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Mr MIKE BAIRD (Manly) [4.27 p.m.]: As we heard today, the Duties Amendment (NSW Home Builders Bonus) Bill 2010 amends a budget appropriation bill that passed through the upper House less than 24 hours ago. It is hard to draw any conclusion other than that the New South Wales Government has lost control not only of State Government services but also of the ability to manage day-to-day business. I do not know whether it is the sort of record one would want when a piece of legislation passes through this Parliament and has to be amended within 24 hours. I do not know how often that has happened but this must be close to a world record.
We have significant concern that such fundamental changes have been made so quickly in this bill so soon after the budget process. It raises questions about the credibility of the entire budget process and how stakeholder consultation was undertaken in the preparation of the budget. It also raises questions about how the Government manages not only the budget but also the operations of government. A financial incentive was announced in the budget but the Government appears not to have nutted out the details. It is an indictment on the Government and an indictment on the Treasurer. We heard no words of contrition from the Premier in question time. She said they were just minor cosmetic changes. The changes may well be reasonably minor but one has to question how the Government reached a position where such changes had to be made and what impact they will have on the budget.
A few hours ago I was notified rather than given a detailed briefing that this bill would be introduced today. When I asked what impact this legislation would have on the budget the response that I received was that it would be negligible. Without any formal modelling and analysis and all the things that one would expect before the implementation of such an initiative, it is hard to make any conclusions and it is hard to believe that the Government is in control. We do not know what impact this legislation will have on the budget. Let me touch briefly on a number of matters in the time that is available to me. The Opposition is disappointed in the way in which the Government introduced this legislation. How did these oversights occur? Why was there no stakeholder consultation? What modelling and analysis have been done? If all those things were done there should be no impact on the budget. The Government is out of control and this legislation proves that it has lost control of its agenda.
The Duties Amendment (NSW Home Builders Bonus) Bill 2010 addresses three measures and will implement the homebuilders bonus outlined in the State Revenue Legislation Amendment Bill 2010. First, this legislation will remove the 18-month completion time frame for dwellings commenced under the Home Builders Bonus to allow enough time for builders to gain development approval. The examples that have been given relate to weather delays and to finance. I know that that will place restrictions on builders, but would the removal of such a time frame provide enough stimulus to address the problems that are being faced in this State at the moment—that is, the historically low levels of new dwellings that are being created?
The second key measure relates to receivership and to liquidation provisions. The legislation will enable a builder who takes over a partially completed development to gain an off-the-plan exemption. That would apply if the original builder went into liquidation and a new builder took over the development. The exemption would apply if the development were less than 25 per cent complete—an issue about which the Opposition has some concerns. The final key measure relates to multi-tower developments. At present, if a builder lays the foundation for a multi-tower development and builds only one tower, the off-the-plan exemption is available only to people who buy in the first tower. This legislation provides for the exemption to be provided to other towers in a staged development, even if the foundations have been laid. I spoke earlier about specific completion dates. The whole purpose of this legislation is to provide a stimulus—a demand driven approach to create new dwellings in New South Wales.
Will the removal of the 18-month time frame help to facilitate this incentive? I understand that there will be delays, but it is imperative to get dwellings underway in this State as soon as possible. That is the intention of this incentive. Will the removal of this restriction continue to keep pressure on developers? Will it stop developers land banking? They might start these developments but they might well not proceed with them for some period until there are more favourable market conditions. They might hold onto the capital as they have secured the incentive and they have started these developments. I believe that this is a grey area for the Government. We have not been given an opportunity to give this legislation appropriate consideration and we cannot do justice to it. This Government, in its broad-brush approach, is trying to ram through this legislation less than 24 hours after its budgetary allocation for reasons that only it can articulate.
