STATE MEMBER FOR MALVERN
SHADOW TREASURER

Portfolio Speeches

State Budget Reply Speech 2015

Mr M. O’BRIEN — Victorians deserve better. They deserve better than this budget because this was not the budget they voted for. Before the election the then Leader of the Opposition moved around Victoria on a roadshow, with a new haircut, new glasses, new clothes and a series of slick promises. It was almost reminiscent of a 1950s Elvis. All that was missing was a swivel of the hips. He was going to boost infrastructure, he was going to boost jobs, he was going to protect the finances and he certainly was not going to increase taxes.

But come the first budget of the Andrews Labor government, and it is all too clear: Daniel Andrews may have campaigned like a 1950s Elvis, but he is governing like Elvis in Vegas. Just like those Elvis shows, a few rhinestones cannot hide the fact that this budget is a disappointing, bloated effort — one that only makes people remember what was once promised and how the reality is so very different today. Because this is a budget of broken promises.

This is a budget that weakens our great state and reduces the economic security of Victorian families. This is a budget that slashes the surplus, trashes infrastructure and smashes Victorian families with higher taxes and charges. This is a budget that lays bare this government’s financial incompetence and, in some cases, dishonesty.

For a budget that Labor trumpets as being for families, it is clear that Labor’s union brothers are the only family that counts. This is a budget handed down by a former union official for the benefit of current union officials. I suppose that is the Treasurer’s definition of intergenerational equity.

Budgeting is supposed to be about laying out a plan for the future, but spending more of other people’s money is not a financial plan, paying to not build roads is not a transport plan, imposing new property taxes is not a housing affordability plan and cutting funding to police is not a community safety plan.

Every budget has ups and downs. In Labor’s first budget debt is up, taxes are up, inflation is up, expenditure growth is up, the fire services property levy is up and unemployment is up. But some things are down. The surplus is down, economic growth is down and infrastructure spending is down. Labor has done something remarkable. In just over 20 weeks of government it has brought down a budget where on practically every single financial and economic indicator Victoria is in a far worse position than under the coalition.

We have heard so much rhetoric from Labor this week about keeping its promises. So how do those claims stuck up? Let us start with the budget surplus. When the coalition was elected in 2010, Victoria’s budget faced a structural deficit after a decade of expenditure increases that had outstripped revenue increases. The coalition worked hard to restore Victoria’s finances and warned that Labor could not be trusted with money. But the then opposition was very quick to assure Victorians that this leopard really had changed its spots. This is what Daniel Andrews was quoted in the Herald Sun of 19 November 2014 as saying:

… we have got no intention of changing the surplus profile outlined in the pre‑election budget update.

This is what Tim Pallas said on ABC 774 Drive on 27 November 2014:

… our commitments will have no impact on the projected budget surplus throughout the four years of the forward estimates.

The surplus profile outlined in the pre‑election budget update — this was released independently by the Department of Treasury and Finance during the election — stated that Victoria was set for surpluses each and every year, totalling $9.1 billion out to 2017–18. These surpluses protect Victoria and Victorian families not just from external shocks but from having to go into debt to pay for necessary infrastructure. But did Labor keep those clear promises to maintain those surpluses? Of course it did not.

Under Labor the surplus profile and the budget over that same period is not $9.1 billion; it is now just $4.9 billion — a loss of $4.2 billion. Losing over $4 billion in less than six months has to be a new record for budget destruction, even for the Labor Party. Premier and Treasurer: you made a solemn promise to Victorians, and you broke that promise.

Now the budget surplus for the next financial year is just $1.2 billion. But what is worse is that that surplus relies on an extraordinary proposition, which is this: Labor’s surplus relies entirely on the hope that $1.9 billion in east–west link funding from the federal government will not have to be paid back. Labor’s surplus strategy depends on taking money from the federal government for the east–west link, dumping the project and then not handing the money back. If you tried that on eBay, they would call in the cops. But Daniel Andrews calls it ‘a modern Labor government’. This is a phony surplus from a phony Treasurer.

Let us look at debt. In the pre‑election budget update, the last year of the forward estimates was 2017–18 and the ratio of state debt to gross state product was 4.5 per cent. In Labor’s budget, debt to GSP in that year is now 4.6 per cent. What Labor has buried in the budget papers is that it has made a policy decision to change Victoria’s debt strategy. Under the coalition the strategy used to be ‘General government net debt reduced as a percentage of GSP over the decade to 2022’. This was under the coalition, and it was similar to the policy of the Bracks and Brumby governments.

