Parliamentary Debates (HANSARD)

FORTIETH PARLIAMENT FIRST SESSION 2017

LEGISLATIVE ASSEMBLY

Wednesday, 24 May 2017

Legislative Assembly

Wednesday, 24 May 2017

THE SPEAKER (Mr P.B. Watson) took the chair at 12 noon, and read prayers.

PERTH MODERN SCHOOL — RELOCATION Petition MR W.R. MARMION (Nedlands) [12.01 pm]: I have a petition signed by 107 people that conforms to the standing orders of the Legislative Assembly, which reads — To the Honourable the Speaker and Members of the Legislative Assembly of the Parliament of Western Australia in Parliament assembled. We, the undersigned, say: Perth Modern School is an extraordinary educational institution with great history and heritage, deserving of our support and protection. When established in 1911 by the State Government as a “selective” school it provided education to many from social backgrounds that would not have received secondary education. Many of these students were able to succeed professionally and have given back to the WA community and the school itself. As an educational institution the transference of Perth Modern School to a commercial, financial and tourist area of Perth Central Business District (CBD) is inappropriate. Now we ask the Legislative Assembly: To call on the Premier and Education Minister to abandon their plans to relocate Western Australia’s only academically selective school from its current and original site of over 106 years on the corner of Roberts Road and Thomas Street into the Perth Central Business District. [See petition 2.]

PAPERS TABLED Papers were tabled and ordered to lie upon the table of the house.

WEST AUSTRALIAN OPERA — FIFTIETH ANNIVERSARY Statement by Minister for Culture and the Arts MR D.A. TEMPLEMAN (Mandurah — Minister for Culture and the Arts) [12.03 pm]: I rise to inform the house of a milestone in Western Australia’s arts and culture community of which we should all be proud. This year marks the fiftieth year of operations of one of the state’s most cherished arts institutions, the West Australian Opera. Established in 1967, it has entertained and captivated audiences in Perth and around WA, staging 158 opera seasons with more than 1 000 singers and performing to hundreds of thousands of Western Australians. As one of the oldest opera companies in Australia and WA’s only full-time, professional opera company, it provides jobs for a stream of talented singers, actors, dancers, chorus members, musicians, conductors, directors and designers. It kicked off its golden anniversary with the special Opera in the Park performance, staged in the grounds of Supreme Court Gardens and simulcast to people all around Western Australia. This year, smaller gala concerts are being presented in iconic Western Australian venues with four singers and piano in Opera in the Pinnacles, Opera in Greenough, Opera in the Valley of the Giants, and beyond. Based at His Majesty’s Theatre, the company has staged world-class operas, premiered revolutionary new works, and mentored talented young people who have gone on to have successful international careers. Guided by a board of directors chaired by Terry Bowen, general manager Carolyn Chard and artistic director Brad Cohen, the company receives funding and support from the state government through our Department of Culture and the Arts and Lotterywest, from the federal government through the Australia Council for the Arts, and through its principal partner Wesfarmers Arts. The McGowan government is proud of the West Australian Opera and celebrates its efforts over the past 50 years. It is a remarkable organisation that has had a major impact on the arts in Western Australia and it is a prized part of our arts and culture community.

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EDUCATION AND CARE SERVICES Statement by Minister for Child Protection MS S.F. McGURK (Fremantle — Minister for Child Protection) [12.05 pm]: The Education and Care Services National Law and national regulations came into effect in Western Australia on 1 August 2012, about eight months after other jurisdictions in Australia. This includes the National Quality Framework, which sets out the rating and assessment process. The aim of the National Quality Framework is to advance the quality of services and improve outcomes for the children who use them. It also enables education and care services to benchmark quality, driving continuous improvement. Most importantly, the National Quality Framework enables families to make informed decisions about services providing education and care in their area. I am pleased that the state government’s education and care regulatory unit has made significant headway in the assessment and rating of eligible services in this state. To date, 90.2 per cent of eligible services have now been assessed and rated, with the remainder currently underway. The education and care regulatory unit is now on track to hit the milestone of having assessed and rated every eligible service as early as the third quarter of this year, which is potentially ahead of some other jurisdictions. To achieve this, staff within the unit have been working exceptionally hard assessing and publishing ratings for the highest percentage of services nationwide in 10 of the last 17 months. This is a significant achievement, given the eight-month head start that other jurisdictions had and the rapid growth of the education and care sector in WA throughout this period. Since 2013, WA’s sector has grown by 24 per cent, the fastest in the nation and more than double the national average. These ratings can be viewed on the mychild.gov.au website and the website of the Australian Children’s Education and Care Quality Authority. The completion of this rating and assessment process should provide parents and families with assurance of the quality of services being offered in Western Australia. LOAN BILL 2017 Consideration in Detail Clause 1: Short title — Dr M.D. NAHAN: We had a long debate on this legislation. I will not pre-empt the Treasurer’s response, but, as we understand it, the government is asking for $11 billion based on Treasury’s Pre-election Financial Projections Statement—that is, the policies embedded in that statement by the previous government. On that basis, is the government committing to all the expenditure in that pre-election statement? Is the government’s request for debt based on the forward estimates of that pre-election statement? What expenses and revenues will the government alter? The SPEAKER: Leader of the Opposition, can you face the Chair, please? Dr M.D. NAHAN: Thank you, yes I will. Mr B.S. WYATT: The Leader of the Opposition is quite correct. We are basing the request on the projections of expected borrowing requirement of the PFPS with an allowance for 2020–21. The member asked whether we are committed to all the expenditure in the PFPS. No, we are not. We are going through a process now that we will all see at budget time when we outline those that we are committed to, others that we are embarking upon and those that will simply become part of the savings of the budget process. The SPEAKER: Members, I advise that this discussion is on just the short title, not the actual bill. Dr M.D. NAHAN: Just to clarify, the government is taking the borrowing envelope, if you wish, from that, and the borrowing is for a purpose. The purpose is to expend money as indicated by the revenue. I would like to know about some matters. That budget contains $11.7 million for the third stage of Willetton Senior High School. It has been there for quite a while. The expansion of the school has been supported by all parties—of course, it is in my electorate. Is the government committing to that expenditure? If not, why is the government borrowing for it? Mr B.S. WYATT: As I pointed out last night in my reply to the second reading debate on this bill, this is effectively an administrative bill, as the Leader of the Opposition knows. It will give the government the authority to borrow; it does not actually mean we borrow as of now. It gives us the authority to borrow over the coming four-year period. In terms of individual items that are currently in the budget, ultimately if we remain committed to those, members will see them at budget time. Mr D.C. NALDER: On the basis of the comments that the Treasurer has not decided on expenditure, what is the basis of determining that $11 billion is an appropriate amount to borrow? The SPEAKER: Members, can I just advise that this debate is on the short title of the bill. It is not about the bill itself; we are debating the short title. This is the Loan Bill 2017. Answer that question, Treasurer, but if we can get back to the point please.

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Mr B.S. WYATT: On the basis that I made the commitment to hopefully do no harm to the finances the government inherited as at the Pre-election Financial Projections Statement—hence we are seeking the authority required as at the PFPS—I have made the point both in this place and outside that hopefully in the end we do not need all of that authority, but we are seeking it because that is certainly the direction of the finances as at the election time. Dr M.D. NAHAN: We all agree that the government needs a loan bill—the question is the quantum—and it needs one now. That is why the Opposition is supporting this bill. However, the Treasurer indicated that he really does not know how much is needed. The starting point is the PFPS. Why does the government not take a smaller sum and then set itself a target to go below $11 billion, and take how much it thinks it needs now and then come back if it needs more? Mr B.S. WYATT: The Leader of the Opposition is right: ultimately forecasting forward four years is problematic, as he knows. Standing still, for 2017–18 and 2018–19 the state will need around $9 billion. I think the Leader of the Opposition said that we do not know how much we need; that is right. The previous government had a similar problem with two loan bills that were introduced; I went through this last night. The 2009 bill needed a top-up in 2012 and the 2015 bill needed the 2016 top-up. In respect of 2009, in particular, that was obviously because spending was particularly problematic and in 2016, to be fair to the Leader of the Opposition, it was revenue that was particularly problematic, so another loan bill was required. It is right that there are a lot of unknowables in what happens between now and 2020–21, but straightaway, even though I am basing this on the PFPS—I think is has been well reported—we have had significant revenue write-downs since the PFPS, so I could have actually suggested that we add that to the borrowing authorisation of $11 billion. I have not; I have simply put that on the government to try to react to those write-downs over the next four years, as governments are required to do, and to simply stick with the authorisations projected as at the PFPS. Dr M.D. NAHAN: Does the government plan to have another loan bill in its next one or two budgets? Mr B.S. WYATT: Do I plan to? No, I am not planning to; I am certainly hoping not. I sat there and caused similar trouble as the Leader of the Opposition is causing for me right now over having to introduce a loan bill— so no. But, as we know and as I pointed out with the 2012 and 2016 top-ups, there are things outside of our control and I need to control what I can. Mr D.C. NALDER: Clearly, this is the Loan Bill 2017. Last night the Treasurer stated that it was not unusual and yet the opposition highlighted that it is unusual because we find no record ever of Parliament witnessing a loan bill when there is not a budget accompanying it. I want to clarify that the Treasurer still believes that it is not unusual that he is requesting $11 billion—the largest amount that has ever been requested in the state— without a budget or a plan as to what the government is going to utilise those funds for, and expect us just to willingly accept that. Does the Treasurer not consider it unusual that there is not — The SPEAKER: Member, we are talking about the title of the bill. Mr D.C. NALDER: Exactly, and I am arguing as to why we have the title of the Loan Bill 2017 when in fact there is no plan or budget, and why we are at this point. I would like clarification from the Treasurer on that. Mr B.S. WYATT: I made the point in my response last night around the four previous loan bills. Of course, the Loan Bill 2015 was introduced a week before the budget on 22 April 2015 and the debate started on 5 May, but the 2015–16 budget was not presented until 14 May. It was very close to the budget, but that loan bill was introduced prior to the budget. Historically, although not unprecedented—the 2015 example highlights that—it is probably unusual; I accept that. However, loan bills have been introduced before budgets in the past. Dr M.D. NAHAN: If we go back to loan act authorisations in the past, since 1987–88, a number of loan acts have been passed. Most in recent times have been for additional borrowing for general government purposes. There also has been financial agreement debt redemption; that is, paying back debt. Given that the government went through the election campaign and swore on its heart that it would treat debt like a mortgage—that is, it would pay both capital and interest payments—will it agree to a financial agreement debt redemption program of paying back debt over the next period of four years? Back in the early 1990s and beyond, especially the early nineties, not only did the government of the day from 1991 to 1993 borrow money, but it paid it back. It had both an increase in borrowings—I assume a borrowing limit; I think this is in material provided by Treasury—and it also had financial agreement debt redemptions of a smaller amount. Given that the government’s commitment in the election was to treat the debt issue like a mortgage—we assume logically from that that there will be an interest payment, which will be in the budget, and a principal payment—will the Treasurer agree to a financial agreement payment? Will he agree in the Parliament to having a program of principal repayment over the next four years? Mr B.S. WYATT: I would love to, but I cannot, particularly while the state is still operating under a cash deficit, which it has had now since 2007. I note that the Leader of the Opposition went through the loan act history and highlighted the financial agreement debt redemption amounts from 1991 through to 1999. I can only

[ASSEMBLY — Wednesday, 24 May 2017] 505 assume that that was on the basis that they were running cash surpluses at the time and so were able to do it. Obviously it was a different accounting method then, but I can only assume that they were operating under cash surpluses. As the member knows, the reason debt has run up so considerably since 2007 is because the last cash surplus was in 2007, so until we get to a position in which the state is running cash surpluses, we are repaying debt and the financial agreement debt redemption becomes very difficult. Dr M.D. NAHAN: The basis of this loan is in fact the pre-election financial statement. The Treasurer knew exactly what it was. It was published by Treasury during the campaign. During the campaign the government promised Western Australians to treat the debt like a mortgage and pay it back. There is no surprise in the forecast now; the government is using a pre-election financial statement—let us take that as is—put out by Treasury and that is very accurate. But, at that same time, the Labor Party went to the public and said, “We have a debt reduction program; we will pay it off over time.” The time was not determined, but all we are dealing with is the next four years—the period of this government. Is there not something inconsistent with the government’s commitment to pay off debt over time and its statement now that the government cannot do it because we are in cash deficits? But the Treasurer knew that. He had the statement in front of him and these are inconsistent. Could the Treasurer explain the inconsistencies with his commitment and the Pre-election Financial Projections Statement, which is his starting point for requesting money? Mr B.S. WYATT: That is a good question. There is nothing inconsistent because I also said that, ultimately, to plateau debt, we would have to peak it and commence its decline. That has become problematic in the past as well; both Christian Porter and the Leader of the Opposition predicted across forward estimates periods in budgets that debt would peak and commence its decline. At the moment, we do not know when debt is peaking, but once we do, we will hopefully get to a position where we can start seeing the decline of debt. We might see it in the budget in the forward estimates—we might not. But we will see that come September. The ACTING SPEAKER (Mr S.J. Price): Members, I remind you that we are still talking about the short title and to confine your comments to that. Some of the other extended conversation that is going on might be better off saved for clause 3. Dr M.D. NAHAN: Yes, okay. We will go to clause 3 shortly. I just want to finish this line of discussion. The reason I am doing this is that this is the only time I can interrogate, if you wish, the minister. Mr B.S. Wyatt: And the budget. Dr M.D. NAHAN: No, in the context of the Loan Bill 2017, because once we decide on this, the government is basically saying that this is it for the term; there will be no more loan bills, it hopes—and I hope. You never know in this world, though. The debt level was a crucial issue. The government had the Pre-election Financial Projections Statement in front of it, which was objectively and accurately determined. It said, “We have a debt plan. We will pay it off like a mortgage.” That was good rhetoric to the public, because most people have mortgages, although, I might add, 40 per cent of them have interest-only mortgages. But the Treasurer implied that he had a debt reduction strategy. I looked and I cannot find any discussion about capping. What I could find was, “We will pay debt off like a mortgage with principal payments.” One of the first statements or exercises here—I think the first one really—is a Loan Bill that is interpreted as no attempt to even cap debt, let alone pay off the principal. Is that true? Mr B.S. WYATT: For the benefit of members, I point out that the Pre-election Financial Projections Statement, which is also covered by this Loan Bill, has a projected deficit position and these are now changed—of course, it is the PFPS—for the worse. There is a projected deficit for 2017–18 of nearly $1.5 billion, a deficit for 2018–19 of $860 million and a deficit for 2019–20 of $535 million. As we in this place know, as the Leader of the Opposition knows, until we get to a point at which we are running a surplus position, it is very difficult to start reducing debt. I have made that point time and again and that is before I get to the point I made previously that there is a cash deficit still across the forward estimates—I dare say it will stay there for a while yet—and since 2007 we have had a cash deficit. That is highlighted by the loan act history document that the Leader of the Opposition was referring to earlier. I get the point the member is making, and I hope it is the only loan bill; I do not want to do another loan bill. Hopefully, the budget will articulate, with a bit more of the clarity that the Leader of the Opposition might seek, what the debt glide path will be and the size of those cash deficits, but we are dealing with a significant operating deficit position across the forward estimates, as at the PFPS stage, that this Loan Bill seeks to cover. Dr M.D. NAHAN: My point is that the starting point is the PFPS, but the government can do something about it; it could come in with a budget and alter that. Those numbers existed before the election and they are the trajectory that the previous government was on. Of course, we had an election. We knew that debt was an issue and that we were in structural deficit and it was going to be a struggle, but the government could come up with policies to rectify that. The Treasurer is saying that we do not know whether we have policies to reduce debt. We heard, particularly from the member for Dawesville, how aggressive the Labor Party was with small and large programs all around Dawesville, except in Dawesville, but my point is that the government is asking for a loan

506 [ASSEMBLY — Wednesday, 24 May 2017] based on a previous government that does not exist now. The Labor Party campaigned hard on the issue of debt. It had a policy to cap and pay down debt, but what it presented to us is that it had no intention or effort to put actions where its words were and do something about debt. It is up to members opposite now; they are in government. They are asking us for a cap based on doing nothing on reducing debt. Mr B.S. WYATT: I am not asking for a cap as such; I am asking for an authorisation of $11 billion, the vast amount of which is required in the next two years. Now, the challenge for the government will be, in light of the revenue writedowns that we have had since the PFPS, to ensure that that entire $11 billion, the authority that is contained in the Loan Bill, is not called upon. That is the challenge for the government. As I said, I could have quite as easily changed the $11 billion to $13 billion to deal with what has happened in the last couple of months, but I have not. I have simply kept it as the projection was at election time, to be a fair decision. As the Leader of the Opposition and the former government knows, both of its Loan Bills were for extended periods. The Loan Bill 2009 was for a four-year period and the Loan Bill 2015 was for a three-year period. They were for extended periods, I assume for the same reason that I am seeking an extended period of four years—that is, hopefully the decisions made by government over that time would ensure that the government does not need to take on that entire authority. But the point I make is that the majority of that loan is required in the next two years. That is why I am seeking the authority for the entire $11 billion. Dr M.D. NAHAN: The Treasurer made a statement that there has been revenue deterioration since the Labor Party came into government. We have no record of that. There was an unofficial statement by Treasury, which was a parameter adjustment. It is not an official Treasury statement. The government made these claims, but we do not know them and that is one of the reasons—which we will deal with in a few minutes—that it is better to have an authorisation after a budget is brought down when we have accurate statements of the actual revenue forecast. We know that the Labor Party has come on board and has about a billion dollars of hollow logs from foreign assets and liabilities, a top-up of GST and the commonwealth giving the government underspends on various capital projects—all up, maybe $900 million. What is the government doing with those? Is it paying off debt with that money or is it spending it? Those are the questions that the Treasurer will hopefully address in the budget, but he is asking us to basically give the government, on behalf of the people of Western Australia, money that does not exist and as if it has no policy to pay down debt, which it went to the election committed to do. Mr B.S. WYATT: The Leader of the Opposition is right. The last officially approved financial document was the PFPS. There has not been another Treasury or government-approved official financial document and maybe that is something that we need to look at for the future, post-election. Leader of the Opposition, maybe that is something we need to look at in the future. As the Leader of the Opposition knows, the next official financial update will be the budget and that is what we are working towards. The comments I made about the various revenue writedowns are from published data, whether that comes from the Commonwealth Grants Commission—we have seen that— or is a result of updated information that comes into government, from the Valuer-General, for example, showing some negative impacts on land tax expectations for the coming year. Data collected by Treasury from various approved and published places is having an impact on those revenue projections and the Leader of the Opposition will see that, officially, in the Treasury document that will be the budget. Dr M.D. NAHAN: To follow up on that, because it is an important point, we changed to fixed four-year terms a few years back—I think it was to the second Saturday of March. That is when Treasury is in full swing for the budget. Treasury comes down with its parameter adjustments upon which governments make decisions. Therefore, by definition, the budget has to be late for the new government, whether it is a returning government or otherwise. We, collectively, must deal with this because our budget periods and reporting periods predate the move to fixed four-year terms. We should perhaps get the Public Accounts Committee or someone else to look at this because we need to address this very important issue. Mr B.S. WYATT: The Leader of the Opposition is right. The big change was when the former government introduced fixed terms—absolutely. That had a range of impacts that I think we are still trying to adjust to. Although I made the point that the budget has more negative revenue projections, one of the reasons I did not change the authorisation from $11 billion was that, as the Leader of the Opposition knows, over four years there could also be positive revenue changes. There are positives and negatives. I can only hope there are more positives coming forward—let me tell members—but I have kept it at the $11 billion in the Pre-election Financial Projections Statement and not simply topped it up to account for what has really been only a two-month change across a four-year period. Dr M.D. NAHAN: There were some positive revenue changes, particularly in iron ore prices — Mr B.S. Wyatt: That was since the budget, not since PFPS. Dr M.D. NAHAN: Not since PFPS? Yes. Mr B.S. Wyatt: We have lost a third since PFPS. Dr M.D. NAHAN: Yes. Also, of course, there was the $226 million GST top-up.

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Mr B.S. Wyatt: Swings and roundabouts—that is right. Mr A. KRSTICEVIC: In his response earlier, the Treasurer indicated that most of the spending would be in the first two years. Can the Treasurer be more specific and tell us, over the term of the bill, but specifically in the next two years, how much will be spent on which components, and how has the Treasurer come to that figure? Mr B.S. WYATT: I thank the member for the question—a good question. Again, as at the PFPS, the consolidated account borrowings are expected to be $5.1 billion in 2016–17, $4.4 billion in 2017–18, $4.175 billion in 2018–19 and $2.325 billion in 2019–20, and for 2020–21, which, of course, are estimated requirements at this point, it is $1.125 billion. The ACTING SPEAKER (Mr S.J. Price): Can I remind members once again that we are debating the words “Loan Act 2017.” Members’ comments are certainly worthwhile and constructive but if we can confine the debate to the short title, it would be much appreciated. Dr M.D. Nahan: For the record—this is very important—the sums of borrowing that the Treasurer listed really relate only to the total public sector debt. Mr B.S. Wyatt: No, they are the consolidated account borrowings. Dr M.D. Nahan: They are the consolidated account borrowings; they are the ones that are relevant to the loan fund. Mr B.S. Wyatt: Yes. Dr M.D. Nahan: Yes; good. Mr B.S. Wyatt: Sorry if I did not clarify that, but that is right. Mr A. KRSTICEVIC: The figures that the Treasurer just read out are the Pre-election Financial Projections Statement figures but they are not the Treasurer’s figures for his plans through to 2020–21. The figures will change, obviously, with increases in fees and charges and the introduction of new taxes. That will put more revenue into the state government’s coffers. The Treasurer is asking for an amount of money at the extreme end of the situation we are in. How can the Treasurer ask for that much money without having a plan and without being able to tell us where the money will be spent, other than saying that the government is following the pre-election documents and it is not the government’s agenda and is not where the government is heading? The government wants to be given an open chequebook for that amount money and then it will decide where the money will be spent along the way. Can the Treasurer be more specific about the government’s spending patterns over the next four years and, specifically, how much spending does the Treasurer see? Alternatively, will the government spend exactly what was put in the prior government’s agenda to spend money on? Mr B.S. WYATT: The ship of state is a big one, and often difficult to turn, or we have to turn it over a long period. The issue of the open chequebook is just the authorisation. Of course, this bill does not allow me to run down the street and grab $11 billion out of the closest bank. The bill will authorise the government, through the WA Treasury Corporation, to go off and borrow as required, and I gave members opposite the cash glide path a minute ago. I think the member is interested in specifically which agencies the money will go to. At this point, that is really as outlined in the 2016–17 budget, with an updated Government Mid-year Financial Projections Statement and the PFPS. Over the next four years, will the government simply adopt the spend profile as we inherited it? No, of course it will not, but I think the member said that the government was seeking the extreme end of the situation. Actually, I am putting a bit of pressure on the government to ensure that we do not have to come back to this place for another loan bill because, as I said, revenue has deteriorated. I made the point to the Leader of the Opposition that that is a two-month period out of four years. Lots of things happen over a four-year period. At budget time in September, the member will see by agency specifically what the following profile is in each agency from the consolidated account. I will conclude on this point how I started: this ship of state is big. For example, 40 per cent of the spend is wages. The actual discretionary spend of government is not huge. Over a period, we have to readjust. Will the member see a dramatic change? He will probably not, but he will see some changes. Mr A. KRSTICEVIC: Does the $11 billion that the Treasurer is asking for cover the $5 billion of election promises that the government made? Mr B.S. WYATT: At the moment, it covers everything in the Pre-election Financial Projections Statement. I effectively committed to do no harm to the finances as inherited in the PFPS. That is why I adopted that; I have not sought a larger amount. Within that constraint, the new Labor government will have to deliver on its election commitments. The ACTING SPEAKER: Can I once again remind members that we are discussing the short title of the bill and some of these comments would be best saved for clause 3.

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Mr V.A. CATANIA: The Treasurer said the revenue of the state is down. Has the Treasurer or his department looked at alternative revenue sources instead of asking for an $11 billion loan? Has the Treasurer looked at a 25c lease rental? Has the Treasurer looked at the option of increasing that through the consumer price index? Has the Treasurer looked at a $1, $2 or $5 increase to assist in not having to have an $11 billion Loan Bill? Has the Treasurer looked at or had discussions with any of the companies that pay the lease rental fee about having a cash out to be able to give the state the injection it needs to get through this hurdle of the unprecedented collapse in the goods and services tax for Western Australia? Has the Treasurer had any conversations with any companies? Given that the Treasurer has said that revenue is down and we need to find a new revenue source for the state, has the Treasurer looked at any new revenue sources? Has the Treasurer looked at those options; and, if so, what options has he looked at? Mr B.S. WYATT: I thank the member for the question. I will not go through whom I have met with et cetera, but I am looking at as many alternative revenue sources as I possibly can—the member would be surprised how few there are, I must admit—as opposed to the alternative beyond the state’s current revenue base, which includes the lease rental fee. It is a small part of the revenue base, but it is part of the state’s revenue base. I think I can get to the point that the member is trying to make—we had this conversation last night. Will I adopt the National Party’s policy on the lease rental fee? No. Mr V.A. CATANIA: When I asked the Treasurer whether he has looked at any new revenue sources, he said he had looked at a few. What are they? Is there an alternative arrangement other than borrowing $11 billion? Can the Treasurer outline what he has looked at? Has the Treasurer or his department done any modelling based on the 25c lease rental and what benefit it would bring Western Australia if the government were to align that 25c with the CPI, given the fact that 50 years of benefit was given to those companies without changing a 1960s agreement? Has the Treasurer or his department looked at increasing that lease rental from 25c to $1? If so, how much windfall would this new revenue source bring to the state? Mr B.S. WYATT: The member will have to cost and work out different iterations of Nationals policy himself. I am looking at a range of different areas, options and opportunities. I have asked Treasury to be very creative. The member needs to be interested in what I adopt and he will see that at budget time. Mr V.A. CATANIA: I asked a specific question on looking at new revenue sources. Of course, we and the whole of Western Australia will have to adopt this $11 billion loan, but, as I said, has the Treasurer looked at new revenue sources? If so, which he has said he has—he is looking at many—which ones is he looking at, and has Treasury looked at increasing the 25c lease rental on BHP and Rio, whether it be last month, six months ago or a year ago, as an option for a new revenue source for the state to help with the projected repair of which the Treasurer has said everyone has to pay their fair share. Mr B.S. WYATT: The member should know what Treasury advised the previous government because he was part of it. I assume he knows what Treasury advised the previous government. I have not tried to trawl through what the advice to the previous government was, but I dare say that since the National Party did not mention this policy until election time, it probably did not seek advice on it from Treasury; the National Party did not know anything about it, apparently. All I can tell the member is that I have sought advice, and he will see at budget time what I adopt and implement in the budget. Mr D.T. REDMAN: I apologise for not being here for the first 15 minutes and I hope that this question has not been asked. The government is basing the Loan Bill 2017 for $11 billion on the parameters of the Pre-election Financial Projections Statement, which includes the exchange rates and the prediction of iron ore prices. I think the Treasurer mentioned in response to a question from the Leader of the Opposition that there has been some parameter shift since that time and some revenue writedowns. Is the Treasurer able to indicate the changes in parameters and the sensitivity impact that they will have on the forward estimates post the PFPS, which is the basis for the government bringing a loan bill seeking the support of this house for $11 billion? Mr B.S. WYATT: This is a conversation that I had with the Leader of the Opposition a while ago, but that is okay. Perhaps there is an opportunity because since the shift to fixed terms, we have not shifted anything else around in terms of reporting requirements and official financial documents. The last official financial document was the PFPS, which is based on the budget of the year of the PFPS. There has not been an official update. Treasury has looked at the published data. That includes the Commonwealth Grants Commission and its update on the relativities for GST and information that comes into Treasury from, for example, the Valuer-General that is showing some of the problems that we are facing with projections around land tax assessments. We know what the property data is showing; we read it every day. That is having a downward impact as well. The sensitivities are all there on page 25. The member will know the sensitivities, particularly around iron ore. Since the budget, there was an increase, but since the release of the PFPS we have seen iron ore come off by about a third—quite a big decline—since election day. Overall, we will work out fairly shortly whether it lands as the budget of 2016-17 predicted as the average over that year. We are getting pretty close to the end of the financial

[ASSEMBLY — Wednesday, 24 May 2017] 509 year. The member is right; there has not been an official update. If I were, for example, to simply react to the last two months, I could have said that because we have lost $2 billion in revenue over that two-month period, so we should jack up the Loan Bill amount from $11 billion to $13 billion. I do not think that would have been the sensible approach because it is two months over four years. As the member knows—he sat in cabinet for a long time—revenues come and go; they increase and they decrease. I want to put the challenge to the government not to simply top that up at the first opportunity we get, and that we apply what was expected in the PFPS. We should rely on the ability of government to react over the four years to ensure that we do not need another loan bill. Along the way, with a sprinkle of fairy dust, we might get some higher revenue. Mr D.T. REDMAN: I cannot remember if the point was made by the Treasurer or by someone else in the second reading debate. When the Nationals prosecuted an argument about a new revenue source, it was asked, “What’s the point, because it all gets washed out to the federal government?”, yet the tenor of the Treasurer’s points in response to my question is that there are shifts in the budget position on the basis of some parameters, for example, the iron ore exchange rate and volumes. Surely, on the basis of the argument the Treasurer has just put, a new revenue source will not get washed out, but will actually have a positive impact, irrespective of the GST arrangements that we have. Mr B.S. WYATT: In the short term, the member is right. The issue is whether we allocate that revenue to a permanent spend. The National Party expected its policy to raise $7 billion over the forward estimates period. If the government grabbed that and put it entirely into debt reduction, it would still have the fundamental problem: it would have lower GST in the out years because the Commonwealth Grants Commission does not care what GST is spent on; it is still going to redistribute the captured wealth. If the government chose not to put it into debt reduction and used it for payroll tax cuts et cetera, it would be locking in a permanent spend, which would exacerbate the debt problem further down the track. If that approach that I have referred to as “jam jar economics”—a phrase that I ripped off from Eric Ripper, the former Treasurer—of just looking at revenue generated by the mining sector, it would increase by that amount. But we need to have a more wholesome view of what it does to the entire revenue base over a longer period. Of course, we are familiar with the redistribution. Mr D.T. REDMAN: It would be interesting to consider one of the other options that has been prosecuted by the Nationals, although it was not our policy position. That is an arrangement for washing out the 25c clause in the agreements. If the government were to wash it out — Mr B.S. Wyatt: How do you mean? Mr D.T. REDMAN: I mean that the government could go to the mining companies and say that it would take the 25c clause and buy it out. Mr B.S. Wyatt: Buy it out? Mr D.T. REDMAN: The 25c clause would be taken out of the agreements and the companies would pay the government a one-off fee to have that settled out. Mr B.S. Wyatt: Basically to cash it out? Mr D.T. REDMAN: Cash it out—yes. That is better terminology. My apologies for the words. The companies will get a benefit. It makes it a little bit easier to have that discussion without the notion of sovereign risk or of having a one-way agreement. A single revenue would come into the state, whatever the figure. I am told that that figure might be calculated at $3 billion to $4 billion. The state is in the situation now in which it has a deficit issue in the short term until the GST comes back into play. Therefore, we have an opportunity to tackle a source of revenue with mutual agreement from companies that will get a benefit from the outcome. It would fill a hole in the state budget for the next couple of years until the GST comes back in to meet all the things that the government talks about when it sits on the government side of the house to make these arguments. The state government could also go to the federal government and say that although that could be seen as a revenue source that would have an impact on GST, the impact of it being kept out of the grants commission process would mean that there is no detriment to other states. Someone else will not lose. That has always been the barrier to getting a negotiated position. The government would be in a strong position. It could seek to cash it out with these companies. Companies would get mutual benefit, which is something that should be palatable to them in today’s dollars. I am sure there is a number that the government could come to. The state government could say to the federal government, “Keep us out of the grants commission process.” Here is a way for the government to sort out Western Australia’s GST shortfall. We know the challenge and the Treasurer has articulated it very well. As soon as we walk into a door in Canberra to try to get a change, it is extremely difficult. We know there will be some play out of that in the federal election. There is an opportunity that would deal with the government’s challenge. It is not entirely in agreement with National Party policy so the government probably would not be breaking a commitment it had made to not hit up the mining companies to pay a fair share, but to use a clause change as a benefit to the companies as well as to the government.

