Mr NORTHE (Morwell) — I am pleased to speak on the Appropriation (2016–2017) Bill 2016. It is interesting to follow the member for Macedon, who contests that this budget is the best budget that has ever been. But she spent most of her time giving advice to the federal government and to former ministers in the former government, so there must not be a hell of a lot in the budget for the member for Macedon. It is just staggering. I have to say it was very interesting to listen to the introduction of the member for Macedon, in which she thanked the Premier but not the Treasurer, for the budget. She is obviously not very happy with the Treasurer with respect to that.
I think it is important when we do analysis of the budget to understand where government revenue is actually coming from. As the shadow Treasurer and other members on this side have spoken about, what we have seen is an increase in state taxes by 20 per cent over two years, or $3.7 billion. It is absolutely staggering. Total revenue is up 6.9 per cent, we have seen that insurance tax is up by 6.3 per cent in 2016–17, and it sits now at $1.2 billion. Land tax is now $2.2 billion, which is up by 28.3 per cent.
From a local perspective, one of the issues of contention is the fact that we are effectively seeing a tripling of coal royalties for some of Latrobe Valley’s largest employers. Again, $252 million over four years is a substantial hit in anybody’s reckoning. Where is the money going? This is important to understand. Whilst we have got this significant increase in revenue that the government is taking, where it is expending the money is vitally important as well. If you have a look at the pre-election budget update, public sector wages, for example, were at $18.49 billion. They are now forecast to be $21.3 billion, so public sector wages are up 15.2 per cent, or $2.8 billion, since the election. That is absolutely staggering, and as we know it is only going to get worse. When you have a look at the increase in costs, the coalition had set out a long-term financial plan, where the cost increases each year were to be about 2.6 per cent. What we have seen in Labor’s expenditure is an increase of $3.1 billion or 5.9 per cent. If you compare the two, coalition expenditure over the forward years was at 2.6 per cent on average and what we are seeing in Labor already is 5.9 per cent. This is a situation of making sure you live within your means, and what I might say on the same point is that while we are seeing that increase in expenditure of 5.9 per cent of course we should not forget that Labor has capped local government expenditure at 2.5 per cent. One could say that is very hypocritical, at the very least.
We all remember the pledge before the election: we all remember the Premier and the Treasurer coming out and saying that there would be no new taxes and no increases in charges, taxes or fees. What a joke that was. He made that promise to every Victorian. Well, that promise has been well and truly broken already.
In addition to whacking businesses and employers for money, money is also being cut in a number of different areas, and as the shadow Treasurer articulated, some of those being hardest hit are our most vulnerable people. When we came to government we extended the electricity concession rate so it was an all-year-round concession. What we are seeing in this budget is actually a cut in electricity concessions, down to $134 million from $165 million. That is a $30 million cut.
Honourable members interjecting.
Mr NORTHE — This is to pensioners, such as veterans and low-income earners.
Mr M. O’Brien — What a nasty government they are!
Mr NORTHE — It is a very nasty government. Of course with the Minister for Emergency Services here, we know that the enterprise bargaining agreement deal with the United Firefighters Union will send the fire services levy skyrocketing in the future as well. We have seen an introduction of taxes and an increase in taxes: the land tax surcharge has increased threefold to 1.5 per cent. The stamp duty surcharge has increased from 3 per cent to 7 per cent. And there is the coal royalty tax, which I have spoken about. In that context we know that there has been a waste of money, in particular the $1.1 billion the government wasted on not building a road — east–west link.
I am pleased that the Minister for Consumer Affairs, Gaming and Liquor Regulation is here, because in that particular portfolio area the government has also had a little bit of a windfall. I am talking about what the shadow Treasurer called a Tattslotto win, which is a very good description I would have thought. What we had at the time was the government in a number of legal disputes with Tattslotto and Tabcorp, and with Intralot among others. This was in regard to litigation over the gaming machine licences and the Labor bungling of that. Essentially we saw a legal determination made against the state of $540 million. Indeed that was when the coalition was in government, so effectively that $540 million was taken out of the coalition budget. What we have had is a High Court decision that has overruled the original determination, and that has now seen $540 million plus interest in this particular budget, so that is better than winning Tattslotto, and it is important to note that.
Revenue from gambling taxes is set to increase substantially over the forward years as well. When you look at public lotteries in this year’s budget, you see there is $446 million. Electronic gaming machines are set to raise $1.1 billion, and for the casino the figure is $251 million and rising over the forward years. Liquor licence fees will raise around $22 million. One of the issues that we have raised in the past, and again when you compare the 2016–17 budget as against budgets that we put forward in the past whilst we were in government, is that you see a difference for the Victorian Responsible Gambling Foundation. We committed to, and we established, that foundation, which cost $150 million over four years or $37.5 million per year.
Ms Garrett interjected.
Mr NORTHE — I think the Minister for Consumer Affairs, Gaming and Liquor Regulation, who is at the table, is giving me a two-fingered salute — —
Ms Garrett — It is 2 million!
