Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

  (a) the Government has delayed release of the Productivity Commission's review of the GST distribution until after the South Australian state election on 17 March 2018;

  (b) the Productivity Commission's draft report recommended changes to the distribution of GST revenue that would see South Australia lose up to $557 million in the first year alone;

  (c) South Australia did not receive one new dollar of infrastructure funding in the 2017-18 budget;

  (d) education funding to South Australia has been cut by $210 million by the Government; and

  (e) the Government’s failure to support Holden has resulted in thousands of job losses in South Australia; and

(2) calls on the Government to provide South Australia with its fair share of Commonwealth funding and to release the Productivity Commission’s report prior to 17 March.

South Australia currently has 11 seats in federal parliament. Four of them are held by the Liberal Party. Those four are held by margins of five per cent or less. There's a very logical reason for that and a clear reason understood by South Australian voters, and that is that South Australia, under the Turnbull government and previously the Abbott government, has been dudded. It's as simple as that, and that's why voters in South Australia do not vote for very many members of the coalition in this place.

They have been dudded with respect to the River Murray. They've been dudded with respect to the GST share of funding. They've been dudded with respect to the infrastructure spending for South Australia. Earlier today, we had a debate about the $210 million cut from education funding in South Australia as well. Then, when you look at the submarine contract, you can see that it was a debacle from the outset, and it still is. The simple reality is that federal Liberal members from South Australia cannot be trusted to defend the interests of South Australians, and the voters know that and their vote is reflected in the number of members here in this place.

Let me turn to infrastructure funding for a moment. When the coalition government came to office some five years ago, they announced an infrastructure plan of about $50 billion. Of that, $2 billion was going to go to South Australia. That is four per cent of the total funds. South Australia has seven per cent plus of the population and over 11 per cent of the national roads, but it was going to get four per cent of the infrastructure funds. But, to make matters worse, the federal government then dropped the supplementary road funding that South Australia had been receiving for 20 years under both sides of politics. They dropped it altogether—$20 million or thereabouts each year.

Government Member:

A government member interjecting—

Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

Yes, it's been reinstated, after years, because they knew that the heat was on them. But they had dropped that as well. And then last year we saw not one new infrastructure dollar being directed to South Australia. Federal members come into this place and say, 'That's the state government's fault because they didn't put any proposals up.' Yet the same state federal members will come into this place and take credit for works to do with infrastructure that they supposedly got without the state government. I say to them: you can't have it both ways. Either you stand up for South Australia or you don't. If you're good enough to get money when you want to claim credit for it, then you should have done so last year as well.

It gets worse than that, as we know. GMH is a classic, iconic South Australian company, established by the longest-serving Liberal Premier in South Australia, Thomas Playford, who did great things for South Australia. After 60-odd years, under this government, which turned its back on the car workers, we saw the car workers lose their jobs, but it also affected all of the other associated industries and the general community and the economy of that area of South Australia because there were so many other businesses that relied on it. I suspect Thomas Playford would be turning in his grave if he was aware of what was going on in South Australia and the things that he established being turned around by this government.

We then go to the education funding. I don't want to repeat the debate we had in the other chamber this morning, because that was had in the other chamber, but $210 million is going to be taken away from South Australian schools as a result of this government reneging on a previous agreement that was in place under Labor and the state government. But we then turn to the GST debate and we get to a situation where we are likely to lose over $500 million in GST funding because this government is possibly going to change the formula.

I notice that the South Australian Libs—the federal Liberals—have come out and said, 'We'll stand up for South Australia.' Well, if you're going to stand up for South Australia, why doesn't the federal government come out before the next state election and make it clear that there will be no cuts? But they won't. They'll wait until after the state election, both here and in Tasmania.

