Public Accounts and Estimates Committee Report on the 2019–20 Budget Estimates

27 Nov 2019

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I rise to speak on the Public Accounts and Estimates Committee Report on the 2019–20 Budget Estimates. Having been a member of PAEC this year—I took over the mantle of the Greens representative on that committee from former member Sue Pennicuik—I will make some comments on the budget estimates process. I also acknowledge the other members who are also on PAEC along with the former chair who oversaw those proceedings, Phil Dalidakis, who of course has now left Parliament.

Whilst there have been, as part of the process, some positive changes that may have occurred previously—certainly I appreciated the chance to be able to put questions on notice and to ask questions in a single time block rather than it being divvied up and only having a short amount of time to ask and get questions answered—there really does need to be a reform of the estimates process in Victoria. I think this was reflected by some of the media commentary at the time on the hearings themselves. There was, with all due respect to the government members, far too much time taken up by Dorothy Dixers, if you will, from government members.

That really does undermine it. The key function of the estimates process is accountability and transparency, and I think that having far too much time allotted to very lengthy government questions undermined that. It was also squashed into a relatively short amount of time, with very extended late-night sittings. That makes it quite difficult for non-government members to do their job, particularly when you come down with a serious case of the flu, as I did at the time. There really does need to be a look at reforming how we do estimates in Victoria, including giving equal time to government and non-government members and potentially even allocating questions amongst the various standing committees that we already have in Parliament, which are already researching a lot of the issues that we are addressing in Parliament, rather than just having one committee question all ministers. Certainly further work does need to be done to make the estimates process more effective.

I just want to talk about the report itself. Clearly there are two big financial issues facing this state. One is the decline in revenue from stamp duty, and the other is the high level of debt required to fund infrastructure. I just want to talk about the government’s response to that. Yes, the state is facing a revenue write-down of stamp duty, I think costing about $1 billion over what was originally forecast. The government’s response to this does seem to have resulted in really going after public sector workers as the way of belt-tightening.

Firstly, the 2 per cent public sector wage cap, which is lower than the projected CPI, could result in real wage cuts for public sector workers. It is none other than the governor of the Reserve Bank who has been calling for this wage cap which is in place federally and across other states to be lifted, because not only does it actually put a brake on wage growth amongst public sector workers but it also puts a brake on wage growth across the private sector as well. Really at a time when wage growth is low and when this is one of the big issues that I and I am sure members opposite as well are campaigning on for higher wages, lifting this wage cap will mean higher wages for workers across all sectors of the government.

Secondly, there is the $1.8 billion public sector efficiency dividend. I actually spoke about this issue in my inaugural speech. I spoke about moving away from the boom-bust cycle of governing and cuts being hidden as imaginary efficiency dividends. This review that the government is undertaking is focused primarily not on the effectiveness and the quality of the public service but on delivering a predetermined financial saving that will lead to cuts, worse outcomes and job losses.

What the government has not looked at is reform of stamp duty overall. This, as stated in the report, is a volatile source of revenue. There are many proposals backed by a number of think tanks and institutions looking to replace that with a broad-based land tax. There is also other revenue that can be gained—for example, from the windfall profits of property developers from land zoning and from the banks as well. Finally, I want to touch on the state debts. We certainly welcome borrowing to build, taking advantage of public interest rates to borrow to build. This is something we have pushed for for a long time.

What is missing in this state is, firstly, a transparent and clear transport plan—you just have to read the Auditor-General’s report to figure out why we need that; and secondly and finally, what we need is a big build of public housing. Social infrastructure—that is what is missing in this state.

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