UNCORRECTED PROOF ISSUE Thursday 30 June 2011 - Estimates Committee A (David O'Byrne) - Part 1 LEGISLATIVE COUNCIL ESTIMATES COMMITTEE A Thursday 30 June 2011 MEMBERS Mrs Armitage Ms Forrest Mr Hall (Chair) Mr Harriss Mr Mulder MrWilkinson IN ATTENDANCE Hon. David O'Byrne MP , Minister for Infrastructure, Minister for Economic Development, Minister for Science, Innovation and Technology, Minister for Police and Emergency Management, Minister for Workplace Relations Ministerial Office Josh Bradshaw , Head of Office Peta Sugden, Adviser for Economic Development Neale Tomlin, Adviser for Infrastructure Yasmin Maskiell, Adviser for Police and Emergency Management Astrid Wootton, Adviser for Economic Development Simon Monk , Adviser for Infrastructure Wayne Johnson, Adviser for Workplace Relations Narelle Harvey, DLO for Infrastructure Department of Justice Lisa Hutton, Secretary Michael Stevens, Deputy Secretary (Corporate) Chris Jacoora, Departmental Liaison Officer Roy Ormerod, General Manager, Workplace Standards Tasmania Martin Shirley, Director Stephen Morrison, Director, Finance Thursday 30 June 2011 - Part 1 1 Estimates A - O'Byrne UNCORRECTED PROOF ISSUE Department of Infrastructure, Energy and Resources Norm McIlfatrick , Secretary David Peters , Deputy Secretary, Infrastructure Amanda Russell , General Manager, Corporate Services Suzie Jacobson, Manager, Corporate Affairs Marnie Peebles, Executive Assistant Nell Butcher, Executive Assistant Peter Todd, General Manager, Roads and Traffic David Spence , General Manager, Infrastructure Policy Strategy Craig Hoey, AG Manager, Rail Safety Colin Finch, Chief Executive, Marine and Safety Tasmania (MAST) Department of Economic Development Mark Kelleher , Secretary Jonathan Wood , Deputy Secretary, Industry Development Ros Harvey , Executive Director, Strategic Policy and Research Lynne Fitzgerald , Director, Strategy and Impact Assessment Craig Watson , Executive Director, Corporate Support Department of Police and Emergency Management Darren Hine , Commissioner of Police Scott Tilyard , Deputy Commissioner of Police Scott Wilson-Haffenden , Director, Corporate Service Tasmania Fire Service Mike Brown , Chief Fire Officer Mike Gallagher, Director of Corporate Services The committee met at 9 a.m. DIVISION 5 (Department of Infrastructure, Energy and Resources) CHAIR (Mr Hall) - Welcome, Minister and everybody. We are right to go with Infrastructure, so I invite you to give a short overview. Mr O'BYRNE - I think it is important that we put the Budget in context. Thursday 30 June 2011 - Part 1 2 Estimates A - O'Byrne UNCORRECTED PROOF ISSUE CHAIR - We are all going to be succinct today. Mr O'BYRNE - Thank you, Chair, and I thank the members of the upper House committee for their time today. Yesterday we were pretty relaxed about where we moved in terms of the outputs. We dealt with it by way of an overview and then some people just wanted to raise a couple of key issues within the overview. We did not keep religiously to the output groups, but I am in your hands about how you want to manage it. It might be easier to go through it. CHAIR - We usually do a few overview bits and pieces first and then we go down through the outputs, so at least we get them on record. Mr O'BYRNE - Good; more structure than we had yesterday. Just setting the scene for the Infrastructure portfolio, we know that this State Budget is facing some significant challenges and we have had to make across a whole number of portfolio areas some significant savings in the way we do things. We need to recognise that particularly in the Infrastructure portfolio we do need to invest in vital transport infrastructure across the State and what we have tried to do within the Budget has been about balancing investing in the future with making those smart decisions for the times ahead of us. The investment in Tasmania's transport infrastructure is about providing those critical networks that link communities across the State - networks that we already rely on, whether we are travelling to see family or friends, or doing business from one end of the State to the other, or touring the beautiful natural assets of the State with friends from interstate. The roads, bridges and other transport infrastructure we use are there for the benefit of all Tasmanians, regardless of their background, their wealth or their lifestyle. It is therefore vital that we continue to invest even in these difficult budgetary times. This investment not only connects our communities and makes them more resilient but, importantly, it also supports jobs for Tasmanians and Tasmanian companies throughout the State and, crucially, it supports our regional and remote communities. Major road and rail projects to be funded in the 2011-12 Budget, which will see these key objectives furthered, consist of a total of $195 million worth of investment in Tasmanian communities for Tasmanian workers and companies. This funding is made up of a significant $151 million investment in roads across the State. This includes major work of generational significance, such