2003-06-27
- Madam Speaker Braham took the Chair at 5 pm.
MESSAGE FROM ADMINISTRATOR
Madam SPEAKER: Honourable members, I lay on the Table Message No 15 from His Honour the Administrator advising of his assent to bills passed in the May 2003 sittings.
APPROPRIATION BILL 2003-04
(Serial 147)
(Serial 147)
Continued from 19 June 2003.
Madam SPEAKER: Honourable members, pursuant to the resolutions of the Assembly dated 27 February 2003, the Committee of the Whole will now consider the report of the Estimates Committee and the Appropriation Bill 2003-04.
In committee:
Mr CHAIRMAN: I call on the Chairman of the Estimates Committee to present the report of the committee.
Mr McADAM: Mr Chairman, I have pleasure in tabling the report of the Estimates Committee and the Government Owned Corporations Scrutiny Committee on its considerations of the estimates of proposed expenditure contained in the schedule to the Appropriation Bill 2003-04, together with answers to questions on notice and additional information provided to date to the committee. I advise honourable members that further additional information and answers to outstanding questions on notice will be tabled on 12 August 2003.
I would like to reflect briefly on how the Estimates Committee performed this year. For something like 26 years, the Territory did not have an Estimates Committee. Last year was the first time one operated. It was a breakthrough and, for the first time, Territorians saw their budget subject to a rigorous process of scrutiny. However, last year there was a fair degree of uncertainty as to how it would operate and a lack of experience for participants. Underscoring that, we recently saw the handing down of the findings of the Public Accounts Committee into budgetary matters. This has been a period of intense emotion in this place, and it would be fair to say that on occasions cool relations have existed between members of this Legislative Assembly.
This year, I believe all of the participants had a better understanding of their roles and responsibilities. Ministers were far more comfortable this year, and clearly benefited from last year’s experience. Public servants were also able to grasp the concept that they were required to answer issues of operational concern. I believe opposition members also had a greater understanding of their role and, on the whole, conducted themselves in a very professional way towards ministers and, of course, the public servants.
We also believe there have been some improvements in the standing orders. The change to having the ministers at set times, whilst disagreed previously by the opposition, provided a smoother and more effective way for all concerned to participate. I also believe that the time allowed was easily sufficient. The time was not wasted in ministers reading out prepared answers to written questions. In short, I thought we saw information provided that people of the Northern Territory can feel satisfied that their budget has been subjected to appropriate scrutiny.
My general observation is that this year was a marked improvement on the committee in its first year. Again, I would like to thank all concerned for what was a fairly tiring and, sometimes difficult, process. On the whole, we can say that we have done what was expected of us, and the Territory is a better place because this budget has been subjected to rigorous scrutiny in a very mature way.
I thank all members of the Estimates Committee and the secretariat, particularly Mr Terry Hanley, Mr Rick Gray and Ms Anna-Maria Socci for all the hard work they have done. The committee has also welcomed the work of Mr McNeill, Clerk of the Legislative Assembly, who briefed us on quite a number of occasions in relation to our work on the Estimates Committee. There were a few issues relating to standing orders, the conduct of the hearings, the conduct of witnesses, the public hearing process and contact with the media, which he so ably assisted us with.
There is no doubt the workload for the parliamentary staff, and not least of all, the hard-working staff of Hansard, was immense during this estimates process. The prompt provision of Daily Hansard and rushes during the day was a magnificent effort, and was greatly appreciated by all members of the Legislative Assembly. The staff in the Table Office have worked very long hours and have sat during the whole hearings with the committee members. I am sure that not all of the debate was interesting, and they may have had difficulty when it became a little late, but their support was welcomed and very efficient.
On behalf of the committee, I thank the public servants for their work.
Members: Hear, hear!
Mr McADAM: It is immensely appreciated, and contributed significantly to the constructive nature of the proceedings. I know that the work done by the public service to prepare for the Estimates Committee process is arduous and time-consuming. I understand Ms Julie Nicholson, Director of Cabinet Office, drafted a very helpful document - Guidelines to Assist Witnesses. As I mentioned previously, it was an invaluable asset to the public servants who appeared before the committee.
I have some other information which I would like to advise the House of. During the 41 hours of debate, there were 74 questions taken on notice. I believe this is a tribute to the ministers in the manner in which they were able to answer the questions regarding their portfolios. I can also advise that, at the time I called a halt to the proceedings today, 50 answers had been received in the committee secretariat. This identifies the efficient manner in which agencies were able to quickly identify the issues raised in question. A further 13 replies were received after the committee rose at 1.40 pm today. A quick calculation will show members that there are only 11 replies to be finalised. I guess this is a far cry from the process last year, where I am advised officers within Hansard were left to sort out in excess 800 replies to written questions that were tabled on the second last evening of the public hearing. As I said, all questions taken on notice which have not already been supplied will be tabled in the August sittings.
I would like to accord special acknowledgment of the Government Owned Corporations Scrutiny Committee which sat for the first time. The officials from PowerWater appeared before the committee and, of course, it was their first experience of parliamentary scrutiny. PowerWater is important to Territorians and I believe it is very appropriate for elected representatives to be able to scrutinise this type of organisation in the manner in which it occurred today.
Finally, I would like to thank all members of the Estimates Committee. I commend this report to parliament.
Mr CHAIRMAN: Honourable members, pursuant to the resolutions of the Assembly dated 27 February 2003, the committee has before it the Appropriation Bill 2003-04, and the reports of the Estimates Committee and the Government Owned Corporations Scrutiny Committee which shall be considered in the following manner:
The question is that the proposed expenditure be agreed to and that the resolution or expressions of opinion, as agreed to by the committees in relation to the proposed expenditure or outputs, with reference to the Appropriation Bill 2003-04, all the activities, performances, practices and financial management of the PowerWater Corporation, with reference to the Statement of Corporate Intent for 2003-04, be noted.
I remind honourable members that the speech time limits for this debate are as follows: ministers, Leader of the Opposition, and shadow ministers, 20 minutes; any other member, 10 minutes. Further, the resolution provides for a maximum of five hours for the conduct of the debate. Accordingly, as the time is now 5.15 pm, if the debate is not concluded before 10.15 pm, I will then put the question.
When the consideration of the bill and the report have been concluded and the question put, the following question will be put forthwith without debate: that the remainder of the bill be agreed to. The bill will then be reported to the Assembly.
Mr BURKE: Mr Chairman, I can indicate that I, for one - and I am sure my colleagues - do not intend to spend five hours in these final stages of this Appropriation Bill debate. However, it does provide an opportunity to respond to the Chairman of the Public Accounts Committee regarding his report on how the Estimates Committee process was conducted within this debate, and also to comment on one or two aspects of the budget from my point of view.
In the first instance, where congratulations are deserved, I intend to give them. I begin my remarks by saying that I believe the member for Barkly conducted himself admirably as the Chairman of the Estimates Committee.
Members: Hear, hear!
Mr BURKE: It is not an easy process, particularly in the process that was adopted this year. I, for one, thought at the outset you would have great difficulty controlling debate. I thought you did an excellent job, particularly in allowing the free flow of questions. I certainly never sensed anything but an attitude of fairness on your part, member for Barkly, and the way you conducted yourself throughout the estimates process. For that, the opposition thanks you.
The aim of the government, and the criticism inherent in the chairman’s reply, was that, for 26 years there has been a process in this parliament where proper scrutiny of the budget has not been conducted properly because the process was one that confined the opposition quite distinctly. Therefore, the government came up with this new enlightening process that would ensure everyone had greater access to information.
Another of the comments made was that the previous process put a great load on the public service - and that was something that was unfair and we were looking to overcome that - and that this new estimates process would introduce a whole new era into the Northern Territory of how we got information on the budget.
This is our second attempt to get it right. Notwithstanding what might be said in this Chamber tonight, from a political perspective the real effort here should be: how do we get it right next year? I believe the government is intent on getting a good estimates process in place – there is no criticism in that regard – but I hope the government would also accept the fact that we certainly have not got it right yet. We need to have a review and pick up on the points that have come out of the estimates process this time.
If we look at the first case, there was an attempt to get the public servants into the room to be questioned along with the minister, which was not the case in the past, in part because, where the minister took questions he could refer to primary public servants who were present to advise him if he wished. The opposition could not only ask questions that were formally written and the minister had a reply to, but was quite at will to be flexible in supplementary questions they asked to those written questions and, also, could take as much time as they liked. In that context I, for one, know that in my role at one stage as Attorney-General and Minister for Health and Community Services, I stood there for nearly 13 hours and answered questions on those portfolio areas.
We can debate at length as to whether or not the previous process was bad, or not so bad, or even good, but that achieves little. The real issue here is that the government is intent on getting a better process in place and how this process we have just gone through fixes that. In the first attempt last year, there was no doubt that the writing and preparation of questions for the opposition, when you first have a go at it, can be quite a daunting process. However, when you do it the second time …
Mr Stirling: We had to let you do it once.
Mr BURKE: That is right. The Treasurer says you only have to do it once. When you do it the second time, whether those questions need to be formally submitted or not, the reality is, it is quite an easy process. The hard thing, at the end of the day, is to confine your questions down to what you believe is a sizeable load for everyone concerned. Let us not forget that part of the aim in this new process was to ensure that the load on the public service has been lessened. Last year, when we went through this process there was no doubt that, because all the public servants were in the room and we had a whole heap of written questions, there was great difficultly in progressing the process so that we could get onto tail-end ministers. There was a whole lot of questions that we wanted to ask primary ministers and, because we had a global amount of time which was three days allocated, there is no doubt that, as we went through that process, it was clear to the opposition that there are areas that we got bogged down in and questions that we needed to move faster on.
There were also issues where, because the government had written answers to written questions available to them, there was quite a good flow of information that was coming across the Chamber to the opposition. At one stage, when the police minister hit his straps, he had realised by that stage that what he could do was to get the whole lot of his answers across to us and maybe speed the process along. From my point of view, when we went through the process last year, there were too many questions and we got bogged down too early with the early ministers. There was probably the same amount of workload on the public servants. At the end of the process, there was no doubt that the opposition had, I believe, a better wealth of information from that estimates process available to them, in fact, than through this current process.
We thought that this process would be much better in terms of the budget settling down, and we now understood the accrual accounting system. We would be in a situation where we were comparing apples with apples in our own portfolio areas. It is clear that in those portfolio areas that budget still has a lot of areas to settle down in the fact that it is not apples with apples in many respects – and the ministers themselves admit to that. When it comes to outcomes that are being achieved by departments, some of those are totally subjective in the way the departments are arriving at them. When you interrogate those subjective outcomes regarding the monies that are allocated to those output areas, there is a great deal of inequity.
The real issue with the estimates process this time, from our point of view, was the fact that, yes, the government allocated four days in a calendar allocation but, if you look at the allocation overall in hours, it seems to me that you did not really improve on the process that we had last year. I am quite happy to be corrected there, but in the overall process, the global allocation of time was hardly much improved.
The fact that written questions were not required from the opposition is of no issue to us. It is just as easy to submit written questions as not submit them, from our point of view, because we need to be prepared to interrogate the budget in any case, so we will have questions prepared. If you looked at the way the public service had to prepare for this estimates process, the load on them must have been absolutely enormous. Sadly, for all of the work that they did, you could see that, for many output areas, many of those public servants never even opened their folders. That is something we have to look at and ensure that we do a lot better than that.
When it came to the time that was allocated, it is a real imbalance when you only get seven-and-a-half hours to question the Treasurer, who also carries the roles of responsibility for education, training and the public service. There was not enough time to really deal with those portfolio loads. There certainly was not enough time to deal with the Minister for Industry, Business and Resource Development, who also carries the load of minister for police, in four-and-a-half hours. I understand the government has a time constraint on the amount of time it wants to allocate to the estimates process, and I accept that. What I am saying is, that if we come up with a process, let us weight the minister’s time allocation with the weight of the portfolio load they carry. That could be calculated by a monetary allocation. From the opposition’s point of view, it was disappointing, in looking at some of those portfolio loads, you could not really get into the depth that you wanted to because of the four-and-a-half hour restrictions on ministers who have a very heavy load to carry.
I believe we need to have a global amount of time allocated. I am not trying to prescribe the way the Estimates Committee runs. I would ask that: first, a review is put in place; second, a global amount of time is allocated; third, that we look at the load of each minister by portfolio size in the weighting that is applied to that minister. If the government does not want to accept that, you can go back to the process where the opposition can decide within that global amount of time how much it wants to allocate to ministers and how it determines its questions; that is, if we want to spend an hour, we will spend an hour, or if we want to spend five hours, but we have to stay confined within that overall period. I believe written questions are essential.
Ms Martin: You had your choice this year.
Mr BURKE: We are all learning. The Chief Minister said: ‘You had your choice this year’. This year, we both approached it with a view to getting a better process in place. When it comes to the issue of written or not written questions at the outset, I believe we got it wrong. We should have written questions. There should be a rationing of those written questions, and that is the responsibility of the opposition, to ensure that there is not a disproportionate load put on the public service in preparation. We should also allow flexibility of the process of non-written questions as to how the opposition then uses its time load in order to get the budget information that we require.
I believe that not having written questions this time allowed many ministers to give very little information. Frankly, I thought it was very disappointing to see the Minister for Health and Community Services. I am sure she had about 20 of her primary staff sitting in the Chamber with her when she took questions. Those staff are proud of the work they do, they do not have anything to hide, and I am sure they are quite happy to get their answers up and out. However, to see a minister sit there the whole of the time and really refuse to go into any of those areas, and I believe - I might be wrong - was the only minister who never tabled one piece of paper. From the Health and Community Services portfolio area, the minister never tabled one piece of paper. The indication then is that what comes through the public servants - all the work and explanations which, in many respects they are quite happy to put on the table and have the opposition look at as many times as they like - is not being provided, and that is a disappointing aspect.
I point here, in my portfolio, to the Minister for Police, Fire and Emergency Services area, who I thought did a very good job. He handled his ministry portfolio well, and sat there and took the questions. It was pleasing to see a minister in the industries portfolio – he got a little hesitant when I got on to the police - confident that he could take the questions, and that he was confident in his answers. In many respects, he was quite happy to table information that was needed, and he was quite happy to say: ‘I am quite happy to provide that information at a later date’. Really, that is what you are looking for at the end of the day.
From the opposition’s point of view, we look at the end of this estimates process and say: ‘What did we get out of it?’. This might be good news for the government, I do not know; I do not think it is good news in the principle of the estimates process. When it comes to hard information that the opposition now has, there was a lot of talking, beating around the bush, and saying a lot of words. However, when it came to real information that we wanted and real answers to the budgetary process as to where the dollars were, it was a very difficult process for the public service to get the information the opposition was seeking to those ministers who wanted it. That would be rectified to a large extent by having written questions at the outset.
The issue of the Power and Water Corporation was good. I am sure anyone who watched the questioning of the chairman of the board and the CEO of the corporation would have seen a very healthy flow of information in that process. I will let my shadow minister speak for himself but, in many respects, that was really all the opposition required from that Power and Water Corporation period. I was very comfortable with the information flow that occurred.
Turning to the budget itself, the only additional point I would make is that, referring to my speech in reply to the budget where I said that this was a CPI only budget in many respects. For some departments and sub-sets of departments, they were flat out getting CPI only in the budget, and I believe that the opposition has confirmed that. Secondly, I pointed out to the government at the time that the land rich tax provisions were wrong and should not have been introduced; they were a disincentive to business. I find it not only disappointing, in the legislative effort, that those measures have been introduced in the budget, but that the Treasurer seems hell-bent on ramming through those provisions this evening, particularly on urgency, when there was no good reason why those particular provisions should not be delayed, or in fact removed. It is the same with the stamp duty collection methods that have now been applied to the motor traders. That is just two examples. Those were things I pointed out in my budget reply and, at the end of this estimates process, I do not feel any reason to change my point of view. I will certainly have more to say if the Treasurer intends to put through those particular provisions, as is stated presently on the Notice Paper.
Another point is that, at the end of the estimates process, I would like to have in real terms from the minister for police, what the real strength of our police force is at the moment. When we finished the other night, I thought there had been an increase of one policeman over the last 12 months. However, when one looks at the Hansard rushes, those figures continue to bother us. The minister told the committee that, in 2002-03 there were two recruit squads of 25 and 27 graduated, for a total for the year of 52. Later, he told the committee that between 1 July 2002 and 31 May 2003, the number of constables and above who resigned was 61. That is, therefore, a nett loss of nine yet, somehow or other, the total of constables and above rose by one from 741 to 742. Even at the end of this whole process, I am still no clearer as to the real strength of the police. Again, if you refer back to the process we had last year, that information was tabled immediately in a better compilation than we received this year, and it was pretty easy to get to what the real figures were at the end of the day.
I also add my thanks, not only to those who were involved, but to the other members of the Public Accounts Committee who sat right through the whole process. I thank my colleagues for the work they put in to this Estimates Committee. I add my thanks, and those of the opposition, to the Assembly staff and all those supporting them, who prepared for this process. For those public servants, who I am sure are not listening at this time of day, an enormous vote of thanks from the opposition needs to be put on the Parliamentary Record for the work they have done in preparing for this estimates process, with the rider that I am sorry that, for this year, the load on them has been disproportionately increased. That certainly was not, I believe, anyone’s intention. With those few words, I thank all those involved in the process.
Mr HENDERSON: Mr Chairman, I join the Leader of the Opposition in congratulating the committee on their work this year, and my colleague, the member for Barkly, and for all members on the committee. From every corner, I have received accolades for the way he handled that committee.
I congratulate the Leader of the Opposition for the constructive comments he has made. From government’s point of view, we are seeking to continue to improve this process. It is a process that is new to this parliament and, I believe, there are still some minor changes needed. I do not believe that comprehensive change is needed, but some changes can be made, and I believe the Standing Orders Committee will further review the process.
I pick up from the Leader of the Opposition about whether there is totally more time this year. Last year, we had 30 hours of debate in estimates. I am advised this year there were 41 hours, plus two hours for PowerWater, which totalled 43, as well as potentially 5 hours in this debate. There was totally more time this year, and that compares with the previous record in the Committee of the Whole of this parliament of 41 hours in 1996. We still hear from the opposition, looking back to the good old days of how we used to do it, how that process somehow provided for greater scrutiny of ministers. However, in total time allocated, there has been more time allocated this year than has ever been utilised previously when we were in Committee of the Whole. I do not believe that we need to extend the amount of time.
