Legislative Council

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Legislative Council 7480 LEGISLATIVE COUNCIL Wednesday 14 May 2008 __________ The President (The Hon. Peter Thomas Primrose) took the chair at 11.00 a.m. The President read the Prayers. SPORTING VENUES AUTHORITIES BILL 2008 Bill received from the Legislative Assembly, and read a first time and ordered to be printed on motion by the Hon. Michael Costa, on behalf of the Hon. Ian Macdonald. Motion by the Hon. Michael Costa agreed to: That standing orders be suspended to allow the passing of the bill through all its remaining stages during the present or any one sitting of the House. Second reading set down as an order of the day for a later hour. AUDITOR-GENERAL'S REPORT The President tabled, pursuant to the Public Finance and Audit Act 1983, a report entitled "Auditor-General's Report—Financial Audits—Volume Two 2008", dated May 2008. Ordered to be printed on motion by the Hon. Tony Kelly. RADIUM HILL SMELTER SITE Motion by the Mr Ian Cohen agreed to: That General Purpose Standing Committee No. 5 inquire into and report on the Radium Hill uranium smelter site in Nelson Parade, Hunter's Hill, and in particular: (a) any rehabilitation or remediation of the site previously undertaken, (b) the extent of contamination and radioactivity levels, (c) the impact of any contamination on public health and the environment, (d) the appropriateness of the Government's planned remediation strategy, and (e) disposal of waste from the site. PROGRAM OF APPLIANCES FOR DISABLED PEOPLE Motion by the Mr Ian Cohen agreed to: 1. That this House notes: (a) that citizens of New South Wales with disabilities have a right to the provision of equipment that enables the realisation of fundamental human rights, (b) that without essential equipment, people with disabilities are at greater risk of suffering isolation and a lack of employment prospects, and there is potential for further injury, (c) that current waiting lists for equipment procurement by clients under the Program of Appliances for Disabled People (PADP) is not conducive to enabling disabled citizens to participate and contribute to society, or enjoy a satisfactory standard of living and freedom of movement, 14 May 2008 LEGISLATIVE COUNCIL 7481 (d) that anecdotal evidence suggests there are instances of extreme hardship for PADP clients due to delays in providing essential support equipment with some clients waiting for between six months and two years, occasionally longer, for wheelchairs and essential aids, (e) that excessive waiting periods have an adverse effect on PADP clients affecting both physical and mental health, quality of life, relationships and prospects, and (f) the PriceWaterhouseCoopers 2005 report titled "Review of the Program of Appliances for Disabled People" stated that there is a potential demand for the PADP in the range of $35 million to $70 million (before co-payments or expenses) compared to the current budget of $23.8 million. 2. That this House calls on the Government to: (a) clear the existing PADP waiting list backlog with an immediate injection of funding, and (b) reconsider and fully evaluate before the full rollout of PriceWaterhouseCoopers efficiency recommendations, whether a funding increase of $13.5 million will secure operation of the scheme today and into the future. PETITIONS Princes Highway Speed Zone Petition requesting that the House reintroduce the 100 kilometre per hour speed limit between Omega Hill and Fox Ground and immediately upgrade the Princes Highway between Gerringong and Bomaderry, received from the Hon. Don Harwin. FISCAL RESPONSIBILITY Matter of Public Importance The Hon. GREG PEARCE [11.10 a.m.]: I move: That the following matter of public importance be discussed forthwith: The Government's recent performance and progress against fiscal targets and principles of the Fiscal Responsibility Act 2005. It is clearly a matter of public importance that the Government comply with its own legislated fiscal targets, and it is not appropriate for the Treasurer to giggle continually when I raise this matter of public importance. A responsible Treasurer would address this matter in some detail. The Government's fiscal strategy was designed, according to its own budget papers, to provide a cushion so that the Government can borrow in times of difficult financial circumstances and when revenues are at risk. It is important that its fiscal strategy enables the Government to borrow instead of having to increase taxes or reduce services. This is a legislated fiscal strategy. The Treasurer has shown that he cannot budget, he cannot control expenses, he does not get his projections right and prior to the last election he deliberately set on a strategy of breaching his legislated fiscal targets to fund the infrastructure backlog created under this Government. Not only that; it is possible that the Treasurer is borrowing to fund recurrent