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Mr B.S. WYATT: You are right. To be frank, the environment is ripe for the commonwealth government to agree to exempt, because it would be caught. My view is that if it were cashed out, it would be caught and the Commonwealth Grants Commission would then redistribute it. The environment is ripe for the Treasurer to quite happily give an instruction to the Commonwealth Grants Commission, because the key point the member has made is it is effectively a new revenue source that is not coming out of other states’ budgets — Dr M.D. Nahan: Yes, it is. Mr B.S. WYATT: Not in their current budgets; but I see what the Leader of the Opposition means. The $130 million will have a very minor impact. Dr M.D. Nahan: I will comment on this. Mr B.S. WYATT: I will be interested in the former Treasurer’s comments because this was something that — Dr M.D. Nahan: We prosecuted this. Mr B.S. WYATT: That is right. The former Premier, or maybe the Leader of the Opposition, prosecuted this late last year. Mr D.T. Redman: And the National Party. Mr B.S. WYATT: And the National Party, sorry. People prosecuted this. I like it. I will be frank with members: I sought some advice on it. Clearly, it would have to be subject to a Commonwealth Grants Commission instruction from the federal Treasurer. I do not know, because I simply do not know yet, what the difference of opinion would be about the value of cashing it out. Dr M.D. Nahan: It is a discount rate. Mr B.S. WYATT: The discount rate. Mr D.T. REDMAN: The Treasurer mentioned that he is seeking some advice on this. There are not too many bipartisan positions in this chamber that we can play through—GST arrangements is probably one. We welcome the government giving genuine, serious consideration to this cash-out option. From the mining companies’ perspective, it gets the monkey off their back because the last thing they want is all this commentary. From the federal government’s perspective, it gets the Western Australian monkey off its back, at least for the short term, because it might be a strategy it could use to support Western Australia without taking a detrimental position to the other states. Of course the Treasurer has a budget challenge, come September, to make it work. Whatever the number is—$2 billion, $3 billion or $4 billion—it would make one hell of a difference to that. Would the Treasurer be prepared to table, or at least make available to opposition parties or the public, the sort of numbers that might come out of that advice? If we are running on the same page, it would be a good outcome for Western Australia. Dr M.D. NAHAN: As we know, the former government did a lot of work on this. The opposition—both the Liberal Party and, I assume, the National Party—would be willing to work with the Treasurer on this. The Treasurer can do the numbers and I can give him a private briefing about my discussion with the mineral sector—the people who are paying these. If the Treasurer has not had discussions, I have had in-depth discussions with them that were fruitful. I have forgotten the exact numbers. It is included in the GST but over a period of time. The issue relates to agreeing on the discount rate. The hurdle rate that BHP Billiton and Rio Tinto have is different from our discount rate; so that is all debatable. The argument is that this levy is treated by the Australian Bureau of Statistics as a royalty. That is the problem. We tried to get the ABS to change the definition but we were unsuccessful. It is actually a levy on land use, but nonetheless. The Commonwealth Grants Commission has a long history of treating all recurrent revenue flows as redistribution but if the asset is sold, the capital transfer is exempted. For a revenue-earning business that provides general government revenue—Western Power as an example—that revenue is sometimes included, not always; but it is included, let us say, for the Public Transport Authority. The sale of an asset is exempted from GST. The Treasurer could argue that the state is getting rid of a flow but exempting a capital transaction. New South Wales does this all the time—it has sold a range of assets. When the time is right—I forget the sum but it is multiple billions of dollars—if the Treasurer went to them and said, “Just exempt it from GST, we will do away with it”, they would be open to it, though the other Australian states fight any change that diminishes any money from them at all. They will man the barricades on this, especially Tasmania and South Australia. They will not take anything lightly, but this has potential to work. The Liberal Party will provide the government every hand on this one, if the Treasurer wishes, or any variation of it he wants. All I can say is that the mining sector repeatedly said no. We did not even get to an in-depth discussion. We talked at the highest level, but we did not even get to discussions about a discount rate. It was a different contest when the National Party was giving them real curry. Maybe they have calmed down a bit since then. I think it is fruitful. Treasury knows all the numbers and the arguments, but if the Treasurer needs our help to assist him, especially if the Treasurer wants to pay off debt, we are more than willing to support that.

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Mr D.T. REDMAN: I support the comments made by the Leader of the Opposition. The National Party took the issues up with the mining companies. I am pretty certain the mining companies took a bet the Labor Party would win the election. They made a pretty good bet. That probably limited our capacity to keep some pressure on that. The issues the Treasurer is facing are not any different from the issues we were facing sitting around the table to make the budget work. There is an opportunity in this space that does not breach the integrity of the Labor Party’s election campaign and I think would also get the ear of the federal government. It might be something worth thinking about. If the Treasurer is open to talk to the National Party—I would have to talk to the Leader of the National Party of course—I am sure our leader will be supportive of us prosecuting an argument along those lines. Mr B.S. WYATT: We are in glorious agreement. The Leader of the Opposition has probably articulated the position very well; I do not think I have much more to add. The Leader of the Opposition went through this process not that long ago. I will just add, the Leader of the Opposition is right: I have learnt very quickly that other states will be reluctant to provide any break whatsoever. About a week after I was sworn in, I had the pleasure of going to Canberra for my first Treasurers’ meeting. No doubt I sat in exactly the same place as the member for Riverton and various Treasurers before him, and the ninth item on the agenda was GST. Scott Morrison said “GST” and all faces swung and looked at me! I said my piece to these glazed eyes and, to be frank, it was a perfunctory response, if I was to be kind. Dr M.D. Nahan: Even New South Wales did not help you, did they? Mr B.S. WYATT: To Mr Perrottet’s credit, at least he is watching what is currently happening. He likes the idea of a per capita floor. The horrendous level of 88c in the dollar is driving him nuts. Mr P.A. Katsambanis: He also gets it. Mr B.S. WYATT: In respect of the Leader of the Opposition’s question about making any advice public et cetera, probably in due course. I am not trying to be obstinate; I am just making the point that it is still very early. These things are inherently complicated. Agreements are needed not just with miners, for example, but with the commonwealth et cetera. There might be an opportunity here. We all seem to be in agreement, which is good. Of course it does not impact on the Loan Bill I need now. One final point: the member for Hillarys is right—I found the New South Wales Treasurer very engaging. Clause put and passed. Clause 2: Commencement — Mr D.C. NALDER: I have one simple question. I heard the Treasurer say before that he is looking at the Pre-election Financial Projections Statement to determine when the spend would be required. Given that the commencement day will be immediately after this bill achieves royal assent, that will give the Treasurer access to $11 billion. It is quite a few months before there is any scrutiny of the budget. I would like to get an understanding about this: between now and the opposition’s ability to scrutinise the budget, what level of funds does the government plan to utilise? Mr B.S. WYATT: Thank you; that is a good question. The buffer that exists in the current authorisation is expected to be exhausted in July. That really drove the urgency, because of course we do not sit in July, but July is when the current buffer is expected to be exhausted. Mr D.C. NALDER: Further to that, I understand that the buffer will expire in July, and that is the $1.2 billion, but the budget will not be handed down until 7 September. It will then be some period after that before we have estimates to allow us to scrutinise the budget. Between the current buffer expiring—the $1.2 billion—and our ability to scrutinise the budget in estimates, how much does the government anticipate requiring during that period? Mr B.S. WYATT: Shortly we will debate the Supply Bill, which, under the Financial Management Act, effectively ties that to the previous budget—the 2016-17 budget. Until that budget is passed, which I suspect will be in, what, late September–early October, we will be operating under the authorisation under the Financial Management Act that links it to the previous budget of 2016-17. Dr M.D. NAHAN: I think the question was: Between running out of the buffer from the existing Loan Bill of $1.2 billion, which will be sometime in July, until the budget is passed sometime in September, what will the Treasurer’s borrowing be? What are the additional borrowings? Mr B.S. WYATT: I will give members opposite the honest answer: we just do not know at this point. That will depend upon cash flow, spending, revenue; all those things that go into, effectively, what makes the budget will dictate that borrowing, so, basically, between the end of July and whenever the budget is passed. I will have a better idea probably when we come back after winter recess, but at this point there are probably too many moving parts to give a precise answer.

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Mr D.C. NALDER: My concern is that the moment this bill receives royal assent, we give the Treasurer access to $11 billion. We talk about the need to have a budget and for the government to scrutinise the spend, yet the Treasurer cannot provide any guidance to this house. The Treasurer is telling us we have to wait until budget estimates in late September or October. Mr W.J. Johnston interjected. The ACTING SPEAKER (Ms S.E. Winton): Member for Cannington, please. Mr D.C. NALDER: My queries are directed to the Treasurer; the Treasurer can clarify the points I am raising. We will be approving an $11 billion loan, the government will have access to it and we will not get a budget to scrutinise until September–October. I think it is appropriate and would be nice to understand, if the current funding runs out in July, what will be required between that money running out and when we can actually scrutinise the budget. Mr B.S. WYATT: I think I made the point a while ago to the member for Carine that we are expecting consolidated account borrowings for 2017–18 at $4.4 billion. How does that roll out over the course of 2017–18, particularly in—I think this is the member for Bateman’s concern—July, August and September? I doubt it will be simply one-quarter of that because it will be, generally, a lumpy borrowing program as revenue comes in in lumps. If we assume, therefore, that the $4.4 billion is borrowed in equal instalments, in equal capacity across a 12-month period, we would expect about $1.1 billion in that period. But it is lumpy. Mr D.C. NALDER: I accept that. I just wanted to clarify that there are no special programs that the Treasurer plans to run out; he is just following the books as there are — Mr B.S. Wyatt: Yes. Mr D.C. NALDER: — no special investment programs that the Treasurer is planning to make before the budget? Mr B.S. WYATT: No. Mr W.R. MARMION: If he knows, can the Treasurer outline how much of that $4.4 billion for the first year will be required for establishing a new railway workshop yard, or will that come out of separate borrowings? Mr B.S. WYATT: I cannot answer that question. I can tell the member that as at the Pre-election Financial Projections Statement, $1.5 billion of it will be for the deficit position standing still, because that is what the PFPS showed. I understand the member’s question; a similar question was put to me by the Leader of the Opposition about a very important project in his electorate. In terms of how specific projects will impact on the borrowing program, I cannot tell the member. Mrs L.M. HARVEY: I am going to a previous answer, Treasurer. A number of Liberal Party commitments make up that $1.579 billion, I think it was — Mr B.S. Wyatt: Sorry, $1.5 billion? Mrs L.M. HARVEY: The $1.5 billion of deficit the Treasurer was talking about. Mr B.S. Wyatt: Sorry, yes. Mrs L.M. HARVEY: A number of commitments were funded under that that were not agreed to by the Labor Party in opposition, and obviously now in government, that could provide considerable savings. For example, for the meth strategy, the Treasury costing on the impact on net debt was $162 million; the funding of WA Girls Academy, $7.8 million; and the seniors downsizing program, around $50 million. The Treasurer can understand our frustration about the government asking for a Loan Bill of $11 billion, while a significant number of items in the Pre-election Financial Projections Statement that were not commitments of this now government are savings that can be harvested. When the Treasurer hands down his budget, which will no doubt have these items that we committed to removed, and the significant—$5 billion or so worth of—commitments that the Labor Party made presumably being seen in the budget, we will be able to have more appropriate scrutiny of it. In requesting this extension of the loan facility to $11 billion, has any consideration been given to the removal from the Pre-election Financial Projections Statement of those commitments that the Labor Party did not meet that were made by the then state government? Mr B.S. WYATT: Globally in respect of the Loan Bill, no, just because it is based on those parameters. Clearly, the spending profile as at the Pre-election Financial Projections Statement and based on the 2016–17 budget will be changed by the new government. I made the point to, I think, the member for Carine or somebody earlier that ultimately the big spending beast that is government, as the member knows, involved lots of salaries and bits and pieces; there is not a huge amount of discretionary spend, sadly. It is a big ship that takes time to move. I think our budget will have things that the current opposition committed to that will not be there anymore—I tell the member that right now. There will also be things that we have committed to that will make up some of the space, we will add extra spending and there will be some decisions around savings et cetera. But in terms of this Loan Bill, it is simply based on the authorisation required as at February 2017.

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Mrs L.M. HARVEY: That brings me back to the premise of our concern about this Loan Bill coming through and not being attached to a budget. The Treasurer had a look at the Pre-election Financial Projections Statement costings, and we know that on 7 September this year the Treasurer will hand down his budget. At that time all the clarity around the projects that are in and out—the items that were in the Pre-election Financial Projections Statement costings versus the items not costed by Treasury that the Labor Party committed to—will all be transparently available for us to scrutinise. Our concern is that having this Loan Bill debate requesting $11 billion as a facility at this point in the cycle is not in the interests of transparency. With the budget deliberations on 7 September, when all those commitments of ours we made during the election campaign are removed and the Labor Party’s $5 billion or so worth of commitments are in, will the Treasurer then bring to this Parliament a renegotiated loan bill with a sum that accurately reflects the savings the Treasurer said he had made—the $750 million or so savings from the public sector and projects that have been eliminated—plus the full cost of the government’s Metronet commitment? Mr B.S. WYATT: Obviously, the Pre-election Financial Projections Statement does not have the election commitments in it. That would have driven a different agenda for the next budget as well. Mrs L.M. Harvey: But in an election cycle, realistically, there are election commitments. Mr B.S. WYATT: Yes, but the point I make is that the election commitments were not in this document as such. If the former government had won the election, it would have formed part of its budget for 2017–18. The member is right; it has not been attached to the budget. The budget will outline in some detail, as all budgets do, agency spend, borrowings, revenue et cetera. We see all that in the budget. Like the Loan Bill 2015 that came down a week or two before the budget, we deal with these things as they come along. Ultimately, if there had been a bit more of a buffer in the previous Loan Bill, maybe we could have waited until after the budget. The reality is that because the borrowing buffer from the previous Loan Bill will be exhausted in July—that is what we know—I need this Loan Bill to go through now to allow us to continue to do the things we want to do. Covering the deficit is perhaps the priority at the moment. I have exchanged with the shadow Treasurer how much is likely to be borrowed in that part of the two to three-month period between 30 June and the budget passing through Parliament. As the member for Hillarys pointed out last night, a loan bill is a very small document. Transparency comes around budget time when the spend and borrowings are allocated. Mrs L.M. HARVEY: That brings me back to the premise of our objection to this Loan Bill. We accept that there is a $1.2 billion contingency, which Treasury advised us of in our briefing, that will see the government through to around the end of July. The Treasurer is handing down his first budget in September this year. If we look at the PFPS on which the government is basing its $11 billion projection, even if it went out to the end of 2017–18, which is to June 2018—10 months away from when the budget is handed down—it will require only about $4 billion just to keep the government running until its first budget, which could have a loan bill attached to it with the appropriate amount that the new government requires across the forward estimates. Will the Treasurer please explain why he is not taking that approach and why he has decided to ask for $11 billion now when we have listened to him acknowledge that there will be significant changes to spending in his first budget? Mr B.S. WYATT: That is right. It is a good question. I dare say that the vast majority of the borrowing will be taken up in the first two years. That is the reality. We had a conversation around deteriorating revenue projections already, so I dare say that our cash flow profile, which I provided a little while ago, will probably be brought forward a bit. Hopefully, in the out years we will start seeing two things: first, any savings generated will start to deliver; and, second, hopefully some better economic growth, revenue et cetera—better than what we expect. Why is the period four years as opposed to one or two years? I have simply adopted what previous governments did in 2009 and 2015. I made the point a couple of times that this will ensure that we have a time period in which we know our borrowing profile and authorisation. Another thing that has been alluded to is that it will also allow Western Australian Treasury Corporation to open up new markets for its borrowings. This started under the previous government. That is a process in itself, not just in Asia but in Europe. Over the coming years we have to borrow more offshore. That is something that is relatively newish to WA. We do not borrow offshore anywhere near as heavily as the other states of the commonwealth. That will allow Treasury Corporation to go through its program as well, which is just another issue beyond the issues I have already raised. Mr W.R. MARMION: I am just exploring the impact of possible revenue sources. Mr B.S. Wyatt: You got a tax on it. Mr W.R. MARMION: No, that is one of the government’s. It could impact on the $11 billion that the government is seeking to borrow. During the election campaign, the Treasurer mentioned land sales of $667.1 million as being a revenue source to help fund rail infrastructure. I would like the Treasurer’s comments on whether the government already has a program in place and what areas it is looking at in terms of sales.

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Mr B.S. WYATT: The member is right. The government took a range of savings and revenue measures to the election. Hopefully, that will have a positive impact on the need to borrow over the forward estimates and I will not have to come back here asking everyone to kindly grant me permission to borrow more money. They are part of the many swings and roundabouts, and moving bits and pieces of the budget going forward that will hopefully have a positive impact on the need to take up all the authorisation contained in this bill. Mr W.R. MARMION: Following on from that question, we went to our departments to find excess land and to try to do the same thing that the Treasurer is seeking to do. I think we were lucky to get about $250 million. The government has a definitive amount of $667.1 million, so it must have some idea of the specific land parcels that might be low-hanging fruit. Could the Treasurer provide us with those examples? Mr B.S. WYATT: The member will not be surprised to hear that, like the member for Riverton’s important project in his electorate and his own important project around the rail yards that I think he asked me about, ultimately, individual commitments around savings revenue—election commitments et cetera—are part of the big beast of government. In respect of how they impact on the borrowing program, I dare say they might impact only on timing of delivery of election commitments. With savings generation, I guarantee there is generally a spend associated there somewhere, so it probably will not have a dramatic impact on the authorisation required. What will impact on the authorisation of $11 billion will be the much bigger macro things such as GST, which may come in better and maybe the pool will increase due to better economic growth. Those sorts of things will have a bigger impact on these than individual election commitments. Mr W.R. MARMION: I wish to explore the same thing with revenue generation because obviously it is something that would be very beneficial to the Treasurer as a source of revenue. Another area that he identified during the election campaign was value capture and developer contributions. He came up with another reasonably specific figure of $267.1 million as a source. There are lots of different ways to get value capture. Local authorities can increase their rates to pay for certain infrastructure. But to get money to the state government, what mechanisms would the Treasurer envisage, apart from a direct developer contribution? Mr B.S. WYATT: That is a good question. It is an interesting area of policy development. It will not impact on this Loan Bill because, as I said, it is done at the time of the PFPS. Perhaps the Minister for Lands might want to elaborate on this, but I will make some broad comments on value capture. As the member quite rightly pointed out, there are a range of different methods. Indeed, I think the shadow Treasurer as transport minister looked at a form of value capture from toll roads, which was a form of capturing value from public investment. There are all sorts of different mechanisms. The federal government is very excited by it. It seems to be pushing it quite hard. I do not yet have an indication whether it has a particular preference; I think it is leaving it up to the states to develop their own. That is probably right. As the member knows, where we will land is where we will land. Dr M.D. NAHAN: I guess I cannot ask this, but I will. I hope the Treasurer has talked to Treasury about its confidence in raising additional money on value capturing. As the Treasurer will probably know, we did a lot of work on this issue. The walls put up by the various departments were very fierce and very well defended. They used everything to defend it. Treasury will always say that it is a good concept, but getting any money from it is very difficult. For the record, I know that the Minister for Transport keeps saying that we were against value capture, but we were not. It mostly comes in the form of excess taxation, so the issue is with taxation. It was something that we, as a state, absolutely needed to do. I am pointing that out for the record as the Minister for Transport is not here right now. It is also extremely difficult to put that into effect in a positive sense to raise more revenue. Mr B.S. WYATT: I accept those points; they are valid. New and inherently complicated concepts like these are difficult, and we have to push against, perhaps, a lack of experience in doing these things—I do not know what it is. A key part of the Minister for Transport’s Metronet team is developing a deliverable value capture model. Mr D.T. REDMAN: On the theme of land values and asset sales, I think the sum of $500 million rings a bell as what was predicted for sales of government-owned land. Dr M.D. Nahan: It was $640 million. Mr D.T. REDMAN: It was $640 million from government land sales. I know that some of the enterprises, such as LandCorp, had joint venture arrangements with a number of private companies for various developments in different suburbs. Is consideration being given to cashing out some of those joint venture arrangements; and, if so, can the Treasurer give me some indication of the process that is likely to be gone through to ensure that they do not see you coming, so to speak, and that the current depressed market, along with government budgetary challenges has set up a scenario in which the government could exit those joint venture arrangements at a significant discount of what it might otherwise get had it played out those developments? Mr B.S. WYATT: The member is getting into some quite specific areas now. LandCorp joint ventures around the place are, to be frank, a problem for the Minister for Lands. The point the member raises is good; we want to make sure that we do not get discounted value or lose value et cetera, but for anything specific about that, the member will have to wait till budget time. Clause put and passed.

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Clause 3: Power to borrow for public purposes — Dr M.D. NAHAN: I move — Page 2, line 11 — To delete “11 000 000 000” and substitute — 5 000 000 000 I flagged this amendment in my second reading contribution, and I will now go through the reasons for it. We have explored many of them already, but I will try to put it more succinctly. We support and recognise the need for a loan bill for a substantial amount. The question is the quantum and the basis for it. The second reading speech of this bill states — In opposition we were highly critical of the huge increase in borrowings incurred by the previous government. They were, that is true, and also during the election campaign. The Labor Party won government in part on the basis of capping debt and paying it off like a mortgage. The second reading speech continues — We continue to be concerned with the direction and magnitude of the state’s public sector borrowings. It is my intention as Treasurer, as we go through the process of formulating our first budget—to be presented to the house on 7 September 2017—that we will reduce the need to draw on the full authorisation sought in this bill. In short, the second reading speech committed the government to not needing $11 billion. The present government, when in opposition and during the election campaign, committed to not borrowing as much, so why does it have to borrow $11 billion? The question is: what is the starting point? It goes back to the Pre-election Financial Projections Statement, which was the estimate by Treasury of the policies of the former government prior to the election. In the last week of the campaign, the government and the opposition did some assessments. The then opposition forecast debt of $39 billion. I cannot say what it was in the general government sector; it was very opaque. The Treasury financial estimate of the four-year impact of our budget and the debt started at $33.2 billion, which is where it is now, going to $37 billion in 2017–18, and then decreasing to $28.8 billion. In other words, we went into the campaign on the basis of reducing debt. That was the policy of the previous government. It has now been pushed off into history. We have made the point repeatedly in this place that loan bills traditionally follow, rather than precede budgets. The government needs a loan bill now, and the issue is the quantum. We asked Treasury—I think the government has reiterated this—and the advice is that the buffer will be exhausted in July or August, or sometime like that, but over the next year the government needs about $4.5 billion, depending on what it does in the budget. If we were to add a little extra buffer, $5 billion would get the government through the next year— preferably two budgets—and it would show what its plan is and whether it is doing what was claimed in the second reading speech about its intention to reduce the debt and overall borrowings. I know the government is doing this because it is setting what it thinks would be the maximum possible level of borrowing that it would need, and then it plans to come in under that amount. I accept that is its intention, but it is trying to avoid coming back into this place with another loan bill by going for the maximum amount. That is not in the interests of this Parliament. Our intention with this amendment is that if the government needed to borrow more than it thought it would, it should come back and ask for more borrowing capacity. Mr A. KRSTICEVIC: The Leader of the Opposition is making some really good points, and I would like to hear some more from the member. Dr M.D. NAHAN: The opposition has put forward a reasonable approach, under which the government seeks a loan bill for a borrowing capacity of $5 billion that would get it through the budgets that it needs and follows the Pre-election Financial Projections Statement demands, allowing it to implement its policy of adjusting expenditure and revenue—whatever it is going to do. It can then come back with another loan bill. There is no pain in coming back with another loan bill—there can be; I went through a couple, and they are painful! However, if all the government is seeking to do is to come in below $11 billion, that would be a positive, I would think. If the government could come back after the budget, whether it be in September or next May, and say it does not need $11 billion anymore, that would be a positive. Our approach is reasonable. It is consistent with accepted policy and logic, and with what the government knows it needs to borrow; it is consistent with the second reading speech and what the election campaign was all about. To a large extent, this is about going back to the campaign and being open and honest with the public. The government committed to doing something about debt, but it is seeking this Loan Bill as if it is not going to. Therefore, we suggest this amendment, under which the government seeks a loan bill for $5 billion, not $11 billion. Mr R.S. LOVE: On the behalf of the National Party, we support the amendment that has been moved in this place; however, our reasoning may be a little different from that which has just been advanced, although we recognise the importance and the merit of what the Leader of the Opposition said. The National Party, as

516 [ASSEMBLY — Wednesday, 24 May 2017] demonstrated in the house yesterday, is of a view that this amount of money is not required. As has been said before, we are quite supportive of the need for a loan bill to provide for the state’s ongoing financial needs; however, the quantum of $11 billion is not necessary. Yesterday, we suggested a somewhat lesser figure based upon our proposal, which we took to the election, for a new revenue source. We were unsuccessful in getting the house to see the wisdom of our position yesterday—we continue to hold that position—therefore, we have taken the view that reducing the Loan Bill to $5 billion is a start. It does not go all the way, and we think we could have done better, but we certainly support the amendment on the basis that it is a significant reduction from $11 billion. We still suggest that the way to make up the difference would be to find a new revenue source, and we have consistently put forward our views on what is an appropriate source of revenue for the state. Mr D.C. NALDER: I stand to support this amendment as well. I support the amendment purely because of the unusual nature of the government wanting to apply and use the Pre-election Financial Projections Statement as the basis for an amount, when both parties went to the election with commitments that ultimately have altered it, and, subsequently, we are several months away from being able to scrutinise any budget or any plan that the government may have. We acknowledge that the government requires a loan bill to continue to operate, and it is not our intention to block supply. We want the government to continue to operate in normal circumstances; however, we believe that it is far more prudent to adopt due process in identifying a loan amount that would allow the government time to establish as a new government, to establish a budget and allow it to be scrutinised, and to provide certainty about funding requirements over the term of government. To me, very many variables regarding what may be required because of the change of government mean that I find it difficult to justify $11 billion at this time. Last night, I highlighted that there has been a lot of scrutiny of and blaming the former government for the financial situation that we are in. I want to reiterate: when I looked at the previous three elections—just park the 2017 election for a moment—in 2008 and 2013, both governments went with similar capital spend and both, from Treasury costings, had a similar impact on net debt over the terms of the Liberal government. Therefore, we can say that until the 2017 election the financial outcomes that have been derived in the state would have been similar under both governments. The 2017 election was different—acknowledging pressure from the opposition at the time—because we went to the election with a commitment to pay down debt. We went with a commitment to tighten up the financials such that we would ensure that the state would start to pay down debt. At the time, questions were asked of the opposition about its plan. The opposition indicated that it had a plan to pay down debt; it would pay it down like a mortgage. We now see a request to borrow on the basis of the Pre-election Financial Projections Statement from a government that went to the election and made $5 billion worth of commitments, but those commitments have not been taken into consideration in applying for this loan. That leaves us to deduce that the government will either increase taxes or cut costs elsewhere to the tune of $5 billion, or it will need to come back and make another application for a loan. The Treasurer indicated that his desire is not to come back and request another loan. Therefore, we believe that it would be prudent to support the government with a loan, but for a more responsible amount. If the government has an opportunity to present a budget, and even get through to the following budget, it will allow the government and the people of Western Australia time to understand clearly what its plan is and where the spending will take place. For that reason, I support the Leader of the Opposition’s amendment. Mr S.K. L’ESTRANGE: I would like to speak to this amendment because, for me, it is eminently sensible that we offer the government the opportunity to take our advice and take a $5 billion loan bill, which we would support, because it will carry it through not only this year’s budget, but also the 2018 budget. It would also mean that the government, on behalf of the people of Western Australia, will have the opportunity to look into the 2017 and 2018 budgets to see the forward estimates projected by the Labor government and assess how their hard-earned taxpayers’ dollars are being spent. It is important that we maintain, I suppose, the privilege of this place, which is to be able to hold the government to account on behalf of the people of Western Australia. This amendment offers the people of Western Australia the opportunity to see that that is being done. Today, we are happy to say, “Here is $5 billion. Run your 2017 and 2018 budgets, then come back after that with a new loan bill if you need more money, but justify why you need more money based on the forward estimates presented in your 2018 budget.” I think that is eminently sensible because it pays due respect to every member of this Parliament, regardless of the side of politics that they are on, and allows them to represent their electorates, and, in so doing, represent the people of Western Australia and give real accountability to how this Parliament oversees the operations of the executive—that is, the government. We must remember—this is particularly for the 19 new members of the Legislative Assembly—that it is the executive that governs and the Parliament that scrutinises the executive. All members, on both sides of the chamber, have a role to play in making sure that that is what this Parliament is for. Many of us on this side of the chamber, in our contributions to the second reading debate, have said that there are numerous examples why the government owes this to the people of Western Australia. Fundamentally, the number one reason is transparency and accountability. That is because at the moment the government is taking the forward estimates of the former Liberal–National government to say that it needs $11 billion, although it went to the election with different commitments and different priorities,

[ASSEMBLY — Wednesday, 24 May 2017] 517 which are why it won government. A real point of difference between the Labor Party winning government and the Liberal–National government losing government is that we went to the electorate with, as a part of a suite of measures, the proposal to sell 51 per cent of Western Power—that is, the poles and wires. As part of that plan, we had the opportunity to pay down debt, on just that transaction, by $8 billion. Other aspects of our policy platform going into the 2017 election would have enabled us to write down $14.5 billion. We went to the election with that plan, but we lost. The Labor Party had a resounding victory, a thumping victory, evidenced by 19 new Labor MLAs in this place right now. That does not mean it can abrogate its responsibility to be held accountable by the people of Western Australia. They can see that if the government were asking for even $5 billion, we would be prepared to give that to the government to carry it forward for two budgets. But the government is saying that $11 billion will carry it through to the forward estimates, which is essentially its term of government, and it will not then have to come back to this place, which is so crucially important in our democracy, to hold itself accountable to the people of Western Australia. Opposition members of Parliament should be able to scrutinise what the government will actually use that money for. I recommend that the government look at this amendment. It is an amendment made in very good faith on the part of both the Liberal Party and the National Party, because the Nationals have now come on board to say, “Yep, we support this amendment”. I recommend that the Treasurer, the Premier, the cabinet ministers and government members see this as a great opportunity to show goodwill to the people of Western Australia and as an opportunity to accept a reasonable amount of money on behalf of those people. MR A. KRSTICEVIC: I, too, would like to stand in support of this amendment. The Treasurer needs to understand that we are his friends. We are here to help him! Several members interjected. Mr A. KRSTICEVIC: We are here to help him, because we know that he is under pressure from the Premier and other ministers to borrow $11 billion when, in reality, he does not want to ask for that amount of money; he really wants to be able to manage this and to allow Parliament to have accountability over the way funds are spent by the government and over the way in which loans are given to the government. He is very concerned about that, and I know he also had other strategies; it is not just about the loan. If the Treasurer were to go to his bottom drawer and dust off the papers that outline details about privatising Western Power, we would support him in that as well. The Treasurer should just remember that there is $11 billion at his disposal on top of the $5 billion we are offering him right here and now through this amendment, and others as well. Let us not forget that we are going through two budget processes here. The Treasurer has a suite of measures and two processes—obviously the September budget, and then back to May—by which to set the government’s election promises in train. He also has the opportunity to break many election promises by raising taxes and charges, introducing new taxes and charges and cutting frontline services. He has great opportunities there to start off, as he has, by breaking those promises and thereby having access to a lot more money. Another matter that was of interest during the early stages of consideration in detail was the Treasurer’s commitment to not put the state in a worse position than it is already heading towards, and going beyond that $11 billion, taking into account the government’s $5 billion in election promises. If he were to break all his promises, as he no doubt will, introduce new taxes and not deliver on those $5 billion in election commitments, he would need only a $6 billion loan bill. The Treasurer has said that he will do everything within those constraints, so there is a way of saving $5 billion in debt and taking a prudent, responsible path. I know all these things are going through the Treasurer’s mind at a rate of knots in trying to find solutions, and we are here to support those solutions. As has already been mentioned, accountability through the Parliament is very important. The Treasurer has, no doubt, made many speeches on that point, both in this place and outside this place. I am sure that if the previous government had come in here and said, “We want a loan bill for $11 billion all the way through to the end of 2020–21”, the Treasurer would be hanging from the rafters, saying that we had decimated accountability and transparency in this state. There would be a wall of noise! Mr B.S. Wyatt: I think I was, back in 2009. Mr A. KRSTICEVIC: I am sure the Treasurer has, in the past. He has an opportunity here to not just talk the talk, but to walk the talk as well. Walk the walk! Mr B.S. Wyatt: And chew gum! Mr A. KRSTICEVIC: And chew gum, that is right! The Treasurer is very capable; I have every confidence in him. I am not so sure about those behind him. I am not sure that they support him as much as we do. We are definitely here — Mr B.S. Wyatt: Is this reverse psychology, member for Carine?