Regarding the Estimates Committee - the committee that the previous government never saw fit to implement - being the main forum to illicit information from governments, the Opposition Leader made comments that we did not get as much information this year as we did last year. At the end of the day, the Estimates Committee process is not the only process available to members of the opposition in seeking information. A lot of the debate in the Estimates Committee was around policy issues and programs that agencies were working on. A lot of the debate and time taken up in the questioning was not in unders and overs and variations within the budget, and how much money is being spent on this or that, but in regard to the effectiveness of a policy or a program. In understanding program areas of governments and what services are being delivered, there is a capacity for shadow ministers to seek briefings from ministers, who will provide those briefings, by public servants. They can sit there and talk to public servants and investigate and talk about policy and program areas without dragging them to a committee.
In my time as a minister, for a range of portfolios that I have held in just on two years, I can count on the fingers of one hand the number of briefings that I have been asked for outside of legislative areas, which have been very few. I am sure all of my colleagues as ministers would be happy to provide those briefings and access to public servants for the opposition to understand program or policy areas of government. In terms of this committee being the only place to elicit that type of program and policy information, that is not right, and I would urge shadow ministers to seek more briefings from government ministers, and we will provide them.
There is another avenue, if you want to get to the detail, not only with the budget but any program or policy area. Understanding that with parliament sitting 33 days a year limits the number of questions without notice that can be asked, there is a process for questions on notice where, again, the opposition can get detailed information from government in relation to specific areas you might be interested in. There are other forums outside of the Estimates Committee and having ministers, in the Chief Minister’s case last year, appearing before the committee for 17 hours straight. There are other areas to get that information and this committee is not the only committee and not the only process.
The total amount of hours was 43. We all need to go away and have a bit of a break and think about this. I do not envisage that we would be seeking to extend the total amount of time. In regard to the Opposition Leader’s suggestion that we might weight ministers’ time in regards to the total dollar value of the budgets that they hold, I point out that if we use that as a weighting measure, then maybe the Chief Minister might only be available for scrutiny for about an hour, because the Chief Minister’s budget is only about $40m a year.
Within the Standing Orders Committee, we can look at another allocation process regarding time. I believe that we do need to allocate time. The process this year was a lot more focussed and disciplined. It does focus people’s attention, that if you only get four-and-a-half, five or three hours, you need to make the best use of that particular amount of time. Just having free roaming time, as we saw last year, meant one minister was not scrutinised, three or four hardly had any questioning at all, and an extraordinary amount of time was used up on the Chief Minister. I do not know if the Auditor-General has recovered from the two-and-a-half hours of grilling that he received on his extensive budget allocation last year. To the Standing Orders Committee: we do not need an extensive review like we had last year. However, we are prepared to look at further reforms within that committee. I do not think we need to have major ones.
Whether we go back to written questions next year or a percentage of written questions, again, let us look at that. It worked much better this year without written questions. I still believe that it was a fairly benign process that existed for many years, where we and the the opposition sat up, burning the midnight oil, drafting 800 to 900 questions, public servants typed up fulsome answers, and then shadow ministers stood here reading the question and ministers stood up and read a prepared answer, with debate ensuing from that. Maybe we could look at a percentage of written questions, or key areas that the opposition feel that they would like to scrutinise. I do not think we need to go back to hundreds of written questions again to which public servants are required to draft answers.
Let us have a look at a proportion of written questions, if it is required. The Opposition Leader’s commented that certain output areas were not scrutinised and public servants had prepared extensive responses. At the end of the day, the responsibility to scrutinise those output areas lies with the committee, and if those output areas were not covered, the committee needs to look at that in terms of the amount of time that it looks into those areas.
For the public service, I do think there was an issue this year, and it will take some settling down. Certainly, there was a lot of work put in to preparing comprehensive responses. In talking to a couple of CEOs about how the public service fared with the process this year - and not just my CEOs, but from other areas - they were essentially saying that the process does allow the public service to get a full and total view of where the dollars are being allocated. The CEOs and the ministers have to get across their areas in a much greater level of detail, as opposed to standing up and hiding behind a prepared answer. The process does provide for better scrutiny. As one of the CEOs said to me, this process was viewed within the public service that, at the end of the day, this is a democratic institution; the public service is there to serve the governments of the day, estimates are part of that process and, if you do not like estimates, well maybe you should have a think. The public service will come to grips with this. All of the public servants who appeared before the committee this year did an absolutely fantastic job, confident in their program, policy and budget areas, and they provided quality information.
There was some debate on the Standing Orders Committee about the process of no written questions. There was a concern amongst opposition members on the committee that ministers would take on board dozens, potentially hundreds, of questions and nothing much would be answered, and we would just use it as an opportunity to hide. The committee says it all: only 70 questions taken on notice, less than 10 for each minister in four-and-a-half hours, with only 11 answers still to come in. That would almost be a record across any committee process looking at the budget in the number of questions that are outstanding post-committee. Again, the public sector has done very well to respond to those 59 questions and get details back to the committee.
In wrapping up, from the Leader of Government Business’s point of view, it was a much more dignified, thorough processes this year. From government’s point of view, we will continue to look at areas to further refine the process, and we will debate that in the Standing Orders Committee. Again, I would like to thank everybody involved.
Picking up on the Leader of the Opposition’s comments about the budget, and the startling realisation from the opposition’s point of view that we are a government that is absolutely committed to fiscal responsibility and our deficit reduction strategy, there is no doubt that budgets are tight in agencies, but we do not walk away from that. We are a government which will focus on delivery of services and improving services to the community. However, we will demand, of ourselves as well as the public service, that we do achieve efficiencies wherever we can because, at the end of the day, we cannot return taxes back to Territorians. We cannot put the investment that is going to be needed into infrastructure in the Northern Territory - and a desperate need for infrastructure, particularly in the bush. We cannot continue to have ever-growing budgets that just blow out of all proportion, to have expenditure growing over income by 10% a year. We are absolutely committed, as a key priority of government’s fiscal responsibility, and we do not walk away from that.
I am no great fan of Peter Costello, but as one of their colleagues on their side of politics has stated, deficit budgets equal higher taxes. That is the way the opposition is pigeon-holing themselves: as a high-spending, high-taxing government. I do not think that Territorians are going to buy that come the next election, when they continue to run the line - particularly irresponsibly in areas like tourism - that you need to throw an extra $20m, or whatever the number it is - pick a number, any number you think of - at the budget. Of course, we would love to throw $20m at the budget, but it has to come from somewhere else, or it has to go on the Bankcard. Until the opposition can answer where they are going to get the money from, those types of calls just do not resolute out there in the public.
The Leader of the Opposition commented about not getting to the bottom of the police numbers. Well, I provided a table that was provided to me by the Commissioner of Police. The answers are in that table. I certainly trust the Commissioner of Police to tell the truth to the committee in regards to police numbers. Again, we will not hide the true story of police numbers in the Northern Territory from Territorians. Those numbers will be in the Police Commissioner’s annual report. We have the Jim O’Sullivan report will come back to this parliament, which, I predict, will further identify shortcomings in past budget areas by the previous government - all the shortfalls in funding regarding police numbers. The letter that I tabled from the former Police Commissioner will come back and haunt the opposition in terms of the fraud that they perpetrated to Territorians regarding the true state of numbers in the police force. In that particular letter, the Commissioner talked about: ‘we have police on paper, but not out in the street’. I can see the election ads evolving as I speak.
Regarding the budget and the committee process, it has been an absolutely fantastic budget. I congratulate my colleague, the Treasurer for his first budget; a very responsible budget that is going to deliver for Territorians and bring us ahead of our targets in our deficit reduction strategy. The Standing Orders Committee will look further at the Estimates Committee process. I would like to close with thanking all of the staff who supported the committee, and the Hansard staff. It has been a very tiring few days, but they can all pat themselves on the back on a job well done.
Dr LIM: Mr Chairman, I contribute to the debate, having been one of the core members of the Estimates Committee and having sat through most of the deliberations, including monitoring the debates on the closed circuit television upstairs in my office when I was not in the Litchfield Room.
I agree with the Leader of the Opposition’s and the Leader of Government Business’s comments, that the Chairman of the committee did a marvellous job. He excelled in his chairmanship. However, without wanting to be provocative, I have to take some exception to how the Deputy Chairman chaired some parts of the meeting. Anyway, I will not go into that any further. In chairing committees such as the Estimates Committee, one needs to be very impartial about the whole thing. Unfortunately, many a time I believe the chairing was particularly impartial, and I will give you some examples later on.
In my observation of the whole process, I thought the times were too restrictive - definitely four-and-a-half hours for some ministers who had so many portfolios, was patently inadequate. The fact that we actually took an early night yesterday - we were scheduled to finish at 6.30 pm, and we finished at about 6.45 pm or 6.50 pm - there were several hours we could have used to allow more adequate interrogation of budgets amongst some of the ministries. That was not in the opposition’s control and so, there we were. We had an early night last night, and I appreciated that, having been up till about 2 am on the first two days.
I thought, instead of answering questions quickly, some ministers chose to filibuster. That is their right. What I found more difficult to tolerate was that some ministers chose to spend a lot of time consulting with their public servants, and then attempting to get an answer out. Had I used a stopwatch on all those ministers, I reckon you could add 45 to 60 minutes per minister by adding up all the time that they wasted providing no information to the opposition and then, when they finally got the information from the public servants, not able to digest it well enough to then repeat the proper information for the opposition’s questions. That could have been done better. Ministers like the Chief Minister and the minister for Health did very poorly. Other times, ministers tried to wing it, and when they winged it - boy, didn’t they get themselves in all sorts of strife! They tripped over their own words, and said things that they should not have said. It gave the opposition a good chance to trip the ministers up, obviously, and trip they did.
Then there is the rationale that maybe written questions might be helpful. Through last year’s experience, I thought the answers provided to written questions were fulsome and informative, whereas many a time this year’s responses were not informative at all. When you notice that ministers are reading from long documents, full of typed notes or information, it would have been easier to just table that information. Instead, the minister chose to grandstand and pretend that they were their notes and refused to table the documents. That makes it difficult. We know the opposition can always glean information from Hansard, but if this was truly open and accountable government – transparent, as they say - then tabling those documents should not have been a difficulty.
I thought the Leader of Government Business and the Deputy Chief Minister both did very well through the process. They were very open with their responses, eager to hand across documents when it was easily identified and there was no purpose in hiding the information contained in those documents. When they did not know the answer, they were prepared to say: ‘We do not know’, and pass it on to the public servants. It shows the calibre of the minister and the confidence they have in their own portfolios. Truly, out of the eight ministers there, I would say those were the only two who could handle their portfolios well. The rest were pretty average, if not below average.
I recommend that the government considers written questions next year. Perhaps not all of them. Written questions would allow the opposition to consider the responses and then go into supplementary questions, from which we would then extract the information as we need it.
There are some issues arising from the interrogation of the budget that I would like to address. First, I would like to draw the parliament’s attention to the way the Minister for Indigenous Affairs presented himself. The way he presented at the very beginning, I thought that these ministers must be all upstairs, listening to boxing music - dah, dah, dah, dah - getting really heated up: ‘You have go there and be strong, be assertive and punch them hard’. Then, when they came down here, their hands were trembling - you could see it, they reached for their glasses of water and their fingers were shaking like billyo. They must have been so pumped up to come in the Chamber, bashing the opposition. It is such a pity. Let me show you. I asked the Minister for Ethnic Affairs: ‘You are reading from a very long document. Why don’t you just table it. If you just tabled it, it would be a lot easier’. What did he do? He slammed into me. Let me read the words from Hansard:
- Mr Chairman, it appears the minister is reading from a fairly detailed document. Would he rather just table it, if there is nothing to hide? It would be a lot easier for us to consider than to try and listen to his vocal report.
Then the Chairman chipped in and said it was the minister’s call – which I agree. Then the minister said:
- Mr Chairman, I will not table the document. These are my notes which I have made because I
contemplated this kind of question.
Fair enough.
Dr Burns: It might have been in Greek.
Dr LIM: I will continue to read. That is also fair enough, not a problem; that is the process. However, this is where I found his further comments very offensive:
- If the member does not understand … … easier to pass it to Mr Fong, he can read them and if he finds
my accent difficult then Mr Fong can read ….
That is what I found offensive.
Members interjecting.
Dr LIM: Members opposite can laugh, they can giggle, they can carry on, but that is very, very offensive. It is unnecessary, and very racially vilifying. It is unnecessary. Not only then, later on in the evening, he went right off again. It was the issue about the Larapinta Stage 4 land release. I was attempting to extract some information from the minister, and he got stuck into me and accused me. I will read his words:
- … and then he attempted to attribute that to me.
That is where it is very wrong. The minister …
Mr KIELY: A point of order, Mr Chairman! He called this point of order upstairs and he knows full well what is in the Hansard. I believe the member should be very cautious about …
Mr CHAIRMAN: There is no point of order. Continue, member for Greatorex.
Dr LIM: Thank you, Mr Chairman. The member for Sanderson gets up to object because he is also implicated in this and that is why he does not want the public to be told.
Mr Kiely: Well read it all out, Richard, read it all out.
Dr LIM: Let me read from the rushes:
- Mr VATSKALIS: The member for Greatorex claimed to prove that the government paid the
blackfellas money. Member for Greatorex, let me put it bluntly …
Mr Baldwin interrupted and said:
- He did not say that.
Let me put this bluntly.
- I interjected then, and Mr Vatskalis said :
Let me put it …
Mr VATSKALIS: A point of order, Mr Chairman! What the member for Greatorex is reading is not in the Hansard. I read from the Hansard and it says:
- Mr VATSKALIS: The member for Greatorex claimed to prove that the government paid the blackfellas
money.
It does not say here that I said …
Dr Lim: Let me finish!
Mr CHAIRMAN: Order!
Mr VATSKALIS: … the member for Greatorex said that the government …
Members interjecting.
Dr LIM: Mr Chairman, I am just reading from the Hansard.
Members interjecting.
Mr CHAIRMAN: Order!
Mr Vatskalis: Table the document, Richard.
Mr CHAIRMAN: Order! Member for Greatorex, is that a direct copy of Hansard?
Dr LIM: Yes.
Mr Kiely: Then table it.
Mr Henderson: It does not look like it.
Mr CHAIRMAN: Order! Member for Greatorex, the member for Casuarina raised the point of order that what you were quoting was not accurate. The word ‘claimed’ was …
Dr LIM: Okay, let me read it again? Okay.
Mr CHAIRMAN: Is the word ‘claimed’ in your document?
Dr LIM: Yes. Let me read it again:
- Mr VATSKALIS: The member for Greatorex claimed to prove that the government paid the
blackfellas money.
Mr VATSKALIS: Member for Greatorex, let me put it bluntly …
Mr Baldwin: They did not say that.
What he meant was: ‘He did not say that’.
- Mr VATSKALIS: Let me put this bluntly.
Dr Lim interjecting.
Mr VATSKALIS: Let me put it …
Dr LIM: I have a point of order on that. The minister should withdraw those words, it is
unparliamentary and he should withdraw.
Mr Baldwin: And it has been attributed to the member …
Dr LIM: And attributed to me, that is very scurrilous and it is out of order.
Mr VATSKALIS: Let me rephrase it.
Dr Lim: And it is out of order.
Mr VATSKALIS: Your inference that somehow …
Dr Lim: Withdraw. You withdraw.
Mr VATSKALIS: Your inference, you did not say it but your inference was …
Dr Lim: You withdraw those words.
Mr VATSKALIS: … that somehow …
Dr LIM: A point of order, Mr Chairman!
And if I may digress from Hansard for a second, the Chairman at that moment was the member for Sanderson.
- Mr Baldwin: Well, hang on here, you know, if you let me get a word in here …
I think it was the Chairman who said those words, not the member for Daly.
- Mr CHAIRMAN: Minister, I am not aware that you did attribute those words to the member for Greatorex. However, in the interests of trying to get a cup of tea in here, if you would be so kind as to clarify whether
you did attribute those words to the member for Greatorex.
Mr STIRLING: A point of order, Mr Chairman! This is an example of why we burn up 41 hours in the committee. I just want to clarify something with the member. Is he suggesting that the term ‘blackfella’ is unparliamentary and ought to have been withdrawn at the time? Is that the basis of this?
Dr LIM: I did not use those words, right? In response to the point of order …
Members interjecting.
Mr CHAIRMAN: Order, order!
Members interjecting.
Mr STIRLING: Mr Chairman, there is a very clear way through this regarding the definition of ‘blackfella’ and whether or not it is unparliamentary. We need only go to Hansard when the then Chief Minister stood in this Chamber, with the support of the opposition, and said: ‘Blackfella is widely used in the Northern Territory, everybody knows what it means, used by blackfellas themselves’. If we want any vindication, we need go no further than the member for Arnhem. It is not unparliamentary.
Mr CHAIRMAN: There is no point of order. Continue.
Dr LIM: The issue that I am addressing here is the way the minister spoke about it - the way he inferred and suggested was what I felt. That is what I found offensive. We use ‘whitefella’ and ‘blackfella’ all the time. When you say it in a non-confrontational way, it is not an issue, but there are times …
Mr Ah Kit: What about Phillip Mitchell calling me a yella fella?
Mr CHAIRMAN: Order!
Dr LIM: I did not hear what he said, but there are times when one says those words in anger. It is unparliamentary. I suggest to you that the minister was angry and he threw those words, not only at me, but attributing those as my motives, and that is what I found offensive.
The minister can get up and defend himself anytime he likes. I am not particularly concerned about it. He can explain himself. People reading this will not have heard his intonations, but there were a lot of people in the room last night and those people would have heard what he said, and they can be the judges.
I raised a couple of issues over the last four days. One of those was about Centralian College and the Minister for Employment, Education and Training was gracious enough to accept my comments to him, given in what I thought was fairness. I hope that he will continue to keep a close watch on how Centralian College fits into the larger entity now called the Charles Darwin University, which starts in about three or four days time. It is a very positive move for all of us in Central Australia that we have the Charles Darwin University Campus in Alice Springs. However, there are significant issues: the financing of Centralian College, or that part of Charles Darwin University, is no longer identified in the budget papers and we do not know how the governance will work or how Alice Springs will be represented. I hear there will be three members from Central Australia on the university council, but that is very different from having a body of people from Central Australia governing Centralian College in their own right. Having a university council that is predominantly Darwin or non-Alice Springs based may disadvantage Central Australia. I hope the minister will keep that in mind and take particular notice of what will happen to Centralian College.
