of gold from the GST deal done by the former Liberal government with the former federal Liberal government in 2000-2001, and this state Labor government has enjoyed the benefit of those rivers of gold flowing into the state coffers.
There was an $8 billion budget when the government come to power in 2002 and we are now talking about a $15 billion to $16 billion budget. Their income has virtually doubled in eight years and yet we are now confronted with the atrocities that are being committed by this government on various departments, agencies and programs as a result of its own mismanagement of that doubling of revenue, that doubling of income over the period that it has been in government. It is not a problem of income and revenue: it is a problem of expenses and expenditure.
In its budget the government continued to try to push the furphy of this being a problem of the GFC; that is, revenue flows declined significantly. The best figure it has been able to come up with is that the impact of the GFC was $1.4 billion over the five years from 2008-09 to 2012-13. It will be self-evident that two of those financial years (2008-09 and 2009-10) have been and gone. My view is that I suspect the majority of that $1.4 billion that has been calculated is collapsed down into those two particular financial years.
The more critical issue is not the problems of the past, because we acknowledge the problems of the past but, as we look to the health of the income statement and the balance sheet for this year and the future, it is what the ongoing or residual impact of the GFC is on this year’s budget and the forward estimates budgets, that is, 2010-11 through to 2013-14. That is the number that we need to see.
That is why, I think almost two months ago when the Budget and Finance Committee had Treasury, we asked them to give us the breakdown. In estimates committees two to three weeks ago the shadow treasurer again asked the Treasurer, ‘What is the breakdown of that $1.4 billion?’ The Treasurer said, ‘Look, the shadow minister for finance asked that question in the Budget and Finance Committee a few weeks ago.’ The shadow treasurer said, ‘Yes, we know; that’s why you should have the answer now.’ The Treasurer said, ‘Oh, no, we still don’t have the answer here. We’ll give you that answer.’ Well, having asked the question in the Budget and Finance Committee and having asked the question in the estimates committees, this week we need that answer.
It is there. It has been produced by Treasury, and my sources within Treasury tell me that the Treasurer has it. I put the question specifically to the Leader of the Government in this chamber. He needs to get that number from the Treasurer and share it with all of us so that we can debate this issue of the relative impact of the GFC and what we believe is the much greater problem, that is, the profligacy, the wastage and the overspending of the Treasurer, the Premier and all the ministers in the government, in big issues and in small.
I want to go back quickly and refer to the contribution I made in May 2002, immediately after the change of government. There was a dispute at that time about a fictional black hole, which had been manufactured by treasurer Foley to try to justify some of the broken promises he made in 2002. At that stage, the former government had adopted a policy that, if a government department or agency overspent and there was no justifiable explanation for it, that department needed to accept responsibility and repay the overspending over a period of time. In 2002, we had done that with two departments, Health and Education.
As I explained that policy at the time, there were cabinet ministers in the former government who rightly said to the former government, ‘What incentive is there for us as ministers, whether we are in the environment department or in the further education department or in the smaller departments, to manage our budgets, reduce our expenditure and stay within our spending limits if one or two agencies continue to overspend and the automatic response of government is just to top them up and say, “We’ll reward your overspending?” What incentive is there for the other CEOs and ministers to manage their budgets as you should manage a budget, whether you are in the public or private sector?’
The first decision that treasurer Foley took, and he was supported by his cabinet colleagues, such as minister Holloway and others, was to throw that policy out the door and say to departments that, if they overspent, they would be reimbursed for that over-expenditure. The government took that decision in that first year, in 2002. My words of warning at that stage, on 8 May and on a number of occasions soon after that, were as follows:
…if you have a treasurer and a government that say, ‘Don’t worry about that; we will just give you the extra money’—if that is the Treasury approach that is to be adopted, let me warn you now that that is a recipe for disaster. That is indeed the response that this current Treasurer is adopting.
And later on:
As I said, I place on the record again that the current T reasurer’s soft approach to overspending by government agencies is a recipe for f inancial disaster. A few bureaucrats in government departments and agencies will be delighted to hear that the overspending policy of the previous government has now been overturned by this Treasurer. He [ t reasurer Foley ] is quite relaxed about overspending: there will be no sanctions; there will be no repayment; those issues will be written off.
I go back to that contribution and that heated debate in 2002 just to indicate that the Treasurer and this government were warned at that stage that, whilst the future financial position was likely to be strong, with the GST deal and the State Bank debt having been paid off by the former government, if you adopted a policy of just allowing departments, ministers and CEOs to spend, and whatever overspending there was recouped and repaid by Treasury, it was a recipe for financial disaster.