expenses. While the Treasurer, in his first budget, at least paid lip service to the Fiscal Responsibility Act and made an argument that the breaches were temporary, in the most recent budget the breaches are simply entrenched through the whole estimates period. So for the first five years of the 10-year strategy the Government has simply failed to reach its legislated targets. There is no argument that the Government is responsible for its fiscal strategy. However, if it cannot meet its current fiscal strategy it is a matter of public importance and a matter of importance to the Parliament that it explains why it cannot meet its strategy, what changes it needs to make, what impacts such changes will have on the budget and the economy, and the timeframe to reaching its targets. As a Parliament we are responsible for maintaining government accountability, and on a matter as important as fiscal targets, particularly when they are legislated fiscal targets, we expect the Treasurer to behave like a responsible Minister and the Government to be accountable. This matter is important and urgent because the next budget is due shortly, and in that budget we expect the Treasurer to properly explain his fiscal strategy, explain why he has not been able to meet it in the past, explain the impacts on the economy and the budget, and give timeframes to meet its targets. The Hon. MICHAEL COSTA (Treasurer, Minister for Infrastructure, and Minister for the Hunter) [11.13 a.m.]: The Government's view is that this matter is not important, largely because the issues will be canvassed in about three week's time in the State budget. I have had repeated questions on this matter from the 7482 LEGISLATIVE COUNCIL 14 May 2008 Hon. Greg Pearce. It is true that the Government is on the record about having difficulties meeting its fiscal targets. We have been upfront about that. Indeed, the most recent budget indicated that we would not meet our long-term fiscal target; from memory, that was part of my budget speech and part of Budget Paper No. 2, which outlined the Government's fiscal target. There is no secret that we have some problems in this area. Indeed, much of the debate we are having with the Commonwealth over State-Federal fiscal arrangements is precisely about our long-term challenges in terms of revenue versus projected expenditure growth. A lot of that is outside the Government's control because, as the Warren inquiry clearly showed, we have a highly centralised system of revenue collection in this country which puts enormous pressure on State revenues at a time when expenditure factors are growing outside the Government's control. In addition, we have been clear about the challenges we face. A number of Government reports, including a budget paper on long-term demographic change in the State, clearly show that over time all the targets in the State budget will be challenged by the ageing of the population. This matter has not arisen overnight. The Government has been explicit about the challenges it faces in terms of both its fiscal targets and its revenue and the need for a better set of arrangements with the Commonwealth. State revenues are certainly under pressure and our long-term revenue projection is for revenue growth of about 4.5 per cent to 5 per cent. However, in key areas such as health we are seeing enormous growth in expenditure driven by factors outside the Government's control. That growth is largely demographic in nature and technological in terms of the changing cost and expenditure associated with new medical technologies. For example, we know that on average the health budget is growing about 8 per cent and currently represents in the order of 26 per cent to 27 per cent of overall State revenue. One does not need a mathematics degree or a PhD in statistics to understand that those revenue trends, matched against growth in expenditure, will lead to big pressures on the Government's budget. That is precisely the reason we have been arguing for a change in State-Federal fiscal arrangements. Last night the Federal Government brought down its budget. Part of that budget's premise is a review of long-term State-Federal financial arrangements. We support that because ultimately it is the basis of trying to resolve this problem. I am surprised that the Hon. Greg Pearce thinks this matter is urgent. He used the fact that we have indicated we will spend record amounts on long-term infrastructure to criticise the Government's strategy. I do not think anyone in the community feels that spending record amounts of money on infrastructure is in any way a negative. Certainly, our targets are important, and we will seek to meet those targets within the confines of the limitations on revenue and expenditure. As part of the State Plan we have said that the triple-A credit rating will be the framework that drives the Government's fiscal position.
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