The other matter I raised was the undergrounding of power cables in the old Eastside of Alice Springs. I raised that with the Treasurer, who is the shareholder for PowerWater. I also raised that same matter with the GOC when they fronted to the committee this afternoon. I am glad to hear that they have agreed to undertake a study, and I hope they will do it with the best intentions for that suburb, in the sense that the old Eastside does want to retain the amenity. Being such a shady suburb, to have the trees cut down would be such a shame and, if there is a way of getting around that, I am sure people in the old Eastside would be greatly appreciative. They might even consider voting for the government and put me out. So think about that. It might be a good way of getting rid of a CLP member in the old Eastside. If you can deliver undergrounding of power in the old Eastside, that would be a great achievement for this government.
I am sure my colleagues in the shadow Cabinet will be speaking about other issues. I felt the pool fencing issues were not adequately responded to by the Minister for Local Government. There were aspects, such as delay of issue of land titles and certificates of compliance, that were not adequately responded to. In other words, what I hear from those responses is that they do not have the job set out right yet. They still have not got it down properly, so that the whole process, which the government brought in very hurriedly, has not been finetuned. It has been more than six months since it has been in force. However, it should have been at such a stage where things should be just happening, fairly quickly. In fact, I believe, that a certificate of compliance should be issued within days. If there are issues of inadequate fencing, and it needs to be reinspected, obviously it is going to take longer. However, most homes in the Territory are fairly compliant with their pool fencing, as the data provided by the Office of Local Government would demonstrate. Most of the fences were fairly straightforward, and if it was just a matter of issuing the certificate, that should be done within a 24 hour turn around. It does not take that long to do that.
Regarding the Alice Springs sittings, we put through most of the questions to both the Speaker and the Chief Minister. I still look forward to the Chief Minister responding to that more adequately, because we still do not know what she or her ministers spent going to Alice Springs with their staff.
Ms CARTER: Mr Chairman, once again, this year’s estimates process was a frustrating experience due to the time constraints placed on shadows and others, limiting the extent to which we could examine the budget.
As the shadow minister for Seniors, and Arts and Museums, I found I was left with only seven minutes to quiz the Chief Minister on these important areas. I took the decision then to only ask questions on Seniors, and I was able to get a couple in before my time ran out. I was not able to explore any matters in detail. Of course, I was totally unable to touch on Arts and Museums, an area which has seen a dramatic cut to its funding. I conveyed my apologies to the departmental staff present, for by then it was 11.45 pm, and I have taken the opportunity today to write to the Chief Minister with my Arts and Museums questions in the hope that I can gain the information Territorians deserve on this matter.
Similarly, yesterday, I was frustrated by the lack of time I had to question the Minister for Health and Community Services. I was allocated four-and-a-half hours to explore the total of the Health and Community Services budget - the largest budget and one of the most complex agencies. This time I had to share with other members of parliament, who also quite rightly had questions. Of the hundreds of questions I had developed during the past six months, less than 50 were asked. I make these comments to advise Territorians that, just because I may not have asked questions on a specific area, it does not mean for any moment that I, or the opposition, are not interested in that issue. It is just that the Martin Labor government continues to constrain the extent of questions, unlike the CLP ever did. As you will recall, under the CLP, members of the Labor opposition were able to ask CLP ministers as many questions as they wanted. If a minister had to be quizzed for 10 hours or more - so be it. We had no fear of questions, and had the stamina and fortitude to stand up to it.
I doubt the current Minister for Health and Community Services would have had the stamina to perform in the manner of her CLP predecessors, and I am sure the new system of minimal finite hours suits her well because, with the limited time I had available, I did not have the luxury to press the minister as I would have liked to on many issues. Instead, I had to be constantly aware that for every supplementary question I put, I was losing the time I needed to explore other issues. To my mind, this worked to the minister’s advantage. I found her responses to questions concerning money less than convincing.
A major concern I raised, which was not addressed adequately, is that the Health and Community Services budget has only been given enough extra money this year to cover standard CPI; that is, 2.5%. The reality is that the Australia Bureau of Statistics has advised that the CPI for health sector is currently running at 7.2%. This is a significant difference, which will translate over the year to tens of millions of dollars - dollars the minister does not have. The end result is that the budget will blow out by Christmas, or there will be major cuts to services. When I quizzed the minister on this, she would not concede she would have problems or admit that services would be cut, and she seemed confident that she would come in on budget. Well, we will see.
Another concern which was not adequately addressed by the minister, was the way the acute sector, and hospitals in particular, appear to have sucked money out of community and public health. This financial year, the acute sector cost $34m more than it was budgeted for, while the community and public health sectors lost ground to the tune of $15m. In August last year, those two areas were budgeted a certain amount to spend on services and then, lo and behold, 10 months later this money was not spent - well, not by them. When quizzed on this, the minister refused to concede that money had been moved from these two areas to prop up hospitals and yet, together, they conveniently make up the extra $15m needed on top of the extra $20m Treasury coughed up during the year to fund the acute sector blow-out.
With some effort, I was able to extract some information from the minister and her staff. A classic example was when I asked how many Territorians had their surgery cancelled when the minister implemented a halt to elective surgery earlier this year. I believe the halt was to reduce spending, but the minister insists on other reasons; for example, to allow staff to recover from dealing with the Bali bomb victims. Much as I applaud the work of staff dealing with these stressful cases, with respect, the bombing was in October 2002, with most cases leaving the Territory within days, while the theatre closures were in April 2003. Given the five to six month time difference, I maintain my belief that halting cases - and I know that will offend the minister, as she prefers to spin the term with the words ‘slow down’ - was a crass effort to cut costs. I can assure the minister that is what her staff believe. Anyway, after some argy-bargy over the words ‘cancelled’, ‘curtailed’ and ‘slow down’, and a number of pointed questions to the minister and her staff, I was finally told that 40 people had their elective surgery slowed at Royal Darwin Hospital. What a breakthrough in information gathering! Naturally, I then was unable to get the same data with regards to Alice Springs Hospital. That was taken on notice. So much for open and accountable government.
Another thing I did confirm during my questioning is that the public dental service has major problems, because six of the 17 dentist positions within the service are vacant. I acknowledge that nationally there is an undersupply of dentists. I certainly hope the minister is able to address this problem quickly, as oral health is vital to good health and private services are prohibitively expensive for many people. Disappointingly, I learned that none of the 25 child health staff, promised and budgeted for in last year’s budget, materialised. It was conceded yesterday in the estimates hearing that this was a cost-cutting decision. Child health, particularly amongst our Aboriginal population, continues to be a major problem, and I certainly hope the minister can find the money to fill these positions this year.
Speaking of child health, it appears the Darwin Central Community Health Centre, located on the ground floor of Health House in Mitchell Street, may well close this year as an efficiency cut. This will be a health blow to the people of my electorate. The clinic currently provides child health care, including immunisation, and primary health care generally, particularly for the elderly in the area. I am very concerned how people without transport and with mobility problems who live in this area are going to get things done like dressings, blood sugar levels and blood pressure readings, when they have to travel to Casuarina. Naturally, when I asked if the Karama clinic was going to be closed, there was a resounding ‘no’ from the minister and a cheer from the member for Karama. I will be interested to see how it can be justified to provide a service at Karama, which is only a few kilometres from Casuarina, while closing down the inner city service.
Another major concern of mine is the lack of information being provided by the minister on what services will be cut to allow her to keep within this budget. Each time I ask this and similar questions, I was told efficiencies would be introduced, but very little detail on what these efficiencies would consist of. An interesting slip by the CEO on this matter was that ‘staff ratios would be changed’. In the health sector, this usually means staff/patient ratios, which raised my concern that staff would be expected to do more. We all know how stressed our staff are trying to cope with current workloads. We all know how hard it is to attract and retain staff in the department. The last thing we need to do is increase their already heavy load. When questioned further on this matter, the minister said that workloads would not increase and the CEO explained that his comment related to the need to reconfigure work areas. I will be watching with interest to see how this pans out.
As I explored these complex budget issues, the minister whispered lists of variations which she believed accounted for the ups and downs in funding. If anyone takes the trouble today to have a look at the Hansard rushes that have come out for this hearing yesterday, they will notice that many of the minister’s comments were inaudible. Each time I asked the minister if she could table the information, as it was complex, she refused and said: ‘I am giving it to you now’. The result, as I am sure she and her advisors were aware, was that no light was shed on the matter and, instead, a confused mass of information was orally presented. Once again, I would encourage people to have a look at the Hansard record to see what I am talking about.
I can assure you, Mr Chairman, I look forward to examining in more detail my copy of the Parliamentary Record of this hearing, and developing my own tables in an effort to try to figure out what the minister is going on about. My gut feeling is that this was a deliberate attempt not to provide information in a number of key areas, and to avoid any useful interpretation of the budget. I was not the only person who came away from that hearing with that view.
I believe the new financial year is going to be another shocker for the Department of Health and Community Services. They have not received enough money to maintain their current level of services. Our community needs increased services and instead, as the then acting CEO said a month or so ago: ‘This is a tough budget.’ My commiserations go to the staff and the clients of this minister.
Mr WOOD: Mr Acting Chairman, as shadow minister for everything, do I get 140 minutes, or is that only 10?
Mr Stirling: Two hours, Gerry.
Mr WOOD: The deliberations over the last few days have been an opportune time to question ministers on their budgets. It is the only time during parliament that there is a real chance to have such questioning on both budgeting and policy. I emphasise that it is the only time that it can be done, but the downside is there is simply not enough time for the job to be done properly.
Many times, questions had to be shortened or deleted, and expansion of questions, because of the need for more detail, was curtailed. There were at least another four hours on Thursday which could have been used. Certainly, departments like DBIRD, DIPE and Treasury are major areas of policy and expenditure that need a longer period for analysis. I would not agree with the opposition’s concept of using costing as a means of allocating hours. Quite simply, we need more hours for those major departments and, from experience, we know what the major departments are.
Ms Carter: And Arts and Museums.
Mr WOOD: Yes, member for Port Darwin. I therefore ask the government to consider an extension of time for questioning when it reviews the workings of this year’s Estimates Committee - maybe even to look at a Monday. I do not have a problem working through the whole week.
There are a number of matters I would like to highlight from the hearings. One is that there is a real need for a simplified reader’s guide of the budget, and I note the Treasurer said he would look at that. The existing budget is only user-friendly for those who understand the science of budgets. One could also say that the more a budget is put into Treasury-speak, the harder it is to understand.
Another matter that could help improve the budget would be to include, where applicable, a third column showing the 2002-03 budget, as against the estimate, so one can analyse figures without having to refer to previous budget papers.
An area that needs improving is for more detailed annotation to explain, for instance, why there is a reduction in the budget, or even an increase. Sometimes this occurred in the key variations, but at other times you would not understand why there was a reduction. Although we had some detailed explanations from the ministers, it certainly would be easier if it was in the budget.
Another area is trying to work out what appropriations belong to what department so that questions can be directed to the right minister. You might wait for a minister at the end and find out that was not the appropriate minister for the question and that you were supposed to have to asked that question on Tuesday. A couple of examples were some questions on the business park. They went to the Chief Minister, thinking that was part of the railway or Territory development, when it was the domain of another minister. An area of my concern is weeds, which, in the Budget Highlights, came under Lifestyle and Environment but, when we got to the environment minister, he said: ‘No, that comes under DIPE’. It was too late to ask DIPE. Some sort of code could be put next to these highlights so that we know the portfolio into which they fall.
I mentioned the user’s guide. When the documents are being produced, the use of a pie chart is something that could be looked at. It was used in some of the documents, but it could be expanded to include all of the Territory’s general revenue;. for instance, royalties, Commonwealth grants, the income from public corporations, and the income from the sale of government goods and services.
Occasionally, there is duplication in the budget. A small examples was last year’s Budget Overview which noted money had been set aside for the upgrading of police cells at Avon Downs. The same item is in this year’s budget under Regional Highlights.
I have a couple of highlights, or lowlights, that you might consider from the Estimates Committee. I am very concerned about the possible closure of the Wildman River Work Camp as a juvenile detention centre. I hope this does not happen, because I believe this type of detention centre is very important, especially for youth. If it is going to be closed, I would like to see the reasoning behind its closure.
Libraries are something that are under threat, especially where we are referring to technical libraries. As the member for Johnston said, he is a great lover of libraries and, even though I do not use them as much as I would like to, I remember during my days at horticultural college, those technical libraries were very important. If we are to expand our research, especially in places like the Department of Primary Industry, we need to make sure those libraries are maintained, with staff, and not just through some centralised body.
My other concern is about the possible land sale, as the minister has said, of open space wetlands next to BP Palms. I will not be letting this issue rest, because there is an important principle here. It is land that has been set aside to be preserved. Sure, it is not park land as in Parks and Wildlife, but it is local land that has been set aside because of its value as a wetland, and it should not be sold off to private interests that knock on the door of the government.
I will continue to monitor, and I hope - it might be a long term hope – to change the government’s mind on future industrial estates in the Darwin Harbour region. I still believe they have not yet looked at all alternatives. That, to me, was quite clear when questioning the minister and receiving explanations from the minister’s staff that there has not really been a look at possible options outside of the same old options that have always been in the plans.
CDL is still an issue that I will continue to pursue. It is an important issue, and one that the government promised it would bring in. However, it says that there are taxation issues. I believe that the member for Braitling’s legislation does not have those particular concerns. It is something that people want, and I would be concerned if this government decides to sign the national packaging covenant which, as you know, those states that signed it previously also signed off any thought of CDL. I know the previous Territory government did not sign it, and I was very happy when they did not, because it allowed us to look at the issue of CDL. Therefore, I am asking the minister not to sign off on that covenant.
There were a couple of other positives. The government has in its budget $1m for the TRY program - training in communities. There is more money being extended on essential services in Aboriginal communities. I noticed a lot of the airstrips being upgraded, and that is very important, especially to a sealed standard. As one who has lived out in those areas and found, on a wet day, that you cannot land and you cannot get home, it is certainly nice to know that if you have a good surface on the airstrip you can land.
Also welcome news is that $40 000 has been allocated to provide assistance to communities to develop alcohol management plans for the Tiwi Islands and Groote Eylandt, and kava management plans in Arnhem Land. There is also $3.8m for building the Territory’s resource program, which provides mining companies with valuable free exploration information. This builds on a CLP program which looked at regional airborne magnetic surveys. I noticed, in the Australian Financial Review, this is now generating more interest in exploring Territory mineral deposits.
Another highlight is $100 000 for new policy directions on liquor, to develop a comprehensive whole-of-government approach to liquor administration, with a view to minimising harm resulting from abuse of alcohol. I noticed the member for Wanguri mention that we are in fairly tight fiscal times, and we are trying to keep within deficit, but I notice there were a couple of amounts of money here which obviously, you could call slightly political, and $600 000 for noise muffle roadworks in Casuarina was one. I am not sure how many residents that is going to help. I have here a few: $400 000 for landscaping at Bagot - nice idea, but they are large sums of money; and millions at Lake Leanyer. That is good northern suburbs money spending, I can see that, yes.
Ms Lawrie: And Palmerston.
Mr WOOD: I just thought I would mention those.
Mr Bonson: Where are the poles? Mention the poles.
Mr WOOD: Mention the poles yes, a good idea, but not in my electorate, thank you.
I would still like the government to look at the need for a centralised web site for reviews. They have promised that they will have an inclusion of all community groups and interests in society in their processes, and that is the way to do it.
Finally, in my last 15 seconds, I would like to thank the Chairman for his great job, the people in Hansard and all the support staff. I would also like to thank both sides of parliament because, for a change, we got on generally pretty well. It was a good experience, and a learning experience.
Ms CARNEY: Mr Chairman, I would like to recap and reflect on this year’s budget estimates. I thought it was much better than last year. Along with everyone, I congratulate the member for Barkly. I wished him well at the beginning of the week, and my view was that he acted very well throughout the week. I thank him for that.
In relation to Parks and Wildlife, although not due to time restrictions, it was not a fulsome exploration of some of the matters contained in the budget, and there were a few reasons for that. In addition to the time restrictions, it was apparent that this portfolio area, perhaps unlike any other, did not have what we all call the ‘apples and apples’ comparison between last year’s budget and the budget for 2003-04. I had hoped that, during the course of the Estimates Committee hearing, I would be able to link up last year’s budget and this year’s budget. However, it became fairly clear early on that that was not able to occur. I thank the minister for his acknowledgement towards the end of my questions that, in the event that in next year’s budget various line items would change, he would be good enough to include various explanatory notes. I also made the suggestion, as the Hansard will record, that, because of the very obvious difficulties that we had comparing the two budgets, I would pursue a briefing with departmental officials.
That is not to say that I necessarily needed a briefing prior to the Estimates Committee. I simply say that it became apparent throughout the hearing that an in-depth exploration simply was not possible. As I said, it was unfortunate that we did not have time. There certainly were some other areas I wanted to explore that, perhaps, were not so integral to the line-by-line analysis between the budgets. However, as I said at the time, I can pursue those matters in other areas.
Regarding Women’s Policy, members will recall that I questioned the Chief Minister. I remain more disappointed than people know about the Chief Minister’s view on Women’s Policy. Frankly, it is difficult to be the shadow minister for Women’s Policy because there is not much of it around. I have since talked to a number of friends and colleagues, and their disappointment is as palpable as mine. However, the Chief Minister obviously has her own philosophical base from which she comes in relation to Women’s Policy; that is not mine. I hope that, perhaps with the assistance of some of her friends and colleagues over time, she may shift so that she does not get into what could be described as gender mainstreaming. It is important that various initiatives exist for women and, until there is absolute equality in employment, child care, superannuation, and a whole host of other things, it is incumbent for any government to ensure that women’s needs and aspirations are well taken care of in any of its policies or planning and, for that matter, budgets.
In relation to Tourism, I was again disappointed as a result of the terrible restrictions we had as to time. The minister has a couple of other portfolios, but I notice he was allocated four-and-a-half hours, which was different to some of the more senior ministers. I simply suggest that, for the purposes of budget estimates next year, the committee perhaps re-jig the timing. All of us know that we ran out of time. I have not done a count, but I would think that I probably ditched between 30% to 40% of my questions. These are not questions in relation to Tourism that I just dream up overnight. Many of them were actually sent to me by people involved in the industry, because I had provided an invitation for people to contact me so that, in relation to the budget, specific questions could be asked.