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Mr A. KRSTICEVIC: It is not reverse psychology! Hand on heart, I can genuinely say that everybody on this side wishes the Treasurer all the best, because his problem is not us; his problem is behind him, and the out-of-control spending that his government colleagues will want to embark on. It would be prudent for the Treasurer to support this amendment because I know he really wants to support it. He is going to find it very difficult, obviously, because he has the pressure of being in cabinet. We do not want the Treasurer out of cabinet, because he is one of the most capable people in there, so we need him in there! As for the rest of them, unfortunately some of them are going to struggle to keep up with the Treasurer, so I hope he can dumb down his conversation in cabinet sufficiently to make sure they can understand the serious situation this state is in and the measures that need to be taken. But more than that, it is accountability and transparency that is important. Mr W.R. MARMION: Madam Acting Speaker, can I hear a bit more from my colleague? I am enjoying his speech. Mr A. KRSTICEVIC: I thank the member for Nedlands very much. I understand that Treasury is in a difficult position. I understand that the federal government is now being more generous with the government than it was with us, so I think that is a bonus. We wore the federal government down for the state government; we softened it up, and the state government can now reap the benefits of that softening-up process we put it through! Obviously, the clincher was the election result! The state government is, as a result, in a much better financial position. As I understand it, there is money on the books and $1.2 billion on the table for the state government if it wants to take it. That is a great chunk of money for the government to have at its disposal if it wants to build Roe 8. Of course, if it does not want to create those extra 3 000 to 4 000 jobs and it does not want to make further investment in Western Australia, it obviously will not need to take that money, but I think it is very generous of the federal government to put it on the table. Ultimately, I think $5 billion is a reasonable amount. The government has two budgetary processes to go through—one in September, one in May—to re-tweak the books, if it is looking all the way through to 2020–21, but we are not looking that far out. I think it would be very inappropriate for this Parliament to take out a loan for $11 billion and to say it is there and available at the government’s disposal all the way through to 2020–21, based on whatever decisions are made in cabinet by people who are looking to spend money to secure their seats at the next election. On the other hand, $5 billion is all about delivering on those election promises, of which the government has already broken some—not the spending ones, but the government is working on that—in terms of pay for public servants, the new levy on properties and the water surcharge. I am sure there will be other things that come up. Why does the government not take the easiest road, be honest and upfront, and say, “This is what we’re doing, because guess what? We’re going to do it anyway, and you’re going to find out about it when we do it.”? There is no point in hiding things. That is the funny thing; sometimes people do not want to be upfront, honest and transparent, but at the end of the day, it is all going to come to the surface anyway, so what does it matter? If the government is going to try to manage the political cycle around the decisions it makes, it will need to remember that people and households are under stress out there. We are looking to take more money off them and we are looking to increase the debt and borrow more money—have access to more money, as well. We need to tighten the reins, and part of that is limiting the amount of money in this Loan Bill to a reasonable amount which will then put pressure on the Treasurer and cabinet to make those hard decisions, to make sure they are financially prudent, and to make sure they are getting value for money from these taxpayers’ funds. It is very, very important for the government to start doing that. The Treasurer said in the past that that was his view of the world and how he likes to operate, but we do not see that philosophy reflected in this Loan Bill, which seeks to borrow $11 billion. As I said, we do not have the numbers on this side of the chamber, but one more would be greatly appreciated during the vote on this amendment. If the Treasurer can look deep into his fiscally conservative bones, he will — Mr W.J. Johnston interjected. Mr A. KRSTICEVIC: No; definitely not. If I were listening to the member for Cannington’s lies, it would be mostly a nightmare and I would be very nasty and aggressive. But that is a different story. We are talking about something very serious here. Mr W.J. Johnston: No; you’re not. Mr A. KRSTICEVIC: Is the accountability of Parliament not a serious matter to the member for Cannington? Mr W.J. Johnston: It’s just a loan bill. Mr A. KRSTICEVIC: I know it is a loan bill. The government wants access to $11 billion through this Loan Bill. Mr W.J. Johnston: We don’t need to spend one cent. Mr A. KRSTICEVIC: The government does not need to spend one cent! To address further what the member for Cannington said when he said we do not need to spend one cent —

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Mr W.J. Johnston interjected. Mr A. KRSTICEVIC: He just said the government does not need to spend one cent. Therefore, the government does not need $11 billion because it will not spend one cent. Therefore $5 billion on the table is a very generous amount for the government to have access to. The member for Cannington is very excited over there. Mr W.J. Johnston interjected. Mr A. KRSTICEVIC: Allow? Mr W.J. Johnston: This bill does not allow any expenditure. Mr A. KRSTICEVIC: No; it does not, but it will start a process. The ACTING SPEAKER (Ms S.E. Winton): Members, thank you! Can we not have the interchange across the chamber please, and direct your comments through me. I believe the member for Carine has the floor. Thank you. Mr A. KRSTICEVIC: As I said, I am here to help; if there is anything the Treasurer needs, he should just ask. Mr B.S. Wyatt: Thank you, member for Carine. Mr W.R. MARMION: I want to make just one comment. The Treasurer has missed a great opportunity. We on this side of the chamber have a high regard for him; he could be a great Treasurer for Western Australia. Mr A. Krsticevic: You could be a great Premier. Mr W.R. MARMION: Yes; he could be a great Premier. What an opportunity for him to stamp his mark on the role of Treasurer by coming into this chamber and, for the very first time, not relying on the opposition’s plan for the future but relying on his plan. I understand he has not had time to develop a budget but it is unusual to be debating a loan bill before we look at a budget. We understand the need for it because, without it, the government will run out of money. Members on this side of the chamber are being very generous in seeking to amend the loan amount to $5 billion. A lot of consideration has been given to this amendment by the National Party and the Liberal Party. We think the amended amount of $5 billion is reasonable. I want to make the point that the Treasurer could stamp his mark on the whole budgetary process by getting off to a really good start with this Loan Bill and sending a message to the taxpayers of Western Australia that he is serious about making borrowings as low as possible. He could send the right message—as he said when he was running the election campaign, he is fiscally prudent—and start his term in office by introducing a loan bill that seeks a much smaller amount. That is why I support the amendment. Mr D.T. REDMAN: I want to make a couple of comments in support of the member for Moore and the National Party’s position. We support the amendment for a couple of reasons. Firstly, the notion of bringing a loan bill to the house without a budget attached is very challenging. Typically, we would see the government’s preparedness to pursue its objectives and its election commitments within the constraints of the state’s financial position, but we cannot see that. As the member for Nedlands mentioned, this Loan Bill is based on the last government’s documents in the lead-up to the election. We have the absence of a budget, which is very challenging when we seek to hold the government to account for any loan bill coming into this chamber. That is a very sound reason for taking a bit of an edge off the $11 billion request. The other reason relates to the National Party’s position. The National Party made an election commitment and has maintained its support of a special lease rental, which would bring revenue to the state of $7.2 billion over the forward estimates. That is a sound alternative revenue source for the government to consider rather than borrowing more or going back to mums and dads and seeking to raise power and water prices, and making all sorts of changes that impact on small businesses and households, which I am sure we will see in the budget to be released in September. It is interesting that the National Party has been knocked over the questions it has asked the government in the chamber over the last two weeks and for continuing to raise the special lease rental issue. We have asked the Premier and the Treasurer about their preparedness to consider that option to raise $7.2 billion by increasing the lease rental from 25c a tonne to $5 a tonne. Some questions were asked yesterday by the Leader of the National Party about whether the government has considered other options such as a consumer price index increase on the 25c a tonne, which is probably a fair and reasonable position put by the Leader of the Nationals, including the option of a cash-out position. There was even a question from the member for North West Central about whether the government had considered all these choices. It is interesting that although we did not get a response from the Premier, yesterday the Treasurer seemed somewhat warmed to the idea of a cash-out option. In fact, he highlighted in a table that he had got some advice on it. It would be good to see that advice. I cannot imagine the Treasurer sitting around the expenditure review committee table getting advice on the cash-out option without getting advice on what it would mean to raise the rental from 25c to $5 a tonne—or $2 or $1. I cannot imagine he has not got that advice. We are saying that the Treasurer does not need to seek authorisation of the full $11 billion but could choose a lesser amount, therefore alleviating the impact on households.

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The two issues here are, first, the absence of the budget, which I think is a challenge and a flaw in the government’s argument for bringing this Loan Bill to the chamber. The second issue is the National Party’s position on a special lease rental, which it has been pursuing and it considers to be a fair position. With support from the Liberal and National Parties, there may be scope for that if the government seeks such a landing point from those companies. Mrs L.M. HARVEY: I too rise to support this amendment. I reiterate the comments I have made previously. The Labor Party won office in a landslide. From our perspective as an opposition—indeed these comments were made many times over the past eight years while I was sitting on the other side of the chamber—transparency and good governance are the key roles and demands of this Parliament, particularly around spending decisions and issues such as debt and fee increases that impact families. The Treasurer came in on a massive wave of support in the community on the back of his commitment to reduce debt and run a system that was more financially prudent and to have more conservative decision-making processes around spending commitments. He made a range of commitments during the election campaign that we estimate to be worth about $5 billion. We have not seen where those commitments feature in this loan facility. The Treasurer is basing this $11 billion loan facility on figures that he has openly admitted and accepted will change because of the volatility of the iron ore price, which we know will fluctuate. These revenue figures will change because the commonwealth government has committed $224 million worth of GST top-up payments, which are not reflected in a budget. We know that projects have been cancelled, including the Perth Freight Link project, which was the former state government’s commitment. The state government spending for that project has apparently been reallocated. We do not know whether that reallocation comes within the spending already allowed or whether extensions will be made to those spending limits due to the way the new contracts have been tendered and the new scope of works that have been let to those contractors, because new projects are to be funded on the basis of Roe 8 being cancelled. These are all the things that neither the opposition nor the community of Western Australia know. The temptation in politics is to come into the chamber and say, “We have won in a landslide; we are in a honeymoon period”, and to use the numbers and say, “If we get this loan facility of $11 billion in place, that should tide us over for the next four years and our spending decisions will receive less scrutiny”. The opportunity is there not to use the entire facility and pretend a saving has been made, when in fact, an ambit claim is being made for more than is required at present because only around $5 billion is required. In fact, that will probably provide a one and half billion dollar contingency to get the government through to the next budget when it can bring in a loan bill consistent with the commitments the government has made to the community, with the spending decisions that cabinet has made and with the projects the government has cancelled. Debate interrupted, pursuant to standing orders. [Continued on page 530.] ACTING SPEAKER Appointment — Statement by Speaker THE SPEAKER (Mr P.B. Watson): I advise members that I have appointed the member for Moore as an additional Acting Speaker for the present session. Several members interjected. The SPEAKER: Can we leave the congratulations till afterwards, members. QUESTIONS WITHOUT NOTICE EDUCATION CENTRAL POLICY 72. Dr M.D. NAHAN to the Premier: I refer to a petition of more than 6 000 concerned Western Australians tabled in the other house today that opposes the government’s Education Central policy. Will the government now abandon its plans for Education Central? Mr M. McGOWAN replied: I have answered this question a number of times already. Education Central was a policy the government took to the election. It will ensure that we cope with the growing population of students in the inner city and provide a first-rate option for gifted students in Western Australia. Mr A. Krsticevic interjected. The SPEAKER: Member for Carine, I call you to order for the first time. Mr M. McGOWAN: By 2020, Churchlands Senior High School will have over 3 000 students, Shenton College will have over 2 000 students and Mount Lawley Senior High School will have in the vicinity of 1 700 students. The ideal number of students for a senior high school is between 1 200 and 1 500 so we have a significant overcrowding problem in the western suburbs and inner-city schools —

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Dr M.D. Nahan interjected. Mr M. McGOWAN: — particularly the 3 000 students at Churchlands Senior High School. We have to deal with that issue. We want to make sure that the people in the highest density areas with the highest number of school-age children have a wide range of choices in the high schools they are able to send their children to. That is the genesis of the Education Central policy. It will provide excellent educational outcomes for all students in those areas. EDUCATION CENTRAL POLICY 73. Dr M.D. NAHAN to the Premier: I have a supplementary question. What will it take for the Premier and his government to listen to the community that surrounds Perth Modern School and the western suburbs and abandon this policy? Mr M. McGOWAN replied: It will certainly not be urging from the Leader of the Opposition because his lack of articulateness in expressing anything makes it very difficult to even understand the argument he is putting, at times. Several members interjected. The SPEAKER: Members! Mr M. McGOWAN: In any event, we took our policy to the election. We have an issue that we need to resolve that, under the last government, was allowed to run for so long, over so many years without a solution in sight. This government has come up with a solution. GST DISTRIBUTION 74. Ms S.E. WINTON to the Premier: Can the Premier update the house on the latest forecasts for Western Australia’s share of GST? What will this mean for Prime Minister Malcolm Turnbull’s promise of putting in place a GST floor? Mr M. McGOWAN replied: I thank the member for Wanneroo for the question. Last year, Prime Minister Turnbull indicated that when the GST share for Western Australia hit 75 cents in the dollar, he would be prepared to implement a floor, below which—the 75c mark—Western Australia’s GST share could not fall. The expectation was and certainly the budget at that time was that we would hit 75.9 cents in the dollar in 2019–20. A revised set of forecasts was made a number of weeks ago. Following the Commonwealth Grants Commission update, it now shows that in 2019–20, our share of GST will hit 59c. In other words, the commitment to implementing a floor — Several members interjected. Mr M. McGOWAN: Opposition members could not resolve this issue when they were in government and they are now objecting to our efforts to resolve it. Dr M.D. Nahan interjected. The SPEAKER: Leader of the Opposition! Several members interjected. Mr M. McGOWAN: Mr Speaker, if I could — Several members interjected. The SPEAKER: Members! I call the member for North West Central for the first and second time; I was on my feet while you were talking. Mr M. McGOWAN: In 2019–20, our GST share will hit 59 cents in the dollar. That is a disgrace. Despite everything that has happened, we will hit 59 cents in the dollar in 2019–20. Dr M.D. Nahan interjected. The SPEAKER: Leader of the Opposition! Mr M. McGOWAN: I am now proposing to the commonwealth a way of ensuring that our share does not catastrophically dip again. Each year, from this point forward until our share hits 75 cents in the dollar, I propose a floor be installed of that year’s GST. The commonwealth will not lose anything and no other state will lose anything but it will ensure that our share of GST does not go below the share that it was in any given year until it hits 75c when the Prime Minister says he will install a floor. In 2018–19, our predicted level of — Dr M.D. Nahan interjected.

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The SPEAKER: Leader of the Opposition, you are boring me over there. Please, just be quiet. Mr M. McGOWAN: He is boring his colleagues, Mr Speaker. In 2018–19, our share of GST will hit — Dr M.D. Nahan interjected. Mr M. McGOWAN: Mr Speaker, honestly. The SPEAKER: Leader of the Opposition, I have given you plenty of opportunity. You ask a question and then you want to give the answer! Just listen. Mr M. McGOWAN: In 2018–19, under the Commonwealth Grants Commission’s forecast, our share of GST will hit 49 cents in the dollar. That is where the floor should sit in that year. In 2019–20, our share of GST will hit 58.9c. That is where the floor should sit forevermore until it goes above that in that year. This is a simple, straightforward — Dr M.D. Nahan interjected. The SPEAKER: Leader of the Opposition, I call you to order for the first time. Mr M. McGOWAN: You are an embarrassment to the Parliament and your colleagues. Several members interjected. Mr M. McGOWAN: You are, seriously. Dr M.D. Nahan interjected. Mr M. McGOWAN: Honestly! The SPEAKER: Premier! Dr M.D. Nahan interjected. Mr M. McGOWAN: I can see why the member for Cottesloe is hanging around now, Leader of the Opposition. Several members interjected. Mr M. McGOWAN: Despite all his flaws, he is better than you! The SPEAKER: Members, come on. Mr M. McGOWAN: The proposal is that the floor will kick in each and every year until it hits the 75 cents or 80 cents in the dollar mark. That will ensure that we can never dip below that level. No state will be worse off and the commonwealth will not be worse off — Dr M.D. Nahan interjected. The SPEAKER: Leader of the Opposition, I call you to order for the second time. Your job is to ask questions, not get thrown out of Parliament. Mr M. McGOWAN: The commonwealth will not be worse off and no state will be worse off and we guarantee that we cannot have that catastrophic decline back down to 30 cents in the dollar that we suffered over the last couple of years. CORRECTIVE SERVICES — WORKPLACE BULLYING ALLEGATIONS 75. Mr P.A. KATSAMBANIS to the Minister for Corrective Services: I refer to the article by Gary Adshead in The West Australian of 4 April, and I quote — The car tyres of outgoing prisons boss James McMahon were slashed and one of his senior executives had their vehicle doused with paint stripper … I quote again — … a tin of baked beans was deliberately put in a microwave oven and allowed to explode in an area of the head office. (1) What investigation has the minister initiated into these serious allegations of workplace bullying and intimidation? (2) When will the investigation be completed? Mr F.M. LOGAN replied: I thank the member for his question. (1)–(2) I raised those issues with the outgoing commissioner, Mr James McMahon, who indicated some issues had occurred in his department. They were allegations and no more than allegations. He could not provide any further advice to me. I also asked the current commissioner to look at those issues but, so far, I am advised they are simply allegations.

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CORRECTIVE SERVICES — WORKPLACE BULLYING ALLEGATIONS 76. Mr P.A. KATSAMBANIS to the Minister for Corrective Services: I have a supplementary question. Given that the minister has not implemented any investigation, does he now commit to undertake an investigation and to table the report of that investigation in Parliament so that we can have full transparency on this terrible issue of workplace bullying? Mr F.M. LOGAN replied: I just indicated to the member that I raised these allegations with the former commissioner and the current commissioner, and they are just that—allegations. RAIL LINE EXTENSIONS — FEDERAL GOVERNMENT 77. Mr B. URBAN to the Minister for Transport: I refer to the Ellenbrook rail line, which those opposite—to my right and in front—hate; the Yanchep rail line, which they also hate and do not support; and of course Byford, which the Leader of the Opposition does not know much about. Can the minister explain to this house if these views are shared — Several members interjected. The SPEAKER: Member for Carine, I call you to order for the second time. Mr B. URBAN: Can the minister explain to this house if these views are shared by the federal government? Ms R. SAFFIOTI replied: Thank you, member for Darling Range—someone of course who represents a key part of the suburbs, including Byford. Last week I attended my first Transport and Infrastructure Council meeting. It was an opportunity to discuss our Metronet program with all the other state ministers, and of course the federal government. It was an exciting and intelligent conversation in which concepts of value capture and local manufacturing for rolling stock were discussed. It was a really exciting initiative. So far, we have been able to secure $1.2 billion for our Metronet program as part of a $2.3 billion program—and we want to go further. There is $10 billion on the table and we want more money for Metronet in this state! We want the whole of WA to support us. That is what we want: we want the whole of WA to support us to get a big share of that $10 billion. I sense that the opposition will not support us to get the extra $10 billion. It does not support the Yanchep rail line, it does not support the Ellenbrook rail line and it does not know where Byford is, let alone support a rail line to it. Mr D.C. Nalder interjected. The SPEAKER: Member for Bateman! Ms R. SAFFIOTI: We would like the opposition to support us to get a bigger share for our Metronet program. This is an opportunity for WA to work together to get more funding from the commonwealth. We hope the opposition — Several members interjected. The SPEAKER: Members, the wall of noise! Please, just listen to the answer. Ms R. SAFFIOTI: We hope the opposition helps us. Of course it did not help us with the Perth Freight Link money. It wanted the commonwealth to rip out the money. We did not need the opposition’s support then and I suspect we might not need its support in the future. If it wants to help — The SPEAKER: Minister, through the Chair. Ms R. SAFFIOTI: If it wants to support us, have a go. Even the federal Treasurer acknowledged how good we are to work with as a government. I quote Hon Scott Morrison — And the Western Australians just had a pretty practical approach, they didn’t want to have a fight with us, they just wanted to work with us. We wanted outcomes. The most pleasing aspect of that meeting on Friday was when the federal government distributed its new document, “The National Rail Program: Investing in rail networks for our cities and regions”. The federal government distributed this document. I thought it was interesting, so I flicked through to see what was in it. There we are in the federal government’s program—“$792 million investment in Perth’s Metronet”. The federal government’s own document sprouted Metronet. It was so good to see — Mr F.M. Logan: They know where Byford is! Ms R. SAFFIOTI: They know. Then there was a map. I love a good map. There it is again, Perth Metronet, in a federal government document. It is so good.

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Mr D.J. Kelly: Minister, is that the federal Liberal government? Ms R. SAFFIOTI: It is the federal Liberal government. Another highlight pretty much matches exactly what we have said about Metronet. This is its quote — As our cities become larger, improving their passenger rail networks is important in key ways:

• New or extended rail lines can support the release of new land for housing, either on the outskirts of the city or in areas experiencing urban renewal. That is Metronet. I am glad the federal government is onside. I hope the opposition changes its mind and supports Yanchep, supports Ellenbrook and supports Byford. Tabling of Paper Mrs L.M. HARVEY: I did not catch the name of the document the minister was quoting from, but I request — Ms R. Saffioti: I will table it because it has “Metronet” in it. Mr D.A. Templeman: I demand you table that document! Ms R. Saffioti interjected. The SPEAKER: Minister, that is enough. Mrs L.M. Harvey: There is no conspiracy here. I just want to see it. The SPEAKER: Paper tabled. [See paper 282.] Ms R. Saffioti: I was actually disappointed the member did not ask midway through the question; that was the whole theory of it. I will table it anyway. The SPEAKER: Thank you, minister. Several members interjected. The SPEAKER: Members, do not talk across the chamber, please. PUBLIC SECTOR JOBS — REGIONAL SERVICES 78. Ms M.J. DAVIES to the Premier: On a week when the Community and Public Sector Union–Civil Service Association of WA is holding rolling meetings about the government’s broken promises on wages policy, I refer to the Premier’s plan to slash jobs in the public sector and the disproportionate impact this will have on regional service delivery. (1) What percentage of jobs will be lost in regional WA compared with the metropolitan area? (2) Which departments will lose their regional presence? (3) Where will those cuts be made? Mr M. McGOWAN replied: (1)–(3) Can I congratulate the Leader of the National Party on changing themes! It is true that we made some announcements in respect to the amalgamation of government agencies a number of weeks ago, and I think they were well overdue. Most people across Western Australia understand that some rationality in the structure of government in this state will result in better service delivery both in the city and in the regions. In the lead-up to the election we announced that there would be a 20 per cent cut to the senior executive service, which grew in excess of 40 per cent over the last eight years. That is something we are currently working through. This is about making government stronger, about making our agencies stronger and about creating greater collaboration between agencies, and that will benefit people in the regions as well as those in the city. One thing that I always find inexplicable when I visit regional communities, as I regularly do, is that when walking down the street of a country town, one will find a multitude of government offices in the same street in the same town. I thought there would have been greater opportunities—I thought all members would support the opportunities—for government agencies to work together in regional communities. A much-talked-about example of not just government agencies but also non-government organisations has been the community of Roebourne. Walking down the street in Roebourne one can see one agency next to the other next to the other. Clearly there is some scope for rationalisation there, better service delivery and savings that we can put into service delivery across the regions.

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PUBLIC SECTOR JOBS — REGIONAL SERVICES 79. Ms M.J. DAVIES to the Premier: I have a supplementary question. I thank the Premier very much for confirming that he will be rationalising and sacking people in regional WA. I ask for the Premier’s clarification. (1) What percentage of jobs will be lost in regional WA compared with the metropolitan area? (2) Which departments will lose their regional presence? (3) Where will the cuts be made? Mr M. McGOWAN replied: (1)–(3) There are no percentages. The member has created a straw man based upon a conspiracy theory. I think it would be fair to say the Western Australian branch of the National Party is the most irresponsible branch of any political party in the country. To be fair, that is saying something. It is the most economically irrational and irresponsible branch of any political party in the entire nation. I know I have a group of people supporting me in that, and that is the Liberal Party—it had to deal with the National Party in government. The stories we hear about the dual budgeting processes, about the fact that ministers could not work with National Party ministers and about the fact that Treasury had no oversight of what it was doing, are legend in government. You should be — Several members interjected. Mr M. McGOWAN: And the Leader of the Opposition agrees, and he had to endure it. The SPEAKER: Members of the National Party, please, listen to the answer. It might not be the answer you want, but it is the one you are going to get. Mr M. McGOWAN: The National Party was, as I said, grossly irresponsible in office, and has not learnt anything since. There are no percentages of any of these things. We want to create stronger agencies that deliver more jobs, more service delivery and less red tape, and in the regions that is the exact approach we will be taking. I will tell members opposite one of things we will be doing: our regional development commissions will be focused on jobs, unlike when the National Party was in office when all the regional development commissions were focused on was delivering on National Party pork-barrelling. MEDICINAL CANNABIS 80. Mrs J.M.C. STOJKOVSKI to the Minister for Health: I refer to reports that no health professionals have applied to prescribe medicinal cannabis, despite being legally able to do so since 2016. Why has it taken so long for patients to be able to access medicinal cannabis, and how will the minister ensure that these patients suffering terminal or chronic conditions can access these products to help manage their conditions? Mr R.H. COOK replied: I thank the member for Kingsley for her question, because it is a very important question. Today there is a very important, open community conversation going on locally at the state level, and nationally, about the role that medicinal cannabis can play in bringing relief, comfort and treatment to people with chronic conditions and terminal illnesses. I am very proud to say that it is a conversation that in large part had its genesis in 2014, when the now Premier—the then Leader of the Opposition—proposed that in Western Australia we legalise medicinal cannabis so that we can bring relief to people with painful conditions and terminal illnesses. It is a debate that we took some policy leadership on in opposition and it is one we are determined to continue to take a leadership role on in government. We are facing two challenges to bringing medicinal cannabis into the lives of Western Australian patients. First of all is the issue around ensuring that we have a safe and available supply of medicinal-grade cannabis. That is around the capacity to produce the products locally, or within Australia, and I am very pleased to say that some progress has been made on that. As of March, 45 applications to cultivate or manufacture the drug have been received by the federal government, including six from Western Australia. It is very pleasing to see that we are making some progress on that. The other challenge we face around this, of course, is the willingness and courage of medical practitioners to prescribe medicinal cannabis to those seeking relief from their pain. Despite the fact that we currently have a regime whereby doctors can become authorised prescribers of medicinal cannabis, to date we have not had the opportunity to process any applications. We will continue to take that leadership role. In June, the Premier and I will convene a round table of health leaders in Western Australia, to continue this public conversation about how we can ensure, as a government, that nothing stands in the way of people, from a prescriber’s point of view or a patient’s point of view, receiving medicinal cannabis to relieve their pain or address their chronic condition.

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We will take this leadership role because it is important, but it stands in stark contrast, I must say, to the role that the previous government took on this. Indeed, in 2014 when the Leader of the Opposition at the time, the now Premier, proposed the legalisation of medicinal cannabis to treat people with terminal illness and chronic pain, the then Minister for Health said that the government considered, and I quote — … legalising cannabis would send the wrong message to the community and undermine efforts to reduce illicit drug use and the harm it causes, particularly among young people. What a dreadful approach to take to what is obviously a very important policy issue. Mrs L.M. Harvey interjected. The SPEAKER: Deputy Leader of the Opposition! Mr R.H. COOK: The previous government was dragged kicking and screaming into this debate. As we know, the federal Liberal government took a much greater leadership and proactive role. In September, the shrill claims from the then Minister for Health were still being made even in this place, when he said — Your attitude is soft on drugs. I will say it again—soft, soft, soft! We need a much more mature approach from the Liberal Party on this. But then—this is as late as September last year—the Minister for Health was disgracefully saying — The opposition’s stance is wrong and all the people who think the opposition is telling the right story are the people who want to smoke socially and get their marijuana, or their tablet, from a GP and as a substitute for marijuana. What a dreadful attitude! We are talking about people with chronic diseases, pain and terminal illnesses, such as little Lily Poulter or little Sophie Martin—girls who are suffering from debilitating conditions that mean they suffer from multiple seizures on a daily basis. Medicinal cannabis is the only product their parents know will bring relief to their children’s conditions. That is what this is about: ensuring that we bring medicinal cannabis to the lives of these people who have chronic pain and chronic and terminal diseases, because we will take the lead and make sure that medicinal cannabis — Several members interjected. The SPEAKER: Deputy Leader of the Opposition, I will tell someone if they have been too long, not you. I call you to order. Mr R.H. COOK: We will take the lead to ensure that nothing stands in the way of the medical community and the families of sick patients with chronic and painful diseases to ensure that they get the help they need. CORRECTIVE SERVICES — REMAND PRISONERS 81. Mr P.A. KATSAMBANIS to the Minister for Corrective Services: I refer to the recent public comments attributed to the minister in The West Australian of 5 April, that instead of building a new prison, the minister would establish a unit within his department to determine which remand prisoners could be released back into the community. Has the minister established this unit; and, if so, who are the members of this unit? Mr F.M. LOGAN replied: I thank the member for his question. No; we have not established this unit, but we certainly have looked at all the figures of who is in our prisons, what they are there for and why they are there, which is part of my job. I will remind members opposite that in their mismanagement of the prison estate, they took the number of prisoners from 4 800 in 2011 to nearly 7 000 this year. Several members interjected. Mr F.M. LOGAN: It will be nearly 7 000 this year! One of the things that the Liberal Party forgot to tell the people was the cost of that. What is the cost of that? Several members interjected. Mr F.M. LOGAN: What is the cost of that? The cost of that — The SPEAKER: Minister, through the Chair, please. Mr F.M. LOGAN: The cost of that is that for every 10 prisoners locked up over a year, it is nearly $1.6 million. Mrs L.M. Harvey interjected. Mr F.M. LOGAN: When I took over from the former government as the Minister for Corrective Services, I was approached —

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Several members interjected. The SPEAKER: Members, please. You asked your question, he is giving you the answer. Just listen. Mr F.M. LOGAN: I approached and spoke to the then commissioner about the management of the prison estate, and I was presented with two things. First of all — Mr S.K. L’Estrange: “You’re fired.” Mr F.M. LOGAN: I beg your pardon? Mr P.A. Katsambanis: I’m trying to hear. The SPEAKER: Members, your own member who has asked a question is having great trouble hearing the answer because everyone around him is talking. Mr F.M. LOGAN: I was presented with two things: first, a $275 million cost overrun for four years; and, second, a $600 million request for a new prison. Nearly $800 million was slapped on my table in the first week. I asked: where is the $600 million that the former government promised before the election, saying it was still going to do it after the election? I could not find it. Treasurer, is it in the forward estimates? Mr B.S. Wyatt: No, I can’t find it. Mr F.M. LOGAN: No, it is not. We will not be letting anybody out of jail. I will tell members what we will not be doing. Unlike the former government, we will not be releasing dangerous sex offenders back into the community. We will not be releasing on bail a member of the Evil 8 to go and live near a primary school, like the former government did. I will tell members another thing we will not be doing. We will not be letting dangerous drug dealers go and have a walk with a puppy. That offender was found in Queensland 18 months later, and we are still looking for the puppy. CORRECTIVE SERVICES — REMAND PRISONERS 82. Mr P.A. KATSAMBANIS to the Minister for Corrective Services: I have a supplementary question. Given that the government has abandoned its original idea, and it will still not be building a new prison, what are the minister’s plans to manage prison numbers? Mr F.M. LOGAN replied: I am still looking for the $600 million that the former government promised for a new prison—unfortunately, I cannot find it—and I am still trying to manage the $275 million cost overrun that the former government left me with. I will tell the member what I am doing: I am doing my very best to manage the budget black holes that the former government left our government with. OCCUPATIONAL SAFETY AND HEALTH REGULATIONS 83. MR S.J. PRICE to the Minister for Commerce and Industrial Relations: How will this government improve workplace safety regulations and why was this not done sooner? Mr W.J. JOHNSTON replied: That is a very good question from the member for Forrestfield. I just remind members that the member for Forrestfield was originally a fly in, fly out mineworker and then he worked on the tools at Alcoa. This is a man who knows what he is talking about when he discusses health and safety. I would like to point out that we have a plan to bring forward unified work health and safety legislation in this state. We have a plan to unify the management of occupational health and safety in this state. We are taking action to advance improvements to regulate health and safety. We are improving the enforcement arrangements for health and safety. We are increasing cooperation by bringing all the agencies together into one portfolio. We are modernising the legislation. The OHS legislation of this state is now 30 years old. It was revolutionary 30 years ago but it is no longer up to date. Mr D.J. Kelly: We introduced it 30 years ago. Mr W.J. JOHNSTON: The Labor Party introduced it 30 years ago. Nationally consistent work health and safety legislation has been recommended to all states. The member asked why these things were not done sooner. That is a very good question from the member. I will just let him know that the first thing that this government did was ask the Department of Commerce and the Department of Mines and Petroleum to talk to each other because both agencies were directed by the last government to separately work on the nationally consistent laws. What a shock! When I asked those two agencies to work together, what did they report back? They said that they have a lot in common. Given that they are implementing the same draft laws, it was hardly a surprise that bringing the two agencies together would create benefits. It was

528 [ASSEMBLY — Wednesday, 24 May 2017] a revolutionary thing to ask the two health and safety agencies to talk to each other. Apparently, the former government was not capable of doing that. The other question we need to ask is: why were the nationally consistent work health and safety laws not being progressed in this state? Ms J.M. Freeman: Why not? Mr W.J. JOHNSTON: Because they were sitting on the black hole, which was the desk of Hon Michael Mischin. Along with so many other reports and recommendations, they sat there and died because they could not come off that desk. Like so many other areas in the commerce portfolio, they went in and they never came back. That will not be the history of this government. We have already brought those two agencies together. They are excited about the opportunities to have better cooperation in health and safety in this state and more focused enforcement. At the end of the day, the number one thing that a government can do is make sure workers come home safely each night. That is the motivation for the members on this side of the chamber and a number of the members on the other side of the chamber, particularly the member for Forrestfield, who has such a great background. We should remember that. He was an active FIFO worker and a former worker on the tools at Alcoa. He is not just somebody who considered health and safety as an afterthought or who was just concerned about legislation; he is somebody who directly benefited from the health and safety laws of 1985. He is the sort of person who will benefit from work safety and health laws that this government will introduce in the future. DEPARTMENT OF SPORT AND RECREATION — REGIONAL OFFICES 84. Mr P.J. RUNDLE to the Minister for Sport and Recreation: With reference to the government’s plan to amalgamate departments into a hotch-potch of uncoordinated services, can the minister guarantee that there will still be a sport and recreation office based in every region? Mr M.P. MURRAY replied: I thank the member for the question. There are certainly no plans to reduce the number of sport and recreation offices in the regions. There has been one case, I think, in Mandurah, where an amalgamation took place. Several members interjected. The SPEAKER: Members! Members for Carine, you have this chattiness today. Stop that or you will be chatting on your way home. Mr M.P. MURRAY: Thank you, Mr Speaker, knowing how brittle I am, for looking after me so well. Thank you very much. There is no intention to reduce the number of sport and recreation offices in the regions. I can say that we have just signed off for those people to be funded for another 12 months. I am not sure where the member is coming from or whether he has heard rumours. He should remember one thing: sport is a huge part of our society in Western Australia. Today’s Leader of the National Party would certainly know that from holding the sport and recreation portfolio. When we look at mental health issues in our society, sport certainly works towards making sure that people are able to partake in many of the sporting activities available and to get out and about so they do not have problems in their societies. We also have the Indigenous problems. If we introduce those people to sport, they learn how to play sport within the rules of the game. We do not have any problems about funding people in the regions. DEPARTMENT OF SPORT AND RECREATION — REGIONAL OFFICES 85. Mr P.J. RUNDLE to the Minister for Sport and Recreation: I have a supplementary question. I will take that answer as a no. The minister should be honest with regional Western Australians and tell them that he cannot guarantee their regional offices will stay open; and how many jobs will be lost? The SPEAKER: The minister has a bit of trouble hearing but I think you asked him to confirm that the regional offices will stay open. Is that right? Mr M.P. MURRAY replied: It is no good having people in the region if they do not have an office. I find that ridiculous. Where will we put them? Will we put them under a tree or under an umbrella? I do not think we will do that. Those offices will stay open. MIXED MARTIAL ARTS — SAFETY ENCLOSURE 86. Ms A. SANDERSON to the Minister for Sport and Recreation: I refer to the sport of mixed martial arts. (1) Can the minister explain to the house how the safety enclosure will protect competitors? (2) Where else in Australia or the world is the enclosure used? (3) Whose advice has this government followed in approving the enclosure?

