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Mr MIKE BAIRD (Manly) [3.45 p.m.]: I move:
That the motion be amended by omitting paragraphs (2) and (3) and inserting instead a new paragraph (2) which states:
(2) condemns the Rees Government for its failure to secure an affordable future for New South Wales.
We have all heard about the economic crisis. I am glad that the first paragraph of the motion notes that there is currently a global economic crisis. It gives me great hope that someone on the other side of the House obviously has read a newspaper in the past 12 months. I did not think that that would happen, but someone has picked up a newspaper and learned something about what is going on in the world—he is not sure what it is—but it involves a "crisis" in the economy, and he acknowledges that that is really bad. Then, suddenly the spin doctors have said to wait, there might be an opportunity to turn the global economic crisis that he read about in the newspaper, and which sounds so bad, into an opportunity to get rid of all the bad news in New South Wales, and blame someone else. It is a classic Australian Labor Party move in this State. It is textbook. I congratulate the State Labor Party on its success in trying to blame someone else for its problems.
The truth is that this crisis has been a long time coming. It is not only me who says that, but also a list of people. We need to talk about who says that. The Government commissioned a report by Vertigan and Stokes to look into the State's finances, as not everything was going well. In 2006 the Premier Morris Iemma commissioned Vertigan and Stokes to conduct an audit. The report stated:
Since 2000-01 the average growth in expenses has exceeded the growth in revenues by 1 percentage point;
Total expenses have risen faster than growth in the economy over the last five years—
in fact, it goes well before 2000. In real terms that means—
This situation raised the importance of procedures and processes that prioritise existing and new expenditures.
In March 2007 the risk created by Labor's financial mismanagement was highlighted by a report that stated:
The biggest risk to New South Wales' rating is its operating performance.
In 13 years the Government has been unable years to match revenue with expenses, a basic premise of planning, or of any budget process. It has not been able to get them together. Today, after all the cuts and the statement that in 10 weeks it will take the world apart and get everything it can, what has happened to expense growth? It is higher. That is the big belly flop today: the Government wants to cut expenses and fix the problems once and for all, but expense growth is higher. We have all heard about fiscal strategy.
Michael Egan, a former Treasurer, to his credit tried to do one thing right, although many things he did not do right. He wanted to build a shock-proof New South Wales economy. When the international economic crisis came, and that has been mentioned, it was stated that because of the surpluses created New South Wales would not have to cut services, infrastructure projects, announce a North West Metro in June and cancel it a few months later because it all became a little too hard. New South Wales was to be in the position to deliver infrastructure and services ongoing. That is what Michael Egan said.
Unfortunately, New South Wales spent and spent and spent. The mini-budget has cancelled infrastructure and raised taxes. The Opposition does have a plan, and we will get to that. A former economist with New South Wales Treasury for a number of years, Michael Carling, referred to the problems with New South Wales finance when he referred to the fundamental and long-running problem of too much spending for too little public benefit.
Michael Carling says this budget crunch has been festering for years and that the facts challenge the conventional wisdom that the Carr Government was tight-fisted, let alone its excesses. He says a pattern of high spending goes back to the 1990s and the reputation for restraint that survives from that era is mythology. He says it does not matter where you start, the continued annual running costs of the State Government took five years to go from roughly $30 billion to $40 billion and they are now well on their way to $50 billion. The budget has not just now gone into deficit, it did so four years ago according to the definition that the Government favoured then, but which it of course dropped when it became inconvenient.
We have been running a deficit and playing with numbers, and the problem of expenses being out of control has been obvious for many years for all to see. We need only look at past budgets and inventing things like land tax invoices for Sydney airport—the spin doctors got together and there was no economic crisis to speak of, but the hollow men said, "We don't know what to do." "I know what we can do. We can find $400 million by writing to the Federal Treasurer and saying we've got a land tax bill for—what do we need—$401 million. Done. Fixed it. There it is, we've balanced the budget." That sort of trick has gone on. They said, "We've used unfunded super. Let's use different and old accounting standards because if we use old accounting standards we don't have to put as much in, which gives us a surplus." This sort of approach to financial management is what we have seen today. It is a big belly flop at a time of recession and economic difficulty. The Government has hit families with charges and cut infrastructure, and it is no-one's fault but that of members on the other side of the House.
The interesting thing about the Treasurer's speech, and there was very little that was interesting—particularly the way the Government attacked my community of Manly, but that will wait for another day; it was an appalling form of political non-pork barrelling—was that the Government had four goals in its plan. What are the four goals we have? The Leader of the Opposition and the Leader of The Nationals announced a Plan for Prosperity for New South Wales. They said we needed some fiscal constraints and to maintain the triple-A credit rating—I think we have heard that today—to ensure expenses growth would be less than or equal to revenue growth—interestingly we did not hear that today; that is the big problem because the Treasurer did not talk about it—and to restore and enhance the level of front-line services. Give that a tick, the Government picked up that goal as well.
The last goal was to ensure that Cabinet Ministers would be accountable for fiscal direction and infrastructure. The Treasurer spoke about an infrastructure levy, so the Government has taken that one as well. Four goals were released 10 days ago. The Government has had 10 weeks to work on this mini-budget. It has picked up three of our goals and said, "Hello sailor, here we go." The Government failed to provide a vision for New South Wales. There is no economic plan and there is no vision whatsoever for the future. The year 2011 cannot come soon enough.
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