Lastly, I turn to the River Murray, because the member for Barker is sitting right there. The member for Barker got up in parliament last week and asked a question questioning Labor's stand on a disallowance motion that would have meant more water for South Australia. The member for Barker, who represents the Riverland fruit growers, came into the parliament and criticised Labor's position in standing up for more water for South Australian growers. South Australians are not fools and they won't be fooled by this government.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I'm very pleased that the member for Makin has begun the new year energised about his role in this parliament. I thought it was particularly unfair at the end of last year when TheAdvertiser assessed him as having achieved an 'F' over the last 12 months for his efforts in this place. I thought that was particularly unfair! But he has turned the page, and good on him. He's going to come in here and fight for the people of Makin, and so he should. While we're talking about fighting for the people of our electorates, can I just mention, as he did, the Murray-Darling Basin Plan. Make no mistake, we are at a critical phase in relation to this plan. The fact is that Labor, the Greens and the Nick Xenophon Team are going to open the gate. They're going to open the gate to the Victorian Labor government—I should say the New South Wales Liberal government too—to rip the plan up. After all that work that Tony Burke did that I've given him credit for, they want to rip the plan up. This will happen. I hope it doesn't, but, if it does, I'll say, 'Ladies and gentlemen, I told you so.'

Let's talk about infrastructure for a minute, and I know the member for Boothby and the member for Grey are particularly interested in infrastructure in South Australia. The member for Makin must have been reading my speech notes, because, quite frankly, he's hit the nail right on the head. The reason we're not getting infrastructure projects delivered from the federal government into South Australia is that we've got a South Australian state government that doesn't want the money. Those opposite will say, 'Oh, rubbish,' but I think it's right because, if they receive this money for infrastructure projects, they give up GST, and, you see, their ability to spend GST money on pet projects, in marginal seats, to prop up Jay in South Australia is critical. Make no mistake, we're hearing a lot about South Australia in this place at the moment. Why is that? Because they want 20 years of a failed Labor government. Sixteen years was bad enough, but they want to give us two decades.

I don't want to talk in generalities. I want to give you a specific. I want to drill right down to the bitumen on the road and give you an example. The member for Boothby and the member for Grey know I have banged on about the Penola bypass for as long as I've been in this place. It was a road that was half-built by the SA Labor government.

Opposition Members:

Opposition members interjecting—

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Wakefield will have his opportunity.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

For too long in this place have I banged on about the Penola bypass, because the state Labor government built half of it. It was the equivalent of building half a house. It sits there, and it ends. We've even had an occasion when someone from interstate thought for sure that the road continued, so they continued into a paddock and had a rather serious accident. In any event, it is a half-built road. I managed to put $9 million on the table for a state road; I sat it on the table. It's been on the table for years. The state infrastructure minister, Mulligan, when our community heralded the arrival of this $9 million contribution, said, 'That's great, but, nah, we don't want it.' They didn't want to complete a road that's half-complete. They didn't want to finish it. When I asked why, they said there would be GST implications—'We'd have to give up GST.' What that meant was that they didn't complete the Penola bypass. They had to give the money back to the federal government so that the state could maintain its GST payments.

Look, I get it. You're about pet projects in marginal seats in Adelaide. But then, thanks to the efforts of the member for Boothby, there was a rather significant announcement around the Oaklands Crossing. Stephen Mulligan, to much celebration, lauded the solution at the Oaklands Crossing, and I thought to myself, 'Hang on a minute, the Oaklands Crossing and the Penola bypass have the same assessment for the purposes of GST funding.' So the SA Labor government were prepared to accept $95 million from the federal government to complete the Oaklands crossing, or contribute to it, but they turned their back on $9 million for the people of Penola. If you need an example of what they care about, there it is. They care about marginal seats and pet projects.

I'm about standing up for my constituents. I'm about infrastructure programs that matter to them, like the Penola bypass and the $9 million that is there, ready to be used to complete that road. We've got a state Labor government that was prepared to reject that money. They're prepared to accept money for the Oaklands crossing that got the same GST treatment. They care about city constituents in marginal seats. They don't give a toss about people who live in the country.

Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Link to this | Hansard source

On 3 January 2018, we realised in South Australia that the Productivity Commission and the Treasurer, who obviously has received this report, have put the torpedoes in the water for GST cuts to South Australia. And what's the reaction we've seen from this government? First of all, it was complete delay. They want to delay until after the state election. They don't want to own up to the fact that the Treasurer, Mr Morrison, has said that the GST allocation system is broken and needs to be fixed, yet they're not prepared to own up to the solution the Treasurer might adopt until after the state election. This is because we're going to get a $557 million cut, which will cost us 2,400 doctors or 5,000 nurses or 5,000 teachers or 4,000 police. This is the impact of this sort of cut—a cut of this magnitude.