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Mr M.P. MURRAY replied: (1)–(3) Today we fulfilled another Labor Party pre-election promise to allow the mesh perimeter to be used in martial arts contests. After some discussions and some reports were completed, we were really pleased to be able to do this. It was something that did not happen under a Liberal government, despite the sport itself pleading to have that mesh around the outside of the ring to look after the safety of people in the arena. Western Australia was the only place in the world that was allowing mixed martial arts without a mesh perimeter. People were falling through the boxing ring–type situations they were using, falling onto the concourse. They were not getting hurt in the ring under the previous government’s rules; they were getting hurt outside of the ring! Ms M.J. Davies interjected. The SPEAKER: Leader of the National Party, I call you to order for the second time. Mr M.P. MURRAY: Where was I? Not only that, requests to run martial arts competitions in Western Australia have been knocked back because the organisers could not continue with the process without the mesh around the ring. Now, we not only have safety for the competitors—in Western Australia, it is a small sport; it is not a huge sport—but, if we wanted a major event, we had to do that for them to come over, and be able to be safe and fair. Ms M.J. Davies: It is not about safety. Mr M.P. MURRAY: I have not been in this job very long, but I think I have made more decisions in a couple of weeks than you made in a couple of years. I am not too fussed about what the member is saying; I am saying to her that we are getting on with the job. We will allow people to act out their sports in a safe environment. URANIUM MINING 87. Mr S.K. L’ESTRANGE to the Minister for Mines and Petroleum: I refer to an article in The West Australian in which the state secretary of the Australian Manufacturing Workers’ Union is quoted as saying that there is no way in the world that uranium projects given approval by the former government will go ahead. Can the minister clarify to the house, and to industry, that he will not stand in the way of uranium mines approved by the former Liberal–National government? Mr W.J. JOHNSTON replied: The incoming government has a clear position that we have already discussed with industry on the question of uranium mining. We have made that position clear to industry, and it is aware of our position. URANIUM MINING 88. Mr S.K. L’ESTRANGE to the Minister for Mines and Petroleum: I am not sure that the minister answered the question. Let us try to go to a supplementary to an unanswered question. Will the minister provide industry with the clarity that it needs by spelling out — Mr D.J. Kelly: He’s already answered that. Mr S.K. L’ESTRANGE: I have not finished the question, member. I will start again. Will the minister now provide industry with the clarity that it needs by spelling out exactly what constitutes a final approval? Mr W.J. JOHNSTON replied: The question the member asked is: will I provide clarity to industry? Let me make it clear: projects that did not get approval from the former government cannot proceed. In respect of the four approved projects, I will continue to work with them on the implications of the incoming government’s position on uranium mining. Several members interjected. The SPEAKER: Members, when I am on my feet, it means silence. From now on, I am just going to write down everyone’s name and call them to order. ROE HIGHWAY STAGE 8 89. Mrs L.M. O’MALLEY to the Premier: I refer to this government’s commitment to protect the jobs of those who were working on Roe 8. Can the Premier advise the house about how this is being done? Mr M. McGOWAN replied: I thank the member for Bicton for the question. I am pleased to inform the house that the member for Bicton, the member for Willagee, the Minister for Transport and I went to the Roe 8 site today, and met with the workforce and advised them that 231 jobs had been secured for people who were working on that flawed project, on a range of new projects across Perth. In the short time we have been in office we have managed to resolve that flawed project.

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Mr D.C. Nalder: Why is it flawed? Mr M. McGOWAN: The evidence that it is flawed is the fact that the member for Bateman is now sitting over there. Mr D.C. Nalder: That is not true; it went through Infrastructure Australia. Mr M. McGOWAN: That looks like good evidence to me, my friend; it looks like good evidence to me. The people of Western Australia voted and they said that that project was flawed, it was an enormous waste of money, and it was environmental vandalism of the highest order. I was very pleased today to go to the site, and I joined with the workforce, who are now participating in rehabilitating that site, along with members of the local community and an organisation that is chaired by the member for Bicton, who is going to rehabilitate that beautiful part of Perth. On top of that, work will commence on a range of projects that the workforce will move on to—that is, the extension of Murdoch Drive to connect Roe Highway with the Kwinana Freeway; dual carriageway for Armadale Road between Anstey and Tucker Roads; and dual carriageway on Wanneroo Road between Joondalup Drive and Flynn Drive. They are very, very good projects. Several members interjected. The SPEAKER: I call to order the member for Bateman and the Minister for Transport, for the first time. Mr M. McGOWAN: They are very good projects, to create jobs and opportunities and fix major traffic bottlenecks across our city, as well as rehabilitate that site. Members might recall that the Leader of the Opposition said it would never happen. He said he had good authority from the federal government that it would never happen. He had a senior Liberal source in the federal government telling him it was never going to happen. It appears to me that the Leader of the Opposition might be on the outer with his federal colleagues, and maybe the fact that a couple of days before the state election the now Leader of the Opposition attacked the Prime Minister might have resonated in the minds of the federal cabinet and the Prime Minister, and it may well be that the federal government sees the state government of Western Australia as progressive, active, getting on with the job and fixing the mess the previous government left the state in. The SPEAKER: Question time is finished. LOAN BILL 2017 Consideration in Detail Resumed from an earlier stage of the sitting. Clause 3: Power to borrow for public purposes — Debate was interrupted after the amendment moved by Dr M.D. Nahan (Leader of the Opposition) had been partly considered. Mrs L.M. HARVEY: To resume the comments that I was making prior to question time, I once again put on the record that I support this amendment. I will go back over my comments, so that they can have a coherent sequence. In the eight years that I have been a member of this chamber, I have heard a lot of criticism and discourse from members opposite about transparency in government processes, good governance and a range of other matters. All we are imploring the Treasurer to do is adhere to the tenets of the many speeches he delivered in this place about transparency and good governance. I understand that in the past a loan facility has been requested prior to a budget being delivered; however, during the last election, the Treasurer and his team campaigned on the premise that they would bring the budget back to surplus, reduce the state’s loan and pay it off slowly over time, like a mortgage. We have not seen where this requested loan facility of up to $11 billion could be allocated, because the new government’s budget has not been delivered. Treasury’s briefing was really clear: there is a $1.2 billion contingency that could see the government through until July. The budget will be delivered on 7 September. Generously, if we can take the government through until June 2018, that is plenty of time to get a second loan bill through. If the government limits this facility to $5 billion to take it through to the delivery of its very first budget—a very important day for Western Australia to see the new government’s first budget delivered—at that time it could have the accompanying loan bill to whatever limit the government thinks it will require for its first four years of government. At the moment, the government is basing this $11 billion line of credit on pre-election financial statements that have the spending commitments and some of the election commitments of the previous government, some of which the government, no doubt, will cancel, and does not include projects that the government has championed. They are not part of the documentation that we have before us in approving this line of credit. There will be some changes. The GST top-up from the commonwealth is not before us to help us to understand where that sits within the revenue forecasts or the fluctuations of the iron ore price. It is just not prudent financial management to come to Parliament and ask for $11 billion when Treasury has advised us that $5 billion is a very generous line of credit to afford the government that will get it through to June 2018. Once the government’s commitments have been started—projects for which we have seen media release after media release—and its

[ASSEMBLY — Wednesday, 24 May 2017] 531 spending decisions have been made, the opposition, small team that we are, can scrutinise them and then go to the community and say, “Yes, an $11 billion line of credit is appropriate.” It is not appropriate, and we cannot apply any transparency, we cannot put the ruler over any of the government’s spending decisions that will justify an $11 billion loan facility. To predicate this request for an $11 billion line of credit based on the pre-election policy costings is disingenuous in the extreme, because the Labor Party’s election commitments were not costed, and there are projects that we know have been ruled out already. Mr A. KRSTICEVIC: I have listened to the Deputy Leader of the Opposition and I would like to listen to more of her remarks as she has made some good points there. Mrs L.M. HARVEY: I know that when a government is elected on a wave, as the government has—it surfed in on a wave; we got the dumper—it has a majority in the Parliament and it can bring through a loan bill at any time because it has the numbers. Our only opportunity, as an opposition, is to do our best to apply scrutiny to the government’s requests that burden the taxpayers of Western Australia with a further loan bill of $11 billion in the context of a complete absence of scrutiny of the government’s financial plan and the financial documents that should back up a request for a loan facility of this size. If, as a small business owner, I went to my bank and said that I have an idea to open a couple of shops, build a couple of driveways, put in a car park and some air conditioning, employ some people and buy some stock—I cannot go to my bank with a concept to build about 20 shops and fit them out, stock them and employ people, and it would all be great, and ask to be given $11 billion, because the bank would not give me a line of credit for $11 billion based on shoddy figures like that. That is all we ask. We ask the government to be sensible and take perhaps the less politically expedient approach to request a loan facility of $5 billion at this time, and allow us to see its new budget and look at the projections through the forward estimates. At that point, sure, the government can apply for a loan bill that will cover it for four years based on the delivery of its first budget that has the new projects, allocations and expected ongoing costs for the commitments it has made—for example, delivery times for its major transport commitments. When will they appear? When will the government need to draw down on that $11 billion line of credit to start progress payments on these projects? We do not know and the Treasurer cannot tell us. The tragedy is that the Treasurer cannot tell us. As an opposition we often do not know what happens within the workings of government, but the Treasurer of this state, who is responsible for the state’s finances, and, indeed, responsible for asking for $11 billion to burden our children and grandchildren, cannot tell us how he is going to spend it, potentially. I accept that the Treasurer has not spent the money yet; I accept that it is a line of credit, but it is not acceptable. The Treasurer would not have accepted that when he was in opposition. I do not understand how fresh out of opposition, coming into government on a wave of gold-standard transparency, and having had to listen over eight years to all the things the Treasurer has said to us about financial management, being fiscally conservative and watching the pennies because the pounds will look after themselves—all the truisms and rhetoric—his first act is to come into the chamber and irresponsibly ask for an $11 billion line of credit without even delivering his first budget. We do not have the capacity to stop supply; we would not do it, anyway. The government has been elected and the community has endorsed it to run the state, but the community expects the government to run the state and to take that responsibility on board and to take it seriously. To come in here and ask for an $11 billion line of credit without a budget to back it up is not acting with any credibility at all, and we expected better from the Treasurer. We know that the government needs money to pay the bills, but we also know that the quantum of that money will not exceed $5 billion prior to June 2018, which gives the government sufficient time to bring down its first budget and ask for a loan facility backed up by a budget with appropriately constructed forward estimates and projects that can be scrutinised by the opposition on behalf of the community. This bill is politically expedient. I understand why the government is doing it; it takes away the opportunity for the opposition to scrutinise future applications or requests for a loan facility. Mr A. KRSTICEVIC: I think that the Deputy Leader of the Opposition almost has the Treasurer convinced, so could she please continue her remarks. Mrs L.M. HARVEY: I will not go on too long. All we ask of the Treasurer is that he accepts our amendment and requests a loan facility that will take the government through for a really good buffer period after he has delivered his first budget and allow us to scrutinise the budget in order to understand what is in and what is out, what the forward estimates will be, and what the projections will be with respect to GST, iron ore, United States currency and all the things that affect our position. Allow us to see a budget and to contemplate a further loan facility in the context of the projects that the community has endorsed by electing the Labor government. The politically expedient course for the Treasurer is to request this $11 billion loan facility now; we accept that. If he makes the savings that he says he will and if he cancels projects and pushes things out into the out years, he can come into this place before the next election and say, just in time for the next election, “We asked for $11 billion based on the reckless spending of the previous government.” That is what the Treasurer will say, but guess what? We have come in under that, and I know that that is what the Treasurer wants to be able to say. That is why he is

532 [ASSEMBLY — Wednesday, 24 May 2017] asking for this loan facility for $11 billion now. He wants to be able to come in right before the next election and say, “Yes, we asked for $11 billion, but we didn’t spend it.” If we look at the books, the government does not actually need $11 billion; it is asking for far more than it needs to spend, based on the paper it has asked the opposition to consider. That is what the government wants. It wants to avoid coming back to this Parliament with another loan bill, which will allow us to scrutinise its spending decisions in the context of what it is asking us to authorise as its borrowings. I request that the Treasurer stay on the moral high ground he took when he was in opposition and that he take the fiscally conservative approach he requested of us. I request that he take the conservative approach and borrow only what Treasury has said the government needs at this time to cover all contingencies until he hands down his budget. Mr V.A. CATANIA: I rise to support the amendment that the Liberal Party moved today because it is a responsible way of managing the finances. The previous Liberal–National government went to the last election with a financial plan to reduce debt so that it would not have to borrow the amount of money the Treasurer has clearly outlined in this bill that he is going to borrow. The government is going to put pressure on mums and dads and small businesses, and cut public servants from the public sector, to try to manage the state’s finances. The National Party supports the Liberal Party’s view that a $5 billion loan is a more sensible, open and transparent approach until such time as the budget is handed down in September, so that we can really see what the Labor government is going to do in respect of job cuts, government departments being merged and royalties for regions. The National Party wants to know the full extent of the damage that is going to occur, particularly in regional Western Australia, and the programs that are going to be cut. We need to know that, but in the meantime we are committed to the sensible approach outlined in the amendment moved by the Liberal Party. The National Party also moved an amendment, because we believe there are alternatives. The member for Warren–Blackwood and I discussed that earlier today. We asked the Treasurer whether he had looked at new and alternative revenue sources. The information is very wishy-washy; we do not know whether he has or has not. He said he had done some modelling. I think it is very important for this house to see the Treasurer’s modelling and the alternatives that have been presented to him so that we can find out whether the only option for meeting the government’s requirements is borrowing $11 billion, which will hit the mums and dads, small businesses and public servants of Western Australia. That is, I believe, a lazy and not very transparent way of dealing with the state’s finances. As I said in this place last night, there are alternatives, which are to look at legacy state agreements and 1960s charges. In the Treasurer’s words, everyone needs to pay their fair share, so why is everyone else not paying their fair share? Why is the Treasurer not looking at alternatives for raising the money the government needs that will not result in putting financial pressure on his government? That financial pressure can be avoided by having an alternative revenue source. The Treasurer has talked about how the GST affects any revenue the state gets. Yes; the state is broken. It is not broke, but it is fundamentally broken in the way it is treated with the GST. I want to know whether the Treasurer has spoken to the federal government and asked if we are able to find a new revenue source; and, if so, could it not be subject to GST redistribution until there is a floor in the GST? It was interesting to hear the Premier say during question time that he wanted to keep capping the floor at 59c, which it is projected to hit in 2019. Only six months ago, the former member for Pilbara outlined that issue and said that we would never, ever reach a cap of 75c. The Prime Minister knew that he could never make that commitment because we were never going to get there. That is the fundamental problem we have with the GST and with our federal colleagues in Canberra. They know that we will never reach that 75c. The Premier says that we should put in a ceiling at 59c; but once we get to 59c, I do not think we will go back, because we have no revenue coming into the state that will affect our GST. Ms M.J. DAVIES: I am very interested in what the member for North West Central is saying, and I would like to hear more of his argument as to why we should be supporting this amendment. Mr V.A. CATANIA: To return to the debate prior to the 2017 election, we did not hear the Labor Party talk about the GST and GST issues. The former member for Pilbara, when he was in this house, often said that the opposition at that time wanted to be a small target—say nothing, do nothing—and that is what happened. The Labor Party in opposition said nothing and did nothing, and now in government is doing nothing yet again. If we go back to the campaign for the 2008 election, we could not name three things the Labor Party did. We are now back at the same stage, eight years later. The previous Liberal–National government took up the argument on the GST; we were not successful. The former Premier, the member for Cottesloe, took up the argument on the GST and was not successful. Mr C.J. Barnett interjected.

[ASSEMBLY — Wednesday, 24 May 2017] 533

Mr V.A. CATANIA: We have clearly won the argument, but the Premier has come into this house and said, “I’m calling for a cap at 59c”, because of a lightbulb moment. He has suddenly worked out that we are not going to reach 75c. The National Party has been saying for six months that we will never reach that floor. I have not heard boo from the federal Labor opposition; it would be interesting to know what its policies are and what influence this state Labor government is going to have on its federal colleagues. I do not think it will have any influence. Why? Because the federal Labor Party needs to win votes in South Australia and Tasmania. Do members think that a future federal Labor government, if it is to be successful, is going to change the way the GST is distributed, or put in a floor? I do not think so. We have a fundamental problem. Western Australia is not a player in the federal scene, which means that we will not get any joy from anyone when it comes to getting our fair share of the GST. Mr A. Krsticevic interjected. Mr V.A. CATANIA: That is what I am saying—the federal Labor Party has not agreed to it. Members, we have to look at alternatives. Our argument must be for a new revenue source that will not impact on the GST, whether it be a cash out or just a CPI increase, to prove the point that we are not captured by BHP and Rio and that mums and dads are not the only ones who have to pay extra due to the state’s financial position. We have to send a clear message to the companies of Rio and BHP and to both the federal Labor and Liberal Parties. National Party members had this conversation in Broken Hill, New South Wales, in the last few days when we met with our federal National Party colleagues, trying to persuade a way that the federal government can support our plan to fix the state’s budget, knowing that an increase to the GST will never come to Western Australia unless we do something. A new revenue source quarantined from GST would give us the amount of money we need to operate as a community and government so that services are not cut, the number of public sector employees is not cut and union rallies are not held that ask, “What the hell is going on? Broken promise!” This will continue over the next four years if the government borrows $11 billion without knowing what it will be spent on, when royalties for regions will be cut from regional WA, the public service will be cut and community organisations will not be supported. Mr R.S. LOVE: I am enjoying this contribution. Mr V.A. CATANIA: The government needs to look at new alternatives. This side of the house knew the state’s position. It is interesting, as the Treasurer said, that over the last four years, the iron ore price has gone down and that has affected the state’s income. The reduced GST revenue also has had a dramatic effect on this state’s income. If we add up all that, yes, it puts the state in a bad financial position. But do not say that we need to borrow $11 billion due to the Liberal–National government’s mismanagement. Remember, there was population growth, equalling the size of Tasmania’s population, in Western Australia for which we had to cater with more infrastructure. It is interesting that the Premier always says that back in 2008 WA’s debt was $3 billion. That is because the government at the time did not do anything and that is why I am a member of the National Party. I wanted to be a member of a party that delivers to the community. The amount of $3 billion did nothing. Mr W.J. Johnston interjected. Mr V.A. CATANIA: I wanted to strangle you. The ACTING SPEAKER (Mr I.C. Blayney): Member for North West Central! I will strangle you, if you do not sit down. Thank you. Members, I want to hear the member for North West Central in silence please. Member for North West Central, address your comments directly to me. Mr V.A. CATANIA: Thank you, Mr Acting Speaker. I refer to former Treasurer Hon Eric Ripper, who, I think, in 2007 and the member for Cannington’s wife, Hon Kate Doust, was in front of me heading up, I think, the Pilbara industry consultative committee. They came up and said that the Pilbara needed — Mr W.J. Johnston interjected. The ACTING SPEAKER: Member for Cannington! Mr V.A. CATANIA: They said that the Pilbara needed a minimum of $800 million to fix its problems. The then Treasurer said, “They’re not going to get $800 let alone $80 million.” That was the mindset and why I was glad to leave the Labor Party. I wanted to be able to truly represent my party. I will get back to the point. Mr W.J. Johnston interjected. The ACTING SPEAKER: Member for Cannington! Mr V.A. CATANIA: The point is that no-one will fix the GST. A floor will not be implemented; it is broken and cannot be fixed. I agree with the Labor Party’s position of quarantining 25 per cent of royalties because that

534 [ASSEMBLY — Wednesday, 24 May 2017] will help the state’s finances. But we also need a new revenue source to counteract what we are now doing— borrowing money without question or clarity on where it will be spent because the government has not put out a budget. It is different from loan bills introduced during the last eight years because a budget had been brought down first, so we had some idea. However, the Treasurer and the Labor government have no idea. The Treasurer has said he is looking at alternatives. Can he outline those alternatives? Has he done any modelling on a 25c increase or on a cash-out and the benefit that would bring to Western Australia? Has he spoken to the federal Treasurer or the Prime Minister about a new revenue source similar to the tax the federal government is seeking to impose on the banks? He can explain that we want to do the same in Western Australia to fix our problem with the GST and ask the federal government to make any such revenue GST-free so that the $7.2 billion we proposed in the lead-up to the election can all stay in Western Australia. We do not want to see rallies such as those that occurred today in the city about the loss of public sector jobs. We do not want to see royalties for regions disappear or services cut, left right and centre here in Western Australia because the Treasurer is lazy and does not have the intestinal fortitude to make sure that everyone pays their fair share. That is what the government should be doing. The Treasurer should be having those conversations with the federal government, the federal opposition, BHP and Rio because that is the only way we can fix the financial problem in Western Australia. Dr M.D. NAHAN: I want to make some clarifying comments on this. The Liberal Party moved this amendment because we support the principle of a loan. It has to happen and we would like it expedited, but the issue is the quantum. We want to make it clear that the election was hard fought and members opposite won in part based on their commitment to reduce debt. We also made that commitment. It was a focal point of the election and, indeed, for years earlier in this place. Members opposite are yet to make a statement about their budget policy or anything similar to that. They have come here seeking $11 billion, which will be the largest loan bill the state has ever sought. The Treasurer has made no justification for it other than to say that if the previous government had pursued unchanged its policies from January 2017, it would have required $11 billion. That is fiction. An election was held and during that election campaign, the government of the day, the Liberal and National Parties, committed to a set of policies that would substantially reduce debt levels and, therefore, the $11 billion would not have been required, so that is not a good benchmark. We heard the Premier say today that he was trying to do a deal with the commonwealth on GST that would bring in large amounts of money. We heard also from the transport minister that a deal has been done on another commonwealth fund for a large amount of money. We know also that things are in flux, so the government is looking at substantially altering revenue. We have heard about a new tax and a 15 per cent increase in the electricity price. We have heard about a lot of changes but what we heard, and what the people of Western Australia heard over and again, was that the new Labor McGowan government would do something about reducing debt over time. This Loan Bill requests us to give the government $11 billion that it indicates it plans to do nothing with. The Treasurer’s second reading speech states that the government was “highly critical of the huge increase in borrowings”, which is true. Importantly, it also states that as the Treasurer goes through the process of formulating the budget, which will come down in early September, the government “will reduce the need to draw on the full authorisation”. In his second reading speech, the Treasurer explicitly states that the government plans to put in place policies that mean it does not need this much authorisation. That is what it states. Why is the government asking for the full lot? The reason is it wants to diminish accountability. If the government does not achieve its objectives, which is stated in the second reading speech, then it will not have to come back to this place for an additional loan bill. That is what the government is trying to do. It is trying to avoid accountability on its stated commitment to the people of Western Australia, enunciated in the second reading speech. We can reasonably say that if the government asked Treasury how much it needed for the next year, with a buffer, it would be $5 billion. That is a reasonable amount. We know the government has the numbers, overwhelmingly, but we do this to inform the people of Western Australia that the opposition has operated on their behalf. We are dealing with a very important bill and the overall borrowing capacity of the state. The people of Western Australia told me and they told members opposite that debt is an issue they want to be addressed. The McGowan Labor government was elected, in large part, on that. This is the government’s first bill and, in this bill, it is basically asking for a loan amount that means it does not have to do anything. It is incumbent upon us to tell the people of Western Australia that the opposition has done its best to delimit the government’s borrowing requirement to when it knows how much it needs to borrow. This is not the mark of a government with a gold standard of accountability. It does not need $11 billion. It needs about $5 billion. If the government gets more, it will diminish its accountability. Mr B.S. WYATT: I want to clarify something that I think some members may have confused in this bill. The Loan Bill 2017 does not authorise me, as Treasurer, or the government, to spend one extra cent that is not already authorised in the budget. This bill does not authorise one extra cent to be spent. That is why, member for Hillarys, the bill is only one A4 page. Not one extra cent is being authorised to be spent; that is the budget process. The Supply Bill 2017 will get us through to 7 September. I have introduced that bill and it will be

[ASSEMBLY — Wednesday, 24 May 2017] 535 debated in due course. The Deputy Leader of the Opposition made the point that the problem with the Loan Bill is that we cannot put a ruler over the spending decisions the government will make and the member is right, because the bill does not have any spending decisions. They are in the budget. At budget time, members will get the opportunity—we will all get the opportunity—to go through the decisions in the budget estimates process. It will be reported on at length and members will put through thousands of questions on notice et cetera. This bill does not allow me to spend one extra cent that is not already part of the Supply Bill. I wanted to clarify that point. The other point I want to deal with is the timing. I understand the Leader of the Opposition’s argument. I think his argument is that $5 billion will get us through to 2018. I am not convinced it will at this point, which is a reason that I want the authority over a four-year period. We have had this conversation at length this afternoon and last night about ensuring we have the capacity with the authority—remember, it is not the capacity to spend, but to plan our borrowing program—over the next four years. The Leader of the Opposition is right; that will change. I do not think it will change with particular spending policy decisions. For example, the Leader of the Opposition mentioned schools. They are the kinds of flotsam and jetsam of the budget. It is the macro things that will have an impact. For example, what GST does and what economic growth might do will genuinely be the issues that impact on the timing and whether we need to borrow the full $11 billion. I hope we do not. I have said that. But if I was to be extreme, as the member for Carine said, I would have made this a $13 billion authority because I would have taken into account what has happened in the last two months. I did not want to do that because two months in four years is not a way to predicate a loan bill. They are predicated on what I have— namely, the most recent, official, financial statements that the member for Warren–Blackwood and I talked about a little while ago. There are a few points to be made at the time. The Leader of the Opposition went back through to 1987, I think. Certainly while I have been in this place, there have been four loan bills and they have all been for multiple years. I will outline them. The Loan Bill 2009 was through to 2013, but the government of the time came back in 2012 to top it up with a $5 billion request. It is important to emphasise that the Loan Bill 2012 that sought authority for $5 billion was intended to last through the election, and through to 2016. The government at the time sought to bind whoever won the 2013 election into that loan bill authority. The final of the three points I wanted to make is that loan bills come when they are needed. That is why, in 2015, the Leader of the Opposition—then the Treasurer—introduced a loan bill a few weeks prior to the budget. It was not months, but a few weeks before the budget. Loan bills come when they are required. I want to emphasise that nothing in this bill authorises me to spend one extra dollar that does not go through a supply bill. I appreciate all the concerns that have been raised by members opposite. Regarding some of the issues raised by the member for North West Central, ultimately I get the National Party position on its policy but I do not think in government we get to make tax policy as some form of revenge on companies we have particular problems with. That is not how we tax. [Member’s time extended.] Mr B.S. WYATT: We do not tax on that basis and I do not intend to tax on that basis. I wrote down what the member for North West Central said because I found it interesting. He said we have to send a clear message to Rio Tinto and BHP. That is not the way we tax and it should not be the way we implement taxation policy in this state or, I would like to think, in Australia. I hope I have clarified these points. I think this issue has been debated for a while now. Last night, we debated the National Party’s amendments. In the Leader of the Opposition’s contribution to the second reading debate, he alluded to the amendment that was coming. I thank the member for Carine for the confidence he expressed and his advice to me. I very much appreciate it. To a certain extent, the member’s reverse psychology reminds me a little bit of my mother-in-law! To be fair to my mother-in-law, it is not by way of looks. My mother-in-law uses reverse psychology. She tried it on me when I was squiring my then girlfriend, now wife. Mr A. Krsticevic: Did it work? Mr B.S. WYATT: Sadly for her, no. She would always say to me, “Oh, Ben, you’re a nice boy. There’s a nice girl next door you might want to meet”! Several members interjected. Mr B.S. WYATT: I think that was reverse psychology. To her eternal disappointment, it did not work. I think we will have this point of dispute around the quantum and I understand that. I hope I have outlined why I am seeking authority to borrow but not spend. This is not a spending bill because that will come at budget time. Division Amendment put and a division taken, the Acting Speaker (Mr I.C. Blayney) casting his vote with the noes, with the following result —

536 [ASSEMBLY — Wednesday, 24 May 2017]

Ayes (18)

Mr C.J. Barnett Mr P. Katsambanis Mr W.R. Marmion Mr D.T. Redman Mr I.C. Blayney Mr Z. R. F. Kirkup Mr J.E. McGrath Mr P.J. Rundle Mr V.A. Catania Mr A. Krsticevic Dr M.D. Nahan Ms L. Mettam (Teller) Ms M.J. Davies Mr S.K. L’Estrange Mr D.C. Nalder Mrs L.M. Harvey Mr R.S. Love Mr K. O’Donnell

Noes (38)

Ms L.L. Baker Mr W.J. Johnston Mr P. Papalia Mr C.J. Tallentire Dr A.D. Buti Mr D.J. Kelly Mr S.J. Price Mr D.A. Templeman Mr J.N. Carey Mr F.M. Logan Mr D.T. Punch Mr P.C. Tinley Mrs R.M.J. Clarke Mr M. McGowan Mr J.R. Quigley Mr B. Urban Mr R.H. Cook Ms S.F. McGurk Mrs M.H. Roberts Mr R.R. Whitby Mr M.J. Folkard Mr K.J.J. Michel Ms C.M. Rowe Ms S.E. Winton Ms J.M. Freeman Mr S.A. Millman Ms R. Saffioti Mr B.S. Wyatt Ms E. Hamilton Mr Y. Mubarakai Ms A. Sanderson Mr D.R. Michael (Teller) Mr T.J. Healy Mr M.P. Murray Ms J.J. Shaw Mr M. Hughes Mrs L.M. O’Malley Mrs J.M.C. Stojkovski Amendment thus negatived. Clause put and passed. Clauses 4 and 5 put and passed. Title put and passed. Third Reading MR B.S. WYATT (Victoria Park — Treasurer) [3.35 pm]: I move — That the bill be now read a third time. MR D.C. NALDER (Bateman) [3.35 pm]: I rise to finalise the opposition’s position on the Loan Bill 2017. I would like to draw members’ attention back to some earlier comments the Treasurer made when he introduced this bill. A lot of it was directed at the former government and the current financial situation. I want to reiterate what I shared with the house. I went over three election periods to look at the fiscal spending commitments by governments and oppositions at the time. When I looked at the 2008 and 2013 elections, both parties took fairly similar fiscal positions to the election. The underlying projects were different but the overall outcome on the finances, both from a commitment in capital spend and the impacts on the debt position for the state, were in line with each other. Irrespective of which party formed government during the period 2008 to 2013, a conclusion can be drawn that the state’s financial positions were fairly similar. But the two positions started to vary during the 2017 election campaign. For the first time, the Labor Party did not submit its commitment costings to Treasury. It made a commitment spend of around $5 billion. The Liberal Party took a lot lower spend to the electorate. Its election commitments, costed by Treasury, seriously broached the overall debt issue. Over the two previous terms of government both the Liberal and Labor Parties had similar positions, but from this point forward the Labor Party owns the state’s debt on the basis that it has brought forward a bill to extend its credit limit by $11 billion. The Liberal Party’s program to reduce debt was costed by Treasury. The Labor Party has introduced a bill to this house to increase the state’s credit limit by another $11 billion for the next four years; it is therefore assuming responsibility for the state’s debt moving forward. The Liberal Party needs to hold this government to account. As the basis for wanting a loan, the government has come to this place using forward estimates that were determined by the former government. It has not taken into consideration the commitments it made during the election, and it has not brought a plan or a budget into this house—and will not for some period. It is an interesting situation. I believe we are in uncharted territory with the government attempting to do that. We feel very uncomfortable about supporting the quantum of the bill—not in supporting the bill itself. We believe that there is a need for a loan bill; it is the quantum of the bill we feel uncomfortable about. However, we acknowledge that a loan bill is required and that it does need to move ahead. The government has the numbers in this house, but we want to ensure that people understand that we believe that the quantum is not correct. I listened to the Treasurer during his response to the second reading debate and during consideration in detail. I would like to summarise my understanding of what has taken place in here. The Treasurer made it clear that he desires not to return to the house for another loan bill during the term of this government, and that the Pre-election Financial Projections Statement has been used as the basis for the loan amount required. But subsequent to the PFPS, the Labor Party made a further $5 billion in election commitments that have not been considered in this Loan Bill. If we assume all underlying assumptions in the PFPS remain constant, it would therefore be reasonable to deduce that the Labor government will either raise taxation revenue or cut costs, or