In this budget we see a new debt strategy: ‘General government net debt as a percentage of GSP to be maintained at a sustainable level over the medium term’. Do you notice what is missing, Speaker? There is no longer any commitment to reduce net debt under this Labor government. When Labor trotted out its financial statement before the election, there was nothing in that document about abandoning the commitment to reduce Victoria’s net debt — another Labor lie.

Let us look at unemployment. Victorians remember all the claims Labor made about jobs before the election. Labor said it had a jobs plan. We know it is really only a jobs brochure. In this budget we see Treasury’s assessment of Labor’s jobs plan, which is that under Labor unemployment will be higher for longer than it was under the coalition. Forecast unemployment is 25 basis points higher in 2016–17 and 50 basis points higher in 2017–18. These are not just statistics; these are real Victorian families who will not have a job because of Labor’s economic mismanagement.

Why should we be surprised that unemployment will be higher for longer under Labor, when we see everything this government has done since coming to office just six months ago? That includes two new public holidays, the abolition of the construction code compliance unit and the scrapping of 3700 jobs on the shovel‑ready east–west link.

Let us go to economic growth. That is something we should all agree is objectively a good thing for this state. Under Labor, Victoria’s economy is growing slower than under the coalition. GSP growth is down by 25 points in this year and down by 25 points in 2015–16. While growth is down, inflation is forecast to increase, hitting Victorians with the triple whammy of a higher cost of living, higher unemployment and lower economic growth.

Now to taxes, which is Labor’s favourite topic, as we know. There is nothing that Labor likes more than taxing Victorians. Treasurer Pallas has secured a place in history. He is now the highest taxing Treasurer in the state’s history. Congratulations, Tim. There is more than $1.1 billion in extra Victorian taxes in this budget alone.

Victorians were made promises by the then Leader of the Opposition and the shadow Treasurer that Labor would not introduce any new taxes, charges, fees or levies or increase any of them beyond inflation. This is what the now Treasurer said on ABC 774 Drive on 27 November 2014:

Our election commitments will not lead to an increase in debt. Our commitments will have no impact on the projected budget surplus throughout the four years of the forward estimates and we will introduce no new taxes.

In his first budget Treasurer Pallas has introduced not one but two new property taxes. There is an extra land transfer duty and an extra land tax — two new taxes and two broken promises. Then the Treasurer has the hide to say he wants to promote housing affordability. The former coalition government knows a thing or two about housing affordability. We released land to meet demand. That is how you help to address housing affordability. The former coalition government halved stamp duty for first home buyers. That is how you help promote housing affordability. You do not do it by introducing new property taxes, which is the only thing this Treasurer knows.

Going to infrastructure, we are a growing city and a growing state; we are one of the fastest growing areas in Australia. There are more than 100 000 extra people every year. Under this government infrastructure investment is down by $6.4 billion. That is $6.4 billion worth of work that Labor has ended and $6.4 billion worth of jobs that Labor has destroyed. Labor has cancelled projects, including east–west link stage 1, east–west link stage 2, the Melbourne rail link and the airport rail link. Labor will leave Victorians stuck in traffic for longer, hurting productivity and damaging the quality of life of our citizens.

Labor is now so desperate for projects that it is trying to claim credit for the CityLink‑Tullamarine Freeway widening project, a project signed by the coalition government. Maybe Labor thinks that any contract of the former government that it does not rip up counts as one of its own projects. Of the road projects Labor did take to the election, most are unfunded in this budget. Thompsons Road, Yan Yean Road and Napier Street — the money is not there to get those projects built.

Of course there was one what I will call not a major project but a semi‑major road project that Labor did take to the election and seek a mandate for — the West Gate distributor. That project has been junked in Labor’s first six months in office. However, somebody needs to tell the Minister for Roads and Road Safety, because the Premier has been saying that the West Gate distributor is finished but the roads minister seems to think it is still alive. Nobody over there seems to really know what is happening.

An honourable member — Did you talk to the roads minister?

Mr M. O’BRIEN — That is true. That brings me to another road project that hangs like a shadow over this budget. Here is what Daniel Andrews said in the Australian Financial Review of 10 November 2014:

It’s a project without a business case, it’s a project without a mandate.

Speaker, do you remember those days when Labor said that business cases were essential and mandates were indispensable? Like some member of the Kardashian clan, this Premier has simply decided that mandates are out of fashion and business cases are so 2014 — they just do not matter anymore.