as the continuing work on the Jordan River crossing component of the $187 million Brighton bypass, a $77 million Brighton transport hub and the completion of the $41 million Kingston bypass. Significant road project funding also featured in the 2011-12 Budget and in the forward Estimates includes $21 million for the West Coast Roads Package, a $42.5 million North East Freight Roads project, the $19 million Tarkine loop road and the ongoing commitment to the $90 million Community Roads Package and the full list of 16 projects for communities statewide. We have also recently awarded new road maintenance contracts worth more than $50 million commencing from the end of this week. This is front-line investment, which helps ensure Tasmanians have safe and quality roads to travel on. We will see an increase in funding for important road safety initiatives and infrastructure through the road safety levy. This will allow us to implement safety measures over and above Thursday 30 June 2011 - Part 1 3 Estimates A - O'Byrne UNCORRECTED PROOF ISSUE those already funded. This is in recognition of the Government's serious commitment to road safety and working towards key milestones of reducing serious injuries and deaths on our roads. Initiatives comprise such things as identified in the Road Safety Strategy and the second Action Plan. That includes the Community Road Safety Partnership and the driver mentoring program, greater road safety education, continuing work on the alcohol interlock program and point-to- point speed enforcement, local government line marking, wire rope barriers and continuing electronic speed sign rollout, just to name a few. Rail is also significant for us. We have a $13.5 million equity contribution to Tasrail for the critical upgrade of Tasmania's rail infrastructure and the company's rolling stock. We will also complement a further significant investment of $31 million towards Tasrail's capital investment program in the 2011-12 Budget. This investment is about providing ongoing support and building an efficient, safe and competitive State-owned rail company. As you know, we bought it back in 2009, and it was probably a genuinely heritage rail asset that we bought back and we are having to spend a lot of money upgrading it, which we can talk about later. The challenges we face as a government are well known, as are the tough decisions, and we have had to make these decisions to ensure we are prepared for the future and we can provide a positive outlook for the future of all Tasmanians. This Budget, however, has been about making smart decisions, and the ongoing investment we are committed to in infrastructure, which we will continue to outline in this committee session, we believe is one of those smart decisions. So with those opening comments, Chair, I am in the committee's hands. CHAIR - Thank you, Minister. You talked about the savings strategies. I will ask a couple of questions on overview and let other members get that there. What is the total amount of savings that your department will have, broken down over the forward Estimates? Mr O'BYRNE - In the first year there is a $4.1 million saving across the department. In the forward Estimates we move to $6.6 million in the following year, and then right out to the 2014- 15 year. I might ask Norm because within the department we have a number of ministers. CHAIR - Are any of those savings itemised at all? That was the question I was really asking. Mr McILFATRICK - I guess there are a number of savings. We probably have a landing point three years out to be looking at around 9 per cent of our recurrent expenditure. Obviously that is masked by a lot of the capital works program, but as for the impact on the agency, the Infrastructure part dominates in terms of the number of people. Around about 70 per cent of our people are aligned with the minister's portfolio. Then there is Energy and Resources and other components. We expect that there will be impact on our staff numbers because recurrent expenditure is moving down. We are looking item by item in terms of our processes, for instance in the Registration and Licensing Branch, which takes up a significant amount of our budget because we have transaction management, we are looking working with the people there to look at how we can do things better. Our track record in DIER is that we have responded to the GFC in a way that has allowed us to reduce our staff by natural attrition and vacancy management by about 70 people over the last two years. That was in response to the 2008 crisis. We recognise now, if we are going to ask our people to do more of that cost-cutting we have to really heavily involve them in the process, so our approach is process review involving each of the key areas and where possible - and I think Thursday 30 June 2011 - Part 1 4 Estimates A - O'Byrne UNCORRECTED PROOF ISSUE that will be eminently possible - to manage the downsizing of maybe 40 to 60 people out of our 600 through natural attrition and through - CHAIR - Through you, Minister - in the next three years, forward Estimates.