Even if we take the politics out of it completely and work from the basis that, on behalf of the people in the Northern Territory, the opposition does have an obligation to scrutinise the budget, it therefore follows that we need to ensure that ample time is provided. Of course, it filters down the line. I knew that my colleagues, the members for Goyder and Daly, were similarly culling lots of questions in order to accommodate mine for Tourism. I thank them for that. I simply make the point that I would like the Estimates Committee to have a look at it for next year.
In relation to the substance of what the minister had to say, I do not think there is any doubt that it can be judged as simply abysmal. There were filibustering answers which were, in my view, at worst appalling and at best embarrassing. He demonstrated how little he knew about his portfolio. It is a significant portfolio; it is crucial to the Territory’s economy and, of course, to the livelihood of those who work in it. He actually provided very little information, He clearly did not know much and constantly deferred to the officers from the Northern Territory Tourist Commission. I do not say for a moment that every minister needs to know about every thing; that is why the staff are there. However, in terms of the performance of all of the ministers, the Tourism Minister’s can, without any doubt, be rated as the worst.
What was obvious, apart from his twitchiness about being questioned, was his sheer lack of understanding about the industry and the budget. What we found out during Estimates Committee was that the minister did not know how Territory Discoveries was funded. He demonstrated that the Northern Territory Tourist Commission is not adequately supported. That is evidenced by the fact that in the year 2001-02, the commission received in total operating expenses $26.3m yet, in this budget, 2003-04, it receives only $27.2m. That is a marginal increase on any analysis, and it does not take account of inflation, nor does it go any way at all to addressing the crisis that the industry is facing, which the minister himself outlined in an answer to one of my questions. I do not think it is good enough for any government not to support an industry that is so crucial and critical to an economy such as the Northern Territory’s.
In relation to various budgetary questions, it was obvious, in my view, that the minister did not know much about it. It was obvious to those in the room as well. For instance, the total operating expenditure for 2003-04 was $27.2m, compared to $28.1m in 2002-03. Now, $27.2m is not more than $28.1m, and the best he could do to explain that was that the apparent reduction somehow takes into account the transfer of the Holiday Centre to Territory Discoveries. But the maths simply does not add up and the minister was clearly very confused about funding.
It was unfortunate that when asked about the high percentage of visitors from the ACT and NSW, an acknowledged significant market segment for the Northern Territory, the minister had no idea whether any television or newspaper advertisements had appeared in those jurisdictions in the preceding 12 months. He admitted that there had been no television advertisements promoting the Northern Territory in the last 12 months. He did not know what the advertising spend was for the last 12 months. He did not know how much the It Will Never Never Leave You campaign was, and it is a significant campaign because we are on the edge, we need something to rescue the industry. Not only has government and the minister failed but, in respect of what is perceived to be a very significant marketing campaign, the minister, although he will launch part of it next week, really does not know very much about it.
He did not know whether the Northern Territory Tourist Commission made a bid to host ATE next year. That was extraordinary, because everyone else knew, and I fail to understand why the minister did not. In relation to the regional tourism associations - significant peak bodies or lobby groups and representatives of tourism operators in the Northern Territory - he was asked whether he made any effort to represent the needs and aspirations of the industry by requesting an increase in funding from his Treasurer. The minister rambled on, and eventually it became abundantly clear, through his failure to answer the question, that in fact he did not lobby, or do his job properly, to secure an increase in funding to the very vital regional tourism associations. That is a disgrace. Even if the minister did make an effort to improve the lot of the regional tourism associations, then he did not succeed and he should have tired harder. However, on the basis of his answers today, it was abundantly clear that he did not lobby for the industry, because had he done so he would have said so.
Furthermore, it was extraordinary when the minister was asked about tourism development, which was the second output area. There were two before the non-specific output areas, but there were two output areas in this budget: one was marketing; one was tourism development - only two. Very different from a whole lot of other portfolios where there are many output areas. This bloke only had two. I asked him about tourism development. In fact, I asked him how much of the commission’s budget in percentage terms was devoted to tourism development in 2002-03. The minister answered:
- What, specifically, do you mean in terms of tourism development, member for Araluen?
- With respect, minister, what an extraordinary question.
He then sought some advice and gave me the figure - only 5% of the NTTC’s budget is devoted to tourism development. He then went for a bit of a drive around the countryside in his answer but, at the end of it, it really was made abundantly clear by this Minister for Tourism that he had no idea what tourism development was. People are employed in the commission to work on tourism development; it is a pivotal part of the future direction of the Northern Territory Tourist Commission. It would appear as though the minister has not even read the commission’s strategic plan.
Some of the things that I have mentioned are more significant than others, but a very clear picture emerges from a summary of the minister’s performance today in relation to his portfolio of tourism; that is, that the minister just does not have his head around it. I thought I might be able to get some sensible answers, but that was not to be. I will pass on my comments in relation to the minister’s performance to members of the industry. Many of them know that the minister is light on - and I am being polite, but they do know that he is a bit light on. Some of his answers today will confirm, if their views needed confirming, and his performance will make them more resolute in working out what can be done for the industry by working around the minister. I suggest to members of the industry that they, as many of them are already doing, bypass this minister and see if they can get another minister in the Labor government to help them, because it is very clear that this Minister for Tourism simply will not.
Mr KIELY: Mr Chairman, I would like to add to the debate on the Estimates Committee. I found it a far better and orderly system this year than last year’s, where we had all those questions tabled and everyone lined up in quite an adversarial situation. I found that, by comparison, this year, with allocated times for people, ministers knew where they were starting and finishing talking about their portfolios, the opposition were able to count on what time they would start and finish, and public servants were able to be prepared, and to be in the room with their minister to provide good quality, in-depth responses to the questions put to them. All of these things, put together, and the mechanics of the Estimates Committee, were far superior to the year before. I also found that the dynamics within the committee were pretty good, and I would like to extend my thanks to the Chairman for the fabulous job that he did. I would also extend my thanks to the two members of the opposition on the committee. I thought they did a pretty good job as well.
Mr Ah Kit: Average.
Mr KIELY: No, I will give them praise there. When you think about how it went last year, compared to this year, it was pretty exceptional. Sure, we can do with a bit more refinement; working up to midnight, and having people waiting around for maybe a three minute interview, or availability for questioning, needs to be looked at. We can improve in subtle ways. I am not calling for a wholesale review, but more of a refinement of the process is how we have to go on this one.
I will be very supportive of keeping fixed times; four-and-a-half hours per minister, with seven-and-a-half hours for the Treasurer, is quite ample. With last year’s format, we had a total of 30 hours. This year, parliament had 43 hours of exposure for the ministers and departments so the budget to be interrogated. The previous best record we ever had was 41 hours in 1996. Therefore, for the opposition to be saying that this is not very good, and they do not get time to interrogate the budget, is not quite right. The figures just do not prove those statements.
I would also like to point out that having radio and TV in the room at all times during the hearings was a very good innovative way to go. It keeps everyone focused. It also has a moderating effect on behaviour, so that is a very positive thing. I will always be supportive of open government, and we can do that by cultivating the media in there. That is wonderful.
I noticed quite a number of the shadows going through were saying: ‘We do not have time for this question, or we do not have time for that’. I believe there were a few distractions leading up to estimates, which perhaps did not help them in their preparation. Apart from that, next year they will be more tuned in and the quality of questions will be a lot better. I would give this word of, not caution, to our ministers: I believe they will be better prepared next year and the questions will be of a higher standard. That is a wonderful thing, because the people who benefit most out of this will be the people who we serve. I am all for more incisive and decisive questions.
I am supportive of the shadow being the first one up and exhausting the questions, but I would also ask the shadow to be responsive to local members. What the shadows did in their efforts to try and humiliate ministers - that is why they were off, because they were not out to interrogate the budget, they were out hunting and trying to humiliate. I would like to see them be more considerate and let local members question. The only backbench member over there, member for Macdonnell, only asked two questions in the whole session, where he talked about his own electorate issues. If they cannot even organise to get their own backbencher in there - they have only one - then they should look and be considerate. Now that they have front and backbenchers, they need to think about that. However, we will leave that one for them to do.
They did do some incisive and good digging. However, as I said, they were playing the man not the ball, and this is where they went astray. There were three instances that I would like to bring to people’s attention, because this is what you get when you interrogate the person not the budget – right? You were doing the wrong thing - you were playing the man, not the ball. What did they do? We had the shadow Attorney-General digging away looking for Chardonnay-sipping Laborites who were on the Attorney-General’s payroll – as though we were only hiring Labor attorneys, as he said. The Attorney-General tabled the report with all the payments. What did he do? He went down to No 4, nearly $400 000 - Withnall and Maley. There is a good Labor gang, if ever I heard one. That means that the member for Goyder, who is always on about being on the lookout for Territorian taxpayers’ money, gets something like $0.5m from Territory taxpayers when you wheel his wage into it - $0.5m. He is looking after Territorian taxpayers, that member. He is a good local member, he is worth $0.5m - good on him. There is one that went awry on them.
We were going through police numbers and what happened? Out of the mothballs crept the skeleton. Out it crept and it was all over - it embraced the shadow minister in its deathly clutches. Why? Because he was shown that all he was good for was recruiting paper police. The opposition has to be aware that things will come back to haunt them. This is what happened here because, once again, they were interrogating the man. They were not going for the figures, and I would really tell them to be cautious on that one.
The third one is a crackerjack – this is the best of it all - when the police minister actually tabled a set of minutes from the Alice Springs CLP Branch about the crime rally there, because the opposition were talking about crime in Alice Springs, the police resources and how we are using them all up in Alice Springs on a wasteful parliament sittings there for the people. The minister read from Hansard where the member for Greatorex explained that his phone number was on advertisements for a constituent. He said in parliament that he was only looking after the constituent because he asked, and it was not a CLP rally, there was no political interference. Then the member for Drysdale backed him up and said that no, it was not a CLP trick. Then, in the minutes of the meeting of Wednesday the 18th – I would like to table these minutes – it says:
- Law and Order Rally.
A motion was moved:
Thanks to Mark Bunting & Max Webster for their work with the law and order rally.
The minister pointed out that Max Webster was not a constituent, as the member for Greatorex claimed. What the minister did not really point out, and I should point it out now, is that where it has who was present at the meeting and the apologies, whose is the first name we see present? Mark Bunting. In the apologies, who do we see? Max Webster. These two individuals are card-carrying members of the CLP Alice Springs Branch.
Madam Speaker might seriously want to look at this because, going by these minutes, these people are members of the CLP Branch who were thanked by their branch for their efforts in organising the rally, and Dr Lim said: ‘No, they were not’. He said he did not know them, one was just a businessman. I believe there is a serious breach here, and Madam Speaker should have a look at that. I will table this document and I urge and encourage Madam Speaker to have a look and deliberate on just what this means for those two members who knowingly - I would suggest - told porkies to the parliament.
Mr STIRLING: Mr Deputy Chairman, I will be brief. I thought it was not a bad process, considering the year before, which seemed to be cumbersome and burdensome. It comes down to these critical questions. I listened closely to the Leader of the Opposition tonight because, in most part he made a lot of sense, but there are still contradictions in what he put to us tonight. It comes down to this question of the allocation of time – 41 hours is ample. There is no question about the global amount of time being right. It is the sectioning of that time, minister by minister, and how you might do that. I was taken a little with his suggestion that you might look by value spend. If you wanted to declare the Treasurer was overall responsible for $2.5bn, maybe it is just the Treasurer who goes along and cops the 41 hours on his own. Nonetheless, the major agencies Health, Education and Police are coming third in that overall spend; maybe they do warrant more time.
The Chief Minister’s area only spends about $40m, she would not get very long before the committee. With people like the Auditor-General, if we go back to last year and how flawed the process was from the opposition benches, they spent hours grilling the Auditor-General with a budget of about $1.7m or $1.5m out of an overall spend of $2.5bn. They then wondered why they ran out of time at the end, and did not have time to question the minister for infrastructure with about $439m or $440m just in his construction infrastructure program overall.
The Leader of the Opposition seems to suggest that he wants the best of both worlds. He likes the approach of not having the written questions. He thought it went pretty smoothly with questions off the floor, but then he thought that it would be good to have the written questions as well. What system are we going to have here? I do not think you can have both. We have adopted a system that is tried and true across every other jurisdiction in Australia. I do not think there would be any will within the Standing Orders Committee to go back to those written questions. He was quite wrong when he suggested that it was much more burdensome for public servants across agencies to prepare ministers, and prepare documents and books for responses to questions in Estimates Committee process, as opposed to the written.
In fact, one of the major complaints from Treasurer Reed and Chief Ministers of the time under the previous system when we were in opposition - and we were roundly criticised for daring to come forward with, I think 2000 or 2500 questions at the time – was the enormous load and burden that that placed on public servants. Well, I can assure him that I am sure this system is a lot easier workload-wise on public servants, and I do not think we would be entertaining going back to written question format. That is not to say that the Standing Orders Committee ought not have a look at the process and all members be encouraged to put their views forward. Certainly, from sitting there as the minister on both occasions, I found that it ran much more smoothly. I thought the opposition did use its time more strategically in the sense that at least they got to every minister, because that was mandated by a certain amount of time per minister, whereas last year minister Vatskalis failed to appear before the committee.
There were a few little questions along the way. I thought the Government Owned Corporations Scrutiny Committee, with having the CEO and the board chairman there was a very good process. That allowed the opposition direct access to the people who run PowerWater, and I thought that is certainly on good footing and we would not want to be changing that.
I want to add my commendation and congratulations to those of others who have spoken tonight to Elliot McAdam, the Chairman, and member for Barkly. It was an outstanding performance, understated, but a great deal of discipline and strength with the way he worked with that committee. He earned the respect of all members of this parliament with his performance as Chairman. Overall, as the lead person in it, he led the committee through. There are always going to be difficult moments inside such a process and I thought he did an outstanding job.
The other point I make is in relation to questions on the Northern Territory Tourist Commission. We have had a fair amount of misleading stuff from the opposition from time to time on a couple of issues inside the budget, not least being the land rich stamp duty provisions - which is a land tax, the opposition tell us. Nothing could be further from the truth.
Tonight we heard the shadow minister for Tourism saying that the 2001-02 budget of $26.2m, and the 2003-04 budget of $26.3m claims a marginal increase. There are a couple of vital facts missing in this. The 2001-02 budget included capital, the 2003-04 does not. The 2001-02 included funding for the Holiday Centre. You have to make an apples and apples comparison here to get to the truth. To 2003-04, you add $1.5m transferred to Territory Discoveries for the Holiday Centre, and $1.9m capital appropriation and you get to a figure of $29.7m, if you want to measure on the same basis as 2001-02. So, we are talking $29.7m in 2003-04, $26.2m in 2001-02. I put that on the record because it is not good to have misleading information from the opposition sitting unchallenged on the Parliamentary Record.
Overall, it is pretty close. The Standing Orders Committee can seek the views of members again, and there might be some minor changes around the end. However, in terms of interrogation of the budget, the opportunity was there. Maybe the opposition ought to have the liberty of deciding how long they want a minister there. I do not know. That is something that can be put before the Standing Orders Committee.
In relation to this as a CPI-only budget, as was claimed by the Leader of the Opposition, we have put a lot of work, in the time of being in government, into establishing a proper base level funding for agencies. That work is proving fruitful in the sense that we well recognise that the number of times agencies track back through the CEO, to their respective minister, then on to the Treasurer of the day for additional funding because they simply could not make the financial year with the funding they were given, suggests a couple of things. One, the base funding was not right, so they were never going to make the financial year; and two, there was a lack of discipline within the whole organisation, from ministers down. They simply were not driving efficiencies throughout the public sector and it was just too easy.
As shadow minister for Education, year in year out, I would run into people in the street, quite early in the financial year sometimes, and they would say: ‘Education is $5m over’. Then I would catch up with them in the TAB a couple of weeks later: ‘Education is $10m over’. They were the sorts of rumours that used to go around. Health was always in their as well. It suggested to me that the bottom line for the CLP budget was always in trouble because agencies simply were not holding to it.
The changes we made in the semi-restructure at the November mini-budget in 2001 have stood us in good stead. There have been genuine savings across operations of agencies out of that, and there has been a willingness to toe the bottom line, generally, across agencies that was not there before. It simply has to be easier in a mechanical sense, with about 18 CEOs with cheque books out there as opposed to 34 or 35 under the CLP.
Overall, it was a pretty good process. That is not to say that it is perfect. There might be some minor tweaks, as I said, and the Standing Orders Committee ought have the opportunity, as all members ought have, to put those views before their representatives of the Standing Orders Committee and have a look for next year’s process. However, it was a big improvement on last year, and we are getting pretty close.
Mr CHAIRMAN: The question is that the proposed expenditure be agreed to and that the resolutions or expressions of opinion as agreed to by the Committees in relation to the proposed expenditure or outputs with reference to the Appropriation Bill 2003-04, all the activities, performance, practices, and financial management of the Power and Water Corporation with reference to the Statement of Corporate Intent for 2003-04 be noted.
Motion agreed to.
Remainder of the bill agreed to.
Bill reported, report adopted.
Mr STIRLING (Treasurer): Madam Speaker, I move that the bill be now read a third time.
Motion agreed to; bill read a third time.
TAXATION (ADMINISTRATION) AMENDMENT BILL
(Serial 149)
STAMP DUTY AMENDMENT BILL
(Serial 150)
PAY-ROLL TAX AMENDMENT BILL
(Serial 151)
MINERAL ROYALTY AMENDMENT BILL
(Serial 152)
FIRST HOME OWNER GRANT AMENDMENT BILL
(Serial 153)
MOTOR VEHICLES AMENDMENT ACT 2001 AMENDMENT BILL
(Serial 154)
(Serial 149)
STAMP DUTY AMENDMENT BILL
(Serial 150)
PAY-ROLL TAX AMENDMENT BILL
(Serial 151)
MINERAL ROYALTY AMENDMENT BILL
(Serial 152)
FIRST HOME OWNER GRANT AMENDMENT BILL
(Serial 153)
MOTOR VEHICLES AMENDMENT ACT 2001 AMENDMENT BILL
(Serial 154)
Continued from 28 May 2003.