Having ditched the east–west link and with no major shovel‑ready road projects, the Premier has now embraced a secret proposal by Transurban to build a pale imitation of the second stage of the east–west link. He now wants to sign Victorians up to a project he never mentioned before the election at a cost of $5.5 billion, with no business case. That is not what the Premier promised Victorians. This Premier’s broken promise condemns him as a hypocrite of the absolute highest order.

What is worse is that the Premier wants everybody else to pay for this toll road except for him. He is busy sending invoices to the Prime Minister saying, ‘Please pay for this toll road’. Not only does the Premier demand that motorists of Melbourne’s east and south‑east pay for a western suburbs trucking tunnel they will not use, but by extending CityLink tolls out to 2050 he wants the kids of those motorists to pay as well. But he is not prepared to put in one red cent of his own. What a fraud.

When it comes to rail projects, we now know that when the Premier says he has no respect for Greens he is actually referring to the member for Yan Yean. Why else would he not only exclude her from the ministry but also turn her promise to build the Mernda rail extension during 2015 into a fraud? How does Labor expect to build a train line costing $600 million to $700 million for just $9 million? Who is going to tender for that contract? Will it be Tonka or Lego? The people of Yan Yean and the city of Whittlesea have been conned by this Labor government, and they will not forget the Mernda rail betrayal.

Of Labor’s promise to remove 50 level crossings, the only thing that can be said is that Labor has delayed removing the crossings that were funded by the previous government. There were eight fully funded level crossings — four on the Cranbourne‑Pakenham corridor and four announced in last year’s budget — but despite the fact that those contracts were out to tender, this government has dragged its feet to delay getting them done. The money is there; the projects need to be done. Why is this government dragging its feet on delivering the coalition government’s fully funded level crossing removals?

In this budget we see no real funding for its own level crossing removals. The government has hitched the entire funding for this to a transaction which has not yet occurred. The Treasurer has again brought up the magic pudding of contingencies. You have to actually have money in the budget before you can have a contingency — and at the moment the Treasurer does not have even that.

On education, the Treasurer claimed in his speech that this is ‘the biggest education budget in Victoria’s history’. We know that is the sort of cheap rhetoric this government likes to put on numberplates, but let us look at the facts. With this budget the Andrews government is patting itself on the back because it has announced funding for 10 new schools. But do members know how many new schools the former coalition government funded last year? Thirteen.

Even though the coalition delivered funding last year to build a much‑needed new school such as the Prahran secondary college, Labor has now completely dropped the ball and has failed to get the school up and running in the interests of local families. Labor has also let down the community in South Melbourne by failing to progress the investment and work undertaken for the new primary school at Ferrars Street. And of those schools that will receive an upgrade with this budget, it is telling that around two‑thirds of them are in Labor‑held electorates despite Labor holding only 53 per cent of the seats in this chamber. Yet again under a Labor government electoral margin — rather than educational merit — counts for more.

Victorian state schools well remember the $420 million maintenance backlog that Labor left last time it was in office. This budget sends the message that Labor’s neglect of the school basics will be repeated, with underinvestment in maintenance and less than half of the promised funding for asbestos removal being delivered.

But it is not only state schools that have cause for concern with this budget. Of the $120 million committed to infrastructure for Catholic and independent schools over four years, a paltry $10 million, or only 8.3 per cent, has been funded in 2015–16. While Labor ducks and weaves on whether it will honour the final two years of Victoria’s commitment to the Gonski initiative, no school can be confident that its future funding will be secure.

When it comes to technical schools, Labor is the party that closed down technical schools in the 1980s, and in this budget it has provided peanuts, ensuring that Victoria remains many years away from any new tech school opening its doors.

In relation to the budget being for families, community safety is absolutely essential. Under the coalition more than 1900 additional Victoria Police officers were recruited, together with 950 protective services officers (PSOs) — the same PSOs Labor disparages; the same PSOs the current Deputy Premier of this state insulted by calling them ‘plastic police’; the same PSOs who protect this very Parliament and keep us safe from harm. Labor’s budget offers no additional police and no additional PSOs — not one.

I do not think I have ever seen a government come to power and not promise to deliver any new police at all. What an appalling action. That is completely inadequate for a state growing by around 100 000 people each year. Worse still, Labor’s financial mismanagement is cutting $23.8 million from the police operational budget to pay for a black hole in Labor’s poorly costed country police radio policy. This government cannot talk with any credibility about Victorian families while at the same time failing to recruit additional police and ripping off the police budget to fix its own financial blunders.