How did they get away with it for so long? They got away with it for so long because of the rivers of gold. It was the equivalent of winning X-Lotto every year. Treasurer Foley continued with this management process of letting overspending go on, but every year he won X-Lotto. There were hundreds of millions of unbudgeted dollars flowing into the coffers from property taxation, from GST revenues, from every possible source during that particular buoyant period in the national and state economies.
Of course, Treasurer Foley sat on his backside and said, ‘How good is this? How good am I? I’m producing surpluses. What the heck about the hundreds of millions of dollars of over expenditure every year. Don’t worry about it. We will pay it off because I’m winning X-Lotto every year, because we are getting the hundreds of billions of dollars from unbudgeted revenue sources.’
That sort of fiscal management policy is a recipe for financial disaster. The warnings were there in 2002. The reason the chickens didn’t come home to roost earlier was because of winning financial X-Lotto every year for a number of years. Now the chickens have come home to roost. There was a tightening for a period of time with the GFC, although that has now eased off. There has continued to be this massive over-expenditure.
The Treasurer, in response to estimates committees questions from opposition members this year, was quite open about it. He got his years and dates wrong, as is normally the case. He said that he had changed the former government’s policy, that he had changed it after a couple of years. Well, he changed it straightaway. He changed the policy in 2002.
He acknowledges in the estimates committees, in response to questions, that the extra money, for example, for health—$500 million of the $800 million he is boasting of for health—is just the over-expenditure from the last financial year. Each of the last three years, as the Hon. Mr Darley will know, there has been over-expenditure of somewhere between $70 million and $200 million a year in health which has just been paid up by the taxpayers.
Can I say, in relation to these policies, that there is an element of the health budget which does relate to increased activity. Whether it be the former government or this government, I am prepared to acknowledge, together with the government, that you need to approach the issues that relate to increased activity in a different way.
However, as the Budget and Finance Committee has established, the health department was given a whole series of savings that had to be achieved across the board, unrelated to activity levels, but in relation to administration and management, etc., which it never achieved. As it came to the Budget and Finance Committee every year, those savings tasks that everyone else had to achieve they just did not achieve.
They did not have to because, from 2002, the Treasurer had adopted the approach that it does not really matter if you overspend, we are just going to top your budget up. So, every year he has topped their budget up. He has paid them out and they did not meet their savings targets. They just ignored their savings targets year after year after year, as they came to the Budget and Finance Committee and reported.
The genesis for the problems we have now was sown in that first year. The warnings were given explicitly to the Premier, the Treasurer and the government, and they ignored those warnings. The cost of the slack management of overspending by the Treasurer and the government is now being felt by everybody.
In relation to the expenditure problem, the opposition has highlighted, over a long period of time, massive over-expenditure blowouts on major infrastructure projects—and I will not repeat all of them today—running into hundreds and hundreds of millions of dollars on a range of projects. I have highlighted the blowouts, in this contribution today, in the Adelaide Oval and the Royal Adelaide Hospital projects already. With the transport projects, some of the overruns in minister Conlon’s department have entered into legend status, on the South Road projects and the Northern Expressway, etc. I am sure that we will see more of that with the other major infrastructure projects.
What we have seen from this government in terms of talking about, okay, where do we find the savings? There is one area in terms of savings. There are many others we identified in the lead-up to the state election. I think that the best example you can find is that if you are not prepared to be frugal in terms of managing the small amounts of dollars you control as a minister, there is no way in the world you are going to be frugal in terms of managing the big expenditure projects.
What we have seen with this government and these ministers in terms of managing their own expenses and their own budgets is massive wastage and snubbing of their noses to the electorate. No wonder, as I said, the position of this government is toxic whenever an opinion poll is run; and, certainly, the opinions of the Premier—and the Treasurer in particular—are toxic when questions are raised.
When you have a situation where the Treasurer of the state is quite happy to rack up $22,000 a year on mobile phone costs and when one of his young staffers is prepared to rack up more than $10,000 a year on mobile phone costs, they are examples of the personal excesses of an arrogant government and an arrogant ministry and staff who are out of control and who, frankly, take the view, ‘Hey, the taxpayers’ money? We couldn’t give a continental about saving anything.’