Mr REED (Katherine): Madam Speaker, the opposition supports some components of this bill and opposes others. In the first instance, of course, having called upon the government for a long time to remove the vehicle registration tax unfairly imposed on Territorians, $90 per vehicle additional on their registration, the government has finally done this. It is interesting to note that they have done it in an atmosphere of collecting an additional $27m in tax, unexpected during the course of this financial year. That quite clearly confirms in the minds of Territorians that the $90 registration tax was not required; it was an unnecessary imposition on Territorians, and a particular imposition on business. In moving around the Territory, I spoke to people, many of whom had a second car, which they simply did not bother to register because they were not going to pay this $90 extra tax. It has been exceedingly unpopular, and the government has been forced to remove it. We welcome its removal. It was unfair, unjust and unnecessary.
We support the payroll tax amendment. It is fascinating to note the backflip here by the government which, when it was in opposition, derided the then government for reducing payroll tax by 0.1%, saying that it was just mean-spirited in terms of a reduction, not worthwhile, and any other criticism they could throw against it at the time. We now find the government in the position of introducing a reduction in payroll tax by the very same amount. We do not criticise the government for the reduction, but we do criticise them for their hypocrisy, in that it is becoming all too evident that this government is all too willing to say one thing at one time, and do another thing at another.
This is one of the more blatant examples of, ‘Don’t do as I do, do as I say’, from this Labor government. The backflip that they have perpetrated on this occasion is simply spectacular. It would win an Olympic gold medal. The business community is only too well aware of their berating of the former government for a similar change in payroll tax, and now, their audacity in doing the very same thing. Of course, that is made worse by the fact that, in implementing the 0.1% reduction, the government had built up expectations in the business community that any changes that they made to the payroll tax regime would be far better and more advantageous to those who pay it, than anything the former government did. In that regard, the government feels secure in its position, and is of the belief, mistakenly, that that change has been warmly embraced by business. It is certainly accepted and welcomed by business, but the business folk who I talk to have not forgotten the government’s commitment in relation to payroll tax. They have not forgotten the fuss that the then opposition made about the reduction that the then government made of a similar kind to that which we are now debating. The government should not attach too much warmth in relation to acceptance of this change to payroll tax. Business does see through it. Whilst they welcome it, they welcome it for obvious reasons. However, they also do see the sleight of hand that the government is pulling on them in what it promised to do, what it is delivering, and the fact that it has been duplicitous, to say the least, in its actions regarding payroll tax.
There are some other changes in relation to stamp duty that we support. They relate to the exemptions and thresholds that apply to hiring businesses. They are appropriate and we do support them. I notice on the second page of the Treasurer’s second reading speech:
- I now turn to the Taxation (Administration) Amendment Bill 2003 and the Stamp Duty Amendment Bill 2003.
The government is concerned about impediments faced by business …
Well, they should well be concerned about impediments faced by business, because business is certainly concerned about them. Business is not at all happy with this budget regarding what this particular legislation is going to deliver them. They are not happy in the shadow of the fact that they are paying an extra 8% for water charges, over and above what they were paying two years ago; they are paying a HIH levy; they face land rich taxes; they have been paying an extra $90 on their registration; and they have contributed $27m extra in taxation over the last year, over and above what the government expected it would collect.
The business community is not happy with what they face regarding additional costs from this government. They believe that there is a particularly hollow ring in the statement ‘impediments faced by Territory business’ coming from this government which has, ever since it has been in government, placed more impediments in the way of business, more imposition in responsibilities and red tape for business to comply with, and has contributed considerably to the additional costs of business. You only have to drive down the track and talk to people - whether it is a motel operator in Pine Creek, small business in Tennant Creek or Alice Springs, business in Katherine, and there are many of them around the city of Darwin - who are facing continuous additional costs and red tape because of the actions of this government. It is all very well for the government to refute those allegations, but the fact is that they are clearly recognised and are not welcomed by the broader business community.
I will now talk about the land rich provisions, and the Leader of the Opposition will do so in more detail. This is but one of the additional implications that business will now face. I believe it will be a disincentive to investment in the Northern Territory. The range of the additional imposition on those persons going into a business is from 0.6% to 5.4%. Taking that into account, a couple or a family wanting to go into a small business now have the potential of having to find more money to meet these land rich provisions.
There are other aspects of the legislation that concern me. For example, in relation to the pastoral industry, perhaps not so much as it relates to large pastoral properties because, traditionally, they have been valued, in the main, on the stock holdings; that is, the number of cattle they have. The number of cattle that they hold is principally what makes up the value of a cattle station.. The land component of the value is usually considerably less, in comparison to the value of the cattle. It may not affect the larger pastoral leases so much. However, I would like the Treasurer, in his response, to explain how it would affect the pastoral industry. Perhaps a good example is the Douglas Daly, where those properties are made up in value terms, in the main, of simply the land value. In fact, there have been sales of properties in the Douglas Daly where there have been little, if any, stock in relation to the sale, and the sole value of the property is then just the land value, in effect.
I would like the Treasurer to explain how those property owners might be affected by the land rich provisions, or indeed, the prospective purchaser of such a property. Given that they have now reached a reasonably high level of development, those properties are selling in the order of $2m to $3m each. They are not particularly large parcels of land, but the business, based on the land, is made up principally of the land value. If the Treasurer could take some time to explain the imposition that will apply in terms of those properties as regards to the land rich provisions, that would be appreciated.
There is growing concern across the business community in relation to this legislation. There is a high degree of anger in the way it has been introduced, and …
Mr Henderson: Helped by you’re the rubbish you put out this afternoon.
Mr REED: … the way that it has - well, I pick up on the interjection from the minister, because that demonstrates the level of arrogance that is held by this government. They are treating the business community and, indeed, other Territorians, with contempt …
Mr Henderson: Annoyed by you peddling lies.
Mr REED: … and that interjection, and the continuing interjections from the minister, demonstrate that contempt. The fact that this legislation was introduced less than a month ago and will pass by urgency tonight, without adequate opportunity for the business community to either become fully acquainted with it, or to be able to approach the government in a full and open way and get fully briefed on the impact of this legislation, demonstrates a government that has become exceedingly arrogant in an exceedingly short period time.
Mr Henderson interjecting.
Mr REED: It is, as I say, a matter of great concern to many people in the business community who do see it as an impediment to investment, and it is an issue the government should not lightly brush aside.
The continuing interjections from the Minister for Business, Industry and Resource Development - a minister who should be concerned about the wellbeing of the business community, and about the concerns that the business community hold in relation to this amendment - and his support for the rushing through of this legislation on urgency, demonstrates his arrogance. It is not appropriate, nor necessary, and it is simply another demonstration of the way in which this government operates.
The other particular point I make regarding that piece of legislation, is that the opposition makes a commitment tonight to overturn it when it returns to government in just two years time. We make that commitment …
Members interjecting.
Mr REED: We make that commitment. Again I note that for the benefit of the business community who are interested in these issues and who will be reading these Hansard transcripts. We make that commitment to the business community tonight, amongst the laughter and frivolity of members opposite. That laughter and frivolity will underscore the importance of our commitment to repeal this legislation when we return to government.
Similarly, we will …
Members interjecting.
Mr REED: I note the ongoing laughter and mirth. It does the government no good, because these are serious issues and they are matters of great concern to the business community.
I make a similar commitment, that the new arrangements to be put in place for motor vehicle traders to collect motor vehicle stamp duty on used cars will similarly be repealed by a CLP government in just two years time.
This is another imposition on another sector of the business community. The remainder of the business community is now saying: ‘Which of us will be next? Which part of the business community will be next imposed upon by this government?’ Its tentacles are reaching far and wide, its impact on the ability for business to continue in an unimpeded way is becoming more serious by the day, and the imposition on business is reaching dramatic proportions. So we make that commitment to the motor vehicle traders that we will also remove this piece of legislation. It is totally offensive that the question of collection of stamp duty on used vehicle sales, when they are traded outside motor vehicle traders, is not being addressed. This is a piece of legislation which is of extreme convenience to the government, that turns motor vehicle traders into tax collectors, but leaves other collection problems elsewhere in the same industry unattended to. Motor vehicle traders are, rightly, very upset.
Questions directed to the Treasurer in Estimates Committee and his inadequate answers have been circulated to each and every motor vehicle trader in the Northern Territory, and the response has been astounding. There has not been a positive one. There has not been a nice comment in relation to this government from that sector of the industry. Of importance is the fact that, nowhere in the Treasurer’s comments, or indeed the second reading speech, has he given any recognition of the importance of the motor traders and the business that they conduct across the Northern Territory. He has given no recognition of the number of people they employ. He has given no recognition to the amount of business they generate across the Northern Territory, and the general importance of that sector of the business community, and the industry has found that particularly offensive. He has, of course, made particular reference to the fact that he finds it exceedingly convenient to turn them all into his tax collectors, without any compensation for costs that will be incurred by all motor vehicle traders. This is something that galls them, particularly because, as they say in their responses to us, that they will have to employ more staff, some of them part-time.
One trader, who employs three people in his small business, and has been trading in the Northern Territory for a long time, is going to have to take on more staff to be able to process what is currently done by the Motor Vehicle Registry or elsewhere in government, so that he can satisfy the wishes of government. He is going to have to suffer the likely difficulties of a person coming into his business to purchase a motor vehicle, who may then, indeed, refuse to pay the stamp duty to the trader, only to find that the dealers are jointly and severally liable. These dealers can see up the road where, if the stamp duty, in fact, ends up not being paid - that is, that the person who buys the car does not do as they say they are going to do, and go to Motor Vehicle Registry and pay the stamp duty - the easiest course for government then to take is not to go to the person who purchased the vehicle to get the stamp duty, but to go back to the motor vehicle trader, who is going to be jointly and severally liable in relation to the collection of the stamp duty. This legislation is offensive in the extreme.
The Treasurer’s response regarding the sale of ex-government vehicles was also offensive to the industry. He simply set the issue aside, failed to address it, and only talked about part of it. A number of dealers have pointed out where he was wrong in the assertions that he had made regarding the government sale of vehicles. He is not going to address that particular sector of trade in motor vehicles. That is offensive to the industry. They have to comply. Government does not have to comply, and government is not going to address the circumstances whereby, in a sale between two private individuals, there is no sales tax put in place. It is the poor bunny who is in business who is going to suffer.
Earlier in his speech, as I said - and I repeat it in the context of the comments that I am making as regards the motor vehicle traders – he said that this government is concerned about impediments faced by Territory business. Well, you are not too concerned, because every opportunity you get, you are pouring more impediments in their way, and businesses are finding it more and more difficult to remain in business under a Labor government.
One issue I would like the Treasurer to clarify in relation to this matter is the level of consultation that has been undertaken between government - I recall in estimates that the Commissioner for Taxes indicated that he or his officers had discussions with the executive officer of the Motor Traders Association in relation to this matter in January or February. What I would like the Treasurer to tell this House and to put on the record, is what the response was from the association during the course of those discussions. Was this proposal accepted with alacrity, or were comments made more to the effect that, ‘We are not remotely interested in listening, the industry will not like it, and go away and please do not bother us, do not put anymore impediments in the way of industry’? I suspect the later was the case.
The other thing I would like to hear from the Treasurer is, why, as Treasurer, he has been gutless - absolutely and totally - in being prepared to face the industry himself. Why, as Treasurer, did he not go to the Motor Traders Association or, indeed, make inquiries of motor vehicle traders, as to what they thought, so that he might get a first-hand impression from the business community on their views in relation to him making them his tax collector. Why did the Treasurer not approach the industry? I did, and had a practice of, in relation to issues of this kind, during the years that I was Treasurer. I was not always happy with the response, but one thing I did know was, I had a personal awareness of precisely what the industry thought of issues that government was pursuing. I hope the Treasurer will clearly enunciate why he has not been to the industry. Perhaps he might be able to regain a bit of ground in relation to the industry’s views regarding this legislation.
I make the point that there are many complications with this amendment. It is totally unnecessary to proceed with this amendment tonight. I believe there will be other amendments required, if not in this act, certainly I would have thought in the Motor Vehicles Act. That legislation which applies to the transfer of registration and aspects of the collection of the stamp duty must be revisited. You simply cannot imagine a means by which these practices are going to be employed under the current requirements, if the industry is able to survive at all under this regime. They will have so many impediments in their way in relation to how they are going to deal with customers, what they are going to do if the customer does not want to pay the stamp duty, and other issues such as the proof of ownership of vehicles, the proof of acquisition from where they purchased the vehicle, and proof of identification that the person transferring the vehicle is the bona fide owner. At present, the MVR requires all that documentation. It just begs the question: should dealers be required to manage transfer processes if the burden is to be shifted to them? If so, what compensation will they get in relation to the costs that are going to be incurred to do the government’s work?
The Treasurer may have answers to those very worrying concerns of industry; there may be solutions. However, the fact is that no date has been set for the introduction of this new collection process. As a consequence of that, there is no need to be rushing this piece of legislation through in regard to stamp duty on these vehicles tonight, because there is an opportunity for the government to fulfil its commitment to Territorians that it would be open, honest and accountable. Open, honest and accountable, Treasurer, means that you will go and talk to the industry - and, hopefully, adopt a practice of doing some of that yourself - so that you will be able to be open with the industry in telling them precisely what their commitments are going to be; you will be honest with the industry in that you will explain fully how this is going to be implemented; and you will be accountable in that perhaps you might be able to explain to them that you will offer them some financial contribution to do your work, bearing in mind that you, in all likelihood, will need less public servants to undertake these duties, and that you may well save money from this. You certainly will, because you will have industry doing work that is currently done by the government.
To rub a bit more salt in the wound, from the industry’s point of view, tonight on the news there was an article that said that over the last few weeks there have been six deaths on the roads in the Northern Territory. The increasing fatality rate on the roads is becoming of extreme concern. The hypocrisy of this piece of legislation, whereby the government is going to save money in collecting stamp duty on the sale of used motor vehicles because of the new practice it is implementing, flies in direct conflict to the fact that the cost to support road safety programs in this budget is being reduced by $170 000. I quote from Budget Paper No 3, page 225, Performance Measures, the Department of Infrastructure, Planning and Environment, where the cost to support road safety programs in 2002-03 had an allocation of $1.42m. In 2003-04, it is going to be $1.25m.
That rubs salt into the wound of the motor vehicle industry and the concerns that they have in relation to what you, Treasurer, are going to ask them to do. At the very time that you are making it easier for government by lowering the cost of collection of stamp duty and, indeed, increasing your chances of collecting more stamp duty, your government is reducing the amount of money allocated to road safety campaigns by $170 000. It is a great shame, it is a tragedy, and the government should be ashamed of itself. However, Treasurer, do not forget, you have an opportunity to explain to us what the industry’s response was when this was first floated with them. I notice that Mr Bevis from the Motor Vehicle Traders Association is in the gallery, and he too might like to hear what you have to say. Indeed, I dare say he would be interested in trying to come to terms with why you, as Treasurer, have not consulted the industry directly, because it is something that I believe you probably should have done.
I turn now to another important component of this piece of legislation, which is yet another imposition on business and industry. That is the Mineral Royalty Amendment Bill, which is going to impact on the mining industry. The Treasurer and, indeed, the minister responsible, are in denial about this impact. They have been denying it all week, indeed, all month, since they introduced this piece of legislation. The fact is that there are many mining companies across the Northern Territory who will be severely affected by this, who will lose money because of it, and who may well be driven elsewhere in their exploration activity. That, in turn, will affect the long-term viability of the mining industry in the Northern Territory, and that is a great shame. That will come about directly because of the shortsightedness of this government.
We do not have to ponder at the consequences of these actions. On the one hand, we have the likelihood of a huge shift of motor vehicle sales out of the motor vehicle industry into the sales between private individuals. That will impact on the motor vehicle traders. They will be laying off staff. Some of them have already made a pretty solid commitment simply to close their business, because the margins in the industry are exceedingly tight already and they just cannot see their way through the implications and the costs that I went through in detail in the Estimates Committee stages as regards that particular imposition. We face the prospect of the loss of jobs in the motor vehicle traders industry, and we face the prospect of a loss of jobs in relation to the mining industry, with a reduction in exploration activity. That comes on top of a declining population, an unemployment rate of 7.3%, a loss of 4000 jobs in the Northern Territory over the last year, and the increase in costs and burdens that this government has placed upon industry.
None of this adds up, Treasurer. None of this adds up to a pretty picture. None of this adds up to giving small business - and small business, I would remind the Treasurer, is the engine room of the economy. Yes, we have to have the big projects. We have to have the railway and the gas, but we have to sustain the small business community because they are there all the time. The big projects come and go. They are very welcome; they contribute significantly to the economy. However, if we do not look after the biggest employer in the Northern Territory, the small business sector, then we are curtains - you can pack up and go home - because they are the ones who employ most Territorians. They are the ones who provide jobs in the regions and small towns across the Northern Territory, in the smaller communities and in the larger centres. They have just about had it up to the neck in impositions from this government. They do not welcome at all the additional impositions that they face in relation to this legislation.
The opposition makes the same commitment in relation to the Mineral Royalty Amendment Bill as it did with the motor vehicle traders imposition and the land rich provisions. In two years time, when in government, we will repeal it. We will make the mining industry great again. We will introduce a clear and beneficial regime that will encourage exploration activity, which is going to be lost through the introduction of the requirements of this legislation, the Mineral Royalty Amendment Bill.
Mr Ah Kit: Another $130m debt, that is what you will reintroduce.
Mr REED: I again pick up the interjections from ministers opposite …
Mr Ah Kit interjecting.
Mr REED: … not just members, but from ministers, because it again highlights the arrogance with which this government operates and clearly demonstrates the fact that they are treating the industry and business community with absolute contempt. It is not sufficient for them to demonstrate that contempt by the introduction and urgent passage of this legislation, they have demonstrate that contempt by their laughter and mirth across the Chamber and other arrogant remarks about this legislation that so affects the business community.
There are components of this legislation that we will support, but we oppose vehemently those issues that I have raised. We make the commitment to repeal those three pieces of legislation because we think that the business community requires more support than this government is affording them. That community has been imposed upon sufficiently over the last two years, more than enough by this government, and they have had enough.