[ASSEMBLY — Wednesday, 24 May 2017] 537 a combination of both, to the tune of $5 billion between now and the end of this term of government. That is the only thing we can deduce about this Loan Bill because the government used the current PFPS, it has not taken into consideration the commitments it made throughout the election, and it has not brought a budget to bear. I think they are the correct assumptions that we can make about this Loan Bill. Therefore, we can expect increased taxation revenue or cutting of costs to the public service, or a combination of both, to the tune of $5 billion. I think I could go on ad nauseam in this house, but what we have witnessed in the last two weeks—we are only really two weeks into Parliament—is enough to raise some concern in the opposition. We must ensure that due process is followed. Having committed to no new taxation, in the last two weeks the Labor Party has been talking about a levy on investment properties, and potentially all residential properties in Western Australia. We have also heard the Labor Party talk about 15 per cent increases in power costs, although fewer than 10 months ago the current Premier was complaining about the then Liberal government raising power prices by three per cent. We are seeing the government initiate contracts for new infrastructure projects across the metropolitan area, without a tender process. I raise those things in conjunction with this Loan Bill because, as I have before stated, the Labor Party won the confidence and support of the Western Australian community to govern Western Australia. It has a responsibility to honour the faith that has been shown in it by the people of Western Australia, and to show good government and follow due process in carrying out its activities as a government. We regret in some way that we were not taken seriously, and that this government has not taken up our offer of a $5 billion loan to provide it time to establish its first and even second budget; however, it has chosen not to do so. We will continue to do our best to monitor this government, thereby ensuring that its processes are transparent and it is held to account. DR M.D. NAHAN (Riverton — Leader of the Opposition) [3.43 pm]: I will make some concluding comments on the Loan Bill 2017 to, to some extent, reinforce what the shadow Minister for Energy has said. This important bill does not necessarily authorise expenditure, as the Treasurer indicated. It does in the short term, because without the authorisation provided by this bill, the government will be constrained from meeting its expenditure. In the short term it does authorise—not explicitly but indirectly—expenditure. It is an important mechanism. This is not unique to Western Australia, but not all states have it. It was put in place as a mechanism by which Parliament controls the overall spending or borrowing by government. We have gone through a number of these loan bills over the last few years, and when in opposition this government was highly critical of our need to do so. As we indicated before, one of the key issues in the last election in which the Labor Party was successful was the level of debt and the reduction of debt. As the member for Bateman indicated, that was unique in the context of at least the last three elections because in this one both parties said they wanted to cap or reduce debt. The Liberal and National Parties went in with policies explicitly to reduce debt. We had a policy audited and confirmed by Treasury that would in fact have, over the same four-year period, led to a reduction in our borrowing requirements of something like $5 billion. Therefore, if we had won, we would not have needed a Loan Bill of anywhere near this magnitude; in fact, we would have had every expectation of having ended four years with lower overall borrowings than we started with. We lost the election; the Labor Party won. It won it largely on the basis of convincing the public of Western Australia that it was going to be a better fiscal manager, including at capping and paying off debt. But it has, instead, come to this place and asked for $11 billion; in other words, it is asking for borrowing capacity to do nothing about debt, despite its commitments and criticism of our debt reduction strategy, and indeed the National Party’s debt reduction strategy. In bringing forward this bill and knocking back the amendment we put forward for limiting the Loan Bill to $5 billion rather than $11 billion, the government is explicitly stating to the people of Western Australia that it is not sure what it is going to do. But all the debt going forward in the general government sector from $23 billion, which I understand is where it sits today, is the Labor Party’s. It committed to it and it is going to do the borrowing. It came to this place and asked for additional borrowing to incur the debt that will take place. I know what it will do: it will go out to journalists and others and say, “We had to have this borrowing. We had to have $11 billion borrowing because of the books we inherited.” Well, that is not the case. That is not true. The government does not need this level of borrowings now; if it does so, it will be of its own choices; it will be because of decisions it made. The Labor Party has gone out and floated a lot of balloons about new revenue sources and cuts and whatnot. Let us see about that. Let us give the government time till September and beyond to see whether those happen. But let us make it quite clear: the government is asking for $11 billion. It also has to fit within that envelope $5 billion worth of additional promises it made. We are not sure of the details because the Labor Party did not submit them to Treasury. The government also knew what the debt and deficit level was. The government’s starting point was the Pre-election Financial Projections Statement. That was the starting point. It was published in, I think, the second week of February. The government no longer has the right to go out and tell everybody in the public that things have gotten worse and it did not know what the budget was or what the financial position

538 [ASSEMBLY — Wednesday, 24 May 2017] was—the debt and deficit. It does, and it is accepting the PFPS as the starting point. Any borrowings that the government incurs as a result of this Loan Bill are its; they are its choice. We will hold the government to its commitment today that it will not need another loan bill, that it will meet its $5 billion in election commitments through other than additional borrowings and that it will meet it within the envelope of the $11 billion Loan Bill that will no doubt pass this house today. We as an opposition, small as we are, will hold the government to account for that. We also know that that $5 billion probably understates the government’s overall commitments because it made a range of commitments, particularly in marginal seats, of which there are quite a few, that it will now be held accountable for in order to maintain those seats in the future. The government has had a very difficult time transitioning from opposition to government. Listening to ministers in question time, we have noted that they are usually focused on what we did in government rather than what they are doing. The Treasurer probably falls into this trap. This bill signifies that the government is in charge of the books now. It has accepted the Pre-election Financial Projections Statement as its statement—as the starting point for its budgetary expenditure. It accepted the debt levels as its own. The growth in debt from the end of June 2017 going forward is the government’s, not ours. I am sure it will go out there and try to say the opposite, but that is no longer credible. That is because we had a policy, on which we lost, to do something about it. The government had a commitment to do something about it. We are yet to see that but this bill allows it to override or break that commitment. We do not know whether it will. We also know from discussions in this house that the government does not need $11 billion. When it goes out into the community and tells journalists and others, “Shock, horror, we’ve had to borrow $11 billion to meet the borrowing commitment we inherited”, that will be false because it does not need it. We have already agreed to that. The government does not need $11 billion; it needs about $5 billion until it decides what it will do in the future. Besides promising to pay down the debt and reduce the deficit, the government also went to the election promising gold standards of accountability. This bill does not meet that commitment. If it wanted gold standards of accountability, it would put the borrowing limit within some reasonable amount of what it needs. In his second reading speech, the Treasurer basically said that he is going for $11 billion but he will work to avoid needing it. He hoped not to need it but he did not know yet because there are a lot of uncertainties. He did not want to need it. If he was really interested in true binding accountability, he would borrow what he needed and if he needed more, he would come back. The question is: Why did the government not do that? Why did it go for $11 billion knowing that it does not intend to and should not need to borrow that amount? The reason is that it does not want to come back to this place and indicate to the people of Western Australia that it has broken a commitment to be better fiscal managers or to pay down debt. It is an exercise in avoiding accountability. Of course, it is trying to blame the previous government for its decisions to seek the right to borrow an extra $11 billion today. As an opposition, I know that we can do nothing about this. We are but few in this Parliament. In the upper house, where our position is stronger in terms of numbers, of course we will not amend and pass through a money bill. This is a seminal bill for this new McGowan government. It is consistent with many things that the Premier has said to date and has done since the election. Again, I want to reiterate that this bill signifies that the government has taken charge of the finances. It has decided to get the capacity to borrow more than it needs. It has done that. Therefore, from this day on, it owns the additional debt that will be incurred by the McGowan government. It has made an explicit decision not to reduce the debt—not to pay down debt—but to incur up to $11 billion worth of additional debt. If it does that, it will meet the outcomes—that is, very high standard levels of debt relative to revenue and a high interest bill that it repeatedly criticised us for. It does not need this level of borrowing. It can do something about it but it has chosen not to do so. The government will be held accountable for it. Both parties went to the people and admitted that the level of debt and deficit is far too high in this state and that we had to do something about it. The people elected the government to do that. They elected the government to do something about the level of debt. It is true that this bill does not incur debt; it just allows the government to borrow, but by allowing the government to borrow, it is a signal of intent to do so. If the government does so, it will be breaking one of the main reasons people brought its members here in large numbers, and it will be held accountable for it. If the government does come back for another loan bill requesting beyond $11 billion, we will not be as comfortable with it because it did not need to borrow this much. It will be breaching a promise. We look forward to the budget on 6 September 2017. It will be another seminal statement in the government’s fiscal plan. We hope it will be a major statement because the task that it has set out, even with this excessive level of borrowing, to accommodate its election commitments of $5 billion within the envelope of spending, is a phenomenal change. One thing that we have also argued in that budget is that the government is committed to no new taxes. The Premier, then Leader of the Opposition, repeatedly said to the people of Western Australia— admittedly after he announced the tax on foreign investors of real estate but he made that open and transparent— that there would be no new taxes on Western Australians, full stop. The Treasurer is a bit wiser than that. I cannot remember at which event, but he was asked whether he would promise no new taxes. His response was, “No. No Labor leader can do that and be treated credibly.” He was honest. The commitment from the then

[ASSEMBLY — Wednesday, 24 May 2017] 539

Leader of the Opposition and now Premier was clear. He also went to that election and, quite rightly, focused on creating 50 000 jobs. All of us on this side of the house wish him well with that task. When asked about taxes, he said, “No, we will not be imposing any new taxes on Western Australia or raising taxes because it destroys jobs.” The taxes that are open to us are payroll tax and transfer duties of various types. They are terrible taxes. The Premier made that commitment. I emphasise that because this $11 billion of borrowing has to accommodate $5 billion worth of expenditure. Given the many commitments that are part of that $5 billion—we have never seen transparency about that—my concern, looking at the balloons the government is floating, is that it will introduce a raft of increases in levies and prices in its first term to try to pay for its election commitments. It will attempt to paint them as trying to pay off the debt that it inherited. Mr A. Krsticevic: And pay payroll services. Dr M.D. NAHAN: Maybe. The reality is that all of us on this side must reiterate throughout our electorates that the Labor Party has come into this place committed to reducing debt and has chosen not to do so. The Labor government has chosen to pursue the Loan Bill 2017 that provides it with $11 billion and indicates that it wants the capacity at least not to do anything about debt. It committed to going to this next budget, and probably a number of budgets, and meeting its election commitment of accommodating that $5 billion and that it would do so within the framework of the Pre-election Financial Projections Statement. Therefore, it will have to either find additional revenue or cut expenditure in other places to the tune of $5 billion. I might add that the Labor Party also went to the election with a commitment to achieve a budget surplus within its term in government. It has subsequently said that that will not be possible this term and that it would be a real struggle. This state has a large structural deficit. Nonetheless, when we put all those things together, it simply does not add up. It will either have to increase its borrowing beyond this Loan Bill or raise taxes. We look forward to those debates here. Another thing that the government has done is to put off the budget to the latest period in living memory— 6 September. That gives it time to make major changes; I hope the government uses it well. It is a long period before the necessary decisions will be made. It also allows a large number of decisions to be made and implemented by ministers without the transparency that a budget provides. A budget is a government’s major statement of policy intent and this government will have been in power for almost six months before making its first budgetary statement. That is far too long—unnecessarily long. It follows from its decision to postpone the first session of Parliament for two months after the election. The excuse was that it was done in 2008. It was, but the government in 2008 was a minority government. Indeed, the government was not formed for weeks after the election; it was a different time. Of course, it also was not a fixed four-year term as we had this time. The issue of postponing the meeting of Parliament and the budget raises additional concern about the transparency of the McGowan government. In the run-up to the fortieth Parliament, the government made a raft of decisions of a fundamental nature that it announced in single-page press releases. They include changing the number of agencies from 41 to 25 and a range of other changes. The opposition was not able to scrutinise those when they were proposed, undertaken or completed because Parliament was not sitting. Now the budget has been put off until 6 September and a raft of decisions are being floated out there—manufactured and put out—that we will have delayed ability to debate. If I had raised this six months ago with the Treasurer and asked him whether he would be coming to this place after winning the election to ask for an $11 billion loan bill, he would have denied it. He would have stated quite clearly, “No, I won’t do that.” But this is what he has done. He is building in the capacity not to meet his solemn pledge to the people of Western Australia to cap and reduce debt. He is taking the easy route. He took the easy route with his promises, and this is what he is doing now. From statements made by the Premier and Minister for Transport, it is clear that the government is trying to use political pressure and hoping the Turnbull government will bail it out. The plan is to go to Turnbull and put pressure on him to increase the GST share in some form or fashion. There are many ways to do that. The real trick is that the government hopes it will be a win–win for them; that is, to get money from the Turnbull government in the form of a higher GST share and to help Mr Shorten gain the benefit of that happening in other states. The game plan is to get the Turnbull government to bail it out with a higher GST share. In response to that I have said that the Liberal Party will support a higher share of GST as long as the government does the right thing and talks to Mr Shorten to get him on the same page as Mr Turnbull. I do not know whether the government has done that. I wrote to Mr Shorten and, of course, I did not get a response. Without bipartisan support in Canberra, Turnbull might bail us out but what one Treasurer gives in GST share, another Treasurer can take away. Unless we get bipartisan support for a better share of GST, it will not be sustainable. It is galling, to say the least, that I stand here and say that I will support the government on the GST. When it was in opposition it made it abundantly clear and stated over and over again that the GST was not a major issue and that our revenue issues were not caused by the GST. I think I am quoting the Deputy Premier in saying that the GST share is one great certainty in our revenue flow over time; we know what it is and it has not changed. That was always true to some extent. This year the GST share will be more than was predicted in the budget

540 [ASSEMBLY — Wednesday, 24 May 2017] because the Liberal–National government—the Abbot and then Turnbull government—effectively agreed to a floor of 37.6c. That is what we did. It is not high, but it is a floor. We put it in there and we were ridiculed, firstly, that we did it and, secondly, that it would not be sustainable. In opposition, the Labor Party said over and over again that GST was not an issue in terms of revenue—we had a spending problem, not a revenue problem. As soon as it got into government, it flipped around and said, “It’s all the GST.” We have to reinforce to the electorate that this is an issue of statesmanship. In opposition, the Labor Party took the stance that anything that is harmful to the fiscal position of the state or harmful to the government of the day was good for it. That is the stance that it took on the GST. We have said that we are putting WA first and if we can assist, either with Prime Minister Turnbull or otherwise, to get a better share of GST and even if it is helpful to the government, we will pursue it. That is contingent on the Labor Party doing what is right and convinces Mr Shorten and the other state leaders to support our joint stand. So far, members will notice that when the Premier speaks about that he focuses only about Turnbull. He never speaks about Shorten. That is a clear signal that he is less interested in doing what is right for Western Australia than doing what is good for the Labor Party across the nation. This is a real test for him, and so far he is failing it. Western Australians want what is right for them, not necessarily what is right for the Labor Party in the Australian Capital Territory, South Australia and Tasmania. This is a seminal issue for him and so far he has failed to take it up. Let me state this repeatedly: all substantial ideas for reform of GST have come from one side of politics—the Liberal–National side. The Labor Party federally, in the other states and Western Australia has not suggested something new that it will work upon as a party. Until it does that, it cannot work. One government of a certain party putting in policies might help us for a year but the other party might take it away. The truth is that Mr Shorten has repeatedly said that he does not see any problem with the GST, he will not put in place reforms to it, he will not even put in a floor of 37.6c and that he will not support the reforms of the Productivity Commission. The Premier went on to answer the dorothy dixer question about his solution. He has put two solutions forward in the last two weeks, both of which have been put to the federal government repeatedly by me over the years. It is nothing new but, fair enough, in this game, not everything is new. This is the test: if the Premier is really serious he should approach Bill Shorten and get him to support the idea of a Productivity Commission review of the GST, and to support in principle the implementation of the Productivity Commission’s recommendations. If the Premier does not make that effort, and Shorten does not respond or does not agree, then we will know that the Labor Party is not serious about GST reform. It wants the money, but it also wants the votes on the other side. It is not hard. I do not know what the Productivity Commission report will do. It is a good initiative, and the commission is the right body to do such a study. It must be done within a year, and if the right people are put in there, it will get a good outcome, and it is the right focus. If we go to eastern states and just say, “Gimme money”, the eastern states people will say, “You’ve got more money than we do; why do you want more?” That is what they would say, and the Treasurer knows that. The big flaw in the GST is not so much the sharing of money; it is the incentives in the system for other states not to pull their weight, and not undertake the hard task of investment and policy decisions to grow their economies. I will provide a good example of that. Victoria and New South Wales are sitting on coal seam methane gas, locking it up and not allowing people to drill and tap it, which is causing a shortage of gas and hurting the manufacturing sector on the eastern seaboard, and losing a lot of revenue that otherwise would go to the states, because the gas is onshore, and they have royalty systems onshore. They are losing money, but they are not suffering the full consequence of that action because our GST system does not take that into consideration, and we subsidise them. The same thing is happening in Tasmania on a different front and, to some extent, in South Australia. We need this Productivity Commission inquiry. The Turnbull government has put on the pressure, and it will be held to account on the outcomes, but we need the Premier to stand up as a statesman and say that we support that process. The inquiry will look at all the ways of achieving the outcomes, such as the ones that he suggested— there is nothing new in this game. If the Premier stood up and said that he supports the Productivity Commission inquiry and demanded that Shorten does also, then we are getting somewhere. So far, he has taken the low road of helping the Labor Party here and elsewhere rather than helping Western Australia. To be a real leader, he must change his ways. If he does that I will support him, and if that means a huge flow of money to the McGowan government from the GST or elsewhere, so be it. That is a good outcome. However, the leadership must come from him. MR D.T. REDMAN (Warren–Blackwood) [4.14 pm]: I rise to close out the debate from the perspective of the National Party and provide a quick summary of the points of argument we have taken up in this debate so far, for the Loan Bill 2017 that the Treasurer has brought to the house. In my second reading contribution I outlined the history, from our perspective, of how we got to this point. A significant number of substantial investments have been made in Western Australia, and particularly, through the royalties for regions program, into regional Western Australia. In every question time and every debate, the government—I think it has a right to do this at this point—points the finger right back at the opposition and says, “Look what you did, and look what we’ve been lumbered with.” However, members opposite talk about that in a global sense. I have not heard any

[ASSEMBLY — Wednesday, 24 May 2017] 541 discussion or seen any finger-pointing about what should have changed—which hospital should not have been built; which schools should not have been built; which investment into regional health programs should not have been made; and which public servants in regional Western Australia supporting these services should not have been hired. I have not heard any of that; I have just heard the global comment, saying, “Look what you did, and we’ve got ourselves in this situation.” For many years to come we will be able to debate the merits of the investments that the Liberal–National government made, but nevertheless we find ourselves in this position. The National Party will certainly defend its history of investments into regional Western Australia and the difference that those investments have made. One thing that this point in time highlights is that this $11 billion Loan Bill gives us a pretty substantial signal about the scale of the challenge. The point of the debate from both the Liberal Party and the National Party is that there is a huge challenge. The merits of how we got to this point might be debated, but nevertheless the challenge we have from this point in time forward is pretty substantial. As every day goes by, the government will increasingly own that challenge. Walking in here on day 1, the government certainly has an argument about what it has inherited, but after that the decisions, the new budgets, the investments and the cuts are all its own. The challenge here is that we can see the scale of the issue. We are not going to refuse to support the Loan Bill. There is a history of parties supporting supply through the house to give the government of the day, which has an overwhelming win in the election in this case, a capacity to prosecute its arguments and take its investment decisions forward. So far, we have seen some signals from the government about what might play out, and we have heard a lot of language about times being hard, and how we need to cut back and make changes. There have been some signals about utility prices for mums and dads going up, and some new taxes—levies, taxes whatever the government wants to call them. I am sure that if the government were on this side, it would not make any distinction, but on that side there is a clear distinction. There are also proposed cuts to the public service, which the previous government—I was sitting around the Economic and Expenditure Reform Committee table—believed that it had scoured pretty hard. Sitting around that table making those calls is bloody hard. I am sure that many of the revenue and savings measures that are being put before the Treasurer and the EERC team are many of the same measures that came before us. We made a call on whether we thought they were good measures or not. We were made to put our political marker over that, and then we came up with a budget and a plan to take to an election. Now history has brought us to this side of the house. Nevertheless, government is faced at this time with the task of delivering a budget in September that shows a way forward for the state, on the basis of commitments it made, and the language about having some financial and fiscal responsibility that it took to the election. That is the cross that the government has to bear as it goes forward. The National Party brings to the table its concern about what history has shown to be true—that is, when budgets come under pressure, the regions lose. The most efficient part of the state in which to deliver services, and the most efficient way to deliver services, is where there is a big pile of people in one stack, and we do not have to have as many roads, water pipes, powerlines, doctors’ surgeries or whatever, to deliver those services. The minute we move out into the regions in Western Australia those service links get a bit longer, the tentacles get longer to deliver and make it happen. There is much more of a challenge in being efficient in doing that. If we are going to decentralise this state, and support a position of actually growing the regions, it will take investment. I guess we are concerned that, in the environment we are moving into, the regions have the capacity to lose. We bring to the table, as the National Party, an unapologetic support for regional Western Australia, and for policy settings that will drive and grow the regions, because they are the wealth-creating parts of the state. Hence, we want to support positions that improve that outcome. We could have taken the position that many oppositions take—I am sure Liberal and National Parties have done the same in the past—that is, to stand up over here where it is all care and no responsibility and point the finger at the cuts being made, and the changes that will affect people, and bring those to a discussion in the chamber. Then, hopefully out in voter land, people will see that we are in here fighting for them, and that will change the vote. The National Party did not think that was appropriate. We did not think it would be credible for us to go to the last election saying, “Support this program called royalties for regions, which has fundamentally recalibrated the regions in Western Australia”, without having a credible narrative about the broader state budget. We have come under criticism for doggedly sticking to our position, which had an impact on the broader budget. We do not accept that, but we knew we had to bring a position to the table that was a credible argument and a plan to support the broader budget because if we had not, the regions would have lost. If we do not support the broader budget, royalties for regions comes under pressure. The finger was pointed at us, and people said, “What about you? You’re the one who’s holding the state to ransom. You’re the party that’s doggedly sticking to a position that makes it all get wrecked.” That was not the position we wanted to be in, so we took to the election positions that were challenging; they were not easy, and it has probably cost us a former leader who will be sadly lost to politics in Western Australia, in my view. He is someone who made a huge contribution to this state, globally— not just in regional Western Australia.

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We took two positions to the election. One was about a new revenue source, and we saw the consequence of that. Even in Perth there were strong advertising campaigns running and everyone learnt about it. As the Leader of the National Party mentioned in her speech, the Premier had highlighted in a public forum that a sentiment had been touched there, and that there was a view that this has some merits. We will continue to prosecute the argument that it does have merits, rather than making mums and dads stump up when they look at their new power bill. It will be a lot higher than it was last time, as will be their new water bill. They will also have to look at the fact that their jobs may be under threat if they work in the public service, particularly the senior public service. If they happen to have an investment property to try to get ahead, they will have another bill for $270-something a year. That is only the start. To make a budget work, there is a hell of a lot more than that. I have seen what can show up around the Economic and Expenditure Reform Committee table and therefore the sorts of decisions that the government will have to take. We took that position. We also supported the part sale of Western Power, and every chance I got, I prosecuted the argument for that and got support. It made sense. I see that there have been a number of forums. In fact, the Leader of the National Party sent me an email recently about a forum with the Committee for Economic Development of Australia, talking about energy and innovations that have been brought to the table in Western Australia, and how innovations might change the way that business is done. I think there is a really good debate and discussion to be had about where this state positions itself around energy; of course, the Treasurer is also Minister for Energy. The member for Moore highlighted the merits of those innovations changing the way we do business and having support from government to make it happen. We are not going to sit in opposition and point out all the things we think are wrong or should not be cut, because I know what challenges the Treasurer and the government have. We took a position that was credible. It supported a fairly significant asset part sale and it supported a new revenue source. That is what we are trying to prosecute here. We have made the case on a number of occasions that the government does not need to go and chase mum and dad and change their power bills; there are some alternatives that the government may or may not be prepared to prosecute. Even during today’s debate, the Treasurer showed some support for the cash-out option, and even said that he is getting some advice on it. That is not the National Party’s position, but nevertheless, it is something that was brought to the table as a product of what the National Party has put on the agenda. Maybe that discussion will come forward if the Treasurer and the Premier become a bit more enthusiastic about it. The National Party will support the Loan Bill 2017. I am sure our colleagues in the upper house will have a number of discussions around the same sorts of topics we have talked about here. The big concern we have is where regional Western Australia sits in this, and we will continue to support regional Western Australia and continue to prosecute debates in this house to ensure we have long-term benefits for regional Western Australia. MR C.J. BARNETT (Cottesloe) [4.23 pm]: I have not taken part in this debate to any great extent, apart from a few interjections. I want to make a few comments, but I will not take too long. The debate has been good—lots of ideas; lots of points of view—and, I think, if new members have listened, they have probably learnt a fair bit about the structure of public finance in Western Australia. I would like to go back to what I see as the basics of this issue. This is about a loan bill to fund government services, to allow for capital expenditure—which is needed in a growing state—and to somehow deal with the debt situation. The reality is that, as everyone knows, in Western Australia the deficit is, according to the Pre-election Financial Projections Statement, $2 billion for 2015–16 and $3 billion for 2016–17. That is significantly less than what was thought 12 months ago, but they are nevertheless large deficits that are structurally locked into the system. Our debt at the end of the last financial year, 2015–16, was $27.3 billion. I stress that it was not $40 billion, as the Labor Party repeatedly said and as the media consistently reported—debt of $40 billion. It was not that; it was $27.3 billion net debt at the end of the last financial year. The latest projections say $33.2 billion at the end of 2016–17; it could be less than that. Nevertheless, we have a big debt issue and a big deficit issue. In simple terms, to correct a debt, we really have two choices. The ideal solution is to run a surplus. That allows us to fund services, capital works and, hopefully, to repay some of the debt. The other choice is to sell assets. The Liberal Party went to the last election with a policy of selling assets, and particularly selling half of Western Power. Why? It was because we could not see a prospect of achieving a surplus, so of the two options, only one was left—to sell assets. I think it is well known that I was very reluctant about the sale of Western Power. I think there are some significant regulatory issues attached to that and I was extremely conscious that the public would not like it. That did not come to me as a surprise, and it did not come to me as a surprise that the unions ran such a strong and, I have to say, effective campaign on that. There was no surprise in that, but I think it was an honest thing to do to take such a major policy decision to an election, just as John Howard took the GST to an election. In this case, the voters overwhelmingly rejected the part privatisation of Western Power, so of the two options, that leaves us with no options left. We cannot run a surplus in the medium to coming years, and the public will not accept the sale of assets—certainly not a major asset like Western Power.

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I would like to recap a tiny bit of history; I will not dwell on it. In the early 1990s, Western Australia had a rapid rise in state debt. From memory, it got up towards $11 billion. That was a result of the after-shock of the late 1980s share crash and of the $1.5 billion or so lost as a result of WA Inc. In the early 1990s, $11 billion was probably comparable to the situation today, 20 years later. It is not unprecedented, but in relative terms, it is probably comparable. I will not labour the point about Western Power, but in respect of how the sale was designed—a part sale, selling it to Australian superannuation funds and, if you like, mum-and-dad investors—it may have been that, over a greater length of time, it would have been acceptable to the public. The Labor Party and the unions campaigned heavily that selling part of Western Power would mean higher prices. The evidence was that prices would actually not go up and, if anything, given the experience in other parts of Australia, might have come down. Nevertheless, the scare campaign—that is politics, and I accept that—was that there would be higher prices. A lot of people, me included, will find it fairly ironic if we see big increases in electricity prices over the next two years, having not sold Western Power and having not repaid at least $8 billion in debt. It will make people think, “Well, why the price rise?” But the sale was unpopular and was rejected. Like any good politician, I accept the verdict of the punters and that is not going to happen. In respect of the budget surplus, during the 1990s, when Richard Court was Premier, there was a mixture of surpluses and deficits, neither of them particularly large or small. The state got through that difficult period when the economy was very uncertain and the effects of the share crash of the late 1980s lingered on through the 1990s. The government of the day survived and funded capital expenditure and other things by selling assets— Bankwest, the State Government Insurance Office, AlintaGas, and the Dampier to Bunbury natural gas pipeline, which at the time was Australia’s biggest-ever privatisation. That got us through that period. We then got to the early part of this century; the time of the Gallop and Carpenter governments. In that sense and in terms of public finance, they were the Goldilocks years. We could not have had a more benign, friendly environment in an economy such as that of Western Australia. There were no great external shocks; there was no share crash; and no 1997 Asian financial crisis, which hit this state very hard because of our trading relationship. Through that period, it was pretty benign. The mining industry was going quite well, commodity prices were not at their record highs but they were strong and there was a property boom in Perth so there was a huge flow of taxation through land tax, stamp duties and the like. That largely generated significant surpluses, which Eric Ripper is very proud of, and good luck to him, but it was a very friendly, benign period. Indeed, the issue that is being talked about so much now relating to the GST was part of that. I will refer to a couple of figures. When the GST was introduced by John Howard in 2000–01 it was well accepted by the states and it started at a fair and reasonable base. Every state seemed to get a pretty good deal. There was a bit of horizontal fiscal equalisation built into it, but there was nothing extraordinary. It was accepted and it worked well until around 2008–09 and then the system got into the problems that everyone has been talking about. I will tell members what the relativities were. The former Liberal government was elected in September 2007, so in 2007–08 Western Australia’s relativity under the GST was 94c in the dollar. In fact, in the time leading up to that, it had been basically around $1, so in that first decade of this century, Western Australia was pretty well getting a good deal. By 2015–16, it had fallen to 30c, as we all know. That was the radical change, and by 2016–17 it is still at that level. In 2007–08 Western Australia got $4 billion of GST and in the 2015–16 year just completed, we got $1.9 billion. Our GST has halved and, as I think everyone knows, if we got a full per capita share of GST, we would be getting $4.7 billion more than we get today. In other words, if we had full GST, we would be in strong surplus; we would not have a debt problem. Even if we were able to get only 75c in the dollar, which I argued for in the last five years, we would be in strong surplus and have a very manageable debt. That is the reality. I know it suits the Labor Party politically to say we wrecked the books and everything else. Ms J.J. Shaw: That’s true. Mr C.J. BARNETT: The dilemma members opposite have is that they face the same set of books, and I will say to members that there is absolutely no circumstance under which Western Australia can achieve a budget surplus so long as we get a GST share of 30c or even if it improves to 40c in the dollar. There is no circumstance in that case under which a surplus can be achieved. That is the problem we faced and the problem members opposite face right now. I cannot see the GST, either naturally or through the Commonwealth Grants Commission process, getting back to anything reasonable within the next five years, maybe longer. I cannot see a political resolution of it in the same period. I have argued this for years and years. I started the argument probably around 2009–10, and I think I have won the argument. No-one in Australia realistically defends the grants commission process. No-one seriously believes 30c in the dollar is fair or reasonable. Even now, the Productivity Commission report could change the angle a little bit and say that maybe it is holding back Australia. Of course it is holding back Australia to have such an uneven distribution of income out of assets. That is where it is at. There is no ready solution. The Labor government will not sell assets. Even selling assets, whether it be BankWest or Alinta in the 1990s or whether it was half of Western Power today, all an asset sale really does is

544 [ASSEMBLY — Wednesday, 24 May 2017] buy time, because so long as we continue to have a deficit, we will continue to accumulate debt. An asset sale buys time. The selling of 50 per cent of Western Power for a suggested $11 billion and retiring $8 billion of debt would buy time. It would probably buy the best part of five, seven or eight years. If the underlying budget improved, obviously, that could get us through but it would not solve the problem. Similarly, as members opposite are going about as a government looking for ways to save money, they can cut expenditure as hard as they possibly can. They will find it difficult, as any government would, but there is no way they can sufficiently cut expenditure to make up for the fundamental deficit that is a result of the GST share. They will not get within a bull’s roar of — Ms S.F. McGurk: Will you ever take any responsibility for the deficit? Mr C.J. BARNETT: I will make my speech and answer questions if the member for Fremantle wants to ask me questions. I am pointing out that there is no way in which we could have avoided debt. There is no way members opposite can avoid continuing debt and this Loan Bill is seeking a massive further increase in debt under the watch of members opposite, not my watch. There is no way they can avoid that unless they get the budget back into surplus and there is no way they can get the budget back into surplus while the GST is where it is at. I will refer to another table and the history of the GST. I do not want to bore everyone with other details, but Western Australia got $2.3 billion in 2000–01, the first year of the GST distribution. In 2015–16, we basically got $1.9 billion. We are getting fewer dollars today than we got in 2001. We can bang on about our share falling from 90c down to 30c or whatever else, but we get fewer dollars. Western Australia gets fewer dollars while the number of dollars for every other state and territory has gone up by two or three times. That is the reality. It does not matter how hard the Treasurer works in trying to save money and cut costs—good luck to him with that—he will not get it back into any sort of balance or surplus budget. That is why he has introduced a loan bill for $11 billion. Mr T.J. Healy interjected. Mr C.J. BARNETT: The member for Southern River may giggle but how will the government maintain the school ratios of staffing, the huge increase in disability, mental health and child protection expenditure in this state? How will it cope with the extra 500 000 people who have come to this state since 2008? Ms S.F. McGurk interjected. Mr C.J. BARNETT: I will continue for a while. I will not take the member for Fremantle’s interjection. I have a few minutes left. I am trying to say that the only solution that can work for Western Australia, work for government and work for public finance, whether it be a Labor or Liberal-led government, is a solution to the GST. As I said, I have been arguing that for a long time. I will claim that I have won the argument but I have not got the result and neither has the government. For so long, and very disappointingly, the argument coming from Canberra by successive Prime Ministers was, “Well you can’t change it unless the states agree.” That was never, ever the case, as I pointed out years ago. It disappointed me that federal politicians from Western Australia repeatedly said the same thing until very recently, knowing it was false. While a change to the GST, whether it be the rate of GST or the coverage—for example, should we include fresh food or not?—those decisions require the states’ agreement. The distribution—the sharing of the GST tax collection—is solely the province of the federal Treasurer and the federal government. It took years for the media to grasp that point nationally but it is now accepted. Any reasonable commentator around Australia, whether they be a political or economic commentator, will have come to the point that the GST system is broken at the very least. It may have served Australia quite well over the last 80 years but it no longer serves that purpose. It is cumbersome, complicated and not understood by everyone. It is a black box. It is a mystery. It is no longer functional for a modern Australia. When this debate started in earnest, I suggested a floor of 75 cents in the dollar. I notice that the now Premier repeats that figure. That seemed to me to be a fair balance from the point of view that Western Australia is the most prosperous state in the country. We have the highest income levels, the highest exports and we have a brighter future. I accept that Western Australia benefited historically and that it can play a role in supporting South Australia or Tasmania. I do not think we should support the Australian Capital Territory or Queensland, but that is where the argument can go on. The GST floor was a good way to draw attention to the inequity, because it was easy to understand that 75 cents in the dollar gave away a quarter of our GST—it was being pretty generous—but it compared unfavourably with the other states. At 30 cents in the dollar, it is now grossly unfavourable. It worked in the sense that the public understands it. Setting a floor, or quarantining, as the Premier argues, a quarter or a third of mining royalties will all help. The Productivity Commission might tweak the formula, which would help too. Maybe gambling tax revenue in the other states could be treated a little bit

