STATE MEMBER FOR MALVERN
SHADOW TREASURER

Portfolio Speeches

STATE BUDGET REPLY SPEECH 2016

Mr M. O'BRIEN — This budget is so flimsy, so lightweight, so devoid of substance that the opposition will deal with it here and now. The Treasurer's budget speech was about as convincing as a Johnny Depp court video but without the substance.

Far from getting it done, as the Treasurer boasted, this budget is all about Victorians getting done over by Labor: getting done over by Labor's broken promises, getting done over by Labor's greedy taxes and charges, and getting done over by Labor's failure to properly fund its infrastructure promises. Victorians are getting done over by a government too distracted by its own internal battles and factional intrigue to focus on the needs of the Victorians it is sworn to serve.

While the government may boast about budget surpluses, Victorians ask: why then are police stations closing and frontline police being cut? While the government says it supports industry, Victorians ask: why then is New South Wales blitzing us when it comes to creating new jobs? While the government claims it backs business, Victorians ask: why then is the Treasurer attacking us with new taxes? While the government pretends to support families, Victorians ask: why then are families facing higher power bills and higher rents due to this government's greed?

We heard the Treasurer go through the motions today, but once we strip away the spin, we see that it is a hollow budget from a hollow Treasurer. Who pays the price for Labor's economic failings? As always, the victims are Victorian families. In the 
2016–17 year, Ford will end production in Victoria, Holden will close down its Port Melbourne engine plant and Toyota will finish up production next year.

Honourable members interjecting.

The SPEAKER — Order! The member for Warrandyte will stop advising the Chair. I warn the member for Melton.

Mr M. O'BRIEN — Many thousands of jobs in the manufacturing, components, parts and supply chain industries will go as a result of the end of car manufacturing in Victoria. But where is the jobs plan from this government? How are these thousands of Victorians going to find new opportunities? We know that New South Wales is racing ahead when it comes to job creation. Since December 2014 New South Wales has created 81 275 more jobs than has Victoria. In the coalition's last year in office Victoria's economy created 77 950 jobs compared to just 33 837 that Labor created in its first year. Job creation is shuddering in Victoria under Labor. Declaring new public holidays, supporting militant unionism and ripping up major infrastructure projects — all of these bad decisions by the government have consequences in the real world. Despite Labor using TAFE as a political pawn, we know that fewer students are getting a TAFE education under Labor than under the coalition.

Victorians are entitled to expect a budget that sets out a clear plan to grow our state's economy and a clear plan to create jobs. Instead the Andrews Labor government delivers nothing but spin and slogans. It is simply not good enough.

When we look at the revenue windfalls this Treasurer has received, we see that he is walking proof of the adage: it is far better to be lucky than good. There are drunken sailors who look at the Treasurer and say, 'Mate, you might want to watch your spending'.

Let us take a brief look at just some of the windfall gains this Treasurer has received since the election without lifting a finger. Land transfer duties, or stamp duties, are up by $1.6 billion since Labor was elected, from $4.4 billion in 2014–15 to $6 billion this year. Goods and services tax receipts are also up. Victoria is set to rake in an extra $1 billion, from $12 billion in 2014–15 to $13 billion this year, thanks to the Commonwealth Grants Commission.

Then there is the Tattslotto litigation over gaming machine licences. When this case was first decided against the state, the payment of $540 million was made from the coalition's budget to the Tatts Group. With the final determination made in favour of the state by the High Court this year, over $560 million, including interest, came back into the state budget as a windfall gain. This is a Treasurer who has literally had a Tattslotto win — but that has not stopped him from hitting Victorians with new taxes.

The Treasurer is like one of those sad cases you see on current affairs TV programs, the type of person who wins the big lotto prize, buys motorbikes for all his mates and then winds up living in someone's garage looking for a handout. It is an extraordinary amount of money this Treasurer has received — billions of dollars in extra stamp duty, extra GST and Tattslotto windfalls, not to mention payroll and land tax, and the $6 billion to $7 billion that will be secured with the 50-year lease of the port of Melbourne. Even, I dare say, Kim Kardashian would struggle to spend it, but this is a Treasurer who puts Kim Kardashian to shame.

To add insult to injury, while the Treasurer is on a spending spree he is preaching austerity to local councils across Victoria. Under the government's rate capping policy, mayors are told to limit rate rises to 2.5 per cent. Clearly this Labor government believes, 'Do as I say, not as I do'. In this year's budget alone revenue is increased 6.9 per cent from 2015–16. If Labor applied the rate capping limit to itself, it would hand back $151 million in payroll tax, $448 million in land tax and over $30 million in fire services levies.

But the hypocrites in this government would never apply to themselves the standards they expect of others. The coalition had expenditure increases at an average of 2.6 per cent a year across the forward estimates. By contrast, Labor is busy paying off its mates in the public sector unions with sweetheart industrial deals and no productivity trade-offs.