We have heard words over the past week of buoyant economies. That was the Treasurer’s response to the collection of an extra $27m in taxation this year: ‘It is because of a buoyant economy’. Treasurer, had you taken the trouble to go and talk to the motor vehicle traders, you would find that the economy is not buoyant. You would find that there are a lot of businesses across the Northern Territory, in all sectors, doing it very tough. You would find that business at the moment is despondent. You would find that business considers the economy to be flat, not buoyant. You would find that the business community is waiting for you and your government to provide some innovative programs and some hope for the future in order that they might have the confidence to further invest and contribute to the growth of the Territory economy. However, because of the actions that we are debating here tonight; your inability to go and talk to business directly; your ineffectiveness in getting across the real issues of the economy - not buoyancy, but flatness and concern across the business community - then the business community is indeed rather maudlin at the moment. They will not be assisted by these ridiculous measures that you are putting in place, simply to make it easier for the government and, at the same time, more difficult for the business community.
Whilst we have made our position clear, we are realists in that we are aware the government has the numbers to push this legislation through tonight, notwithstanding the growing concern across the business community in relation to a number of matters in it. We are aware that the government is doing that with urgency and treating the business community with contempt, and that it is in denial about the impact that this legislation is going to have on the business community. That is a sad reflection on the government.
In closing, I ask the Treasurer to address the matters I have referred to. Perhaps the Treasurer might come to his senses in his reply closing debate and indicate that he has had a change of mind and has recognised that there is absolutely no need to rush through the legislation on stamp duty as it applies to used motor vehicles and the collection of it by traders, and he will defer that legislation until the impact of it is better known, the scope of activities that have to be undertaken are better known, and an implementation date is known. If he takes all those things into account, that part of the legislation could be deferred. I would like to think that he would even come to realise that, in terms of the land rich provisions, it is no good comparing business with residential, you have to compare residential with residential and business with business. He would then understand the folly of his land rich provisions. He would also, perhaps, extend himself to understanding the impact the Mineral Royalty Amendment Bill is going to have on the mining community.
Mr BURKE (Opposition Leader): Madam Speaker, I make a few comments, particularly with regard to the areas the member for Katherine has indicated will not be supported by the opposition with relation to the Taxation Administration Amendment Bill. As I said in earlier debate, those areas I flagged in my initial response to the budget, in particular the land rich provisions, and the stamp duty impost on motor traders. With regard to exploration exemption certificates, as the member for Katherine said, we also will be opposing that legislation. With all of those three provisions, I give an undertaking that, immediately on obtaining government, all three will be removed, and that is a categorical undertaking.
I say that because I believe, in those three areas alone, it is awfully disappointing to see that, for the sake of what would seem to me to be small revenue increases to government - and in some cases revenue increases, if at all, particularly to the motor traders amendment - one is signalling a message to people who have worked hard in the Northern Territory to develop and expand their businesses, and people who want to invest in the Northern Territory, that this government will not support them in realising or expanding that investment in any tangible way.
Probably the most offensive parts of this legislation - as the member for Katherine pointed out - is the lack of consultation the government has undertaken and also the language that the government, particularly the Treasurer, has used. If you are now a businessman in the Northern Territory who has about $1m worth of assets, you are now considered to be a high flier, and high-fliers should be got, because these high-fliers are avoiding paying the taxation to the government that they should be rightfully paying which, I believe, and they know, is an absolute nonsense. The example the Treasurer used in introducing the rationale for his land rich provisions cannot hold up. If you look at the Hansard rushes, it is illogical in its argument, in its entirety, and that is why business is starting to awaken to what are the real implications of this amendment.
At the other end of the scale, the people most affected by the motor trader stamp duty amendments are the people who are really doing it tough. They are not the high-fliers of the motor trade business, they primarily are not those who deal in new cars, because new car dealers - as we, and the Treasurer, I hope, already know - ensure that the stamp duty is paid, the certificate to purchase is organised, the registration is transferred immediately, and not the least, that they have no more liability for that car once it leaves their yard, particularly if it is in an accident. It is really the fact that if you are now a businessman with about $1m worth of assets, you are now classed in a new category; you are called a high-flier. The logic for introducing it is spurious, and I believe the effect of these land rich tax provisions have far wider implications than have been taken into context by the government.
The other thing I believe is most offensive about these sorts of measures is this issue of stamp duty, because we now have a new tax system in Australia. The new tax system that was introduced into Australia, known as the GST, was not only opposed by the Labor government but, when it was eventually agreed to by all the states and territories, it had, as its central agreement, this: that states and territories had in place some of the most inefficient taxes in Australia and, by introducing a GST, we would gradually get rid of many of those taxes that were inefficient and an impost on business people in particular, as soon as possible.
The fact that stamp duty was not removed at the outset of the new tax system is one issue. However, the Treasurer, I am sure, well knows that one of the central issues for the review of the new tax system in 2005 is the removal of stamp duty on non-residential conveyances. One of the objectives of the GST is to get rid of inefficient state and Territory taxes. Another essential objective of the GST is to get rid of stamp duty on non-residential conveyances. We have a Labor government in the Northern Territory, within two years of that review, now introducing greater imposts on stamp duty to normal small businesses, in particular, the motor traders.
If one looks at some of the Hansard rushes in questions during estimates, the Treasurer stated, in his answer regarding these new land rich tax provisions, that the 60% threshold has now been removed, because the it created a great deal of problems for both the businesses concerned and their accountants and, certainly, for the taxation office, to try and figure out whether a business reached the 60% threshold in its transaction. As a layperson, the way I understand it is that, if you have a business of, say $1m, and that business has more than $600 000 worth of assets which are considered to be land assets, and the remainder of that $1m in the rest of the business - essentially the goodwill of the business - is in other assets, that business then reaches the land rich provisions under the old scheme. Therefore, if you had more than 60% of land, you were taxed at the rate of about 5.4% and, for the remainder of the business, it was 0.6%. That is correct, Treasurer? Right. This is the situation that all businesses work with in the Northern Territory in their transactions.
The rationale for introducing this new taxation arrangement is because some high-flier came to the Northern Territory, bought a hotel - and we all know which hotel - for $15m, and paid $480 worth of stamp duty;. they should have been subject to the land rich tax provisions - they worked the rort and, on an argument of equity, they should pay stamp duty the same as any residential conveyance pays stamp duty in the Northern Territory. That argument just does not stand up. It will not stand up to business now, because everyone knows that business people do not have the advantages - certainly in terms of home loans, which is a simple example - that government provides for certain residential conveyancing. Business has a whole range of other costs that they have to deal with that residential purchasers do not have to deal with. Therefore, you cannot make a comparison between a purchase of a supposed $15m hotel that should have paid stamp duty on a level playing field with someone who buys a residential home in Palmerston. Business is not that stupid that you could make that sort of comparison.
However, that is the comparison the Treasurer made and continues to make, and that is where I believe his argument is fundamentally flawed. If you use the argument the Treasurer made – a $15m purchase paid $480 worth of stamp duty - you are immediately making the accusation that the person acted illegally. They did not act illegally. They transferred the shares of that business in its entirety and, in transferring the shares of that business, they transferred all the assets and liabilities of that business. In so doing, that business then was treated in terms of what value that business actually had. The value of that business was probably, in the share transfer, about $80 000 because, if it was more than $100 000, they would have paid more than $480 worth of stamp duty. If you use the Treasurer’s argument that it was a $15m hotel and they should have been considered as a land rich asset, they should have paid $810 000 worth of stamp duty to the government. The fact that they paid $480, to my mind, shows that, by your own argument, they have acted illegally and, therefore, should be treated for the illegality of the transaction that they made.
The reality is, of course, that on $15m worth of assets, even under the current provisions, if they were not considered land rich, they paid for the transfer at 0.6%, which was in the law as it currently exists. The stamp duty paid to the government would have been around $9500. They did not pay $9500, they paid $480 by your own statement. That company transfer was obviously heavily debt laden, and the asset base of that company, at the end of the day, could only attract that amount of stamp duty.
To try to make the comparison to a residential conveyancing, I believe, is wrong and that is why it will not float in the business community. That is why the business community is starting to wake up to what is going on. It also does not stand up in the logic of what the government is trying to introduce, because what you have now said is that you have removed the 60% threshold. Well, if you have removed the 60% threshold in terms of what is and is not land rich, it would seem to me that what you have to do, therefore, is take away the value of land completely. Rather than under the old scheme, where a business attracted the land rich provisions if it had more than 60% of land in its business package, what you have actually done now is removed that 60% provision. A business that has almost no land, which could not be considered land rich, now attracts the full provisions under your new legislation. You can have a business that has 80% of assets, 20% of land and, if you purchase 51% of that business, under your provisions, you pay 5.4%. I believe that is where the legislation falls and that is why business, more and more, is becoming quite concerned about just how this new legislation is going to affect them.
If you want to bring a partner into a business, and that partner wants to buy more than 51% of shares in the business of $1m or more, you attract this 5.4% of stamp duty. That is a direct disincentive to investment in the Northern Territory. It is a blow to people who have put a lot of time and money into growing their businesses in the Northern Territory. Many of those people who would be along Winnellie Road are not high flyers. They are people who have built up their businesses over many years, who are now going to, if they want to sell that business, have to find purchasers who are prepared to pay a far higher amount in stamp duty than would have been the case in the past.
I find it the wrong message that we, as a Territory government that has to compete against more mature governments, in terms of their asset base in other parts of Australia. We are trying to attract investors to the Northern Territory, and look after people who have built their businesses in the Northern Territory. These new provisions, to my mind, are a clout in the face to Territorian businesses; they are now considered high flyers who will look at every opportunity to rip off the government. They are a slap in the face for anyone who wants to now look to the Territory as a place that is attractive in providing opportunities to invest in. It is also a slap in the face for the whole new taxation system in Australia that has, as its objective, to get rid of stamp duty on non-residential conveyances.
We will be ensuring that business is aware of the impost of this. More and more of them are becoming aware of it, and are realising the con that has been worked on them, and I am sure, as the member for Katherine said, they will, at the very least, not understand why this government has rushed through this particular legislation this evening, when there has been no consultation of any degree with business, and no necessity to rush this legislation through at the moment.
The second area is the area of stamp duties to motor vehicle traders. As I said, I cannot understand where the government benefits from this methodology. On the one hand, it does not do anything to attract an improved system for those bigger dealers who would be dealing in new cars, because they ensure that all of those things are paid before the car even leaves the yard. Where it really hits is the second-hand dealers. They are really concerned because, no matter what sort of bureaucratic changes you make, or what you say to streamline it and ensure that government gets revenue a little earlier than it might have before, at the end of the day, they see themselves playing on an increasingly uneven playing field against competitors that the government is doing nothing about. The major competitor, as the Treasurer should well know, is the private-to-private sale. That is what they are up against. They are not only up against the private-to-private sale, they are up against the government itself by the way the government disposes of NT Fleet vehicles through its auction process, where it considers its own dealings to be private-to-private sales. It does not take upon itself any of these new stamp duty provisions.
What the government should have done is recognise that, no matter what sort of changes you make, a $10 000 car, in the punter’s mind, is still a $10 000 car. When he walks into that car yard, he probably only has $10 000 in his pocket. If he has $5000 in his pocket and he is looking for a $5000 deal. What the dealer is trying to do is get the value for the car, given all of the costs that he has to pay in any case and the warranty that he has to put on, and close the sale. Now he is presented with a situation where, when he closes the sale, he then has to put on top of that sale an additional cost to the customer. He has to say: ‘What would have cost you $10 000 is now going to cost you $10 000 plus GST’. In many respects, that is going to lose the sale.
That is what they are concerned about. It is not about some great streamlining of the bureaucratic process. They are concerned about the fact that they are flat out selling cars from week to week. They are flat out staying in business. We know that the last thing you do to a punter when you have closed the sale is say to him: ‘By the way, you have to give me the stamp duty’, because that is the sort of thing where the guy turns on his heel and walks straight out the yard. That is the fact of it. They are in the business every day, and they know what closes the sale and what loses the sale. That is why they are so angry.
They are also angry about the fact that the private-to-private sales are not paying GST or stamp duty and the government is doing nothing about it. That is why you will not convince them that this is good legislation. They are upset and they will get more upset. You will force some of these traders into a situation where they themselves will be breaking the law. When they know the guy is only going to pay $5000 or $6000 for the car, some of these small traders are going to write down the car. They are going to say, at the end of the day: ‘You only have $5000, mate, so we will write the car down to reduce the stamp duty’. The revenue to government is going to be less, but they have still closed the sale. That is the situation you have put these traders in. To ensure that they can stay alive and feed their families, some of them are going to have to resort to breaking the law.
If you had any common sense about this arrangement, you would consider the fact that most people, when they sell a car to a used car dealer, that car has not much rego on it. I bought a car for my son recently and there was bugger all rego on it. Most people, if you got to car yards …
Mr Stirling: Pity he didn’t drive it.
Mr BURKE: That was a flippant remark, but that hardly deals with the situation. You go to most car yards and see how much rego is sitting on those cars; it is not a lot. They have to renew their registration. The issue is that, if they are not renewing their registration within 14 days, the government wants to find a way of somehow, not even getting more revenue, but recouping delayed revenue, because these people are not paying their stamp duty within 14 days. It is a hell of a mechanism you have picked to rectify it. The government should do something about the fact that, if you purchase a car from a used car dealer, the fine that you will incur if you do not pay your stamp duty within 14 days would be increased. That is a sensible move; it is no impost to the trader, but it puts a greater responsibility on the purchaser.
I would have thought that the government would ensure, for example, that the certificate of purchase is in the hands of the MVR, probably the same day. That is something that the motor traders themselves might do, or have to do, so MVR knows that they have the responsibility to get the stamp duty within 14 days. What you have done is found some mechanism that might seem bureaucratically easy. However, think about the reality of the person who is out there trying to make a quid in a small used car yard, trying to survive in very competitive circumstances against government and private-to-private sales, trying to compete with GST imposts even on their warranty, and problems with employees. The fact that you have just added this other one, which may sound not a big impost to government - it is certainly easy for government to flick pass the problem to the dealer - puts an incredible impost on a person who is already a tax collector for government through GST. You have now made him an additional tax collector for another tax. Not only that, a tax that we all should be working to get removed, not to put on to used car dealers.
I have received correspondence in my office, from the Motor Traders Association, and individual dealers. I asked them for their views and we have had a large exchange of information. Included in that, Treasurer, is the common cry: ‘Why were we not asked? We are the ones who are out there struggling in business. Why didn’t this government take the time to ask us about some of the practical problems involved in this and maybe we would have told them’. You had the chance and, unfortunately, want to bludgeon through this legislation. You have the chance now to say: ‘Okay, we heard you, we are listening. This open and honest, accountable government is listening. We will delay this legislation’.
However, the Treasurer has come up with some airy-fairy excuses, and says: ‘Oh well, we will continue to talk with the industry and eventually get this legislation in place, and everyone will be happy’. Oh yes, ‘Tell that to the marines’, the traders are saying. If you are serious about listening to them, and doing anything about this legislation, well get rid of it. As I said, if you were honest regarding the new tax system for Australia, you would not have even considered it. We should be looking at ways to get rid of stamp duty, not put greater imposts on those who are trying to survive in business today.
We will not be supporting the Taxation (Administration) Amendment Bill. As the member for Katherine said, there are some areas of the bill which we do not oppose but, because it is encapsulated in the one piece of legislation, we will be opposing that legislation in its entirety because of the two issues there: the changes to the land rich tax provisions, and the changes to the stamp duty requirements for motor traders. We emphatically oppose those two provisions in the legislation and. therefore, will oppose the bill.
As I said, with the exploration exemption certificates, no one suggests it is working as well as it should. No one suggests that, in its intent, it cannot be improved. We are saying it should be improved, with incentives, so that we can see real incentives for explorers from anywhere in the world, or Australia, to come to the Northern Territory and use Northern Territory businesses. We have a university here that is trying to get more and more business, to try and get itself a greater recognition around Australia. One of the basic things of exploration, I would have thought, was some of the assaying they do and, certainly, some of the anthropological research they have to do. I would have thought that is one of the things you would put in exploration exemption certificates that really has, as a focus, to try and get more work for the Northern Territory University, and also more incentives overall for Territory businesses.
It seems, with those three pieces of legislative amendments, the government has had its eye only to the revenue measures that it can get, and no eye to, not only the politics of the issues, but the impact that it has on business people in the Northern Territory who, if you have a $1m worth of assets or more, you are now considered to be a high-flier - which I believe is offensive in itself. Secondly, for those who are struggling, particularly in the second-hand car business, you have put on them an impost that for many of them it will be too much to bear. Therefore, we oppose those pieces of legislation.
Mr DUNHAM (Drysdale): Mr Acting Deputy Speaker, the inevitabilities in the world are death and taxes, as people tell us, and the other inevitability is that a Labor government will increase taxes. That is what we have before us. We know that in the budget papers the government has found that it has increased taxes by 12% - its own source revenue - and we are finding other measures here to garner even more revenue. Other speakers on this side have talked about the Stamp Duty Amendment Bill and the Motor Vehicle Amendment Act, and I shall talk quickly about the Mining Royalty Amendment Bill.
It has been spoken of twice, at least, by the Treasurer; he has almost parroted the same speech. It has also been spoken of by the minister for resources who has responsibility for mining. The essential question is this: we want to encourage exploration - that is correct. We want to encourage local purchase - that is correct. If, in the high risk category of exploring for mineral deposits somebody actually takes it through to a mine, we are happy to trade off a little of that royalty, in the full knowledge that for every miner, there are 2.7 jobs sitting out in the community of people servicing them. All wrapped up in a package, this is a win/win for everybody. The only people who do not win are people across the borders who would like to provide more trade to our jurisdiction, and also Treasury, who are hungry to garner as much revenue as they can, and they have a pliant government who have a similar disposition.
I would ask the minister to look at this yet again. He has given an undertaking that he will monitor its effect. But do not forget, there is $280m worth of certificates out there, which means that there is $280m worth of local purchases being made, at least. The capacity to trade them off against up to 30%-something of your mining royalty is a small price to pay, given that, if a mine is up and running, these things have the potential to virtually create a town. Look at the town of the Treasurer, for instance, Gove, and the fact that its whole rationale, its whole reason for existence, is an ore body. It should not be a hard argument for you to mount.