[ASSEMBLY — Wednesday, 24 May 2017] 545 differently and that might help too, but will that solve the problem? No. It is just tinkering that might bring a benefit, but it will not solve the problem. The problem requires a fundamental reform, not tinkering with the GST formula, not a reincarnation, not life support for the Commonwealth Grants Commission, because GST is an institution that has outlived its purpose in a modern Australia. Three years ago, we got the closest we have been to getting on a pathway to fundamental reform. It was when the four big states met—New South Wales, Victoria, Queensland and Western Australia. Each Premier — Ms S.F. McGurk interjected. Mr C.J. BARNETT: I am not listening to the member for Fremantle. Ms S.F. McGurk interjected. The DEPUTY SPEAKER: Member for Fremantle, I think the member for Cottesloe has made it pretty clear that he does not want to take an interjection at the moment. He has offered to take them at the end of his speech, so we will let him keep going. Thank you. Mr C.J. BARNETT: At that point about three years ago, the four big states had an agreement. Each of the Premiers of the day signed a simple document to say that they supported, as the four big states of Australia, a fundamental reform. That reform was pretty simple—modern, simple and easily understood. Out of the $60 billion a year of GST that is now collected, the majority of it—say $50 billion to keep it simple—would be allocated on a simple population basis. The more people in a state, the more schoolchildren it has and the more hospital patients it has, the more GST it would get. John Howard introduced the GST for running services related to population. Through some sort of grants process, say $10 billion of the $60 billion could be allocated to give some sense of fiscal equalisation across the country. Of the $10 billion, South Australia, Tasmania and the Northern Territory would get more than their pro rata share. Every state would know that if it had a strong economy and a growing population so its GST would keep up. It would get rid of all the mumbo jumbo of trying to measure Aboriginality and isolation—when Hobart is identified as being isolated because it is not Melbourne. All that absolute rubbish could be swept away in one simple measure. Those four states represent 90 per cent of Australia’s population and 90 per cent of Australia’s economy. Debate has been about the political will and worrying about seats in South Australia or Tasmania, but when 90 per cent of the Australian population and 90 per cent of the Australian economy are singing the same tune, we are well on the way to achieving the result. My strong suggestion to the Premier and any other Premier, whether they be Liberal or Labor, from those four big states, is to go back to where we were three years ago. I suggest they try to get that consensus amongst the four big states. That is where we need to go. With the four big states, Sydney, Melbourne, Brisbane and Perth are on board and the rest can be raffled. We can achieve it because the four big states have the numbers, the economic force and the population numbers. That is where we need to go, rather than the Productivity Commission and more reports, more reviews and more tinkering. That will not do the job. I strongly recommend that the Premiers of the states get together and get onto that line. Mr W.J. Johnston: It worked well when you were Premier. Mr C.J. BARNETT: I got the four big states to sign up. The job was not completed, but it was the closest we have ever got to resolving the GST. Ms S.F. McGurk interjected. Mr C.J. BARNETT: If we could get back to that—there are different governments and different Premiers in place. Ms S.F. McGurk interjected. Mr C.J. BARNETT: I am not talking to the member for Fremantle. Several members interjected. Mr C.J. BARNETT: You can see the problem, Madam Deputy Speaker, because when I get up — Mr W.J. Johnston: He’s just the emperor now! He’s no longer the Premier. Withdrawal of Remark Mr S.K. L’ESTRANGE: The member for Cannington referred to the member for Cottesloe by a name. That is not parliamentary; we know that. Can you please ask him to withdraw it? The DEPUTY SPEAKER: I am sorry. I did not hear anything I thought was unparliamentary, and I do not think the member would have thought that either. There is no point of order. Debate Resumed Mr C.J. BARNETT: I am not fussy; I have been called far worse in this house. I am not going to get sensitive at this stage. Members can either treat it seriously or they do not, or they can laugh me out of town. I do not care.

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Mr W.J. Johnston: We don’t treat you seriously. Mr C.J. BARNETT: Members opposite may not treat me seriously, but I am telling the Premier — Several members interjected. Mr C.J. BARNETT: Members opposite can play their politics and that is what elections are about. They have ruled out the short-term solution of privatisation. It may have got them through the next four years. The government has ruled that out in every respect. Ms S.F. McGurk interjected. Mr C.J. BARNETT: It is now talking about tinkering around the Productivity Commission, which will not deliver the result. It might get some tweaking, but the Premier has an opportunity as a new Premier—a clean skin on the block—with some colleagues on both sides of politics federally. I know them all well. When the Premier goes to his first Council of Australian Governments meeting, hopefully he will attend a dinner beforehand when the real discussion takes place. If the Premier can recreate that goodwill between the four big states, which is not punitive on the small states, he can get to the practical solution. If the Premier can get back to the point where we were three years ago when the four big states agreed that was the way to go, he will have the practical solution. Mr W.J. Johnston interjected. Mr C.J. BARNETT: Madam Deputy Speaker. The DEPUTY SPEAKER: Minister! Mr C.J. BARNETT: The Premier can then get to an in-principle agreement. Every sensible economist and commentator around Australia knows that per capita distribution is the only way of fixing this; it is fair for Australia. Queensland will get worried, and New South Wales and Victoria are now worried about their GST shares. It will get all the uncertainty out of the Australian Federation and Australia will be a stronger economy. We will not waste effort on this silly debate that has gone on for probably a decade too long. Once the Premier has that agreement, which I think would be comparatively straightforward and I think he would get in-principle support out of the commonwealth government, then he will get to the tricky bit of how to transition to that. I do not have the answer to that. It will take time. It might be a decade of slow, gradual transition. It might require a guarantee from all parties, including the commonwealth in particular, that no state would be any worse off in any subsequent year. It might be that the commonwealth has to take a greater responsibility for its territories. Why should the states fund the Northern Territory? It is a commonwealth territory and the commonwealth can step up and take some responsibility for its territory, and let the states deal with it properly. Ms S.F. McGurk interjected. Mr C.J. BARNETT: Ask me a question—I am ready for you. Come on; bring it on! Ms S.F. McGurk: Not one word the former Premier said outlines that he understood that problem when he was in office and that he responded to that problem in his management of the budget—that spending was restrained and that he understood what the GST share would be. The former Premier has not addressed that in anything he has said today. Mr C.J. BARNETT: The Gallop–Carpenter government did not have the external shocks that took place. It did not have a global financial crisis or a collapse in mining royalties. That is a reality—good luck. That was a benign Goldilocks period. The former government had those shocks. The global financial crisis happened in 2008. That was seen around the world as the greatest shock to the world economy since the Great Depression. Indeed, if members look at some of the problems in Europe today, they will see that the after-effects of the global financial crisis are at full play in countries such as France and in other parts of Europe. They are still struggling. In the middle states of the United States the GFC still shows its ugly face in depressed property markets, unemployment, major underemployment, collapsing industries and the like. Western Australia has seen a high rise in unemployment since the minerals downturn and we have major fiscal problems in our budget, but they were primarily delivered by external shocks. My friend at the time, Kevin Rudd, came to the party. I did not agree with all parts of his national stimulus package, but the part that he and I negotiated for Western Australia, like sinking the rail line through Perth and the Ord River expansion, worked well. The former government made a very conscious decision to have big capital works spending to avert the threatening disaster of the global financial crisis. We got through it far better than anyone would have anticipated. Members opposite may object—yes, I am conscious the former government spent, but if it had received a resolution to the GST issue, or at least a pathway, we would not have had the deficits. The point I make and where I started is that the problem we grappled with has not gone away. Members opposite may criticise, laugh and ridicule, but it has not gone away. It is there right now and it will continue for years to come. I accept this government’s philosophical policy position that it will not sell major assets, but it has no alternative. It cannot even buy time, unless it does that. The Labor Party may criticise spending. I know members have a social conscience. Do they blame me as a Premier for increasing spending on disability by 120 per cent? Do they blame

[ASSEMBLY — Wednesday, 24 May 2017] 547 me as a Premier for increasing spending on mental health by about 90 per cent? Do they blame me as a Premier for increasing spending on child protection by 90 per cent? Do they blame me as a Premier for protecting the Kimberley for generations to come? Do members blame me for any of that? No, they do not. I am past the political debate; I am not doing that. I laid down a way for this government to go forward. If it does not work on that, it has no solution and this will not be this government’s last loan bill. It will have further loan bills and it will face what we faced and experienced. The AAA credit rating will not be recovered, as Richard Court did in the mid-1990s. The government will lose a further rating level. That is absolutely inevitable unless it has some way of buying time or unless the Premier can now achieve what I was able to achieve, albeit modest, three or four years ago. If the government wants to tinker at the edge and debate exempting bits of mining royalties, it will all provide a benefit but does it reckon it will win the day? Not a snowball’s chance in hell. MR A. KRSTICEVIC (Carine) [4.53 pm]: I will say a couple of words in closing my contribution to the Loan Bill 2017. I thank the Treasurer for his answers during consideration in detail. As he indicated, this is the largest loan bill in the history of the state—$11 billion. It is obviously being borrowed for the requirements of the consolidated account until 30 June 2021. Even though the member for Cannington said it is not an appropriation bill, it is a bill to ensure there is adequate access to funds required to continue to provide public services and infrastructure investments. In other words, the money will be spent; the money will be appropriated. It is interesting how, two and a half months after the state election, the government came to the figure of $11 billion. The Treasurer indicated he went to the Pre-election Financial Projections Statement that the previous government prepared and, after looking through it, said, “That adds up to $11 billion, so we’ll take that. That sounds about right; we can work with that.” He did not actually go through the hard work of justifying what is needed. The money being asked for is for the entire period of this government. Parliament will not have the opportunity to scrutinise what the government is doing, apart from at budget time when we have budget estimates. That is probably the only time we can really go into detail to try to find out where this money has been allocated and how it is being spent through the system. As members would have learnt this morning, the committee process obviously gives us another avenue to scrutinise Parliament, especially the Public Accounts Committee, to work through what is happening. I am sure the Premier is confident that it will not do its job considering it is government-dominated; therefore it will be rubberstamped through this Parliament, but I hope that is not the case. It is also very important to reflect on some of the comments made by the member for Cottesloe about the headwinds the former government dealt with after its election in 2008. It had to work through a global financial crisis and it had to deal with a mining construction boom. Because of a shortage of workers in Western Australia, it had to get people from overseas to fill jobs. Half a million people came to Western Australia, which required a massive infrastructure spend. To compete with the private sector, there was a requirement to pay public servants more to keep them in their jobs. There was also a fall in the iron ore price as well as the GST issue. Of course there were all of the other issues around land tax, stamp duty and payroll tax, property prices and the collapse of the property market. All these things happened in that period and needed to be dealt with. We are dealing with the finances of Western Australia. It is not a household budget; it is very complex. There are lots of interrelated components. A lot of people have trouble just managing their own household budgets. Imagine managing the entire state and all of the relationships that go with that, the bureaucracy, the private sector, the federal and local governments and all of the mechanisms that make up this state. It is not easy. As I have said to members before in this Parliament, they will hear lots of statements made but will they really know the truth? I will give one example about the state’s finances. We talk about electricity prices and the fact that this government is looking to raise them by 15 per cent or more over the next two years. When the Liberal Party came into government in 2008, electricity prices had not been raised since the 1997–98 financial year. That was effectively when they were frozen. The Liberal Party was elected in 2008. For 11 years electricity prices did not go up in this state. The Treasurer talks about subsidies. I think this year’s subsidy is about $300 million. When we came to government, I am pretty sure in 2009 the subsidy was about $1 billion. That was the sort of subsidy we were giving. What did we do as far as trying to bridge that gap? I think the Treasurer also said he is looking for contestability in that sector. He wants to reach parity of cost reflectivity. He is heading down the same path. We came to government in 2008. In 2009, there were two increases of 10 per cent and 15 per cent and in 2010 there were electricity increases of 7.5 per cent and 10 per cent. In 2011 the increase was five per cent; in 2012 it was 3.5 per cent; in 2013 it was four per cent; in 2014 it was 4.5 per cent; in 2015 it was 4.5 per cent; and in 2016 it was three per cent. I am not sure that the figure of 90 per cent is correct, but the government is saying that over the course of 18 years electricity prices have increased 90 per cent. When looking at any other increase over 18 years, we note that 90 per cent is not a big figure. This is the part about being transparent and honest about what is said in Parliament. Members can say that electricity prices have gone up by 90 per cent, but no-one has said that that was over 18 years. No-one has said that at the time the Liberal Party came into government, the Labor Party policy was roughly 10 per cent a year until parity was reached.

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The Labor Party said it was going to increase electricity prices by 10 per cent a year until parity was reached. We did not go to quite that extreme; however, due to the fact we did not have billion-dollar surpluses, we needed to plug that hole. These are the complications and issues that the Treasurer and some of the more experienced members on that side will know about. They are difficult issues to deal with while trying to balance all of this. When the Premier attacked us in 2016 for increasing electricity prices by three per cent, I have to admit that I laughed. The current Treasurer, especially when the now government was in opposition, indicated that it was heading down the same glide path. As we know, it is very easy to throw stones in opposition, but members need to do different things when in government. The current Premier indicated, as late as February this year, that knowing the fiscal projections and Pre-election Financial Projections Statement figures, he was happy to say that there would be a surplus in his first term as Premier. Realistically, we know that is not going to happen; there will not be a surplus. Well, there may be a surplus; it just depends how many new taxes and charges the government introduces, and how much expenditure it cuts out of the budget. The Premier may well achieve that. I cannot realistically see that being the outcome. Even though we talk about raising electricity prices by between about 15 to 17 per cent to get parity, the whole objective is to have a free market in the electricity sector so that prices can go down. They have to go up before they go down. I just do not understand why they need to go up before they go down. If we are talking about 30 per cent reductions in the gas sector, again that argument amuses me to some degree because I am sure we can look at cost cutting and efficiencies with the current level of funding in that sector. To be honest, if we really want efficiencies in the electricity sector, solar panels are going up at a rate of knots out there. The more we tell people that electricity prices will be going up at unrealistic levels, guess what? More people will get solar panels and less money will come into the coffers. Unless we change the way we charge for electricity, unless we charge for the actual transmission along the lines and have a separate charge for that, it will not really help the situation. The government will have to increase the price by a lot more than 15 per cent to get cost reflectivity. Not only that, that assumes all the other components fall into place, and the federal government does not require the state government to still meet these carbon targets and efficiencies through that avenue. They are all costs to the way things operate. I really do not think that is going to help the government, and I think it will hurt people. We hear and see every day that people are struggling out there. They are struggling, and we are looking to slug them even more. One of the cutbacks is the halting of wages growth in the public sector. Again, apart from the fact that it is a broken election promise, I do not think that is actually a bad decision. I think we all need to tighten our belts at the moment, and we all need to take a deep breath and then try to get things back to reality. We are in a difficult position at the moment, albeit that the rest of Australia seems to be doing reasonably well. There is obviously not this driving desire among our colleagues in other states to be fair and equitable in sharing the burden with us when we are struggling and finding it a bit difficult after they obviously benefited from our success. Obviously, the other part of it is being discriminated against for doing things and being innovative and growing our resources sector. We are getting less of the goods and services tax share because we tried to grow our economy, the economy of this country, and we tried to share that prosperity with everyone around Australia. I think that is a little disappointing The good news is that the Treasurer indicated that he was not looking to fund his election promises outside of the loan of $11 billion. I got the impression that the Treasurer was not looking for another $5 billion to cover those, and he was looking to contain those within the $11 billion Loan Bill 2017. No doubt we will see that through the respective budgets that come through. I am looking forward to the budget in September to see how the Treasurer will deal with this issue. Like I said, I do not imagine that the Treasurer will be delivering a lot in those budgets, unless of course the federal government comes to the party and starts throwing a lot of money this way. That could happen; I hope it does. I hope it does start throwing a lot of money towards Western Australia because we deserve it. The federal government should have done that a long time ago, so that we did not have to have as much pain and suffering throughout this state. If that is the way the Treasurer finds this extra money, so be it. But the federal government should hurry up if it is going to do that. As the Premier has indicated, he is very keen on transparency, financial accountability and looking at the financial consequences, which is why he has initiated a commission of inquiry. That commission will obviously not be genuine in what it is doing or its approach, but just looking at the shallow words and sentiment around that inquiry, I think the sentiment is great but the reality is that that is not what is expected to be delivered. That commission is not really going to teach us much about how we can improve the state of our finances and manage our accounts in a better way. It is interesting. I saw that the Treasurer was swayed by the argument to reduce the loan amount down to $5 billion. He was not allowed to support that because, as we could all see on this side of house, the member for Cannington was hovering over him, making sure that he did not waiver in his resolve to try to go with what the opposition was proposing. Obviously, the Treasurer will struggle to keep those sorts of people at bay and to make sure they do not get their wicked way with the state’s finances. As I said, if the Treasurer ever needs any support, we are always happy to stand in this Parliament and support the Treasurer when it comes to defending the finances to make sure that his colleagues do not take advantage of him when he is not paying attention.

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As we indicated, our trajectory was not to head towards $41 billion or $44 billion; our trajectory was to sell— privatise—51 per cent of Western Power, which I know the Treasurer was not that long ago very supportive of. That would have pushed it back down to around $29 billion. We had a plan. I am happy to take responsibility for all the decisions we made up the election, bearing in mind the direction we were heading in after the election had we won. We all know there will be a honeymoon period. There will be a period of time when the Treasurer can just blame someone else for everything. It is not about blaming people; it is about understanding the circumstances. We go around and talk to the people of Western Australia. I talk to people in my electorate and say to them, “These are the areas in which the former state government invested money. Is there anything there that you think we wasted money on? Is there anything we shouldn’t have put money into?” Surprisingly enough, Elizabeth Quay is the only thing they really say to me, because that is what has been brainwashed into them through the media; that is what they used to hear every day. I tell them the story of Elizabeth Quay and I tell them how the jigsaw puzzle fits in, and they stand there and say, “Why isn’t anyone telling us that? Why isn’t anyone telling us that in the media? Why aren’t they telling us it’s a great investment? Why aren’t they telling us that it’s going to help tourism? Why aren’t they telling us it’s creating jobs? Why aren’t they telling us it’s actually not costing us money, but that we’re making money?” It is quite interesting to have that discussion with people on a one-on-one basis and give them a little more information and background. They do not understand why they are not getting that message. They say, “Why isn’t the media putting these stories out there?” Obviously, they are not sexy stories; success is not something that the media likes to portray or people like to gloat about. We like to talk about doom, gloom, depression and sadness for some reason, rather than talking things up. That is what we need to do at this point in time—we need to talk things up. Several members interjected. Mr A. KRSTICEVIC: It is obviously important to acknowledge the difficult situation we are in; there is no doubt about that. A lot of that is not of our making. There are global factors, federal factors and a whole lot of things. Obviously there are some decisions we make as a state government that we have control over, but a lot of it is outside our control. That is the difficult part about trying to move with the times, I suppose. It is a bit like doing the budget forecasts; the experts tell us what the iron ore price will be but it does not even get close to that. The figures that we are working with are very rubbery. They have always been rubbery. I am sure that the Treasurer will find that the figures will be worse rather than better. Again, as he takes control of the Western Australian economy, as he starts managing it and as his ministers start taking control, they will find that they have these headwinds as well. They will find that there are lots of things that they cannot control or influence. When they look at the things that they can influence, they will say, “We have to cut services; we have to cut back on our hospitals, police and teachers.” The government does not want to be cutting the things it has control over. It wants to make sure that people have access to those services and it wants to reinvest and give confidence to the private sector so that it will invest in the economy, take its hands out of its pockets, open its wallets and spend some money and invest, like it is in Elizabeth Quay and lots of parts of the state. I think all these things are great. It will be appropriate occasionally for the government to acknowledge some of the good things that we have done—some of the good things out there that are value for money. It is very easy to criticise. It is very hard to do things. A lot of government members already know that. They have been ministers before and they have been in government before. Others understand exactly how difficult this all is. There is no doubt that the next four years will be challenging. As I have indicated and as we have already seen, there will be a lot of broken promises but I think the people of Western Australia deserve to be told up-front: “We have made all these promises. It’s going to be difficult for us to deliver, not because we did not know what the finances were”, because it does, “and not because we did not realise what the revenue source complications were”, because it did. The government cannot say that it did not know what was going on. It cannot say that it was asleep in opposition and that it had no idea. It cannot say that it did not understand all the budget documents that were being produced and it could not see what was going on. The reality is that it did know what was going on; it did know the situation. It does not mean that it necessarily liked it and it does not mean that we can necessarily influence a lot of it. The government needs to accept that and be honest and up-front with people and tell them what the issues will be. Maybe it can take different revenue sources on board. That is important. I think it is critical. I genuinely wish the Treasurer all the best. I hope his mother-in-law appreciates being referred to in the same sentence as me. We can only have our best interests at heart and those of the people whom we love. I am sure she is exactly the same. Like her, I am sure the Treasurer will give the same level of care to the people of Western Australia. MR B.S. WYATT (Victoria Park — Treasurer) [5.13 pm] — in reply: I begin by thanking everybody for their contribution to the Loan Bill 2017 over the last two days. When in opposition and now in government, I always

550 [ASSEMBLY — Wednesday, 24 May 2017] found that when people are willing to engage, the consideration in detail process is quite a useful dialogue between government and opposition. I hope that at the very least I was able to provide answers to questions that were put. Clearly, there is a difference of opinion around the size of the Loan Bill that should now be passed by the Parliament. Inevitably, in the past I think I may have moved similar amendments; I cannot recall. Hopefully, at the very least I explained for the people in this place and the public more broadly the reason we are seeking authority of $11 billion. I just wanted to emphasise the point again that this does not authorise me to spend one extra cent. That is the purpose of supply. We will go through that budget process in due course as budgets are presented to Parliament. During this short contribution, I do not intend to revisit all the issues that were talked about. I think they were revisited at some length during discussion on the member for Moore’s amendment last night and the Leader of the Opposition’s amendment today in respect of a couple of different points, basically doing the same thing of trying to reduce the amount that we are seeking to authorise to borrow. The arguments were slightly different but trying to seek a similar outcome. I want to quickly respond to some of the comments made by the member for Cottesloe. Basically, he is right in that a surplus will only return once GST is higher than it currently is. Thankfully for the first time in a long time, our projections are upwards, admittedly not as fast as we would like them to be but certainly they are upwards. Ultimately, I was interested in the position of the former Premier, the member for Cottesloe, that asset sales effectively buy time. Just reflecting on that comment, he is probably right on that as well, particularly in a scenario with a projected operating deficit, which we have and which we are all familiar with. The one point that I will make is that the member for Cottesloe was not a passive observer to all this. I note that the member for Cottesloe is, rightly, proud of spending what he did, and he outlined the increases. That is fine; a government can own the spend but it must then own the consequences of that spend. Ultimately, everybody accepts the unfairness. The point I made time and again in opposition, and I will make it again now, is that the GST glide path was always predicted. We always knew what it was going to do. The former Premier, the member for Cottesloe, was right. In about 2009–10 he started making this an issue publicly. With respect to the 2012–13 budget, in particular—he said it again this afternoon—he said that if his government had more money, things would be better. Yes, I get that. If we had more money, we would not be in deficit. If we had more money, we would not have such high debt. Despite the warnings that were coming to the former Premier, the member for Cottesloe, he continued down the path he took. That is not rejecting the comments that he made. Ultimately, I think he is right in how difficult it is to get to a surplus position and that asset sales will buy time, perhaps already reduce the amount of borrowings over the short to medium term if an asset sale can be put away. Admittedly, there are probably few assets as large as Western Power that will generate such a return on total public sector net debt. The former Premier was around for a long period. I quoted in this place many times the former shadow Treasurer, the then member for Belmont, Eric Ripper, warning the government and the member for Cottesloe that if they did what they did with the GST—that is, take more state revenue and put it into a pot that is then subject to equalisation from the Commonwealth Grants Commission—it will equalise, and as a result we were equalised. The very warnings that Eric Ripper gave way back in 1999 came to pass. The then member for Belmont, Mr Ripper, put that specific question to the member for Cottesloe during question time. When he asked him whether he thought the Commonwealth Grants Commission was the right body to be making decisions around the redistribution of this income, the member for Cottesloe responded, “Probably not but that is a question for a future time.” Unfortunately, he missed that huge opportunity when the federal government was desperate to win on that GST debate back in the late 1990s. That was the time to correct it. The comments made by the member for Cottesloe are right; it is going to be incredibly difficult to find a solution to this issue. My view, for what it is worth—the member for Cottesloe said this—is that the GST allowed the commonwealth government to fundamentally get out of its fiscal responsibility to the Northern Territory. Prior to the GST, the commonwealth government assumed fiscal responsibility for the Northern Territory. The GST process effectively allowed the commonwealth to evacuate its finances out of that and the GST went in and filled that hole. That is not a critique of the spending needs of the Northern Territory but it is a critique of what the commonwealth government did in respect of the state’s GST. Many billions of dollars are now flowing into the Northern Territory that has allowed the commonwealth government to escape its historic role in funding its own territory. I have spoken about this enough. Again, I thank all members. I thank the shadow Treasurer, the Leader of the Opposition, the Deputy Leader of the Opposition and the Leader of the National Party. I think it has been an interesting debate. As I said, I hope that I have at least tried to answer questions during consideration in detail. Members may not have liked some of the answers I gave but I gave it a crack. I commend the bill to the house. Question put and passed. Bill read a third time and transmitted to the Council.

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ADDRESS-IN-REPLY Motion Resumed from 18 May on the following motion moved by Ms J.J. Shaw — That the following Address-in-Reply to Her Excellency’s speech be agreed to — To Her Excellency the Honourable Kerry Sanderson, AC, Governor of the State of Western Australia. May it please Your Excellency — We, the Legislative Assembly of the Parliament of the State of Western Australia in Parliament assembled, beg to express loyalty to our Most Gracious Sovereign and to thank Your Excellency for the speech you have been pleased to address to Parliament. MS M.J. DAVIES (Central Wheatbelt — Leader of the National Party) [5.20 pm]: It seems odd to be rising after the debate that we have had over the last couple of days, and I will choose not to cover again too much of the conversation we have had on the Loan Bill 2017. However, I would like to contribute through the Address-in-Reply process, and begin by offering my congratulations to the Deputy Speaker and the Acting Speakers. I have already offered my congratulations to the Speaker, and I wish them all well as they go about running the business of this house. I also welcome all the new members to the house. Many of them are as yet unfamiliar to me. If I have not been present for their inaugural speeches, I am making my way through them in Hansard, because it is important for me to get to know the people I work with in these very close quarters. It is exciting, and I am sure that most have felt humbled as we have stood in this place. As someone who has been a member of both chambers, I can offer the observation that we are all here to make a contribution, despite the fact that we will not always agree. We all come to this place hoping to make our communities better, and to improve things for them. The theatre and the froth and bubble of this chamber at times, particularly during question time, is certainly not representative of the work we do in our electorates, which is enormously rewarding. I am sure all the new members will look forward to doing that. I know a number of them have worked for members of Parliament who are in the process already, so they will understand that it is rewarding meeting with some of the most vulnerable people in our community, taking up issues on their behalf, and sometimes bringing them to this chamber and debating them. I wish all new members well. I believe we all seek to enhance and improve this great state. I congratulate the Premier and the ministers in cabinet. This is the first opportunity I have had to say that. The government has won resoundingly, and I expect that it will continue to remind us all of that; I would expect members opposite to do that. Mr M. McGowan: I would not be so crass. Ms M.J. DAVIES: I do not think that we would need reminding, given that, when we walk into this chamber, we on this side are surrounded by government members, so we have a daily reminder. I would, however, offer some caution, particularly in light of the Premier’s comments that the majority that Labor has returned gives it a mandate to do whatever it pleases, and that we should just allow it to happen. I think this is more directed to the Legislative Council, given that the numbers in that chamber are different from what they are in this one. That certainly will not be happening from our perspective, although we respect the fact that the government has won resoundingly. There are many members sitting in this chamber, and although we can find ourselves sitting on the opposite side when the house divides with only four of our members, or with the few sitting on this side, which is a little bit demoralising—I am not going to like that—we will still be aiming to hold the government to account. That is our job, and we will be doing it. The government does not have a mandate to do whatever it likes without scrutiny being applied. The Premier and his ministers must absolutely make good on their commitment to deliver for all Western Australians, not just those who voted for the Labor Party. I recall some of the answers we have received in question time to date, particularly from the Minister for Transport, who was talking today about Metronet. That was clearly a centrepiece of the government’s election platform. Regional members are naturally concerned that the vast majority of what this new government has committed to spending is directed at the metropolitan area. I remind the Minister for Transport and all the other ministers making decisions on a daily basis that projects in regional Western Australia need their attention. In particular, for the Minister for Transport, the member for Moore and I have a rail line and a train of our own, which we fought very hard for—the AvonLink— and I feel that its demise is near because of the change of government. Although all this money is being spent on Metronet and looking after the suburbs and the good people of the Perth metropolitan area, I implore this new government to make sure that we do not let this service go, because people in my electorate and the electorate of the member for Moore value this service greatly, and we do not think that we deserve it any less than the people in the suburbs and the members who have stood up and spoken highly of the Metronet project. The government is here to govern for all, despite its enormous majority, especially those who have not voted for the government.