No action of the Andrews Labor government could better demonstrate its determination to put politics ahead of people than its disgraceful attack on the Peter MacCallum Cancer Centre. To cause the loss of $20 million in philanthropic funding, to cause the loss of 42 cancer beds and to undermine the financial security of one of our most important cancer treatment centres is outrageous. To do so in the pursuit of outdated socialist ideology — a hatred of private medical practice co‑locating with public health — is nothing less than a disgrace. But given this Premier’s track record when he was Minister for Health in the Brumby government, perhaps we should not be surprised.

This budget has serious failures when it comes to health. It completely fails to fund the Maroondah breast cancer centre or the Aikenhead Centre for Medical Discovery; it provides only 10 per cent of funding for the Victorian Heart Hospital that the government promised to have open by 2018; as we heard in question time today, it funds less than 2.5 per cent of the cost of the expansion of the Casey Hospital; and it cuts 20 per cent from dental concessions.

How can a Labor government that claims to care for families cut 20 per cent from dental concessions for impoverished families in this state? In addition, 94 per cent of the hospital beds identified as needed by this government’s Travis review remain unfunded.

True to form, in this budget Labor ignores most of Victoria which is beyond the tram tracks. If you do not live near a graffiti‑covered inner city laneway, this government thinks you are just camping out. It has shown its lack of concern in the traditional Labor way — through budget cuts to funding for agriculture, regional tourism and country roads, including through cuts to the country roads and bridges program, as well as by short‑changing country Victoria by abolishing the coalition’s $1 billion Regional Growth Fund and replacing it with a pale imitation.

When it comes to public transport Labor made big promises, but what we see in the budget is just a big black hole. All we see is $1.5 billion for the Melbourne Metro rail project, which has an $11 billion‑plus price tag. The Treasurer and the Premier can never tell us where the money will come from. They will try to put $3 billion into a high‑priced credit card as a result of walking away from the east–west link. They say the private sector will invest, but since when did the private sector invest in public transport infrastructure? It does not happen. It might invest in services, but it does not invest in the building of the infrastructure. The federal government has said it is not its business and that it has money available for other projects. The Treasurer cannot tell us how he will fund the $11 billion cost of the Melbourne Metro rail project.

What happened to Infrastructure Victoria? The body was supposed to be set up to give the government a tick on all these big‑ticket items. The government has committed to building the Melbourne Metro rail project and to spending $5.5 billion on taking Transurban’s ideas off the shelf without going through Infrastructure Victoria, with no mandate and no business cases. What happened to all of that? Again it is last season’s fashion.

When it comes to train and tram procurement, those opposite should pay copyright fees to the member for Polwarth and the member for South‑West Coast. Labor never conceived of having a 10‑year procurement program for trains and trams, let alone announcing it, until the coalition government announced it during the election campaign. If imitation is the sincerest form of flattery — and it is probably the only form of flattery the Minister for Public Transport is capable of when it comes to this side of the house — the former Premier and former Minister for Public Transport have been flattered indeed. All Labor has done is take the coalition’s ideas off the shelf because it has none of its own.

I have spoken a lot about economic issues but social issues are also at the heart of this budget. I need to mention only one to demonstrate how all the rhetoric, slogans and political spin about the budget being for families and about putting people first is an absolute hoax. In this budget the government has cut funding for the Victorian Responsible Gambling Foundation, not just in real terms by not indexing it to inflation but even in nominal terms. What a mean and indefensible budget measure that is. It is one that affects some of the most vulnerable members of our community. This is from a Premier who as opposition leader could not stop telling us in his advertisements how he was all about putting people first. What people benefit from cuts to problem gambling funding?

This is a government that has its priorities wrong. In just six months it has weakened Victoria on every economic indicator and has hurt Victorian families. This Treasurer is like somebody who has been thrown the keys to a sports car and has crashed it on the way out of the dealership. He has turned the strongest finances in the country into a ruin. He has a phoney surplus propped up by east–west link money. He has higher unemployment, higher debt and lower infrastructure spending. This is a bad‑news budget. It is not a budget for families. It is a budget of broken promises. For Victorians looking for work it is bad news. For Victorians stuck in traffic it is bad news. For Victorians worried about the cost of living, the budget does not help; it hurts. This is a bad budget from a Labor government that has demonstrated that, true to form, it cannot manage money and cannot manage major projects. Victorians deserve better than this budget. The only positive thing about it is that we are one budget closer to the return of coalition government to Victoria.

Contact Michael
Michael O'Brien MP

313 Waverley Road
MALVERN EAST VIC 3145

Phone: (03) 9576 1850
Fax: (03) 9576 1849


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