8037 LEGISLATIVE COUNCIL Wednesday 4 June 2008 __________ The President (The Hon. Peter Thomas Primrose) took the chair at 11.00 a.m. The President read the Prayers. ENVIRONMENTAL PLANNING AND ASSESSMENT AMENDMENT BILL 2008 BUILDING PROFESSIONALS AMENDMENT BILL 2008 STRATA MANAGEMENT LEGISLATION AMENDMENT BILL 2008 Bills received, and read a first time and ordered to be printed on motion by the Hon. Tony Kelly, on behalf of the Hon. Michael Costa. Motion by The Hon. Tony Kelly agreed to: That standing orders be suspended to allow the passing of the bills through all their 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. CHINA EARTHQUAKE Motion by Reverend the Hon. Fred Nile agreed to: That this House: (a) recognises the human tragedy that is unfolding in the People's Republic of China, (b) expresses its sympathies to the victims of the earthquake in Sichuan Province, China, and (c) calls on State and Federal governments to offer, where practical, all available assistance to those suffering as a result of this disaster. STANDING COMMITTEE ON STATE DEVELOPMENT Government Response to Report The Hon. John Della Bosca tabled the Government's response to report No. 32, entitled "Aspects of Agriculture", dated 28 November 2007. Ordered to be printed on motion by the Hon. John Della Bosca. UNPROCLAIMED LEGISLATION The Hon. Eric Roozendaal tabled a list detailing all legislation unproclaimed 90 calendar days after assent as at 3 June 2008. PETITIONS Cooma Hospital Kidney Dialysis Service Petition requesting the provision of a kidney dialysis service for patients in the Cooma region, received from the Hon. Melinda Pavey. 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. 8038 LEGISLATIVE COUNCIL 4 June 2008 TABLING OF PAPERS The Hon. Eric Roozendaal tabled, pursuant to the Annual Reports (Statutory Bodies) Act 1994, a report of the Trustees of the Anzac Memorial Building for the year ended 31 December 2007. Ordered to be printed on motion by the Hon. Eric Roozendaal. BUSINESS OF THE HOUSE Postponement of Business Government Business Notices of Motion Nos 1, 2 and 3 postponed on motion by the Hon. Tony Kelly. APPROPRIATION (BUDGET VARIATIONS) BILL 2008 Second Reading The Hon. HENRY TSANG (Parliamentary Secretary) [11.12 a.m.], on behalf of the Hon. Michael Costa: I move: That this bill be now read a second time. The Appropriation (Budget Variations) Bill 2008 is a key part of the annual budget process. The 2007-08 budget was delivered before the start of this financial year. Throughout the year the Government is required to cater for unforeseen and urgent expenditures that were not forecast at budget time. This bill ensures that variations to the 2007-08 budget are appropriated by Parliament and ensures a transparent process for examining this expenditure. The practice of seeking approval for supplementary funding to cover expenditure not provided for in the annual Appropriation Act has now become an important part of the annual budget process. This process has been endorsed by the Auditor-General and in the report of the Legislative Council's General Purpose Standing Committee No. 1 on the appropriation process. The Parliament is aware that it is not always possible to seek the Parliament's authority in advance for unforeseen and urgent expenditure and has established provisions for such situations, such as the Treasurer's Advance. The Treasurer's Advance is an amount that is made available to the Treasurer in the annual Appropriation Act to be used for unforeseen and urgent expenditure. This amount is available for both recurrent services and capital works and services. The bill has three key features. Firstly, it provides an account to Parliament of the way in which the Treasurer's Advance has been applied for recurrent and capital expenditure. Secondly, it seeks an adjustment of the 2007-08 Treasurer's Advance prior to the end of the current financial year. Thirdly, it seeks appropriation for payments which are intended to be made in the current financial year when no provision was made in the annual appropriation bill. The Government, in presenting further appropriation bills, has sought as far as possible to ensure that the Parliament has the opportunity to scrutinise anticipated additional funding requirements prior to expenditures being incurred. The Appropriation (Budget Variations) Bill 2008 in respect of the 2007-08 financial year seeks appropriation of $190 million in adjustment of the advance to the Treasurer and an additional appropriation of $218 million for recurrent services. Schedule 1 to the bill is an account of how the Treasurer's Advance has been applied this year. The Treasurer's Advance