With regard to the Motor Vehicle Amendment Act. Every member of this House by now must have had some comment. I would be very surprised if there is an electorate out there that does not have a couple of motor vehicle dealers in them. Certainly, with mine covering the industrial area of Winnellie, Berrimah and into the city, I definitely have several. They have made a point of contacting me. There are a number of issues here, and I talked to the Minister for Transport and Infrastructure about them. I told him that we would be debating this bill. He made an undertaking to provide me with certain information, which is yet to arrive on my desk. The information is that there is a great suspicion out there that this is a tax that is being evaded, and Treasury is not looking for this to be revenue neutral, as was discussed in estimates.
This is not an efficiency measure; this is a measure of trying to pick up tax that the government itself can do. There is a $2000 fine for not paying your stamp duty and organising the formal transfer of a vehicle within two weeks. That fine, as I understand it, has yet to be invoked. I have asked the Minister for Transport and Infrastructure to provide me details on the level of delinquency in this area.
Anecdotally, I have heard from one licensed motor vehicle dealer that he has sold about 200 cars every year he has been in business. He did a search and found that about 500 of them had never had the stamp duty paid and never had a formal transfer of papers. In the case of a traffic or parking infringement, he gets these notices regularly sent to him, and I understand that is fairly typical of most of the used car yards. They merely go in and present their corresponding bit of paper that says it has been notified to the MVR and it is the new owner of the vehicle who is, in fact, delinquent.
This raises three or four issues for government. One, that this is a lot of foregone revenue, and I can understand why you would want to get someone else to pick it up, given your abysmal failure to pick it up in the first place. Two, the fine of $2000 has, I understand, never been invoked. Maybe that is an area you could look at in terms of carrots and sticks - it is a pretty big stick. Three - and this is probably the most concerning one - given that if these people present to have their car registered on the expiration of their registration, they will be hit with the stamp duty. So what has happened? They ain’t registering them. You are talking about lots and lots of cars out there that have been purchased, the stamp duty has not been paid, they are not being pursued through MVR and, in all likelihood, a high number of these vehicles are not being re-registered. For this, the government wants to flick it to the poor bloke who sold the motor car?
Without putting too fine a point on it, a lot of this clientele is Aboriginal, and it presents a whole new series of problems for them that come into the category of additional resources. That is the difficulty with determining identification and the like. There are some great difficulties with this. I was told a story that I found quite hard to believe, but I am assured it is true, about a person who wanted to purchase a vehicle but did not have a driver’s licence. They wanted to purchase it for someone else. They had the credit rating to enable them to purchase it, and they were happy to provide it to a person who had the driver’s licence. The person did not have adequate identification, not even a driver’s licence, and they were told: ‘Don’t worry, you can use your health records’. I can assure you, they are entirely confidential and private, and should not be used by any government department as some means of ascertaining the identity, age and status of people.
This is an area that government has found problematic. With all its resources, with its capacity to pursue people and fine people it has found it problematic, it has done a duck shove. Let us not beat around the bush, Mr Treasurer. What is happening here is, you have several problems on your hands that you find difficult to deal with, so all you are going to do is punish a new collector. And before we hear the scuttlebutt from the other side about: ‘Oh well, it is GST, and they do it anyway, and you guys are GST supporters’, and that sort of stuff, this is a new proposition. It comes on top of an already overwhelming burden that is carried in this particular industry in terms of warranties, the inspectorial functions that go with licensed motor vehicle dealers, and all that goes with running a small business in any community.
Returning to the Mining Royalty Amendment Bill. We have talked about this in our party room and, as with the other two bills, on return to government, we will be looking to ways of sending this particular chart northwards - not southwards, as the Treasurer seems intent on doing. We will be looking for more capacity to encourage people to buy locally. We will be looking for more instruments, enticements and whatever, to have the mining industry spread that vast wealth that often comes with mining - 22% of the Territory’s GDP comes out of this particular area and, as I said, it has immense spin-offs in every community where there is an ore body that is being harvested. I ask the minister to look, not just at how we can get more money into the Treasury coffers, but how we can use our taxation policies to the best advantage of the Territory citizenship. If that means you not getting a lot of money that you can then deploy through your government activities, maybe it is by giving relief. Have you ever thought of that? By giving relief, maybe the benefit that spins through to the community is something that is tangible and creates an atmosphere in this place of investment and attracting people to the Northern Territory.
The proposition I have given to the minister is that there is a Treasury point of view, which he holds and has now parroted twice, and there is a view held by the miners. There is capacity to reconcile this, and the way to do it is to get Percy Allan, for instance, or Access Economics. Let us get somebody who can independently analyse it, who is acceptable to both parties, and do an assessment of the economic imperatives that hang off this particular taxation measure. If it is found that it is a retrograde tax, the minister should rethink it.
He certainly did not go to the lunch that I and his colleague, the Minister for Business, Industry and Resource Development, went to, but I can tell you, there were people who sat in that room who will be tens of thousands of dollars worse off with this measure. The minister should at least ask those people why that is so; how this can have such an impact; whether the thing was efficient; and whether these people are some sort of predators out there in the industry who have found out how to get through this government incentive. It could well be that he finds out that there are businesses out there that are thriving off this; that local purchase is encouraged because of it, and that it has the potential for encouraging exploration.
Maybe all of those things can be wrapped up into another package, but it is not this package. I am authorised, on behalf of the CLP, to say that, on the return of the CLP government, we will be addressing this area and looking for further incentives to purchase locally, to give encouragement to explorers, once they are here, to look to local suppliers. We will be quite happy to look at trade-offs of royalty provision, given that, notwithstanding that you might have a diminished royalty return, you may well have a massive boon to a community like Tennant Creek, which was spoken about in glowing terms because of the higher prospectivity associated with the opening of a new mine there. That is where we will be going.
The payroll tax amendment is applauded by business. It is another chart they would like to see go ever southbound and, hopefully, even reach its destination of zero, so long as the trend is there. As the shadow Treasurer said, there is some disappointment in the business community that these increments are so slow, but at least it is heading in right direction.
Mr WOOD (Nelson): Mr Acting Deputy Speaker, I would like to address the tax amendments, specifically the bill regarding the land rich provisions and changes to the manner in which stamp duty is collected from licensed motor vehicle dealers.
Sometimes things are not all that they seem; this is especially so when you look at this legislation. First, to run this bill through on urgency, without giving myself enough time to look at the history of land rich provisions, the ramifications of what is being proposed, a comparison of other states, and what effect it could have on business investment in the Territory, is a shame. I am grateful for the government’s briefing but, as you know, this was at a time when we were preparing for the Estimates Committee. There were other committees that I had to attend, there were a number of other bills that had to be considered, and there is the normal workload one has to do in their own electorate. To get a handle on a complex bill like this is not easy in three weeks.
It is also disappointing there has not been enough work done before this bill was introduced in discussing the issues with business. I recently received a copy of the New South Wales budget, which was delivered on Tuesday. It has a section headed ‘Transfer Duty Base Protection’, which says:
- Treasury is developing more comprehensive measures to protect the revenue base. Relevant parties
in the property industry are being consulted to ensure that provisions will not unnecessarily impede
business activity.
So there is another government having the same concerns as the Northern Territory government, but it has flagged that it is not going to do anything until it consults with the relevant businesses involved which will be affected by these changes.
In the time I have had to understand this bill, I have had to rely on advice I have been given by the government at the recent briefing, and by others, in trying to determine whether this legislation is really about inequity or reducing avoidance of stamp duties, or is it just a way of increasing an existing tax, or the redecorating of an old tax into a new tax.
Let us look at the legislation and what was said in the second reading speech and at Question Time of the previous day. The first concern raised by the Treasurer was the matter of inequity. The minister said that if you buy a house worth $250 000 to $300 000 you will have to pay up to $9000 in stamp duty. He went on to say that this compares with the case of a purchase of a hotel, valued at $15m, and the new majority shareholders only paid $480 stamp duty. If something is inequitable, should it not be compared to the same thing? In other words, we all pay stamp duty on our houses, so is it fair to compare the amount of stamp duty charged when buying a business against that charged when buying a house? I do not believe so. For equity, should we not compare apples with apples, not oranges? Or, in other words, business with business, and houses with houses. Businesses pay many other taxes, such as payroll tax, lease duty, hire arranging duty, higher local rates, duty on insurance polices, the work health levy, and nor do they receive the first home concession, or the rebate for the principal place of residence. So the purchase of a house is not the same as the purchase of a business. Are we then comparing the same tax with the same tax? The minister, when he speaks about the stamp duty of $9000 on a house, is actually talking about a conveyancing duty. In the case of the $15m hotel, the $480 stamp duty mentioned was, in fact, share duty, and that was low because the value of the shares were low, due to large liabilities on the property. The minister was comparing two types of taxes.
This leads into the second matter that the Treasurer raised: limiting avoidance opportunities. What the Treasurer is saying is that we need to change the rules to stop this, but don’t we have to be careful here? The land rich provisions passed in our parliament were introduced to avoid avoidance. So is it true that companies using the law as it stands are avoiding tax? It is one thing to avoid tax, but it is another for companies to pay only what is permitted by law, or only what is required, without being regarded as tax avoiders. I believe the matter of tax avoidance, as a reason for the changes, is a furphy. If the government believes there are inequities caused by a purchaser (a) being able to purchase a majority share in a land rich property and pay less stamp duty than purchaser (b), who purchases a similar property, which was not owned by a corporation and, therefore, had no shares because of the existing rules on land rich property purchases, then perhaps there may be a reason for looking at the rules.
In Budget Paper No 2, page 53, the government states that the proposed changes align the duty consequences of indirect and direct acquisitions in land. The problem I have is that the government uses inequity arguments based on stamp duty on a home, and anti-avoidance arguments to argue its case. Those arguments, as I have shown, do not stack up. What the government is trying to say is: ‘We will scrap the 60% land rich provisions so that the value of land and fixtures will attract stamp duty or, more precisely, conveyancing duty’. However, if the government is trying to argue the case for aligning the duty consequences of indirect and direct acquisitions in land sales, why keep the 50% share provisions? Why allow someone to purchase 49% or less of shares in a company which owns land, and allow that someone not to pay any duty? Is not there still inequity? What I am trying to highlight is that there has been no debate about why these existing provisions were enacted in the first place. Why were special provisions given to people buying shares in a land rich company?
I make a note that I did ask that question during Estimates Committee. I received an answer, but the answer still did not say why the 60% - in some states the 80% - rule existed. He talked about how people were packaging up shares in a certain manner, and this legislation was introduced to stop this avoidance. So we have this legislation that was in place to stop avoidance, and now we are changing it because people are saying that it is now being used to avoid tax. There certainly has not been enough discussion on what the original reason for this tax was. Of course, there is no proof that there was tax avoidance in the case of the $15m hotel.
What is being put forward seems to be based on reasoning which, on the surface looks fair and reasonable but, in actual fact, it seems to be based more on ‘what we want, and now let us find something to support the argument’. At the same time, we need to look at whether there are implications that may not have been foreseen. If all other states have basically the same rules as we have presently, except for the ACT, will the new stamp duty charges be a disincentive for companies to invest here? Will the changes mean that companies will tend to only invest in businesses without land so as not to attract a stamp duty? Will local businesses who want to expand their business be less inclined to expand if they see the new stamp duty charges as just another tax, especially after they were so relieved to see the end of the budget improvement levy?
If it is the case that companies are attracted to invest because we have no land tax, will the new provisions make them think twice? What effects will these changes have on our sluggish economy, and will not businesses query that, when we are receiving more money from the Commonwealth through the GST, why are we changing the rules on stamp duty? I cannot give definite answers to all these questions, but surely the government needs to look at the consequences of its actions carefully.
Is it a reasonable thing for the government to want equity and to stop people avoiding their obligation to pay tax? I can understand where the government is coming from. However, what is good in theory, in the glasshouse, and in the rarefied atmosphere of Treasury, may not be good in practice. This bill seems to me to be similar to the Temporary Budget Improvement Levy, which I opposed last time. That bill was not thought through properly, and its effects were poorly understood although, naturally, the amount of money it would raise was understood.
This new amendment is too rushed. It should not be brought to parliament in this form until the various business and taxation bodies have had a chance to, not only understand the changes, but also fully understand the implications on business and the economy. The government needs to spend more time on seeing what the implications on business and the economy will be. Maybe the benefits or otherwise of business taxing centres overall should be the subject of a full and open review. I do not step back from the notion that businesses should not pay their fair share of tax, but we need to look at the implications of these changes. After all, why were tax provisions brought in in the first place? Why have they been amended so often? Why has it been the case that there has been a special provision for somebody buying shares in a company which owns land? These questions have not been fully answered.
I do not believe the effects of these changes have been thought through properly and thoroughly assessed. Nor do I believe there has been enough consultation with various sectors about the changes. We know that it will earn money, but what are the down sides? For all these reasons, I believe this bill should be withdrawn.
On the stamp duty changes for the motor vehicle people, I also have been lobbied by a number of people regarding these changes. As I have said in the Estimates Committee, this bill, more than any, should be withdrawn. It is in here as a matter of urgency, yet it is not creating a new tax. It is only talking about the manner in which this tax is collected. From what I have read from the Motor Traders Association - and this all started on the day the budget was announced - the first they knew about it was when someone rang up and said there was a line in the budget saying that they were going to be collecting the tax. One might argue that, when you are changing a tax, you do not want to let people know until the budget comes out in case they take advantage of that. However, in this case there is no new tax, no one can take advantage of this, so there really should have been a lot more time for the government to talk to the industry about these changes.
What the government is trying to do is a fair and proper thing:. they want to collect the tax that they are not collecting at the moment. However, they want to use the motor vehicle people to collect that tax. From my discussions with the motor vehicle dealers - and they are mainly small business, I do not think there are too many big people around. There are lots of them around, so I would say their business is a very competitive business and, in their case, every dollar they can make, I would say they are very happy that they have made a sale, because there are plenty of these places springing up all the time.
They have raised these concerns with me about the possibility, when you really pushing for a sale - and as I said, there are lots of competition in the used car business. If the person knows that the sale of the car is worth $10 000, but it is actually going to be $10 300, and the $300 or whatever it is, is stamp duty, then they are going to being doing their best to try and waive that stamp duty. I cannot imagine that too many used car dealers make an awful lot of money, because most of them rent their premises. I would say that, if they do not sell too many cars during the week, they certainly have to pay the rent, the electricity and probably the security, because most of them have to have the security checks. They have plenty of costs, and I do not see too many of them as part of the big new car dealer-type people. These are small people trying to make a quid for themselves. Another concern is that they might have to put on extra staff to collect the money. That may only be for half a day per week, but it still puts an impost on the cost that these people have to find.
I do not know why the government cannot look at some particular way that, included in the stamp duty - and this may not be possible, Treasurer - to make it revenue neutral. Why is there not perhaps a slightly higher stamp duty, and part of that stamp duty then is paid back to the dealer for his or her work? At the moment, the government would get all the money and the dealer would have to do the work. I wonder whether there are other ways the government could look at trying to collect this tax with the help of the motor vehicle dealers, but putting in incentives that will at least give them the opportunity to see whether it is worthwhile.
What is being done here is, it has been announced in the budget, they are told this is what is going to happen, and it is more a case of lump it or like it. If the government had given itself more time, perhaps it could have avoided some of the angst that I believe is occurring out there between the motor vehicle dealers and the government. Perhaps a solution could have been found which would have been beneficial to all.
I will not support this bill in its present state. I do not think there is any need for urgency. As the minister himself said, there is no date for which this is to be implemented. If that is the case, that is more the reason why we should leave it for the moment - withdraw it, and go back and talk to the Motor Vehicles Association. I am sure, if everybody got together in an atmosphere of less urgency - as both sides agree there is an issue there where quite a bit of tax is not being collected - and perhaps bring in the other parts of government who should be making more of an effort to collect the tax under the present legislation, we could see whether a system could be worked out which would do what the government is trying to do. That is a fair thing, they do not want to see tax not being paid. You probably could come up with an answer. However, if you are going to do it this way, all you will get is angst. I know governments do not like too much angst if they do not need it, but they could come up with a solution which would be satisfactory to all parties. I would ask for the withdrawal of this piece of legislation.
On the other piece of legislation, which was the Mineral Royalties Amendment Bill, I would support that bill, with the proviso that the minister has said he will look at reviewing it. He has brought some changes in. I am not an expert on mineral royalties and exploration, but would like the minister to come back to this parliament, perhaps in 12 months or so, and report on what effects the changes have had. This bill is also being brought in gradually, so it might take a little longer for one to see the effects. However, if the minister is going to guarantee that the parliament will see what effect these changes have had on mineral exploration, we can then look at it and maybe, if adjustments need to be made to the act, that could happen at that time.
I am quite happy to support the Mineral Royalties Amendment Bill, but I would not support the other two until they came back to this parliament in a completely different state.
Mr STIRLING (Treasurer): Madam Speaker, I thank members for their contribution. I listened closely to each of the speakers with the points they made. They were, by and large, points that were made during the estimates, and either in reply closing debate or during Question Time in the last week of parliament. If I could go to the member for Katherine, the shadow Treasurer’s, comments first. As I said, I tried to follow fairly closely what he was saying.
The first point I took issue with him over was the fact of the Temporary Budget Improvement Levy not being required, and the evidence for it not being required was the fact that we were removing it. Of course, what he denies in his thinking there, is the fact that we are still, even now, in a deficit situation. Every time we go through a budget cycle in a deficit situation, we are adding to that $1.813bn worth of debt that Territorians have been saddled with. $1.813bn worth of debt is a staggering amount of debt for a small jurisdiction.
The reason that Temporary Budget Improvement Levy went on in the mini-budget was the deceit of the former government in telling us, when they passed the budget here in mid-2001, that there was a $12m deficit attached to that. We relied on that figure. We went to Access Economics with all of our costings against all of our election commitments and they said: ‘Yes, this is sustainable. This is achievable, given the state of the Territory’s fiscal situation at the moment’. It was not known at that point, not until about 10 or 12 days after we were elected, that the $12m was fraudulent. The $12m deficit was somewhere between $126m and $139m and, with due diligence and discipline, we reigned that in to $83m at the close of that financial year.
This financial year 2002-03, we projected and estimated for a deficit of $94m. We are holding, or were on track, at the last estimate, to come down to $31m. That is not a bad improvement over those two financial years, compared with the last two financial years that the CLP was in government. They did not have any strategy in terms of either holding the line or attempting even to reduce the deficit they were running. It ill behoves the former Treasurer to suggest that the fact that we are removing the Temporary Budget Improvement Levy means that it was not required in the first place. It definitely was required, and it was only our due diligence and attention to the bottom line that gives us an opportunity to put something back.