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It will be the task of the Nationals to make sure that the government does not forget, as has happened in the past, that people in regional Western Australia need our support. It is hard to deliver services and to make sure there is investment in regional Western Australia. Regional development is difficult, and I know that members in this house understand that. The government needs to make a concerted effort; there must be a plan. It is more expensive to attract and retain people. We have seen a vast improvement in both those things over the last eight years, but there is always more to do, and it was very hard to turn that ship around in the eight years that we had in government. I think that the mood in regional Western Australia shifted when people saw the Liberal– National government make a commitment to the people of regional Western Australia that it was there for the long haul, and there was a fund that would allow the government to deliver projects that regional people had long since put in the bottom drawer and forgotten about. That is what people felt like when we came to government 2008—that none of their aspirations would ever be met. They did not even dare to think that they might be able to put a project on the table, take something into one of their regional development commissions, or approach a member of the government, because it simply was not on the agenda of the previous Labor government. People were in utter despair. There were many black holes in regional WA; they had just been left to rot. We accept, as I said, that we have lost, and it is now the government’s task to take up the cause on behalf of every person in Western Australia, but we will be making sure that the government does not forget that regional Western Australia is the engine room of this state and its great economy. The fact that we lost, and that we are sitting on the other side of the house, is a hard transition. That said, members of the Parliamentary National Party can and do hold their heads high. Our small but mighty party has been around for 100 years, and I am confident we will be around for another 100 years. We bucked the trend of the wave of change that washed over Western Australia at the last election. There was undoubtedly a tidal wave of support for the Labor Party. When I say that we bucked the trend, I refer to the numbers. In 2013, 71 694 people cast a vote for the National Party in the electorates in which we ran. We typically run in every regional seat. In 2017, 71 313 people cast a vote for the National Party. In the biggest swing to the Labor Party ever seen in this state, the Nationals lost just 381 votes. Of course, there were shifts across those electorates, and we have lost some incredibly important members of Parliament, but looking at the raw numbers of support for the Nationals, our team can hold their heads high. We did our bit, and we are in a very strong position to make sure that we are there holding this government to account. In the Legislative Council, between 2013 and 2017, we lost just 28 votes. After the biggest swing against the government in history, and the biggest swing towards a Labor Party—congratulations to them—the National Party has held its own, but there were some losses and some shifts where those voters were. Before I move on further, I want to draw attention to the fact that we had a very strong campaign team. The work done by our members of Parliament, our candidates, the organisation and our volunteers and supporters was exceptional, and I want that on the record. We are a small party and a small team. We do not have unions or big business supporting us. We had sections of the big business fighting against us with a campaign the likes of which we have never seen in the history of campaigning in Western Australia. I put on record an enormous thank you on behalf of the National Party to Hon Jacqui Boydell, our campaign director; Hon Martin Aldridge; Nathan Quigley; and our campaign central team for making sure that the National Party is still here to fight another day From a very personal perspective, while I am on my feet, I would like to thank my local campaign team of Rob Tinneti, Theresa Middis, Heather Giles and Amy McAllister. Our Central Wheatbelt campaign team, which was far vaster than that, put in the hard yards to make sure Central Wheatbelt remained in the hands of the National Party, and it did a magnificent job. The last personal thanks I would like to give, because this is the first opportunity I have had while on my feet, is to my ministerial team. As ministers in the chamber this evening would know, our ministerial teams are absolutely invaluable. They become an enormous support and we probably spend more time with them than our own families at times. I put on record my thanks to Doug Cunningham, Nicole O’Keefe, Jill Sounness, Josh Nyman and Amy McAllister. The team in that ministerial office while I had the privilege of being a minister of the Crown in the previous government was exceptional. Some of them had served over numerous governments, and I could not have done it without them. That was part of the broader Nationals team going into the election. As I have observed, we now sit on the other side of the chamber, but an enormous amount of effort was put in to deliver us here, and it is right to acknowledge the people who work behind the scenes to support us in these roles. I cannot go any further without mentioning that we lost two members who recontested their seats. Hon Dave Grills, the former member for Mining and Pastoral Region, made a magnificent valedictory speech in the Legislative Council. Dave is an authentic individual who is passionate about the communities of the Mining and Pastoral Region. He is one of those grassroots campaigners who loved nothing better than to be out in his community doing the best that he could. I am devastated to lose him, but I know that he will go on to do good things, and we will see him walking the halls of Parliament House advocating on issues he is passionate

[ASSEMBLY — Wednesday, 24 May 2017] 553 about. The other is, of course, Brendon Grylls. We have already touched on this in this house. The departure of Brendon Grylls as the member for Pilbara and previous leader of the party only strengthens our resolve to continue the pursuit of the policy and change that will deliver for our constituents—those who live, work and invest in regional Western Australia. Brendon’s passion for regional WA has left an indelible mark on the communities that we seek to represent. His leadership and his approach to public office has meant that the people of regional WA now know what it is like to matter, and I know that is something they will not forget. They will not forget what it is like to have the government’s attention and light shone on them, because he had courage to bring that to the table. Dr A.D. Buti: Get over it. You know, it’s not like someone has died. They haven’t stopped talking about it for days. The ACTING SPEAKER: Members, please. Ms M.J. DAVIES: I will take that interjection. Of course, he has not died, but this individual, Brendon, was an exceptional member of Parliament who contributed to the communities that we care about. If the member ever took the time to visit regional communities, he would know that; he will get that feedback. Dr A.D. Buti interjected. Ms M.J. DAVIES: The member chooses to ignore it. Mr P.C. Tinley interjected. Ms M.J. DAVIES: The member was not in the house—I have acknowledged that we lost the election. I am now speaking about a previous Leader of the National Party who served in this Parliament for 16 years. The members should show some respect. I place on record my thanks to Brendon for his service to not only the electorates he represented, which were Merredin, Central Wheatbelt and Pilbara, but for all Western Australians. He had an exceptional talent for tackling intractable issues, for inspiring people to get involved and for challenging the status quo. It was a privilege to serve as his deputy, to serve in cabinet and to be his successor in the electorate he represented in Central Wheatbelt. On behalf of our parliamentary team and the Nationals, I thank him for his service and his willingness to risk his own political career for something that we all believe in. We all went to the election with that belief. Point of Order Mrs L.M. HARVEY: I am sitting right beside the member delivering her speech and I cannot hear her because of the chatter from the other side of the chamber. The ACTING SPEAKER (Mr T.J. Healy): I ask members to be silent while the Leader of the National Party gives her address, please. Debate Resumed Ms M.J. DAVIES: Thank you, Mr Acting Speaker. Political courage is rare in modern politics. It is easier to be beige. It is easier to avoid conflict. It is easier to fly under the radar. It is easier to be a small target. Cynics may feel that royalties for regions and the policy we took to the election are populist policies; but I tell you what, the people who live in our communities in regional Western Australia certainly do not think that. These policies are more than populism; in particular, royalties for regions fundamentally changed our state for the better. As we have prosecuted in this place, we still fundamentally believe that we need a new revenue stream to stabilise our state’s finances. I think we lost a champion of regional WA. Whether members believe in his politics or not, he was an exceptional contributor to this state. I am sure that those who have served with Brendon since 2001 would agree with that. Obviously, he was unable to provide a valedictory speech, but I am sure that if he had had this opportunity, he would tell all members of Parliament in this chamber that they should be fearless in their pursuit of the things that matter to their constituents. I think he would also thank his family, his staff and the people he had the privilege to represent. I say to Brendon, Susan, Thomas, Oliver and Jack: we wish you all the best. To Susan and the kids: thank you very much for sharing your husband and your dad with the Nationals for 16 years. It has been a privilege to serve with him and I am sure it will not be the last that we see of him. I want to speak briefly about the period between 2008 and 2017 when the government put regional development firmly on the agenda. It was not just a token effort. I do not deny that there had been expenditure in regional WA before we came to government, but it was not coordinated or concerted. The government would turn up to a community to give it a new school. The government would turn up to a community and say, “Here’s a new hospital” or “Here, have an ambulance subcentre”. There was no cohesive structure. We often observed prior to 2008 that although we planned every inch of the Perth metropolitan region, there was little structure to the future and the investment strategy for regional communities; it was lacking. That meant that it was left to the whims of

554 [ASSEMBLY — Wednesday, 24 May 2017] the political cycle and people in positions of power, and it lent itself to the neglect that those communities ultimately experienced. Royalties for regions gave us a dedicated revenue stream for the first time. Prior to that, there had been a regional development fund. [Member’s time extended.] Ms M.J. DAVIES: Regional development received $80 million from the Gallop–Carpenter government over four years. It was all pre-allocated and there had not been any discussion at a local level with any of the people who it was delivering to; there was no grassroots involvement in decision-making. That was something that we came to government to change; we came off the back of the very city-centric Labor government that had neglected the regions. I believe that we have given people in the regions a blueprint and a map, and a desire to lift their aspirations for what they can achieve. It is right that people in the regions can aspire to have projects that have only ever been talked about for the Perth metropolitan area. It should not matter that a person lives hundreds of kilometres from the Perth CBD. We are not saying that we need a tertiary hospital in every one of our communities; we do not think that is the case. We do think we should have access to decent health care, and there are creative ways to come to meet this need, but it is hard. We have to work at it and think outside the square. Traditional models of service delivery do not work. We find that with funding mechanisms that come from the federal government as well, in relation to aged care and health care; they do not work. Particularly, in my area—I have to speak from the Central Wheatbelt’s perspective—child care is broken and it is not sustainable. The model used to fund child care does not work. We used royalties for regions to see whether we could come up with a different way to deliver sustainable childcare services, because the mums and dads, and families in regional Western Australia have the same expectations as everyone else. It is very hard in some of the smaller communities to make the model for 80 kids or 90 kids or more work, because it does not. We have to be creative, but we have to have the will to be creative. It is really easy to ignore it, because there are not as many people out there as there are sitting on the doorstep of this place in the Perth metropolitan area. It is the same with aged care. The federal government model of funding is 80 beds or more for an aged-care facility. The biggest town in my electorate has 7 500 people. We are not going to have an 80-bed, high-end dementia care unit, so people have to be creative. Royalties for regions gave us the opportunity to go to the federal government and the state departments and say, “How would you solve this? How would you solve this for our communities? Be creative.” We worked with the public service and people willing to think outside the square to deliver the Southern Inland Health Initiative and childcare services, and to think about how we might buck the trend so that the aged members of our communities, the ones who built the towns, are able to stay in the towns that they built with their family and friends at the time that they need them the most. We did that; royalties for regions allowed us to do that. That is why we are so fearful that the commentary that we have heard from the government to this point is that that is all about to stop. The government is either trying to find savings or it is going to cut it; we have not been able to get a clear answer from the minister. We certainly have not been able to get a clear answer from the Premier or the Treasurer, so we are nervous and our communities are nervous. We know that every royalties for regions project that has not had a signed financial assistance agreement—even some that have—has been called back in to be put on the minister’s office desk to be scoured through. Mr R.S. Love: Line by line. Ms M.J. DAVIES: Absolutely. We have also heard comments that if you have not started your project or there is not a stake in the ground then you can pretty much just write it off. These are people who have done the project work, have the business cases and met the threshold of their project going through cabinet. The member for Moore pointed this out; they were approved by the cabinet of the day. These community groups and, in many cases, groups of local governments in our communities, have been working away, particularly on aged-care projects, trying to find solutions for their communities. We fear that that is now all to be lost because they will either be substituted for promises that were made by the incoming government—which is its right—or just cut. That is unacceptable to us. Some clarity would be good because everything has ground to a halt. People are nervous and confused. They do not know what the future of the regional development commissions will be. It is a very poor signal to send to people who have worked so hard; they feel let down. We know that not one of these contracts is safe. Another sign that this government has put on the table—I spoke about it briefly the other day—was the announcement made by the Minister for Transport about the $89 million contribution out of a possible $2.3 billion federal state road and rail package. That was claimed as a win for regional WA. That was the quote in the media statement from the Minister for Transport: that funding for two projects that equates to $89 million out of $2.3 billion was a win for regional WA. It is like the crumbs off the edge of the table. Thanks very much! One of them is for planning money; it is not even a project at this point. The signal that is being sent to regional communities is, “We’ll give you a little bit, but don’t expect too much more. You’ve had your fair share already. You don’t get any more.” That is less than four per cent of the total package that the government has crowed about in question time in this Parliament and in public. It is four per cent. I am not sure that anyone in my community would think that that is a win. They would certainly be very nervous to think that that would be

[ASSEMBLY — Wednesday, 24 May 2017] 555 considered a win under this new government’s attitude towards spending. That, coupled with the fact that more than half of the election commitments made by the incoming government were about Metronet, sends all sorts of signals to our communities that give them cause to be nervous. The members of the National Party are equally nervous. We are nervous that we do not get answers to questions and that there will not be any further project funding. We are nervous to think that, “We have had our fair share. That is it—no more. See you later.” From the answers that we are getting from ministers, the Premier and the Treasurer, we feel that they are focused on the Perth metropolitan area and that it is like the good old days of pre-2008 when we came to government. The playbook is not too much different. I wonder how in all good conscience the members for Bunbury, Kimberley, Pilbara, Collie–Preston and Albany can sit in the house and support an agenda like this when they will have to go back to their own communities and have this debate there. It will be difficult. We talked about that from the perspective of a broader economic debate. How are all members of the government going to go back to their communities having said, “No increases to taxes. No increases to fees and charges”? There are regional members who will now have to stand shoulder to shoulder with their comrades and defend enormous expenditure in the metro area and very limited expenditure anywhere else in the state. That will be a challenge. As I said, the expectations of regional Western Australians have been raised over the last eight years; a very high bar has been set. People in our communities know what they deserve. They have seen what it is like to have a government care and they will not tolerate being ignored. I do not want to go on for too long, as it has been well canvassed over the past day in relation to the Loan Bill, that this side of the house believes that there needs to be a new revenue stream and we do not think that the government is exploring all opportunities. However, it did seem during consideration in detail, despite the fact that the Premier and the Treasurer had previously said that they were not interested in talking to either of the companies, that some work is being done. It seemed that they are looking at some of the state agreements and having conversations with some of these companies. The government absolutely should because its members cannot go back to the communities that they represent and realistically say to them that they were going to do what they had said they would not do before the election—that is, ask for another $11 billion—but not ask for every sector of the community to do its fair share of the heavy lifting. It is the ultimate irony. Today there were rallies by the Community and Public Sector Union–Civil Service Association of WA and I have read enough of the speeches of the incoming members to know that there are strong union links right through this house. I am sure that the unions will come calling. There are rolling meetings on that. I cannot remember what they said but there was something to do with a machete. There is a CPSU media statement titled, “You Lost Us At Machete” and a poster that reads, “No Machete. Real Bargaining. Job Security. Premier, Keep your promises.” This is from the CPSU just two weeks into the Parliamentary sitting. It was not brave enough to come to the steps of Parliament House to talk about frozen wages and negotiating, which it had no hesitation in doing when we were in government. It is keeping its distance. It is having a little bit of a go but it is not putting too much pressure on yet but I think that will change. Mr R.S. Love: Maybe there were too many of them to fit in the courtyard. Ms M.J. DAVIES: Maybe. The unions are having meetings dotted around the city as far as I can tell. That is an interesting development. I think that the meetings will increase over time as those job losses start to be realised. Again today, the Premier could not confirm what percentage, whether there would be an equal spread of job losses between regional and metropolitan areas or whether we would be harder hit in regional Western Australia. We know that that is normally the case because it is more expensive to employ, attract, and retain people in country communities. The National Party made that commitment but I am not sure that the government is up to that. That will be the challenge. The unions will start to get restless and they will hopefully bring their argument a little bit closer to Parliament House next time. They should not stay down in the Perth CBD but bring it to the steps of Parliament as they did when we were in government and put on a little bit of pressure and stand up for their members. We have canvassed the fact that the Nationals still believe there is an opportunity for this government to pursue additional revenue. We canvassed today in this house that we need to make sure that we understand the context in which spending decisions were made by the previous government and that there were some headwinds, and that the government cannot get itself out of a structural deficit by saving and cutting; it will not work. The government needs a new revenue stream and an increased GST. That GST is over the horizon; it will not come in any time soon. There is an opportunity for this government to sit down and look seriously at a revenue source that will not impact on mums and dads or pensioners on fixed incomes or small businesses and make sure they are not being asked to do the heavy lifting when it appears there is no appetite to compel the two biggest mining companies, which we assisted and facilitated to grow and deliver enormous profits on a non-renewable resource owned by the people of Western Australia, to do so. We expect this government to do everything in its power to make sure that burden is not left to the most vulnerable in our community.

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I do not want to go over it again because I feel as though we have done it ad nauseam over the last few days. I think people are very clear on the National’s position. I thank once again the National Party and the team we have here. I think we can hold our heads high off the back of the election and we will certainly be seeking to hold this government to account over the next four years. MR I.C. BLAYNEY (Geraldton) [5.50 pm]: Firstly I congratulate the Speaker on his appointment to a challenging and complex job and the Deputy Speaker on her appointment. I would also like to welcome my fellow newly appointed Acting Speakers to their role, which is also challenging and interesting. We should all remember that this institution deserves our complete respect because it is greater than any one or all of us. I would also like to acknowledge the staff of the Parliament and say that it is always a pleasure to work with a group of people who are both pleasant and totally professional. I would like to also acknowledge and congratulate the Premier on his accession to his office and his ministers on their appointments, and all other members on their election to represent in this place the people of their electorates. I remember being told a few years ago that fewer than 1 000 people have been elected to Parliament, so we should remember that we are lucky and are privileged to be here. I would like to also acknowledge my colleagues who were not re-elected, and thank them for their support and friendship during their time here. I would like to thank my wife and family for their support through what was a quite difficult campaign for the seat of Geraldton. I would like to acknowledge and thank the member for Cottesloe, our former Premier, Hon Colin Barnett, for his help and support for me as the member for Geraldton over the last eight years. Whenever I took a serious issue to him or his office, it was always given proper consideration. I always felt that as a member of his party, I would get support if needed. The 2017 election was a hard race. In my case, it went on for nearly two years. I faced two energetic challengers in a Nationals upper house member seeking to stay in Parliament via his change to this house, and a youthful, popular and strongly local candidate from the ALP. My margin has dropped from around 22 per cent to around 1.5 per cent. However, students of politics will remember that Geraldton has had some huge swings in previous elections—32 per cent when former member Jeff Carr retired and in the resulting by-election, and then 20 per cent when his successor, Bob Bloffwitch, was defeated by Shane Hill. When my seat of Geraldton swings, she swings big. Since 2008, I think our governments have really delivered for Geraldton. For example, in education, we made Geraldton the central TAFE headquarters. We built beautiful new buildings for the Meekatharra School of the Air on the coast at Bluff Point; expanded Geraldton Universities Centre a number of times to its current 320 students; committed $25 million in upgrades to re-establish our two government high schools as two separate, stand-alone schools; built a kindy and new admin block at Beachlands, a library at Allendale and a family and child centre at Rangeway; provided $25 million for new TAFE facilities; built Geraldton’s first new primary school since 1979 at Wandina; and air conditioned all our government schools and installed at most of them 40 kilometre an hour signage. I would like to thank our previous education ministers, Dr Liz Constable and Hon Peter Collier, for their support. In regional seats, transport is obviously given very high priority. Products go through our port via our roads and railways. Our people have to move around a lot through our airport, our roads or our bus services. Our government completed Indian Ocean Drive; upgraded the Place Road–Flores Rd intersection; built a beautiful, much safer bridge across the Greenough River south of the Greenough Hamlet; upgraded Geraldton Airport and deregulated it; finished the southern transport corridor; and completed a number of upgrades at the port of Geraldton. In community infrastructure, we built two new fire stations, relocated the library, provided a new vessel and renovated the building for the Geraldton Volunteer Marine Rescue Group, opened a further stage at Hillcrest Lodge, and built several packages of public housing. In sporting infrastructure, we redeveloped Eadon-Clarke Reserve, built 500 lux lights at Wonthella, a project for which Geraldton has been asking for 40 years, and commenced Kidsport, one of the really exciting innovations by our former government in sport and children’s development. Geraldton, as the region’s major city, was the base for the expansion of the midwest iron ore industry, and I found it fascinating and very fulfilling to help the development of Karara, which was also a very strong interest of the then Premier, along with its port facilities and railway upgrades. Karara is Western Australia’s first magnetite mine. It is quite an amazing project, and I encourage any member who gets an opportunity to visit, to do so. It is only about 40 minutes flying time from Perth Airport. Along with this, we built the first stage of the 330-kilovolt power line, which cost $440 million and is the biggest Western Power build for 20 years. We also opened the Greenough River solar farm, and the Mumbida wind farm, which is the second wind farm at Geraldton. An expansion of both the solar farm and the wind farm is in the pipeline.

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Other regional infrastructure that the former government provided are things such as the Country Age Pension Fuel Card, a quite useful and exciting project to expand police and emergency services communication, and, of course, the program the former state government started, with the later stages being done with the cooperation of the federal government, to expand mobile phone towers to address blackspots throughout Western Australia. It was a dream that I think is now a reality whereby we can enter Western Australia at Eucla and exit at Kununurra, and if we are on highway 1, we will have mobile coverage all the way. Last year we placed another 26 extra police in Geraldton. In health, we opened a new cancer and dialysis centre at Geraldton Hospital. Over the last eight years, the Liberal–National government increased funding considerably to the patient assisted travel scheme, the Royal Flying Doctor Service and St John Ambulance. In 2017, the Barnett government made strong commitments to Geraldton and the midwest. We have started the process of developing the Abrolhos Islands national park, and tourism and aquaculture industries. We were close to announcing the go-ahead for the accommodation project to serve Geraldton Universities Centre and the hospital, and the expansion of Geraldton Museum. We committed to the development of the cruise ship industry by approving shore tension units to enable cruise ships to berth in Geraldton port, with a committed berth to be available through the cooperation of the Mid West Ports Authority and Co-operative Bulk Handling Ltd. The local community was disappointed to have Geraldton listed as one of the regional ports that had caused Carnival to change its plans. I want to state strongly that we had addressed our issues. Once again, I acknowledge the former Premier’s help on that project. Our largest commitment was to the redevelopment of Geraldton Hospital, which we costed at $138.5 million. The now government’s commitment was to stage this project as an initial $40 million project. I hope that as the minister looks at the previous government’s work on this, the new government’s commitment will become as extensive as the previous government’s commitment. The community is expecting to see this project proceed. The Barnett government built a new $170 million hospital to service Albany, so there is no reason for the McGowan government not to address the need for expansion of the hospital to serve Geraldton and the midwest. We also committed to provide Hillcrest Lodge with a further small piece of land that is of little use to anyone else, to enable a $6 million project to proceed. Once again, I would like to think that this project will receive favourable consideration. It would be a useful expansion of facilities, and provide a boost to a very slow local building industry. I would also ask the Minister for Transport—I hope she is out there somewhere listening—to look at the proposed sealing of the road between Meekatharra and Wiluna, obviously rather a long way from my electorate, but it is a project I have taken an interest in since I have been the member for Geraldton. This is another long-held dream. Funding was allocated in a rather strange way under the development commission. There are two blocks of funding of $4 million and the balance in the third year. The project had been worked so that it involved the local shires and had a strong component of Aboriginal employment and training, so it was a quite innovative and interesting project. Once again, this project was close to the line, and it would be wonderful to see it completed. It would mean that traffic could turn north at Kalgoorlie and be on a bitumen road all the way to Great Northern Highway at Meekatharra. We also committed to a new classroom block at Waggrakine Primary School, which is the only primary school north of Chapman River and is now the biggest government primary school in Geraldton. I have already written to the new minister about this, and I hope it receives favourable consideration. Projects now on the drawing board include the much anticipated undergrounding of power in the Geraldton CBD. The project I have probably worked on the longest, although I have to admit I did not get very far with it, is the heavy-vehicle bypass around Geraldton. The project has taught me one thing: the city council has one view, the Mid West Development Commission has another view and Main Roads Western Australia has yet another view. That is not a recipe for success. I say to new members to get all their local institutions on the same page because they will not get far otherwise. Divide and rule is the oldest technique in history—it is not just for the military. As members know, I am a regional member. I have been a regional person all my life. I have always appreciated the work done in the region by the Mid West Development Commission. I acknowledge the work and commitment of Gavin Treasure, the current CEO, and Hon Murray Criddle, its chair. From my reading and observation over eight and a half years, it seems to me that the MWDC is as good as any of the other commissions, if not the best. If the new government can strengthen the rules around regional preference, I will not be afraid to say well done. The main obstacle I encountered is the agreement between the states, the commonwealth and New Zealand that results in the removal of regional preference if an interstate competitor is tendering. I got the previous government to agree to restore regional preference if no interstate companies were shortlisted. Another technique used by companies to get around the rules is to set up a one-person office in town for 12 months so it can be regarded as local. I had a recent case in which Building Management and Works refused to split a $20 million project at a local high school into three separate projects. The reason we tried to split it into three separate projects was that we have a heap of companies that can tender on a $6 million project but only one local company can tender on a $20 million project. If we had three separate projects, there would be

558 [ASSEMBLY — Wednesday, 24 May 2017] a good chance that local companies might pick up one or two of them. If it is just one $20 million project, we have only one chance. With the state of the building industry, I know this local company will have to really fight to get that project. That division of government obviously does not care very much about regional preference. I am not troubled by a review of royalties for regions. Any project, especially one that spends this amount of money, probably needs a review after eight years, but I ask that the results of the review be open and available. These things matter in the regions. I have always felt that the program did not really have a focus on developing new industries and jobs, which should probably be its main purpose. If one looks at regional development bodies in other places—I will cite the Scottish and Welsh bodies—the development of jobs and industry is foremost in their work. I look forward to the results of the review and I encourage the government to be open in the way it goes about it and reports it. I will mention the complaints I received from my local commission last year that many of their decision-making powers were removed to Perth not long before the end of the previous government. I am quite happy to stand here and say that I think the government is wrong in its opposition to leasing Western Power’s poles and wires and Fremantle port, as I said last night. What is the value now of Telstra’s copper wires? John Howard was criticised for selling Telstra, at one point I think by Kim Beazley, for getting too much money for it. I think the company has transformed itself and the change has seen it become part of a thriving telecommunications market. Would a future federal ALP government nationalise Qantas, the Commonwealth Bank and CSL? I think not—it would sell them off. How did the government refuse to sell a lease over Fremantle port—it is worth reminding members that this is the last major port in Australia where this has not happened—with the rumours floating around that the regional ports, including Geraldton, will be sold. It is interesting to note that during the recent election campaign, the only party to mention leasing Geraldton port was the ALP, which ran a scare campaign about it. This was a successful line to run in the election campaign, going by the distribution of seats in the house. But everybody knows that the key to these situations is the rules that sit over them, which is really at the heart of the problems with the state railway lease, which the committee I chaired in the last Parliament discovered in its inquiry. I suggest that the government reconsiders its opposition to leasing these assets. If it sells 100 per cent of Western Power in one fell swoop, it will at least halve the state debt in contrast to its intended program that seems to be to ignore it. If members are wondering how to bring this about, last night I mentioned Paul Keating’s comments about how to perform a triple backward somersault with pike. However, it is rarely noted but worth remembering that a lot of Hawke and Keating’s reforms enjoyed the support of a John Howard–led opposition. That is all too rare I am afraid, and certainly not the pattern we have seen from Canberra over the last few years. I also suggest that the government reconsider its decision to reduce the first home buyer grant. I am also personally quite disappointed about a project I was interested in—it was a smallish project, but I thought it was very worthwhile—to develop an inland plains zoo at Chittering. That was a great project and I would have loved to see it go ahead. I visited the one in South Australia, which I thought was fantastic. I will also say, as others have, that the decision to stop the building of Perth Freight Link was short-sighted and wrong. On a positive note, it looks like we may soon have a direct air service from Perth to Shanghai courtesy of China Eastern Airlines. I wrote to the then Minister for Tourism in January 2015 to urge him to do what he could to bring this about. If it comes off, it will be useful. Shanghai is China’s commercial capital and it is slowly regaining the place it held prior to the Second World War of being the financial capital of Asia. I ask the government to go back and read the recommendations in the “Growing WA through Innovation” report that I handed down in the last Parliament. The government should note the potential to develop a serious medical research facility between Queen Elizabeth II Medical Centre and the University of Western Australia, and reboot Technology Park Bentley with better transport links and facilities at Curtin University. I will also repeat the report’s recommendation that the Minister for Innovation and ICT consider reaching a research agreement with Israel. The Barnett government did a lot of things. It was not all about fancy projects in the CBD. Our government did more in the regions than any other government has ever done, and it coped with a massive expansion in our resources industries and our population. [Member’s time extended.] Mr I.C. BLAYNEY: The greatest of the former government’s achievements was that, with an increase in the population equal to the population of Tasmania, every student had a classroom and teacher, the hospital system coped and our police ranks remained full. Our teachers, police and medical staff are the best paid in the country. We had to maintain our frontline services and, understandably, we had to spend to do that. We aggressively targeted methamphetamine, hoons and crime, which are the things our community expects to be done no matter what party is in power. I am excited to be in the role of shadow Minister for Agriculture and Food; Fisheries; and Forestry. Agriculture has been my life. I have got to know fisheries since becoming the member for Geraldton. Geraldton is the centre for the biggest export fishery out of Australia, of course. Forestry is a valuable industry that I look forward to engaging with. The thing that interests me about forestry is that the turnover is not that high, but the number of people employed is quite significant; I think it is about 5 000 people.

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It is often said that history is written by the victors. In the short term, it undoubtedly is. However, in the long term, I think the people of Western Australia will come to appreciate the former government, which got things done, and made Western Australia a vastly better state. As a footnote, this year I spent Anzac Day at Villers-Bretonneux on the Western Front in northern France. My wife and I spent four days looking at various significant sites there. It was a fantastic experience. Of course, next year it will be 100 years since the end of the First World War and I encourage any members with the opportunity to attend to do so. Thank you. MS L. METTAM (Vasse) [6.09 pm]: I would like to begin my contribution to the Address-in-Reply by welcoming the many newly elected members of Parliament and by extending my congratulations to them all on being elected to this important and humbling role representing our local communities in state Parliament. I would also like to congratulate the Labor Party on its resounding election win, and the new Premier, and the Speaker on his election to that role in this house. It was only two and a half years ago that I was elected member for Vasse at the Vasse by-election, so I remember what it is like to be in this place speaking for the first time. I am also honoured and humbled to have been re-elected by my electorate as the member for Vasse. I would particularly like to thank the electors of the region for returning me to the seat of Vasse in what was a very difficult and disappointing election result for the Liberal Party. Despite the disappointing election result, I am pleased to be continuing my role as Whip, this time for the opposition, and representing the tourism and small business portfolios as the shadow minister. They are two areas that I am very passionate about, particularly given my region’s strong links to both portfolios. I would like to sincerely thank the local Liberal Party branches and volunteers who helped me during my campaign. I also thank my husband, Jonathan, my two beautiful daughters, Bianca and Sophia, and my parents for their never-ending support. This role often demands long hours and, as other regional members would appreciate, travel away from home. I am very grateful for their ongoing support. I am very privileged to represent the Vasse electorate, one of the most beautiful regions in our great state. It is surrounded by picturesque beaches, an abundance of natural attractions, world-class wine and food, a strong regional events scene, and a thriving and growing agricultural sector. It is not just my family who has been attracted to this wonderful region over the past 14 years. The south west region is one of the fastest growing regions in the state, particularly the Busselton region. It has experienced strong population growth of 39 per cent over the past decade, which is well above the state average of 27 per cent. This strong population growth is expected to continue. Busselton and the Margaret River region is set to grow by 42 per cent between now and 2050, so the region will only get busier. It is a thriving tourist destination, which accounts for significant seasonal fluctuations in its population. It is home to one of the largest regional fly in, fly out populations in the state. That is why, in acknowledging this growth and the huge potential of the region, the former Liberal-led government invested heavily in major projects that supported local businesses, especially those in the tourism, hospitality and agricultural sectors. Most notably, the Liberal–National government committed $56.5 million to the Busselton–Margaret River Regional Airport expansion and $10.5 million to the Busselton foreshore redevelopment. The Busselton–Margaret River Regional Airport is a game changer not only for the region, but also for the state. Its redevelopment and expansion will provide new job opportunities and support economic growth by providing interstate and possibly international passenger services that will increase tourist numbers and provide greater opportunities for our producers to capitalise on the emerging demand from our Asian neighbours for quality produce by providing the potential for the only international freight hub in the south west. Strong population growth has placed higher demands on a diverse range of community services. That is why I remain proud that the former Liberal–National government invested in infrastructure in the Vasse electorate, including Busselton airport, the Vasse bypass, Cape Naturaliste College, local primary school upgrades, the Parks for People program, mountain bike trails, new mobile telecommunication towers, local waterways and additional police resources. The latter will come into effect shortly. It is my hope that the McGowan government will not direct any of this funding elsewhere, as it is essential for maintaining high-quality services and the demand that this region produces. I am very proud of the former Liberal-led government’s achievements. As I am sure many members on the other side will gloat about, we now face a very different political environment. I have been returned to the seat of Vasse with only one other Liberal member for the south west alongside me. My focus is now committed to ensuring that the south west region and regional WA generally are not overlooked or forgotten by the city-centric Labor Party. I hope that the Premier remains true to his election pledge that the south west region, which includes the electorate of Vasse, and not just the Labor seats of Bunbury and Collie–Preston, will receive a greater share of royalties for regions funding under his government. There has never been a better time to invest in regional Western Australia. The south west region remains an area of huge potential for our state, offering opportunities in the growth of its tourism, hospitality and agricultural sectors. The next major project required to drive and support economic growth and unlock the potential of our region, particularly for our agricultural industries, is a new saleyard to service the south west, given that the current lease in the Boyanup town site expires in 2022. As the Minister for Agriculture and Food, the member for Collie–Preston, would be well aware, this key local issue was raised during the election

560 [ASSEMBLY — Wednesday, 24 May 2017] campaign, with members of all political parties following the Liberals’ lead and committing to progress a new south west saleyards. It is vital that our regional agricultural capacity is supported with the necessary infrastructure to provide a least-cost pathway to port, which a proposed new saleyard site in the Shire of Capel would provide. In tourism, with the strength of our natural assets and world-class local produce, the south west region is well placed to attract further growth in intrastate, interstate and international visitation. An expanded Busselton– Margaret River Regional Airport is set to open in 2018—the same year that direct flights between Perth and London will commence—offering huge opportunities. It is essential that this vital project is supported by the new state government through destination marketing and that it specifically promotes the region in the cities of Sydney and Melbourne with an eastern states’ Tourism WA office. This was a policy that the Liberal Party brought to the previous election and I am keen to see the new McGowan government commit to it. The south west region had developed international brand recognition, particularly during large events such as CinéfestOZ, the Margaret River Pro, and Margaret River Gourmet Escape, which would not be possible without government investment. Margaret River Gourmet Escape, featuring some of the world’s best chefs, food and wine critics, and celebrities such as Nigella Lawson, has alone attracted 80 000 visitors to the region since its inception. In 2015, the event generated more than $7.8 million in expenditure for the local economy, resulting in 23 000 room nights booked in the region and more than $6.5 million worth of global brand awareness for WA. Tourism is a vital industry for regional Western Australia. In 2015–16, visitors spent $4.5 billion in our regions. Events such as this are an essential component of seeing our state increase the value of its tourism industry to $12 billion by 2020. We need to ensure that our regional events, including the Margaret River Pro, which has been flagged as potentially being dropped from the world championship tour, are retained and that their growth is supported through state government funding. The Vasse electorate and regional Western Australia also need to be supported through continued improvements to the travelling experience, whether by plane, train or automobile. As many members will be aware, since my election to Vasse I have been a strong advocate for the dualling of the carriageway between Busselton and Capel. This provides access between Bunbury, Capel, Busselton and Margaret River, and is a strategic freight, tourist and inter-town route. Not only will this help reduce travel times, particularly during the peak tourist season, but first and foremost it is an important safety issue. We know that safer roads lead to safer outcomes. There have been 65 crashes between Capel and Busselton over a five-year period, and it is one of the state’s riskiest roads. At a state level there also remains the opportunity to assist the Margaret River wine industry to ensure that investment in existing and future wine tourism activities does not diminish. We can ill afford to let this happen. Combined with the removal of the state cellar door rebate, as well as the recent changes to the federal wine equalisation tax rebate scheme, our thriving wine industry is not without its challenges, chief among which is the unfair and growth-stifling tax regime it operates within. Although the Margaret River region produces just three per cent of the volume of wine produced in Australia, it represents 40 per cent of its value. Given that in Australia wine is taxed on its value, not according to its alcohol volume, the Margaret River region is the most highly taxed wine region in the country. That is yet another example of how Western Australia fares poorly compared with our eastern states counterparts. In the lead-up to the state election it was pleasing for this sector to hear a commitment from all political parties to consult with the industry going forward. It is essential that this now happens under the McGowan government. Another area I am very passionate about is the complex and important issue of protecting the public from shark attacks, which, sadly, has resulted in 15 deaths since 2000, and another 17 injured. Last week a number of members in this house spoke very passionately about that topic. The state government recently announced its shark mitigation policy, which I was pleased to see includes grants for local councils to install beach emergency numbering signs. It is important that these signs are in place along the whole Western Australian coastline, given the confusion that can be created in an emergency when a local or tourist has to explain exactly where they are and time is critical. I was pleased to see that the new government is extending the previous Liberal government–led trial of drone technology, and hope to see the ongoing use of drones in the Capes region, as well as other coastal areas. I will also monitor the results of the trial of the Clever Buoy shark mitigation technology at City Beach. If it proves successful, I will strongly advocate for this technology to be rolled out at local beaches in the Capes region. Tourism was front and centre of the election campaign, and across the state it presents huge opportunities for further economic growth. Despite the sector’s importance, the McGowan government’s amalgamation of government departments and the wider cuts for the public sector effectively relegate the tourism sector—the sector with arguably the greatest economic growth potential for Western Australia—to the role of a small player in a mega-department. Each year the tourism sector injects more than $10 billion into our economy by gross state product, and $1 billion in net taxes. The industry generates more than 97 000 jobs, and makes up 7.1 per cent of total WA employment—more than the mining, manufacturing, agriculture, forestry and fishing sectors. Since