payments in 2007-08, which highlight the commitment of the Iemma Government to ensuring appropriate services for the community, include $46.9 million to match federal funding for irrigators; $25 million towards the construction of the new hill grandstand at the Sydney Cricket Ground; $20.2 million for other emergency drought assistance, on top of the $350 million for drought relief provided in the 2007-08 budget; $10 million for a new educational wing at the Museum of Contemporary Art; $7.9 million under the equine influenza response plan; $34.8 million for out-of-home and foster care allowances; $10 million as part of a $30 million plan to provide an additional 150 acute care hospital beds; $10.3 million to extend the school safety zone plan; $11.1 million to establish Events New South Wales, which will help attract major cultural, commercial and sporting events; and $4.4 million to cover World Youth Day planning costs. The Treasurer informs me that the bill includes $140 million to reduce debt accrued during the construction of the Epping to Chatswood rail link, on top of the $960 million in rail debt repayments announced in this year's budget. With the Iemma Government investing a record $17.7 billion over the next decade on new 4 June 2008 LEGISLATIVE COUNCIL 8039 rail infrastructure, including $12 billion on the North West Metro project, it is prudent financial management for the Government to pay down debt where it can. Top-up funding has occurred in four of the past five years. This request before the Parliament is less than half that required in previous years and constitutes less than 1 per cent of the total State budget. The Federal Government introduced 12 such bills for additional spending over and above its normal budget requirements over the past five years. The practice of introducing further appropriation bills has enhanced accountability for the expenditure of public moneys from the Consolidated Fund. It is further evidence of the Government's commitment to transparent and full financial reporting to Parliament and the community. I commend the bill to the House. The Hon. GREG PEARCE [11.18 a.m.]: The Appropriation (Budget Variations) Bill 2008 is a disgraceful example of the Government elevating financial management to an art form. In his speech, the Parliamentary Secretary the Hon. Henry Tsang attempted to justify the fact that the Treasurer cannot forecast or manage his budget. The Treasurer has had three years now to try to get it right, and he has an abysmal record when it comes to trying to forecast expenses or revenues. But in this bill we see a new level of adhocery by the Treasurer in that he has now increased his Treasurer's Advance to more than half a billion dollars, which means, effectively, that the Treasurer is personally managing that sum of money in such a way that it is reported to Parliament through one of these bills well after the expenditure is incurred. It is a very significant amount of money and it raises very serious questions about the Treasurer's ability to keep his eye on the ball and, in particular, about his ability to manage and rein in his high-spending fellow Ministers. This budget can be seen in the context of the Labor Government's consistent pattern of allowing expenses to blow out every year, as noted in its own audit of State finances. Premier Iemma regarded that as such a serious problem that his first action as Premier was to appoint Messrs Stokes and Burdekin to work out what was happening with the budget that was rapidly heading this State into very nasty, choppy waters. The Stokes Vertigan report revealed a number of things but expressed key concern about the Government's bad habit of allowing expenses to grow faster than revenues, in breach of the requirements of the Fiscal Responsibility Act. I am sorry the Treasurer is not in the Chamber to respond to me about that Act's requirements—his own legislated fiscal targets. The Government's very poor management practice also depended virtually every year on unforecast windfall revenues to allow it to meet its budget outcomes and generally to keep the budget in surplus. To last year the Government had received $15.75 billion of unforecast revenue windfalls. The 2007-08 budget projected that approximately $1.75 billion of extra revenue would be received that was not budgeted for. That incredible result—another example of the Treasurer's poor forecasting—means that about $17.5 billion has been received by this Government and squandered as extra unforecast revenues. The overview of the bill says that additional amounts are required to be appropriated for the exigencies of government. That is a very interesting term.