On the question of taxation overall, I go to the Leader of the Opposition, who said: ‘Stamp duty has to go - we have the new tax system, we have the GST. Why are we still raising stamp duty?’ It is a question you could ask every Treasurer in the land. Where does he think jurisdictions are going to raise revenue to provide the services - education, health, police - that he has just interrogated ministers on for three days, if you do away with your revenue base? Those decisions in and around stamp duty are out in about 2005, in discussions with the federal Treasurer as to whether they go and, of course, where jurisdictions then obtain their revenue from if they were to outright abolish stamp duties.
The member for Katherine bemoaned the fact that we were reducing payroll tax. I would have thought business was pretty happy about this - coming down from 6.3% to 6.2%. It is not enough, he said. You have to ask yourself, how on earth did payroll tax get so high in the Northern Territory in the first place. It was not the Labor government that had it up close to 7%. It was, of course, the former Treasurer himself who had those abnormally high in comparison with the rest of Australia. It was the CLP that established those very high rates. We have made a commitment that we will continue to work to get those payroll tax rates down comparative to our near neighbours, South Australia, Western Australia and Queensland.
The former Treasurer also made a bizarre comment about an extra $27m revenue in the budget, and this is a very bad thing for government - as if we had increased taxes. An extra $27m in the budget - where does he think it comes from? Part of it is payroll tax, part of it is conveyancing duty. It all suggests that you have more workers employed by businesses over the $600 000 threshold by which they pay payroll tax in the first place. How can that be a bad thing? I ask myself: why is this bad? More people in jobs, more people paying higher levels of payroll tax because there are more people out there in employment in the first place.
Mr Burke: You have got to be kidding!
Mr STIRLING: Why do you think payroll tax goes up? When we are putting payroll tax down, why does it go up? There is only one reason …
Mr Burke interjecting.
Mr STIRLING: I am talking about payroll tax. Why do you think it went up? Because there are more people in jobs in the Northern Territory. Again, with the conveyancing and those taxes coming through, it suggests that things are moving around out there; properties are being bought and sold. They are signs of a growing economy. It is hard to work out where the former Treasurer is coming from when he makes those sorts of comments.
The member for Drysdale talks about giving relief instead of taxing all the time. Well, during the CLP’s last term, taxes and charges went up $500 a head during that time in office, or $2000 a family, at a time when economic growth fell to zero. In the first two years of a Labor government, the increases are around $140 a head, about 60% of what the CLP had each year and, of course, as opposed to zero growth, our economy continues to grow.
The overall tax breaks in this budget - and I imagine we vote for these bills one by one, because the Leader of the Opposition and the member for Katherine seem to suggest they are going to oppose all of this. That would mean that they would be opposing the removal of the Temporary Budget Improvement Levy; the payroll tax reduction from 6.3% to 6.2%, at a cost of $1.5m to the government; the new stamp duty exemption for commercial leases and franchises with average rent of $30 000 or less, at a cost of $140 000 a year to government; and the increase in the hiring arrangements exemption threshold from $36 000 to $90 000. These are all pro-business moves, and you have to look at the overall. You have to look at the global. The tax breaks in this budget amount to $10m, with the removal of the Temporary Budget Improvement Levy, the payroll and stamp duties on hiring. That is $10m more in Territorian’s pockets than would have been coming into government’s pocket. New measures in this budget collect something less than $5m. It is about $1.9m, with the mining royalty changes, the EEC scheme, estimated possibly in the order of $2m. There is no firm estimate there under the land rich changes, and about $100 000 under the motor vehicle changes. There is your $5m, and $10m going back out there. There is the relief that the member for Drysdale was seeking.
When we talked about this at each occasion in relation to the land rich provisions, I explained from a point of view of equity. The Country Liberal Party is very, very protective about big business. But business is different to buying a house. I tell you, for every private home owner, that house is about the biggest purchase they ever make in their life. The duty on a $200 000 house - I have been through these figures - or a unit, is $6800, while the top end of town can swan through and contribute nothing by way of stamp duty. Now, if there is equity in that, it is CLP equity, and it harks back to the filthy days of the silver circle, that is what I suggest. It is still protection for the silver circle that they ran and dominated for all those years. We will not have that, we want a bit of fairness.
The other point of equity in this: if stamp duty and conveyancing duties do go at some stage, all the better, if that is negotiated and managed with the federal government in the future. But if they do not, and if they are going to be around for a while, well we want to see a reduction from the top rate of 5.4%. You are never ever going to achieve a reduction whilst the top end of town can swing through, buy the million dollars worth of properties, and not contribute. If you do not get your base right, if you do not get the big payers who can afford to, contributing into these duties, then you are never going to have the revenue in order to be able to reduce the rate from the current 5.4%. That is what I want to do. I want to do it for the battlers and the people who are buying their homes out there, so that they are not having to pay at a top rate of 5.4% if the property was over $0.5m, lesser rates if it is of less value. I want to see reductions across the board in this. Well, you are never going to do it unless you get your base right and your revenue into the net in the first place.
In relation to the stamp duty on motor vehicles, and this idea of joint and several liability, each speaker contributed to debate on this with a negative view. I met with the Motor Traders Association this week. They were the happiest people I have had the pleasure to meet with as Treasurer. However, there is a serious commitment from myself and Treasury that there is no commencement date. This is, I guess, the answer to why we are putting this bill through tonight - because we are going to do this and we believe that there can be a process worked through with industry by which they can be put in place without a huge impost.
One of the things the member for Brennan said: ‘Well you are going to make them tax collection agents’. Well, what do you think they did pre-GST with sales duty? Who collected that? What do they do with the GST? Of course, they collect it and they rebate it to the federal government, as did every other business under the sales tax regime before the GST. I accept that there are more complex systems than possibly needed and required, and we can streamline the system in relation to this, and make it less of an impost than it may seem, at the moment, to motor traders and the objections they have.
If I could put some points – and I think the member for Drysdale touched on this. A recent compliance program by Consumer and Business Affairs indicated that, in a sampling of 911 sales made by motor vehicle dealers to indigenous people, 95% of those vehicles were not transferred and the duty not paid because dealers and purchasers were not completing the necessary paperwork and lodging it with MVR. In one case, it was identified that the dealer was collecting the stamp duty - in some cases, more than should have been paid - and the transfer fees from the purchasers, and not remitting them to the Motor Vehicle Registry. In some cases, it was found dealers were collecting abandoned vehicles, because they were still registered in their name, and re-selling them. I am not putting this against the industry overall. These are a minority of unscrupulous dealers. That is a snapshot of a part - fortunately, a minority part - where the system is simply not working.
In 1999, under your government, the Treasury audit program identified the purchase price of 30% to 35% of used car sales by dealers as being under-declared, and the revenue loss on those sales was estimated at that time to be around $500 000 per annum. There was a systemic disregard for the rules in relation to this. The major findings of that audit, in 1999:
dealers signing blank transfer forms and allowing purchasers to complete the purchase price,
subsequently under-declared;
the sale price. Of course, they are the compliance tools, required as evidence that a sale occurred
and the sale price which then can be cross-matched against the transfers, when lodged, by purchasers;
assumption that the authorities did not check them. In one case, a person was prosecuted for an
under declaration of approximately $16 700 on a vehicle purchased for $57 000 after being
encouraged by the sales person to do so;
within the 14 day statutory payment period, sometimes several months after the sale;
compensate for the unexpected cost, they either under-declared the purchase price, or deferred
transferring the vehicle and payment of the stamp duty;
complaints were received from purchasers who received assessments on under-declarations, where
it was later found the purchase price had been inflated by the dealer to assist the purchaser obtain
finance on a new vehicle, and to discharge loans on the traded vehicle.
There will be benefits under this scheme when we get the process through and right. The total cost will be transparent to purchasers at the time of the purchase, and as consistent with the other current arrangements for new vehicles, where you see a new vehicle price plus on-road costs, this will be itemised. Why cannot it be the same for a second-hand vehicle - second-hand car price, plus on-road costs, so the purchaser knows what they are being confronted with?
I accept there will be increased administration for dealers, but a big part of it can be offset by improving the current bureaucratic process for transfers of registration. When we get to an online service, a lot of these things will disappear. Victoria and Queensland imposed joint liability on dealers. Western Australia imposes a joint liability on dealers, but only to the extent that they under-declare the dutiable value of the vehicle.
It will be similar to the arrangements in place for new car dealers. They already arrange the registration and collection of stamp duty on new car sales. The measure really is designed to address compliance concerns and, of course, improve the collection of the duty in the first place. I want to put this on the record: we wanted the Motor Traders Association to put all of the difficulties and impediments they saw on the table the other day, and they did so, quite willingly. The purpose of that meeting was not to get into how to resolve them but to start to get a broad picture of the sorts of issues that were concerning them. A lot of them do go to the bureaucratic process that we have now and the need to streamline that.
We believe that the system can be developed, in consultation with the dealers and the Motor Traders Association, to collect stamp duty and transfer the registration of vehicles that they sell. That will assist the customers of the dealer; they will know the total cost of purchasing the vehicle, and be aware of the cost of stamp duty and the transfer cost involved in acquiring that vehicle until they seek to transfer the registration. They will not have to attend to the transfer of the vehicle registration if that can be undertaken by the dealer as well. That system will also assist in ensuring the vehicles are registered within the required time after they are purchased, which will reduce compliance issues for the police and the Motor Vehicle Registry in relation to motor vehicle offences. Those new arrangements should also assist dealers by ensuring that there is a prompt transfer of the registration, and minimise the current problems faced by dealers with infringement notices and other traffic offences being sent to the dealer rather than the new owner. Consumer Affairs and Motor Vehicle Registry support the changes that are under way here.
In relation to the motor traders’ concern about collecting the duty, I talked about the stamp duty. The member for Brennan actually talked about the GST and that they had to collect that. That has never really gone away as a source of concern to those businesses and, of course, that is one that is collected by all businesses. Insurance duty, hiring duty, bank taxes, income tax taken out of wages paid to workers and forwarded to the ATO, are all examples of collection points for governments inside the business world. The centralisation of that collection point is going to be a far more efficient and robust system than collecting from every individual purchaser of a vehicle, as in the example I showed in that earlier compliance, perhaps somewhat 5% of a particular cohort.
There is a concern that the Northern Territory government is a large used car dealer in the extent of vehicle auctions, but the government is not a dealer. The auctions represent a private sale, as distinct from a sale by a second-hand car dealer, so the new changes would not strictly apply. We would look at that, in the sense that government sells these vehicles by auction, that they could do the same thing. We could have a system set up for transfer where it is applicable for payment of the stamp duty. Second-hand car dealers themselves pick up somewhere around 50% of all the vehicles going through the trading stock at government auction.
These arrangements will not add to the cost of the vehicle. They are costs that ought properly be paid anyway once a person has bought a vehicle. They are up for the stamp duty and the transfer of the registration. Therefore, they will not add to the cost of the vehicle or increase the cost of the stamp duty. They will merely bring forward in the cycle, the collection of payment of the duty with the purchase of the car. Overall cost of the vehicle and duty will not change. There will be a change of practice, I suppose, and maybe some change to culture.
I do not know why people, when they go and buy a new car, readily acknowledge that there is going to be some on-road costs, that the price you see for the new car is not necessarily inclusive of the total cost to drive it out of the showroom. Yet people believe that is the case when you go to a second-hand car dealer. It is a very sad misconception and it needs to be corrected. It can be corrected by simply showing the price of the vehicle and the on-road costs.
The motor traders put forward quite strong views that we will have more private sales, and they go unnoticed. In that situation, person A sells to person B. Person B does not pursue the transfer, does not go to MVR to effect the transfer. Person A is going to be picking up every speeding ticket and parking fine and every other infringement notice that person B incurs, so you would reckon that person A would want to know when person B was finally going to transfer this registration and get their name off the record. Nonetheless, we accept the Motor Traders Association’s views in this regard and we do need to give some thought as to compliance in that area. I am not sure how. That is for Treasury to work through with the Motor Traders Association. I am confident in their ability to make good ground with the Motor Traders Association, to come up with a system that will not be overly onerous, but will ensure that payment of proper fees and transfer of registration occurs with all of these vehicles.
I will touch briefly on the Exploration Exemption Certificates, just to put on the record again how inefficient this scheme was. I have been through this before, and the upshot was that, in the end of a process of an explorer coming to the Territory and spending a $1m, the benefit to them out of the EEC - and this was a scheme designed to promote as an incentive to exploration in the Northern Territory - was $100 000 from their $1m spend. However, a mining company, for purchase of that $1m EEC for the princely sum of $100 000, was able to write off up to $1.5m in tax. The mining company is $1.4m better off, the exploration company is $900 000 worse off. Who is the beneficiary here? This was a scheme designed as an incentive to exploration, but what we found was that the bulk of the money spent on it by government went to royalty paying miners, not to explorers. Some form of incentive for explorers! I ask myself how this could be. It was recognised back as far as 1997, when then Minister Coulter made changes to the scheme.
We recognised the impost to the royalty paying miners in extra royalty they would pay with the curtailment of issuing new EECs. Mind you, they are able to recoup them all the way through until 2010. I met with representatives of a couple of mining companies, explorers and the Minerals Council, and I was persuaded in part by the strength of the arguments put on behalf of some of the miners involved in this, to the extent that the original Mineral Royalty Amendment Bill was going to reduce the cap against the royalty by which they could claim the EEC expenditure from 35% to 25%. That would have meant $3.8m revenue in 2003-04 to this government. We have a committee stage amendment tonight to reduce the cap, rather than from 35% to 25%, from 35% to 30%, and it will go to 25% in 2004-05. So, the nett effect of this amendment is to halve the revenue that would otherwise have been coming to government. The effect on those royalty paying miners would be $1.9m in 2003-04, rather than the $3.8m as it stood. I would hope that that amendment would be supported in the committee stage of that bill later on this evening.
Each of the members, and particularly the member for Drysdale, I suggest, puts a lot of store on this EEC scheme, that the abolition or the winding down of it, is going to damage exploration - they simply will not come to the Territory. If that is the case, I ask him why, where there were 140 explorers eligible to go along to Treasury and present their receipts for expenditure in the last year of operation and gain an Exploration Exemption Certificate, just seven of those 140 eligible do to so, bothered to do so. That suggests that the other 133 were not interested, it simply did not act as an incentive to exploration in the Northern Territory. I do not know the reason for that. It certainly was not the most successful scheme, either in living up to its premise, which was to promote exploration, and it was not efficient for government, in the sense of the money spend.
It would have been easier for government to throw the money direct at the explorers and say: ‘We will fund 60% of your spend in the Northern Territory if you come here’. It would be nearly as cheap, rather than the way this then panned out, and has done so for many, many years. Why did our predecessors not have a good look at them? They never said: ‘Is this working? It is costing us a fortune. Is it boosting exploration? What can we do about it?’ They simply did not. Well, we are the government now, Madam Speaker, and we will continue to look at all of these schemes from the point of view of equity, efficiency, and value for dollar for the taxpayer, and this was not one.
Motion agreed to; bills read a second time.
In committee:
Taxation (Administration) Amendment (Serial 149); Stamp Duty Amendment (Serial 150); Pay-roll Tax Amendment (Serial 151); First Home Owner Grant Amendment (Serial 153); Motor Vehicle Amendment Act 2001 Amendment (Serial 154) :
Bills, by leave, taken together, and agreed to.
Bills to be reported without amendment.
Mineral Royalty Amendment Bill (Serial 152):
Bill, by leave, taken as a whole.
Mr STIRLING: Mr Chairman, I move amendment 50. The proposal is in clause 5, Proposed definition of ‘eligible exploration expenditure’, to omit all words after paragraph (b) and substitute:
- or so much of those amounts the inclusion of which, in calculating the royalty payable in respect of a
royalty year, does not –
- (c) if the royalty is payable in respect of a royalty year commencing on or after 1 July 2003
but on or before 30 June 2004 - reduce the royalty payable by more than 30% of the amount
of royalty that would be payable had eligible exploration expenditure not been taken into
account, whichever is the lesser; or
(d) if the royalty is payable in respect of a royalty year commending on or after 1 July 2004 - reduce
the royalty payable by more than 25% of the amount of royalty that would be payable had eligible exploration expenditure not been taken into account, whichever is the lesser;
Mr Chairman, I did go to some length to explain this amendment in reply closing debate. The original amendment bill was going to reduce from 35% to 25% the royalty that would otherwise be payable in 2003-04, and the proposal is that it be reduced from 35% to 30% for 2003-04, and from 30% to 25% in 2004-05. It has the effect of halving the impact on those royalty paying miners than otherwise would have been the case. It has been welcomed by the Minerals Council and the companies in question, and we look forward to continue working with them.
Amendment agreed to.
Bill, as amended, agreed to.
Bill to be reported with amendment.
Bills reported; report adopted.
Mr STIRLING (Treasurer): Madam Acting Deputy Speaker, I move that the bills be now read a third time.
Motion agreed to; bills read a third time.
COMMITTEE MEMBERSHIP
Public Accounts Committee and Legal and Constitutional Affairs Committee
Public Accounts Committee and Legal and Constitutional Affairs Committee
Mr HENDERSON (Leader of Government Business)(by leave): Madam Speaker, I move that –
(a) the member for Barkly be discharged from service on the Public Accounts Committee and
that the member for Millner be appointed in his stead; and
(b) the member for Arafura be discharged from service on the Legal and Constitutional Affairs
Committee and that the member for Barkly be appointed in her stead.
Motion agreed to.
ADMINISTRATIVE ARRANGEMENTS
Mr HENDERSON (Leader of Government Business): Madam Speaker, I advise honourable members that the member for Karama has been appointed as the Government Whip.
SPECIAL ADJOURNMENT
Mr HENDERSON (Leader of Government Business): Madam Speaker, I move that the Assembly adjourn until Tuesday 12 August 2003 at 10 am or such other time and/or date may be set by Madam Speaker, pursuant to Sessional Order.
Motion agreed to.
ADJOURNMENT
Mr HENDERSON (Leader of Government Business): Madam Speaker, I move that the Assembly do now adjourn.
Motion agreed to; the Assembly adjourned.
Last updated: 04 Aug 2016