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2008 we have seen positive growth in every market—37 per cent for international visitors; 13 per cent for interstate visitors; and 63 per cent for intrastate visitors—due to a range of factors, one of which was a 50 per cent increase in the tourism budget over the same time. Further growth in visitation numbers, visitor spend and international education above or in line with the national average is essential to grow our state’s economy, and emerging international markets, including China, Singapore, Malaysia and the United Kingdom, as well as interstate visitors, will play a key role in this growth. Among other things, destination marketing is absolutely essential to support this growth. I was pleased to hear in the Governor’s speech that there will be a guaranteed tourism spend on destination marketing and events under the McGowan government. I trust that refers to Labor’s election commitment of $425 million over five years into destination marketing and tourism; some in the tourism industry were concerned about that, given that it was missing from Labor’s own election costings. Fortunately for Labor, it has the opportunity to build on the success of some very successful campaigns, such as Just Another Day in WA, and Experience Extraordinary. [Member’s time extended.] Ms L. METTAM: The Labor Party can also thank the former Liberal–led government for having the vision to build tourism drawcards including Elizabeth Quay and the new Perth Stadium, which Labor did not support. We have come a long way since being tagged “Dullsville” under Labor. These precincts have not only created jobs and attracted significant private sector investment, but will also help draw more visitors to our great state. National sporting events secured by the Liberal–led government, including the visit by Chelsea Football Club in 2018, the trans-Tasman Bledisloe Cup and the rugby league State of Origin Series in 2019, are huge drawcards for tourists. In fact, Australian Football League games held at the new, world-class Perth Stadium are expected to attract an additional 40 000 visitors per annum. On a smaller scale, the former Liberal–National government invested in our regions through projects such as The Gap in Albany, upgrades to the Esperance foreshore, the skywalk in Kalbarri, major upgrades to Fitzgerald River National Park, the creation of two Kimberley marine parks, and the Parks for People initiative across the state— all of which have increased the attractiveness of the overall visitor experience and helped boost tourism in regional WA. The new Labor government can also thank the former Liberal–National government for securing 14 direct Perth– London flights a week that will commence next year and put Perth and Western Australia on the international map. Tickets for those flights recently went on sale and they are already proving very popular. This is fantastic news for Western Australia. It has already started a so-called price war on flights between Perth–London. Perth– Paris has been tipped as the next nonstop flight by Qantas, which shows the huge potential this brings, and supports the former Liberal-led government’s decision to make these flights possible by providing $14 million for capital works at the domestic terminal. The McGowan government can support tourism and regional Western Australia by addressing the issues of cruise ship access along the Western Australian coastline. The cruise sector contributed $275 million to the Western Australian economy in 2015–16, with 121 cruise ship visit days and 224 409 passengers. The previous Liberal-led government ensured that locations such as Esperance, Geraldton, Exmouth and Broome would benefit from regular cruise ship visits. However, there is significantly more work to do in this area given Carnival cruise line’s recent announcement of limiting its P&O visits from Fremantle and then along the WA coastline. The issue is the reliability of access. The former government funded the establishment of shore tension units to be installed at Geraldton harbour to increase the number of days that safe mooring could be provided at the port. I understand from the member for Geraldton that this has largely been addressed and that Geraldton welcomed a cruise ship recently. However, there are outstanding issues in Broome and Exmouth that need to be addressed. The Liberals had also committed to a floating deck wharf facility in the Exmouth Gulf adjacent to the Exmouth boat harbour to provide a safe and reliable all-weather berthing option for cruise vessels. We also ensured that guaranteed berths in ports at Esperance and Geraldton could be arranged for cruise vessels so that cruise companies continued to develop Western Australian itineraries featuring these destinations. I appreciate that Labor went to the election promoting a cruise ship terminal for Bunbury. However, given the demand from the industry to go north in winter, it is critical that access issues are addressed in Broome and Exmouth as a priority. Airbnb is another significant contributor to our state’s tourism economy, with Deloitte Australia estimating that $151 million was spent by over 171 000 Airbnb guests while visiting Western Australia in 2015–16. Airbnb, like Uber, is here to stay. Although I acknowledge the challenges the platform creates for hotels, it is essential that we offer visitors a diverse range of tourism experiences and cater for a range of budgets, and Airbnb plays a very special role in that. A destination in which greater choice for visitors is called for is Rottnest Island—one of the most iconic and picturesque holiday destinations close to Perth and Fremantle. There has recently been a pick-up in visitor numbers on the island, largely attributable to the viral media publicity surrounding the “quokka selfie”, which is

562 [ASSEMBLY — Wednesday, 24 May 2017] very pleasing to see. However, there are significant challenges to be addressed, including rising costs and low staff morale within the agency, which I am pleased to see that the new Minister for Tourism acknowledges and has committed to addressing. We also need to assist our tourism industry by keeping the cost of doing business to a minimum and reducing red tape. As an example, the level of payroll expenses to total revenue in Australia is much higher compared with other competitive global markets. It is 33.5 per cent in Australia compared with 31.6 per cent in New Zealand and 26.6 per cent in the United Kingdom. Other developing countries such as Asia would achieve even more significantly lower payroll ratios. They are the countries that we are competing with. The regional skilled migration scheme for Perth was suspended by Labor on 13 March, having an impact on restaurant owners who were already faced with the challenge of attracting quality chefs and restaurant managers willing to work nights and weekends. A number of high-end restaurants have recently closed their doors in Perth, which is not what we need at a time when we are trying to promote industry. I wish to speak more on the small business sector. With over 218 000 small businesses, representing around 97 per cent of all businesses in WA, governments need to ensure that they reduce red tape and provide opportunities for this sector to grow. I said earlier that one of the best ways to support our small business sector is through projects that drive economic growth by providing opportunities for access to new markets. Government needs to get out of the way, reduce red tape, provide the necessary public infrastructure to enable businesses to run efficiently, strengthen and grow business productivity, and encourage innovation and enhance competition. In terms of public infrastructure that will support small business, while I welcome the Labor Party’s election commitments, such as the $30 million investment in Bunbury rail, including non-stop travel from Perth to Bunbury and the sealing of the Cape Leveque Road linking Broome and the Dampier Peninsula, I am sceptical about how these projects will be funded during this term of government. Further improvements to regional telecommunications are essential and are consistently raised with me by many of my constituents and small business owners as just one example of the support that government needs to provide to help create business development opportunities. This is why the former Liberal-led government invested more than $105 million from 2012 onward in the construction of 344 new or upgraded mobile phone towers and small cell satellite installations in regional WA. Payroll tax is another big issue for small business. Over its past two terms, the Liberal-led government increased the payroll tax threshold from $750 000 to $800 000 in 2014–15 and then to $850 000 in 2015–16, and along with commitments to lift the land tax exemption, committed to raising the payroll tax threshold to $900 000 from 1 January 2018. These measures provided significant relief, benefiting more than 16 000 employers, and complementing payroll tax rebates in the 2009–10 and 2012–13 financial years, which were designed to support employment by small and medium-sized businesses. While I acknowledge that the task of paying down state debt is not easy, one thing that greatly concerns me is the Treasurer’s flagged 15 per cent increases in electricity fees and charges in the upcoming state budget, and his desire to move towards cost reflectivity for power pricing. Throughout the entire election campaign the Labor Party scared the public with lies about our long-term economic plan to pay down debt, fund infrastructure and create jobs through the partial sale of Western Power, and that this would lead to increased power prices, yet it is the Labor Party that, only now elected, has flagged significant increases that will hit households and small businesses. I would like to conclude by acknowledging our upper house colleague and former President of the Legislative Council, Hon Barry House, who has been representing the South West Region for the last 30 years. He served much of that time in Bunbury and was the first member of Parliament to establish an electorate office in Margaret River, effectively representing the Capes region in many ways akin to a local member of Parliament. During his time in this role, Barry has worked tirelessly to represent the best interests of the region. Barry has remained true to himself and his beliefs, and has earnt the respect of all who have crossed his path. He is the patron of over 20 local clubs and organisations and ends his parliamentary career leaving a lasting legacy to the South West Region, the Western Australian Parliament and our state. I thank Barry for his exemplary service to the local and Western Australian community, and wish him all the best in his “re-wirement”. MR R.S. LOVE (Moore) [6.39 pm]: I rise tonight to make a brief contribution to the Address-in-Reply debate. I begin by recognising the Whadjuk people, the original owners of the land upon which we stand. I also recognise the various Aboriginal groups, both Yamatji and Noongar, in the electorate of Moore, and assure them that the National Party has the advancement of our first people very much at heart, and is always seeking to work with Aboriginal people for the betterment of all in this state. I would also like to commence by congratulating the recently elected Speaker and Deputy Speaker, and of course all the others who participate in the Acting Speaker role. Congratulations must also go to the newly elected McGowan government and its various ministers, and the various new members, of whom there are very, very many, especially my colleague the member for Roe who made a great speech the other night and who I am sure will make a fantastic contribution to Western Australia as a member of Parliament. He is a very well-credentialed gentleman and I very much look forward to working with him.

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I would like to thank the electors of Moore, first of all, for having faith in the National Party and in me by returning me to that seat for a second time. The seat of Moore is one of those three-corner contest seats. It was a very bruising encounter. The members for Geraldton and Kalgoorlie know very well that these types of seats are never easy contests. At the end of the day, we have to learn to come together again and work together over the next four years to be able to give a good outcome to the people of not only the electorate but also the state. It was a good result for the Nationals in Moore. It was the first time in many years that we won the primary vote. Mrs L.M. Harvey: Congratulations, member. Mr R.S. LOVE: It was a good result. Combined with the great level of support we received at polling booths from the many volunteers who came forward, that shows that the seat of Moore is progressing to be a seat in which the Nationals are better understood and appreciated. I hope that will continue in the future. For the Nationals, the state and me, it was very disappointing that our former leader, the former member for Pilbara, Hon Brendon Grylls, was not re-elected. I spent a fair bit of time with Brendon, especially in the last few weeks of the campaign, as he went around explaining the policies that he, along with the rest of the party, was pushing very hard for. There is no doubt that his ability to communicate a message, to capture a theme and to work on it, is outstanding. I believe that he was one of the, if not the, most talented politicians in this place in the time he was here. The plan he advocated was, in our view, the only credible path to bring the budget and structural deficit we all know we are facing under control. He fell victim to a concerted campaign funded to the tune of millions of dollars by companies such as Rio Tinto and BHP and carried out quite ably by their willing helpers in the Chamber of Minerals and Energy. It was a sad day for democracy to witness the amount of interference in that campaign carried out by groups that were not putting themselves forward for election. It is very worrying and is a forerunner to how interest groups—I am not singling out any one now; I am talking generally—can target an individual member and that can result in a particular outcome in an election. That is a very powerful tool and it opens up a real Pandora’s box in Western Australian politics. I ask for a bit of forbearance from the Acting Speaker to show members this corflute. This corflute contains a message, and corflutes like this one appeared in and around polling booths on and just prior to election day. It is normal for election material to promote a person and to state who has authorised it. I note that this corflute was authorised by the Chamber of Minerals and Energy of Western Australia, Perth and it is printed by a particular group, but I will not necessarily go into that. No human being has put their name to this corflute, only an organisation. That poster and others like it were at polling booths. This particular one was at Dongara. I think that shows that the group concerned very much had an intention to be involved in the political process. If people are going to do that, they need to put themselves forward, get together a party or some individuals, and run some candidates. If we let people do this sort of thing in the future, our democracy is under a great deal of threat. I do not care whether members agree with us or with the principles that they were putting forward, but we need to accept that, in itself, this is a very dangerous precedent and not something that should be allowed to continue. I recognise the contribution of outgoing members of the National Party. We had valedictory speeches from Tuck Waldron, the outgoing member for what was the seat of Wagin, and Wendy Duncan, who was a very able member of Parliament and former representative for the Nationals in Kalgoorlie, along with the Mining and Pastoral and Agricultural Regions. In her time she very ably represented three different areas. I very much enjoyed working with Wendy. I also greatly respect the work of Dave Grills in his efforts to get right around Western Australia. He spent an enormous amount of time in the Kimberley, in places that other people had not focused on. Dave got to know a lot of people and became a bit of a local, especially in some areas of the Kimberley, along with the goldfields, which is where he came from, and in Esperance. He did an enormous amount of work. I shared a room with Dave in Parliament House and I came to respect him greatly. We will miss him into the future. The other day I spoke about some of the matters plaguing the electorate in the context of the discussion about the state’s finances and our commitment to sell Western Power on the basis that funds would be available to come up with some innovative power-delivery systems in areas of my electorate, especially the midwest, but also the wheatbelt and places like Jurien Bay, Chittering and even Toodyay. These are places where there has been a lot of disruption to power supplies, especially since some of the changes to the protocols on days of high fire danger, which limit the ability of crews to address issues on the powerlines, and which once addressed may interfere with their ability to re-energise the lines. Outages that once may have been fixed in a few hours in days gone by are running for days and days. It is a source of great frustration for people in my electorate. I understand the need for some of these protocols, especially through heavily forested areas, maybe in the Perth hills or in the Dwellingup area or somewhere like that, but in extensive farming areas, especially post-harvest, I think the risk of fire is greatly overstated and the caution about re-energising causes real safety issues in communities. We have communities like Mullewa, where, recently, on very, very hot days my constituents were not able to get relief—some of them with medical conditions that require a stable core body temperature. With no power in the town, even the medical centre did not have enough power to provide a resting place. The swimming pool and other areas of relief were all shut

564 [ASSEMBLY — Wednesday, 24 May 2017] down because there was no power. The people in Mullewa went through this for days and days. I know some members from way up north might think that the electorate of Moore is near the coast, so it must be nice and pleasant, but I can tell members that Mullewa in the summertime is a rather hot place. Mr W.R. Marmion interjected. Mr R.S. LOVE: The former Minister for Housing, who has been up there with me in his former role, inspecting housing, knows only too well that it can be a very hot place, and it does not cool down at night. Mr W.R. Marmion: Not many trees, either. Mr R.S. LOVE: No, not too many trees, but it does not really matter. Once that red ground gets hot, it takes a long time for it to cool down—not overnight. A lot of elderly people there are in a great deal of distress. Recently Western Power released a report on its performance in Mullewa, following a meeting that I helped organise up there in the last couple of months about issues that were being faced. It showed that the average length of outage per customer in Mullewa over the last 12 months was 3 235 minutes. I do not think that is acceptable and something needs to be done about it. The other day I was up at Perenjori with the current Minister for Energy to acknowledge the development of a battery storage system there, which will help to address some of the problems that that town has had. Western Power reported similarly poor performances in Perenjori in the five-year period leading up to this battery storage unit being developed. These issues are not isolated; they are all too common, and they seem to be prevalent in the midwest area. The combination of the age of the infrastructure, the peculiarity of the long summers, the salty air and the occasional bits of moisture that lead to pole-top fires, along with changes to the work plans on days of high fire danger, have all contributed to making this a very difficult period. I really urge the government to continue to allow innovation and change to the delivery of energy in these areas, and to continue to prioritise the needs of the residents of these towns. Another matter I raised the other day when speaking to the Loan Bill 2017 is the changes we are hearing about to the royalties for regions program. I do not mind if the government wants to re-examine where it wants to put its future efforts from royalties for regions. However, I take issue when the government overturns decisions that have been already made. These decisions have gone through a cabinet process, have been accepted by the government of the day, and have been put into programs backed up by statutory funds, so the money is available. The cabinet of the former government of Western Australia and the various ministers of the day have all ticked off on it and have said that these are worthwhile projects; they have given them state approval and made announcements, and they have told the communities that these things are coming. Now the government appears to be saying that these things will not be coming. There are a couple of other issues I would like to very briefly touch on in that regard. It has been my experience over a number of decades that the local area where I come from, Dandaragan, and areas up and down from there—from the Perth boundary to the midwest, right up to the end of my electorate—all have woefully inadequate health services being delivered to them. Many of these areas have little or no infrastructure or services for people. If someone can no longer drive or afford to get to help, or is too sick to get to help, they are in trouble. If they need to go home—eventually even sick people need to go home—there is no-one to look after them when they get there. These are real issues, and the government needs to understand that its decisions are hurting people and will continue to hurt people into the future. These are serious issues, not window-dressing or pork-barrelling by various members of political parties. These are very serious and fundamental issues that go to the heart of what constitutes a decent standard of living for people in my electorate. Over the last week my office has been dealing with a person who lives not very far from Perth, but in that general area, who has a terminal illness and has difficulty travelling. Try as we might, we cannot get someone to come and regularly attend to and take blood samples from this person. If he lived anywhere else, I am sure that service would be available, but because he supposedly lives in the bush, albeit fewer than 100 kilometres out of Perth, no services are available for people like him. They fall over the line because they are not in the metropolitan catchment; they are in the wheatbelt area. The wheatbelt does not have the resources to look after them and they are not serviced directly from Perth. We put together a health plan over the last few years, which was announced on 30 January 2017, of $22.46 million being invested into providing primary care, outpatient services et cetera for people in this area. I have the announcement; it is endorsed by Hon John Day and Hon Terry Redman and it has gone through all the government processes, and now we hear that even though the money is available, it might not happen. That is absolutely unacceptable. As I say, if discretionary funding for future years is not allocated, and the government wants to make changes on stuff that has not been announced, that is fine; do it. But when people are waiting for services and are expecting those services, that is not on. Another example was on 15 December 2016 when the current Leader of the Nationals spoke about the importance of aged care in her community. An announcement was made about $46.19 million for age-appropriate housing in various towns in the wheatbelt and great southern areas. [Member’s time extended.]

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Mr R.S. LOVE: I will list some of the towns. There are 124 independent living units to be built in Victoria Plains Shire, which is Calingiri and Yerecoin; Toodyay, Goomalling, Dowerin, Beverley, Brookton, Pingelly, Moora, Dalwallinu, Wongan–Ballidu, Cunderdin, Tammin, Quairading, Wandering, Cuballing, Narrogin, Wickepin, Corrigin, Kulin, Narembeen and Kondinin, and that is just in the wheatbelt. In the great southern, the towns are Broomehill–Tambellup, Cranbrook, Gnowangerup, Jerramungup, Katanning and Kojonup. All these towns have been told that they will get these units. Preliminary work has started on some of them, but we have been told it might not happen. How can that be if cabinet has approved it and the money is available? The ministers have ticked it off and an announcement has been made. These are not election promises; they are announcements by a government of Western Australia. If people cannot believe announcements made by a government of Western Australia, it is very worrying. Governments should be able to be relied on and people have a right to expect that when government has made an investment and said it will do something, it will follow it through. It is the same as any entity: if they make a deal, they should carry it through. If they do not, they are not being very honest, in my view. The royalties for regions program has been criticised. I have heard even members on this side criticise some of the rationale for the expenditure. As a former parliamentary secretary in the area, I can attest to the fact that a great deal of community planning occurs to bring together, both from the top and bottom, strategies that will lead to improvement of lives in regional areas. These are improvements in a lot of ways, not least of which are economic improvements, which are very important. Each region has blueprints that come together to give a statewide picture of where investments can be made to give maximum effect to regional areas. If the government wants to change the emphasis in some areas, it does not have to reinvent the wheel; the work has been done. It should look at what it wants to achieve and at the blueprints that indicate the investments it can make. The work has already been done. The government can reprioritise moneys that are not already committed. I have no problem with that, but the government does not have to throw out the whole system. I point out that the people who serve on the development commission boards such as the Midwest Development Commission and the Wheatbelt Development Commission in my electorate are very committed and knowledgeable and have done a tremendous job of guiding royalties for regions investments in their area. I would hate to see their autonomy done away with. As Nationals, we believe in making decisions from the grassroots and then working up those requests, fitting them into a broader strategy and making that work. Under our philosophy, local decision-making is extremely important, and I would hope that anybody who is looking at a regional area does not have the patronising view that the people in Perth always know best. We need to have strong connections into the regions and trust the judgement of the people who live in the areas; they are the people who know best what they need. The consequences of the uncertainty about the future of royalties for regions are very real and widespread, and no more so than with the incentives for general practitioners to come into areas. Those incentives will not be funded after the end of June, but funding is available in the royalties for regions program if that is the will of the government. By not committing to these areas, it is putting at risk the provision of the fundamental factor in health care in any community—that is, the doctor. In many communities, the GP is the gateway to many other services. If there is no GP, there can be some backfill with a bit of emergency telehealth, which is a great thing. However, for many towns, the GP is the gateway to all sorts of specialist services, including mental health services and drug rehabilitation services. Without a GP in the town, the health system falls apart. The government needs to be very mindful of the effect this will have on regional communities. There are many other projects that I would like to talk about, but I will highlight a couple of others that are dependent upon royalties for regions funding. As my neighbouring MP the Leader of the Nationals pointed out, the AvonLink is a unique service that is provided mainly, in my electorate, to the town of Toodyay. Then it goes on its merry way to Northam and occasionally out to Merredin. That is a very important tool for regional development in the Avon area. It would be very short-sighted to lose a service like that. The government is recognising the importance of rail transport and is investing billions of dollars into rail in Western Australia, so I think it would be very sad if, coincidentally, it were to drop one of the few passenger services that still exist in regional Western Australia. I know that people are questioning the results of the trial that was put in place and are saying that it is far too expensive. Over the last 18 months, the service has been so utterly disrupted that people stopped using it. Track repairs were being done on the line leading out of Perth by Brookfield Rail. I am not saying anything about Brookfield; it has just been doing its job. As a result of those repairs, when people rocked up to the train, they found that the train had stopped halfway up the hill and then it sat there for up to three hours and eventually people had to be discharged onto buses. At other times, services were cancelled after people had been sitting on the train, or the train simply did not arrive. Consequently, the trial, which was going quite well until about the midpoint and was showing strong growth in total passenger numbers, has hit a rocky patch. I highlighted that to former Ministers for Transport, one of whom is in the chamber, and I was told words to the effect that the department and the minister were aware of the disruption that had taken place but they would not seek to make any timetabling changes or make any judgements based on that disrupted period. I say to the current government and the current minister, who is not in the chamber—it would be nice if she were given the message—that it would be unfair and inaccurate to make a judgement without taking into account the 18 months of track work and disruption.

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The other side of transport into the town of Toodyay is Toodyay Road. Toodyay Road attracted a lot of attention shortly after I was elected. I worked with the previous member for Swan Hills, Frank Alban, pretty hard on getting some improvements to Toodyay Road. In the time that I have been in office—it is only four years— Toodyay Road has seen many, many, many, many fatalities. It is only about 60 kilometres long but when entire families have been wiped out by semitrailers in one go, it is not a good outcome. I would like to acknowledge the former Minister for Road Safety’s commitment. She assisted and put together a package with the former Ministers for Transport. It addressed most of the metropolitan section of the road, which has been repaired. Money was put into key intersections in the wheatbelt section of the road and also put into planning for needed improvements and land acquisition so that improvements can be made in the future. I urge the current government to continue that. If members want to look at the statistics, they are shocking. Mrs L.M. Harvey: They’re appalling. Mr R.S. LOVE: It is the most appalling loss of life that I have ever seen. In four years, it is not acceptable for entire families and entire communities to be ripped apart like that. If the road were 600 kilometres long then, yes, people die on roads occasionally, but I am talking about a very short section of road. It really needs urgent attention. Jurien Bay marina is another issue. It is probably not quite such a safety issue, but the government needs to continue to address it. Once again, it was in the realm of the Department of Transport. Back in 2014, I led a grievance in Parliament to the then Minister for Transport. He put in place a working group to deal with the really serious water quality issues in the marina. What does that have to do with the state government? It is a major government asset and it became unusable because the water was poisonous. I mean poisonous; it was so strongly contaminated because of the influx of seaweed and other things, which then settled and led to a composting effect underwater. That released a huge amount of hydrogen sulphide and other gases that turned the water into an acid. Fish kills occurred very regularly and the marina itself was dead. The boats in the marina were attacked. Aluminium boats had to be pulled out of the water because the chemical reactions were so severe that they did not have much of a future if they stayed in the marina. We worked towards the studies that are necessary to put in place remedial action to ensure the marina is usable in the future. I hope the current government understands that and knows there is a discretionary fund from royalties for regions—a set amount of money—that the government can apply to matters of priority. I hope the government sees the marina as a priority in the future because it is certainly one that I feel is very, very important. There are other important issues up and down the coastal strip, which is an under-utilised tourism asset. Back in 2007, I was pleased to meet with the then Premier, Alan Carpenter, and to get his commitment to the development of the last stage of Indian Ocean Drive. That was a good investment by a Labor government. Labor governments can sometimes make good investments in regional areas and I urge it to continue to do that! I do not want to see it become like Moora back in the day when its hospital was funded, then the funding was ripped off it. The only way it got the funding back was by the urgent action of its residents. Many people may remember the image of Cynthia McMorran, a very highly respected local pensioner lady and Geoff Gallop. Debate adjourned, on motion by Mr D.A. Templeman (Leader of the House). JOINT STANDING COMMITTEE ON DELEGATED LEGISLATION Council’s Message Message from the Council received and read requesting concurrence in the following resolution — That the Legislative Assembly be invited to agree to the rules and orders of the Legislative Council contained in the schedule for the constitution, powers and procedure of a Joint Standing Committee on Delegated Legislation. JOINT STANDING COMMITTEE ON AUDIT Council’s Message Message from the Council received and read requesting concurrence in the following resolution — That the Legislative Assembly be invited to agree to the rules and orders of the Legislative Council contained in the schedule for the constitution, powers and procedure of a Joint Standing Committee on Audit. JOINT STANDING COMMITTEE ON THE CORRUPTION AND CRIME COMMISSION Appointment — Council Membership Message from the Council received and read concurring with the Assembly’s request for the appointment of a Joint Standing Committee on the Corruption and Crime Commission; and notifying that the following members had been appointed to the committee: Hon Jim Chown and Hon Alison Xamon.

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JOINT STANDING COMMITTEE ON THE COMMISSIONER FOR CHILDREN AND YOUNG PEOPLE Appointment — Council Membership Message from the Council received and read concurring with the Assembly’s request for the appointment of a Joint Standing Committee on the Commissioner for Children and Young People; and notifying that the following members had been appointed to the committee: Hon Sally Talbot and Hon Donna Faragher. House adjourned at 7.11 pm ______

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QUESTIONS ON NOTICE

Questions and answers are as supplied to Hansard.

MINISTER FOR EDUCATION AND TRAINING — PROFESSIONAL DEVELOPMENT 132. Mr Z.R.F. Kirkup to the minister representing the Minister for Education and Training: Since 17 March 2017 has the Minister had any media, public speaking, communication, presentation, leadership or organisational training, and: (a) if yes: (i) what was the course; (ii) which individual or company provided the training; (iii) what is the cost of each training session or course; (iv) where was the training session or course held; and (v) who requested the training; and (b) if no: (i) does the Minister have any media, public speaking, communication, presentation, leadership or organisational training scheduled? Mr P. Papalia replied: I thank the Honourable Member for some notice of the question. (a) N/A. (b) (i) No. MINISTER FOR SENIORS AND AGEING — REGISTER OF LOBBYISTS — CONTACT DIRECTION, INSTRUCTION AND ADVICE 190. Mr Z.R.F. Kirkup to the Minister for Seniors and Ageing; Volunteering; Sport and Recreation: Has the Minister or the Ministerial Chief of Staff provided any direction, instruction or advice to their Ministerial staff or Agencies relating to contact with any individual or company on the Register of Lobbyists, and if so: (a) what was the wording or nature of the direction, instruction or advice; (b) who received the direction, instruction or advice; (c) how was the direction, instruction or advice disseminated; and (d) if the direction, instruction or advice was via letter or email, please table the document? Mr M.P. Murray replied: (a)–(d) The Ministerial Chief of Staff has reinforced the instructions provided by the Public Sector Commissioner through the AEDM training conducted on 4 May 2017. All Ministerial Staff adhere to the Ministerial Code of Ethics and the Public Sector Commissioner’s Instruction No 16. MINISTER FOR SENIORS AND AGEING — REGISTER OF LOBBYISTS — CONTACT DIRECTION, INSTRUCTION AND ADVICE 241. Mr Z.R.F. Kirkup to the Minister for Seniors and Ageing; Volunteering; Sport and Recreation: Has the Minister or Ministerial staff met or had any contact with any individual or company on the Register of Lobbyists since 17 March 2017 and if so: (a) what are the dates for each meeting or contact; (b) what was contacted; (c) what was the nature of the contact; (d) where was each meeting held; (e) who was present at each meeting; (f) what was discussed at each meeting; and (g) what company or individual was being represented by the lobbyist?

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Mr M.P. Murray replied: The Minister and his current Ministerial Staff may have had contact with lobbyists for administrative purposes only or may have had incidental or irregular social contact in which case this is not listed below: (a) 10 May 2017; (b) Emma Ramage; (c) Introduction; (d) Ministerial Office; (e) Emma Ramage and Amanda Reid; (f) Informal chat; and (g) Nil. MINISTER FOR SENIORS AND AGEING — BRIAN BURKE — CONTACT 258. Mr Z.R.F. Kirkup to the minister for Seniors and Ageing; Volunteering; Sport and Recreation: Has the Minister or Ministerial staff met or had any contact with any Mr Brian Burke since 17 March 2017, and if so: (a) what are the dates for each meeting or contact; (b) who was contacted; (c) what was the nature of the contact; (d) where was each meeting held; (e) who was present at each meeting; and (f) what was discussed at each meeting? Mr M.P. Murray replied: No. MINISTER FOR EDUCATION AND TRAINING — BRIAN BURKE — CONTACT 265. Mr Z.R.F. Kirkup to the minister representing the Minister for Education and Training: Has the Minister or Ministerial staff met or had any contact with any Mr Brian Burke since 17 March 2017, and if so: (a) what are the dates for each meeting or contact; (b) who was contacted; (c) what was the nature of the contact; (d) where was each meeting held; (e) who was present at each meeting; and (f) what was discussed at each meeting? Mr P. Papalia replied: No. MINISTER FOR SENIORS AND AGEING — PROPERTY DEVELOPERS — CONTACT 275. Mr Z.R.F. Kirkup to the Minister for Seniors and Ageing; Volunteering; Sport and Recreation: Has the Minister or Ministerial staff met or had any contact with any property development companies or property developers since 17 March 2017, and if so: (a) what are the dates for each meeting or contact; (b) who was contacted; (c) who made the contact; (d) what was the nature of the contact; (e) where was each meeting held; (f) who was present at each meeting; and (g) what was discussed at each meeting?

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Mr M.P. Murray replied: Since 17 March 2017, the Minister and his current Ministerial Staff have not had any contact with any property development companies or property developers. (a)–(g) Not Applicable. MINISTER FOR SENIORS AND AGEING — UNION MEETINGS 309. Mr Z.R.F. Kirkup to the Minister for Seniors and Ageing; Volunteering; Sport and Recreation: (1) Since 17 March 2017 has the Minister or any Ministerial staff met with any of the following organisations: (a) Australian Manufacturing Workers’ Union; (b) Australian Meat Industries Employees Union; (c) Australia Rail, Tram and Bus Industry Union; (d) Australian Worker’s Union; (e) Breweries and Bottleyards Employees Union; (f) CEPU Communications Workers Union; CEPU Electrical Union; (g) CFMEU Construction & General Division; CFMEU - Mining Division; (h) Community and Public Sector Union; (i) Finance Sector Union; (j) Food Preservers Union; (k) Maritime Union of Australia; (l) National Union of Workers; (m) Shop, Distributive and Allied Employees Union; (n) Transport Workers’ Union; (o) United Firefighters Union of WA; (p) United Voice; and (q) the Western Australian Prison Officers’ Union of Workers? (2) If yes to (a)–(q): (a) what are the dates for each meeting; (b) where was each meeting held; (c) who was present at each meeting; and (d) what was discussed at each meeting? Mr M.P. Murray replied: Since 17 March 2017, the Minister and his current Ministerial Staff have not had any contact with any Unions, however, the Minister and his current Ministerial Staff may have had incidental or irregular social contact in which case this is not listed. (1) (a)–(q) No. (2) Not Applicable. ______