Of course, when this is reported in the Adelaide Advertiser and when the state Premier, Jay Weatherill, seeks to make this a legitimate issue for the South Australian election, for the opposition leader, for the Liberal Party, what do we get? I'll tell you what we got. We got a great bit of confusion from the South Australian Liberal Party. On 7 February in an Adelaide Advertiser report called 'Hands off our Ca$h', we had cabinet ministers Pyne and Simon Birmingham quelling fears by 'emphatically stating':

… the Turnbull government had no policy to change the way the cash was distributed.

Mr Pyne said:

The Productivity Commission writes reports, the Government makes policy. There is no policy to change the GST mix …

However, we know that Mr Morrison has said the system is broken and needs to be fixed, so what we get in that very same story is the member for Boothby saying she's going to fight for 'a fair deal for SA'. That seems to indicate that something's going on in federal cabinet regarding South Australia's GST allocations. Why else would she say that she's going to fight to protect it? Who is she seeking to protect it from if not the federal Treasurer, if not the federal cabinet, if not the Turnbull government? We know she's had much to say about banking reforms, bizarrely being on the side of the banks, unlike most Australians; she's on the side of the banks, not on the side of the people.

We then, of course, have the member for Barker, who just spoke. He made a very parochial speech, but, to The Advertiser, he said:

Any attempt to undermine this principle will be met with a fierce fight from me and, I would expect, every other South Australian in Federal Parliament …

So what we're seeing is the federal government putting on all the mood music. We know Morrison, Cormann and the Prime Minister are putting on all this mood music in Western Australia in a desperate attempt to deal with their political problems over there. The state government have blown their budget. The previous state Liberal government blew their budget and left the incoming Labor government with that problem. And what we find here is a bunch of state Liberal Party backbenchers from South Australia fighting a desperate rearguard action against their own cabinet. This is division over an issue which vitally affects South Australia—that is, our GST allocation.

The same article says:

Grey MP Rowan Ramsay said the current GST carve-up was not sustainable in the long-term but suggested putting a minimum on the cents in the dollar return …

So he's making up his own policy. He's not for cabinet. He's not for the member for Barker and the member for Boothby's policy of protecting South Australia's allocation. He's for his own policy on the run. We know that the member for Grey tends to just say whatever comes into his head at any moment, and it's normally a bit wayward and a bit deranged, and so here we have him making his own statements on horizontal fiscal equalisation.

This is the fairest system in the world for allocating these funds. It means that South Australians get a fair go. That's all we want—a fair go—because we need to develop the country. We're developing a vast continent, with small populations often in big parts of it. We need to keep the GST system the way it is, and we certainly need a position of no disadvantage to South Australia. But what we've got is Liberal cabinet ministers and Liberal backbenchers all at sea over their own government's policy.

Nicolle Flint (Boothby, Liberal Party) Share this | Link to this | Hansard source

A strong economy is the key to our nation's growth. It's the reason that our government is backing small business, boosting exports and delivering tax cuts. A strong economy benefits all Australians by creating more and better-paying jobs. A strong economy also means that states do not need to rely on GST revenue to fund essential services. However, in my home state of South Australia that's exactly what is happening and what has to happen, because after 16 consecutive years of Labor government and 16 consecutive years of irresponsible spending the South Australian Labor government can barely keep the lights on.

I'm a proud South Australian and I will always fight to ensure that we get our fair share of Commonwealth funding. But I'll tell you what else I'm fighting for: I'm fighting for a change of state government in South Australia so that my wonderful home state and our state economy can get back on track. There is nothing more important than that for my residents in Boothby and for every single South Australian. We need to get rid of the state Labor government, who have failed each and every resident of South Australia. They've failed to protect our most vulnerable elderly residents and our most vulnerable children. They've failed to deliver affordable and reliable power. They've failed to transform health. Instead, they've decided to trash our health system, shutting down the wonderful repatriation community hospital in my electorate and closing 160 hospital beds in the south of Adelaide. State Labor have failed to grow jobs—it's just tragic that we have one of the highest rates of unemployment in the nation—and they've absolutely failed to balance the state budget.