Mr NORTHE — It is 2 million, right! But what we have actually seen is a reduction in funding for the Victorian Responsible Gambling Foundation, and that is in the budget papers. It was in the budget papers last year. The minister says it is only $2 million, but at the same time whilst all these taxes are increasingly we have actually seen a reduction in funding to the foundation.
In terms of the electorate of Morwell, I suppose there is quite a bit of disappointment among us, and I know I have raised it a couple of times in my contribution already, but it is a real concern that the government has effectively targeted an industry in regional Victoria without any consultation, and increased its royalties threefold in one fell swoop. That might sound okay for some who have an issue with the industry, but this will have a significant impact on those particular businesses directly. It is also going to have a significant impact indirectly on businesses in my electorate, and it will have an impact on electricity prices for all Victorians.
On that point, the Latrobe Valley Express of 28 April, under the heading ‘Government’s royal rumble’, dealt with a number of issues pertaining to this matter. I will quote part of that article. It states:
At the weekend the government announced it would triple the brown coal royalty rate from 1 January next year, raising $252 million over four years.
A spokesperson for Hazelwood Power Station and Loy Yang B owner ENGIE said the increase would inevitably have a “detrimental impact on the region’s energy sector” and it had not been consulted on the decision.
ENGIE spokesperson said: ‘However, this government decision takes $20 million a year straight out of the Hazelwood business. That is a significant additional cost that has to be found at a time when we are already experiencing very difficult electricity market trading conditions’.
The article goes on to say:
AGL Loy Yang general manager Steve Rieniets said the increase in royalties would add almost $35 million in annual operating costs to the business.
This is staggering — $35 million annual operating costs:
‘Increased costs of this magnitude could flow through to wholesale electricity prices and ultimately to customers’, Mr Rieniets said.
The Treasurer said, ‘This will not cost jobs and this will not raise electricity prices’, but this is a guy who should know. This is the general manager of AGL Loy Yang, who has said categorically that increased costs of this magnitude could flow through to wholesale electricity prices and ultimately to consumers. That is what he said.
An Energy Australia Yallourn spokesperson said the company was working to understand the impact of any increase in mining royalties on customers and its business more broadly.
‘As we’ve consistently said, operators and government should be mindful in any decisions they make of minimising or avoiding additional costs to customers’, the spokesperson said.
Again, it defies logic that the government would target a particular industry in a regional area which, I might say, since December 2014 has seen a substantial loss of full-time jobs in the Latrobe Gippsland region. So at a time when we really need support from the Victorian government for businesses who are large employers in the region, what we are seeing is a whack of $252 million over four years. It is just crazy. In the budget the government also talks about a Latrobe Valley transition program, and whilst we await the details of that, one does hope that it is an employment program or an economic activity employment program that supports local businesses to grow and expand.
I say that because when the coalition was in government we had a very successful local program called the Latrobe Valley Industry and Infrastructure Fund, consisting of $15 million, which supported local businesses that could demonstrate growth and capacity to expand, but more importantly the ability to create new jobs. That program, over a period of time, supported more than 40 local businesses, created around 1100 local jobs, and created about $93 million worth of economic activity. When there was a change of government the program was abolished. It was not continued and there has been nothing in place since that time to support our local businesses, so one hopes that that program does provide that support.
In terms of train services a lot has been said about the Gippsland line, and the member for Bass is sitting behind me. Given all the interruptions and disruptions that we have had over these past months for the community of Gippsland, one must say that the budget is an absolute disappointment to Gippsland commuters. We have seen a little bit of funding for planning and for other things, and there are a couple of off-peak services, but that is not what the commuters of Gippsland need. What they need is major infrastructure investment such as the coalition’s commitment to duplication of the tracks between Bunyip and Longwarry, and making sure there are additional peak services. Off-peak services are not the problem for Gippsland commuters. It is the peak services where we have issues with punctuality and capacity that are the major challenge for that line, but unfortunately there is nothing in the budget that will address those particular concerns.
Our community certainly acknowledged the fact that the government has put some money towards the Hazelwood mine fire response, and will continue on with some of the investment that the coalition government made. It is important that our community does have funding, resources and support to improve the health of those in the community because it is something that has set us back for a long time, and it is important that we recognise that and continue to invest and have the resources available.
We were pleased that the Morwell Park Primary School also received some funding in the budget. This was part of the Morwell Primary School regeneration project to which the coalition government had committed, along with the amalgamation of three primary schools onto the one site in Morwell. It was something that had bipartisan support, but unfortunately for the Morwell Park Primary School it did not receive funding last year so it has been a nervous 12 months for the school community, but we are pleased to see that funding for the school was announced in the budget.
What we are not pleased about is that funding runs out for two important organisations in my community — the Gippsland Carers Association and Barrier Breakers, which is a mental health advocacy group. The coalition provided funding, not a large sum of money but $100 000 over four years for those two groups. We pledged a further $120 000 over four years if elected. Unfortunately there is no money in the budget for those two important organisations. It is not a big sum of money in the larger scheme of things, and that is a massive disappointment for those groups, along with the fact that the Latrobe Special Development School very much needed a substantial upgrade to its school community. Overall, that is my synopsis of the budget for this year.