When that story hit the headlines in the Sunday Mail under the heading of ‘Ding-a-ling’, with a big photograph of Kevin Foley on the front page, a number of people spoke to me, and other members of the opposition, just saying, ‘This is a perfect example of what is wrong with this government.’ You have a situation where most people say, ‘Doesn’t the Premier and the Treasurer know that you can actually get mobile phone plans?’
You can get a mobile phone plan for $130 a month—or less—for unlimited calls. You can spend $1,500—$2,000 tops—for unlimited calls. If you were frugal, instead of spending $22,000 of taxpayers’ money a year on mobile phone calls, why would you not take out a plan? If he had a problem with the government deal—he has been there for eight years and he has been spending $14,000, $15,000, $16,000 for years (and I have been raising this for at least two or three now)–then negotiate a deal with a provider, and say, ‘Give us a deal where we cap the expenditure so that me, the Treasurer, can get $22,000 worth of calls for $3,000 or $4,000.’
That is the sort of deal that should be negotiated. Why don’t they do it? Because they could not give a continental. It is the taxpayers’ money. They believe that they have a God-given right to waste the money of the taxpayers—whether it is hundreds of millions of dollars on an infrastructure project or $22,000 on mobile phone calls, they could not care less. That is why the Treasurer, for example, will spend $29 for a glass of Moet and $300 for a cosy dinner for two at the Wildfire Restaurant. That is why at 1.30 in the morning when he is in New York he will be at Rande Gerber’s Whiskey Blue nightclub in New York. Why? Because it is owned by Cindy Crawford’s husband, Rande Gerber, and frequented by the A-list.
Go to the website and what does it say about the A-list clientele that go to Rande Gerber’s bars? Besides Kevin Foley (he is not mentioned), you have Scarlett Johansson, George Clooney, Salma Hayek and Hugh Hefner and his Playboy Bunnies. They are the A-list clientele for the Gerber bars, such as the Whiskey Blue nightclub. The taxpayers are paying for Kevin Foley’s drinks at 1. 30 in the morning in the Whiskey Blue nightclub. What does the website say?
The premier hunting ground for angular debutantes and the Wall Street players who love them. Whiskey Blue, at the W Hotel, has cropped up in bright cities across the country shilling its special blend of high-life sophis tication and lounge-y hedonism.
Plush leather divans invite patrons to engage in something a little more than sitting, while white-sleeved bartenders mix martinis and cosmos from behind a mahogany and alabaster bar.
Why is it not surprising that our Treasurer would want to be there at 1.30 in the morning, spending taxpayers’ money buying drinks? That is the problem with this government. We have a Premier who—
The Hon. P. Holloway interjecting:
The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Order!
The Hon. R.I. LUCAS: —is required under the Public Sector Act to indicate once a year in the Government Gazette the total remuneration—
The ACTING PRESIDENT: Order! The Hon. Mr Lucas has the call. Other members are out of order.
The Hon. R.I. LUCAS: —of his ministerial staff. So, what does the Premier do in relation to Mr Nick Alexandrides, his chief of staff, for example? He indicates that his total package is $175,000. In the Budget and Finance meeting with premier and cabinet, we put the question to Mr Chris Eccles: is it true that Mr Nick Alexandrides is recorded in annual reports and in the Auditor-General’s Report at a remuneration band of $250,000 to $259,000? The answer was yes. So, Mr Nick Alexandrides is on a total package of $250,000 to $259,000. I ask the Hon. Mr Gazzola and the Hon. Mrs Zollo: does a chief of staff, a spin doctor, in a minister’s office, a government department or agency, deserve a quarter of a million dollars total remuneration package?
The Hon. P. Holloway: What’s your remuneration, taking your superannuation into account? Come on, what’s your super worth?
The Hon. R.I. LUCAS: We are elected members of parliament. We are not apparatchiks, boffins; we are not staffers in this government’s departments and agencies—
The ACTING PRESIDENT: Order! The minister is out of order. We will not have a conversation.
The Hon. J.M. Gazzola: He asked the question, though.
The ACTING PRESIDENT: Well, we will not have a conversation. The Hon. Mr Lucas should not be asking questions. He is making a speech.
The Hon. R.I. LUCAS: Mr Acting President, I am not going to be diverted by the intemperate, violent at times, interjections from the Leader of the Government. I will not be intimidated by the Leader of the Government screaming, yelling and going red in the face in the chamber.
The ACTING PRESIDENT: I do not want you to respond to it.