In the area of receivership and liquidations, the example that was given related to World Square. If building construction remains unfinished for many years, new buyers should be allowed to pick up these off-the-plan exemptions. What sort of modelling has been provided? How will the Office of State Revenue or Treasury determine what number of multi-storey buildings will be completed? If a builder has built only one storey of a four-storey development, will Treasury get out its tape measure to determine the critical mass? Will it determine what percentage of timber or steel will be used? It strikes me as being a difficult provision to enforce. I am not sure whether it should be the job of the Office of State Revenue to enforce these provisions. These amendments make sense if a builder goes broke. We are happy to continue concessions to potential purchasers of those apartments.
Again, from my point of view the timing is critical. We must look critically at supply measures and at demand incentives. The Opposition has endorsed demand incentives but will they be as effective as they could be? How many multi-tower development sites are there currently across New South Wales? Perhaps the Minister could provide me with a response when he replies to debate on this bill. If there are many multi-tower developments, that might impact on the budget. If they impact on the budget should the Government be adjusting its budget? From a credibility point of view there are budget surpluses. I will conclude my contribution by talking briefly about the budget. If these multi-tower developments impact on the budget the Government should adjust its budget accordingly—a pretty simple analysis.
The concessions that are being provided by this Government will reduce the budget bottom line—it is not a complex argument. How many multi-tower developments are there? Will large developers be able to land bank rather than create the dwellings that we all want? Potentially the people of New South Wales will be providing incentives through stamp duty relief. However, a developer might decide to proceed with only one storey of a five-storey development, wait for more favourable market conditions, and still secure those benefits. The Opposition supports stamp duty concessions and anything that encourages building development, but how will this legislation do that? Does it give developers too much flexibility? Will they wait until the market has improved before they complete their developments? If they wait for three, four or five years the dwelling crisis that is being experienced at the moment will only worsen.
The whole point of this incentive is to try to stimulate the creation of new dwellings. The Opposition has many concerns about these proposed amendments. If Opposition members were given an opportunity during the winter break to sit down with various stakeholders and with the Government to discuss these issues, they might gain some understanding of the modelling that has been done. They would then be in a position to make a much more detailed response to debate on this issue and many of the questions that have been asked in this place would be answered. The Opposition does not oppose this legislation but it places on the record its concern that a number of fundamental issues have not been addressed.
If this Government were in control of its agenda it would not have to introduce legislation such as this to amend such fundamental tenets. This is the centrepiece of the budget brought down by the Treasurer. It is not a budget line item; it is the centrepiece of the budget, and it is wrong. The Treasurer should explain to us how that occurred. Were the appropriate stakeholders consulted? At the same time he should answer the questions that have been asked relating to these amendments. Do the amendments deliver new dwellings to New South Wales or have they given significant flexibility to developers to develop according to their agenda and schedule as opposed to the demand incentives that we are trying to create?
Last year when I formally responded to the budget I pointed out that many years ago much time was spent considering the budget in this House. The Clerks tell me, and the member for Riverstone probably remembers well, that the budget received significant scrutiny. We have now reached the stage, apparently through amendments passed more than a decade ago, where the Treasurer delivers the budget, the Leader of the Opposition speaks to it and then it is whacked up to the upper House to be pushed through. That is not in the interests of this State or of democracy. It does not make for good government and it does not hold the Treasurer and the Treasury to account. The people of New South Wales are not well served by such a process. This bill is a good example of an amendment that has been thrust upon the Parliament because the budget that preceded it did not receive due consideration. The Parliament may have picked up these issues if the budget had been scrutinised properly.
According to the Clerks, overseas visitors often approach them to explain how the budget process works and what scrutiny the budget receives. The Clerks have to tell them that the budget is not scrutinised much at all. We should not be proud of that. I have not had the chance to comment formally about the budget in this place and, given that we have many other items of business to deal with today, I will not take the time to do so now. However, I will make a few points to which I shall refer in more detail when given the opportunity to respond to the budget. This Government—indeed, any prospective government—should improve the scrutiny of the budget, policy, costings and the direction of government by allowing the Parliament to review the budget, as originally intended. That role should not be bypassed, as has occurred with this budget. It should be the job of every member to analyse, understand and question the Government on its budget.