I will address some of the specific issues raised in this motion, particularly infrastructure and education. The Turnbull government's commitment to infrastructure in South Australia is undeniable. In the 2017-18 budget our government committed to an overall infrastructure spend of $3.1 billion for South Australia. This is a significant investment in upgrading infrastructure across the state, and a large part of that funding is going to benefit my residents in Boothby significantly. We have committed $496 million, or 80 per cent of the total value of the Darlington upgrade project. This will see traffic flow much more easily along South Road. It's absolutely critical to get my residents and those residents further south to work and to school as quickly and efficiently as possible. Part of this upgrade is our commitment of another $42 million—I was so proud to be the candidate when this commitment was made during the election campaign—to extend the train line from Tonsley up to Flinders Medical Centre and the university. The Flinders Link rail project will transform public transport options for local residents. It will make it so much easier for students coming to Flinders to get to uni, help health professionals at Flinders Medical Centre and help patients to get to Flinders Medical Centre and Flinders hospital more quickly and easily.

I was also very proud during my time as a candidate for Boothby to be the first member of parliament to ever commit significant funding to fixing the Oaklands Crossing, which is a 40-year-old problem for my residents. I secured a $40 million commitment towards the Oaklands upgrade and grade separation, and I'm grateful to the Minister for Urban Infrastructure and Cities for securing an extra $55 million, so that this project can start now. The state government has also made a commitment and we will see this long-term problem fixed for my local residents.

We're also providing record local road funding to my councils. We've invested $7.8 million through Roads to Recovery for councils in Boothby—the cities of Holdfast, Mitcham, Onkaparinga and Marion—and the Black Spot Program is doing things like fixing the Jetty Road rail and road intersection, which has made it a lot safer for both cars and pedestrians.

Education was another issue listed in this motion. It is ridiculous to claim that the Turnbull government is cutting funding to education. We are investing an extra $23.4 billion in our schools over the next decade. I spoke on that this morning in the House. We will see average funding per student increase by around 52 per cent.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak about the Productivity Commission report, which—no surprise—has been delayed. And why has it been delayed? Because the government are waiting until after the Tasmanian and the South Australian state elections. There must be a reason why they're delaying it, and it doesn't take a genius to work out that reason. Following a $210 million cut to South Australian education and schools alone, which I spoke about in this place last week, we now face the prospect in South Australia of a further drop in state revenue due to federal government pandering.

The delay of this Productivity Commission report is just another way for the incompetent Turnbull coalition government to try to win back support in WA, where they're trying to avoid the state poll consequences and also trying to avoid the backlash that the federal government is seeing in a drop in all the Gallup polls and other polls. This is a great example of the typical, incredibly lazy approach from this government, as we've seen in so many areas. They are not promoting good, long-term fiscal policies. Let's look at the facts. The draft report was handed down four months ago. Now we hear that in the draft there is a proposal for the eastern states to see a cut in GST revenue, with Western Australia picking up billions. The voters of South Australia and other states expect more from this government than to just chop and cut away to pander to a particular state where it's floundering in the polls. Voters in South Australia head off to the polls on 17 March, so why shouldn't they have access? Why shouldn't this government be up-front with them so they can see the Liberal Party's vision for the nation, which includes ripping billions of dollars of GST revenue from states like my home state of South Australia?

What makes it even more remarkable is that we haven't heard a thing on this from the South Australian Leader of the Opposition, Steven Marshall. Where is he? We haven't heard a thing from him. His opposition, by not standing up to this federal government at all, is so weak. We haven't heard boo from him. Perhaps they're not cutting—we don't know. But at least be up-front and tell us before the state election. Steven Marshall is like a wet towel on the floor with this.

In contrast, we see Premier Jay Weatherill fighting tooth and nail on this issue, as he's fought tooth and nail on many other issues. We saw him stand up to this federal government with the submarines. When the Abbott coalition government were basically telling us that we weren't going to get the submarines in South Australia, we saw Jay Weatherill, the Premier, stand up to them and fight until we did get them—unlike the opposition leader. When there are $210 million until in cuts to education, who's out there in South Australia fighting for the South Australian students and schools? It's Jay Weatherill, the Premier. We haven't heard boo from Steven Marshall and the opposition. So we need someone who will stand up and continue to stand up to the federal government's unfair policies.