The Hon. R.I. LUCAS: Thank you, Mr Acting President, I won’t. That is what I am saying. I will not be diverted by that intemperate behaviour by the Leader of the Government. Clearly, that sort of response indicates that he and this government have something to hide. My questions to the government are: why on earth would it hide the total remuneration when it is required by law—the Premier is required by law—to indicate the total remuneration? What was the government’s response? Mr Rann told his chief spin doctor, Jill Bottrall, to say that superannuation was not a monetary benefit and that is why it had not been included. There is nobody in South Australia who will believe that statement from the Premier: that superannuation is not a monetary benefit.
The Hon. P. Holloway: You know he’s in a defined benefit scheme just like you are.
The Hon. R.I. LUCAS: It does not matter. The statement made by the Premier—
The ACTING PRESIDENT: Order! The minister is out of order.
The Hon. R.I. LUCAS: The Premier had not included it, as he is required by law to do, because it states, ‘Remuneration includes all monetary benefits.’ That was the point that was being made. The journalist put the question to Mr Rann, or to his office:
It says that you have to include all monetary benefits. Surely superannuation is a monetary benefit; why didn’t you include it?
The Premier’s response was, ‘Superannuation is not a monetary benefit.’ It is no wonder this state is in a financial mess.
The Premier of this state, in a desperate attempt to cover up the unlawful act of not revealing the total remuneration of his chief of staff and other staff, says that superannuation is not a monetary benefit. The people who read that statement have just laughed at the Premier, but they know that he said that to get out of having to answer the question as to why he refused to comply with the Public Sector Act. The heat is now back on the Premier, minister Holloway and others.
The Hon. P. Holloway: There is no heat at all.
The Hon. R.I. LUCAS: No, indeed—minister Holloway’s staff, too, we understand—although we suspect the numbers are not as significant a difference. It is almost an $84,000 difference instead of $175,000—$259,000 in total remuneration costs to the taxpayers of South Australia—and that has not been revealed in the Auditor-General’s Report or in the departmental report. The only way it is ever revealed is through the work of the Budget and Finance Committee of the Legislative Council. That is the only way it is revealed. It is no wonder this Leader of the Government opposed the establishment of the Budget and Finance Committee and on every occasion seeks to smear the work of the Budget and Finance Committee.
The Hon. P. Holloway interjecting:
The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The minister will come to order.
An honourable member: I don’t think you should be calling Greg Kelton gullible.
The Hon. R.I. LUCAS: Mr Acting President, we should get that on the record, the Leader of the Government calling Greg Kelton gullible and—
The Hon. P. Holloway: I said he publishes everything you say without—
The Hon. R.I. LUCAS: The Leader of the Government is saying that Mr Kelton and The Advertiser publish everything I say without—
The Hon. P. Holloway: Without any sort of assessment.
The Hon. R.I. LUCAS: That sounds like an accusation of gullibility from the leader of the government.
The ACTING PRESIDENT: I think we should forget about Mr Kelton and return to the bill.
The Hon. R.I. LUCAS: Indeed, Mr Acting President. Again, I am not sure why there are these intemperate attacks on journalists from the Leader of the Government. He should—
The Hon. P. Holloway: Because your attack was a sleazy attack on the Premier’s chief of staff.
The Hon. R.I. LUCAS: No, he is not previous. He has been sacked, has he?
An honourable member: No, the Premier’s chief of staff.
The Hon. R.I. LUCAS: He now says it is a sleazy attack on the Premier’s chief of staff. It is not a sleazy attack on the Premier’s chief of staff: it is an attack on the Premier. If the chief of staff can get away with an extra $84,000 without anyone knowing, good luck to him. The attack is not on the chief of staff: the attack is on the Premier. The responsibilities rest with the Premier and with ministers like minister Holloway.
That is where we need to see honesty and integrity. If the Public Sector Act says you must reveal the remuneration of all your spin doctors once a year, then you should do it. And, minister Holloway, if you are not doing it for your staff, you have to accept your responsibilities as well; because, minister Holloway, I think if you go off and check you will find that the total remuneration for your staff is higher than what has been revealed in the gazette as well. So, let us not get this holier-than-thou attitude from the Leader of the Government in this chamber, Mr Acting President, on what the requirements of the Public Sector Act are.
The Hon. P. Holloway: You know they’ve been gazetted like that for years—just like when you were the treasurer.