I will make four points about the budget. These points refer to credibility, and I will expand upon them when I make my formal reply. The budget expense forecasts are unbelievably unrealistic. Expense growth cannot average 8 per cent over four years and then drop to 3.4 per cent moving forward. In the case of last year's budget forecast, expense growth dropped from 9.6 per cent to 2.7 per cent the following year. The Premier said in question time today that the budget was moving back into the black. But the people of New South Wales need to understand that that is just not so. There is no way that the Government can hit its expense target. It has not done it in 15 years, so why should next year be any different? Any economic forecaster will tell us that the historical average is a good indicator of what will happen in the future. If we roll forward the 8 per cent for the past four years, we find the underlying position is that the budget is not in the black. Rather, it is significantly in the red to the tune of billions and billions of dollars. I argue, as we see today in this bill, that no credible modelling accompanies the concept that these additional provisions will impact the bottom line. They must. The forward projections are not realistic.
The proposed mining royalties are further evidence that the budget forecasts have no credibility. Royalties from the mining sector are forecast to increase by $925 million, yet the mining tax that the Rudd Government is seeking to impose on the industry will impact not just on it but on every other industry in this country. The economic credibility of this country is under siege from that Federal proposal. The Premier and the Treasurer are happy to say nothing about it. They have not put the interests of the New South Wales economy at the top of the agenda. They are happy to do what Sussex Street tells them to do regarding the mining tax: toe the line. Eric and Kristina are doing just that and not putting the interests of the State first. Indeed, they have done the opposite, and put the increased revenue in the budget. The credibility of the forecast is at issue. Is the Government willing to stick up for the State's interests or is it just another arm of the Labor Party? There can be nothing more shameful for a Premier or a Treasurer than not to put the interests of the State first. The budget exposes the Government's position in that regard. It was further exposed today when a leading mining executive in Canada—
Mr John Aquilina: Point of order: The bill is narrow and straightforward. I understand the shadow Minister's frustration in wanting to debate the budget, but clearly this is not the time to do so. He is going well and truly beyond the leave of the bill. This is not the place to be debating the wide ambit of budget issues and, in effect, to be replying to the budget.
The DEPUTY-SPEAKER: Order! I uphold the point of order. I am sure the member will return to the leave of the bill.
Mr MIKE BAIRD: That highlights the fact that the bill seeks to correct an error in the budget so that it can be pushed through without any consultation with the Opposition. The Government opposes any debate on the budget at this point and says that it is not the appropriate time. Is this not a parliament? Do we have a democracy? The New South Wales Government style is something to behold. I conclude the point by saying that a Canadian senior mining executive named Kevin Rudd as the miner of the year because no doubt investment will flow Canada's way from Australia as a result of the mining tax. New South Wales is happy to ignore that.
The Opposition supports the stamp duty concession for the people of New South Wales. But at the same time Labor has included the new transfer ad valorem fee, which will add $429 million to the New South Wales budget. So this Government is taking in more revenue than it is giving back via the Home Builders Bonus. In his reply to the budget the Leader of the Opposition put forward a plan to get the State economy moving again. We have spoken about an infrastructure fund of $5 billion to build the infrastructure this State needs and to stimulate economic productivity. We have spoken about our jobs action plan and what creating 100,000 new jobs will do for the economy. We have spoken also about a regional relocation grant and the allocation of infrastructure and jobs to regional and rural New South Wales to make this a unified State that is not focused on Macquarie Street or just on Sydney, Newcastle and Wollongong.
At the same time, we have announced saving reforms and an overall direction to take this State forward. I look forward to providing the details of those announcements and selling to the people of New South Wales our vision for getting this State moving again. We can manage the economy in a way that makes the people of this State proud. This bill is a further example that the Government is not in control of its business, consultation or financial management. Whilst we support the amendments proposed in the bill, we highlight our questions about them and seek an explanation as to how they will get the economy moving and, most importantly, put new dwellings on the ground in New South Wales.
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