What we'll see is cuts to education, roads, infrastructure, health, Aboriginal affairs, the environment, just to name a few. We will see cuts to jobs programs, which are so important in South Australia—jobs programs designed to help people from GMH and other industries that have shut down. This is an absolute disgrace, and the government must come clean with the South Australian people now. They must come clean today and tell the South Australian people what they're proposing in that Productivity Commission report.

If I'm wrong about the WA windfall, why is the federal government delaying the report? It's been out for a long time. Release it if there's nothing to hide. Let the South Australian voters, who are going to an election in a few weeks time, know up-front exactly where they stand and where this federal government stands with South Australia.

Don't get me wrong. I love WA; I've visited many times. But it's a little rich to complain about other states taking GST revenue during the mining boom and then complaining about not having enough cash when times are tough. We can't keep moving the goalposts—and they are moving for political purposes. It is about trying to win back votes in WA. People are absolutely sick of this pandering. So let's look at what other states are saying. For example, Victoria, led by the business community, had this to say:

It does little to improve the transparency, simplicity, economic efficiency, or equity of the current system …

(Time expired)

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

The member for Makin has actually raised a very important issue: the review by the Productivity Commission of the GST carve-up. Unfortunately, after his initial comments in the motion, he digresses and falls into the trap of the South Australian government. In fact, he follows their lead and links South Australia's long-term underperformance on almost every level to the federal government. It is not a thesis or hypothesis that stacks up. The federal government runs a federal system, and all states are basically treated the same. Yet all the ailments of South Australia and its underperformance seem to be, at least in the Premier's view and in the view of the members opposite, the fault of this federal government.

It's been 16 long years of Labor in South Australia. They have misjudged the economics of the day and badly misdirected infrastructure investments, including very expensive opening bridges down at Port Adelaide, the O-Bahn extension and a desalination plant that hasn't been seriously utilised since it was built in 2011. While it has spent the taxpayers' hard-earned dollars on these projects, the state government has ignored the infrastructure that would boost the economy, particularly in the regions. I make the point that South Australia does not have a serious deep-sea port, and it's been holding us back for many years. The government should have invested in this area. The state government's status quo is to blame the Canberra coalition for all its failure and, unfortunately, the member for Makin has joined them.

Let me say from the outset that I'm totally committed to the principles of horizontal fiscal equalisation. This country has been built on the premise of equality and equity. It's not possible to support a system where children, our aged or our disabled are treated with less generosity from state to state. That's why I think it is completely correct that the Productivity Commission should review the mechanisms that address horizontal fiscal equalisation. It is the vehicle that delivers social equity across Australia, but currently the GST is meeting the entire scope of that fiscal equalisation, and this is leading to distortions. The member for Barker touched on them when he spoke about the Penola bypass.

I, too, after some lobbying efforts, was allocated some amounts of money for South Australia in 2016 to help the state government upgrade some of their infrastructure. In particular, I got $400,000 for an upgrade of the Kulpara to Kadina road, which is an increasingly busy and rough-as-guts bitumen road carrying 2,000 to 3,000 vehicles a day on Upper Yorke Peninsula. It's interesting that the state government are actually paying for works on parts of that road at the moment, but they could have had an extra $400,000 from the federal government. All that was required was a 20 per cent contribution from them, which they rejected because they said it would affect their GST payments. Similarly, I received an $800,000 contribution towards the Tod Highway on Eyre Peninsula. These are very important transport routes. Once again, the state government would have had to come up with 20 per cent, or a little less than $200,000, and they refused the money because it would downgrade their GST allocation.

I make the point here that something is wrong. When state governments are rejecting money from other sources because it will affect their GST allocation, clearly the incentives in the system are wrong. I applaud the review by the Productive Commission, and, like others, I look forward to their final report. But I hope they address this issue.

In my mind, we will have to look at a system that is somewhat different and that shares the load further outside the GST boundaries. We cannot have member states making decisions because they're worried about losing money from other states. I have some sympathy for the view that the Western Australians put up—that there ought to be a minimum rate that states pay. The suggestion has been 70 per cent; so, if your state contributes a dollar through GST, you are guaranteed at least a 70 per cent return. It's going to take a little time before we get to that position, I believe. I am willing to support that premise but only if it does not disadvantage my state and my issue is addressed in other ways.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Sitting suspe nded from 13:35 to 16 : 00