The Hon. R.I. LUCAS: The difference, of course, is that never under the former government was an extra payment of $84,000 concealed from the people of South Australia. And why? Because the government, through the Premier, said that superannuation is not a monetary benefit. Let me assure you, as a former treasurer, that I would never have made such a stupid statement that superannuation was not a monetary benefit. As I said, there is no-one in the state who would agree with that statement from the Premier.
There are two final points that I want to make. One is in relation to the changes in the budget.
The Hon. P. Holloway interjecting:
The ACTING PRESIDENT: You’ve kept him going for another 20 minutes.
The Hon. R.I. LUCAS: Mr Acting President, I was meant to finish 10 minutes ago, but these have been intemperate attacks, as I said, bordering on violence, from the Leader of the Government. I am being encouraged to do so, Mr Acting President, but I never refer to the fact that a member may have left the chamber, whether willingly or unwillingly.
The other changes are in relation to the Commissioner for Public Employment. I think this is a critical issue, as part of this whole budget package. I will probably speak at greater length on this on another occasion, but I believe it is an important issue that members need to be aware of. We are getting rid of what was the independent person in the Public Service, and the chief executive of the DPC will become commissioner. A lot of the powers of the commissioner will be delegated to CEOs of various departments, and some of the residual powers will go to the CEO of DPC.
As you will know, Mr Acting President, on previous occasions I have raised serious issues in relation to charges of nepotism against a former CEO of the Department of the Premier and Cabinet, and they were investigated by the former independent commissioner for public employment. The question I put to the CEO of DPC is: in the future, how would similar complaints be handled? I hasten to say that I do not at all make a similar complaint against the current CEO, and I indicated that to him in the Budget and Finance Committee.
This raises an important issue. Previously, there was an independent commissioner for public employment who was in charge of only a dozen or so staff, not a big department. In future, if there is an allegation to be made against the chief executive of the Department of the Premier and Cabinet to whom would someone go to have that matter investigated? He is now the commissioner, as well as being the CEO of DPC. To be fair, the current CEO acknowledged that that was an issue that needed to be addressed, and the Budget and Finance Committee is awaiting a response on the matter.
The final issue I raise relates to targeted separation packages. This is a critical issue, and I will perhaps speak on the process at greater length on another occasion; however, the current arrangement we have from the government is that there will be what is known as the ‘gold-plated’ TVSP package where, once someone is declared surplus, they will be offered a package of up to a maximum of 116 weeks’ pay. After six months, they will be offered the ‘silver-plated’ package, which (and I am not entirely clear about whether or not this has been announced) I think might be 80 or 90 weeks’ maximum payment. After 12 months, the issue of no forced redundancies would be revisited by the government.
The problem the government has, in managing this process, is that it has said it has to get almost 4,000 full-time equivalent public servants out of the system. If it is unsuccessful using the gold-plated and silver-plated packages, it will then have to move to revisiting the no forced redundancies provision. The impression has been given that that decision will be taken about 12 months after September this year—so, September next year.
The problem, which we have established in the Budget and Finance Committee, is that some agencies—for example, DENR three weeks ago—will not know which particular individuals will be targeted to go and offered packages until potentially well into next year. So, there will be a situation where some of these public servants will not have to make a decision in relation to a targeted separation package until year 3 or 4 in this current budget cycle.
The problems are self-evident: in September next year, the government will not be in a position to know whether or not 3,700 full-time equivalent public servants will be prepared to take up voluntary separation packages. So the government will not be in a position, in September next year, to make a judgement, with that information in hand, regarding whether or not it should move to a position of forcing redundancies in the public sector. That is what it said it is going to do and said that it would do it on the basis of knowing whether or not the gold and silver plated packages in the public sector had been successful.
The problem this government will confront—and public sector workers will confront—is that this government may well take a decision in relation to forcing redundancies in the public sector to around September next year, well before some of the public sector workers have been in a position to consider whether they will take the gold plated package of up to 116 weeks pay or the silver plated package of maybe 80 or 90 weeks’ pay as a final settlement for voluntarily leaving the public sector in South Australia.
So, it is a critical issue in terms of managing the public sector. Certainly it will have a critical impact on whether or not this government is able to achieve its fiscal targets. There is considerable doubt on that as members on this side of the chamber have highlighted during their contributions to the Appropriation Bill debate. As I indicated at the outset, during the committee stage of the debate—to a degree on this bill but also on the Statutes Amendment (Budget 2010) Bill—the opposition and other members I am sure will explore in some detail many of the issues raised by members during their contributions on both this and the companion bill.