Since Labor was elected the public sector wages bill has blown out from $18.5 billion to $21.3 billion — an increase of $2.8 billion or 15 per cent. This is not a 15 per cent increased investment in frontline services; this is the cost to taxpayers of backroom deals with Labor's union mates. Spend first, ask questions later — that is the Labor way.

If all of those tax windfalls were not enough, and clearly they were not, the Treasurer has also announced a raft of new tax increases that will hit Victorians in the hip pocket.

The land tax surcharge introduced by Labor last year is to be increased threefold, to 1.5 per cent. The stamp duty surcharge will rise, from 3 per cent to 7 per cent. These property taxes will not hit foreign investors, as the Treasurer would have you believe; they will be passed on to those who rent these properties, one way or the other. These new property taxes will cost Victorians $486 million across the forward estimates, and this is before we come to the new coal tax.

The appetite of this Treasurer to gorge on tax brings to mind the Roald Dahl book Charlie and the Chocolate Factory. One character in particular springs to mind. I have thought about it. When it comes to tax, the Treasurer is the Augustus Gloop of Victorian politics — greedy, gluttonous — and I am afraid to say it ends pretty badly for him.

Under this Treasurer in only two years state taxes have increased from $17.9 billion to $21.6 billion, a massive increase of more than 20 per cent. And having gorged himself on taxes, the Treasurer pretends that minor fiddling of payroll tax thresholds over four years will offset the damage that he has caused to business competitiveness in this state.

I sometimes think that this Treasurer's purpose in politics is to make former federal Treasurer Wayne Swan look good. But I will say this for Wayne Swan: at least when he introduced a carbon tax, he had the decency to admit that it would drive up power prices. When this Treasurer hikes up the tax on coal threefold — the same coal that produces around 90 per cent of our electricity — he has the audacity to claim it will have no effect on power bills.

Only a fool or a liar would deny the link between tripling taxes on coal and higher power prices. Treasurer, take your pick. The tripling of taxes on coal is the Premier's very own carbon tax — a tax that will drive up power prices, drive out businesses and cost jobs, especially in the Latrobe Valley and in Gippsland. Just as Julia Gillard famously told Australians on the eve of an election, 'There will be no carbon tax under the government I lead', Victorians remember the words of the Premier on the eve of the 2014 election being interviewed on Channel 7 news:

Peter Mitchell: Do you promise Victorians here tonight that you will not increase taxes or introduce any new taxes?

Daniel Andrews: I make that promise, Peter, to every single Victorian.

That promise was crystal clear — no qualification, no hedging, no conditions — so how can this Premier justify tripling the tax on the fuel that provides up to 90 per cent of Victoria's electricity? How will this Premier explain to families already struggling to pay their power bills that he has made a deliberate decision to make their lives that much harder? This is just another broken promise from a Premier whose words simply cannot be believed.

While this Treasurer boasts about the forecast surplus, let me provide him with a reality check. Firstly, we remember when he claimed a budget surplus this time last year. At the time we said it was a phoney surplus from a phoney Treasurer — and, sure enough, the Auditor-General agreed. He blew the whistle on this Treasurer's funny-money attempt to prop up a deficit budget with east–west link payments from the commonwealth. We now know that this Treasurer actually delivered a deficit of $286 million last financial year. The Auditor-General said so.

Despite this record of fiscal fiction, the Treasurer expects to be lauded for proposing surpluses totalling over $9 billion across the forward estimates. Yet this is exactly what he inherited from the coalition in December 2014. The pre-election budget update released by the Department of Treasury and Finance during the election campaign sets out cumulative budget surpluses of $9.1 billion over four years. So the boasting of this Treasurer is not only pathetic, it is dishonest. Despite billions of dollars in tax windfalls over the past 18 months, he has not improved the budget bottom line one iota. This Treasurer delivered a deficit when he promised a surplus. He has not cut taxes; he has increased them. And he has not reduced debt; he has raised it.

Let us nail the lie of the Treasurer when he claims that he is reducing debt. We know that the debt to gross state product (GSP) ratio on 31 December 2014 was 5.9 per cent. We also know that in the pre-election budget update (PEBU) Treasury forecast that debt to GSP would fall to 4.5 per cent in 2015–16 and stay at that level right across the forward estimates. Just to be clear: that was not Labor's work; that was the coalition's work for which Treasury accounted. That is the benchmark against which this budget must be judged.

So when we see that the budget forecast of debt to GSP in this budget is not 4.5 per cent but in fact 4.7 per cent, the truth comes out. This Treasurer has increased debt compared to the PEBU projections, and it will get worse next year. More Labor debt, more Labor interest payments, nothing to show for it — that is how Labor rolls.

With 100 000 extra people in Victoria every year, the need to build infrastructure to keep pace with this population growth has never been greater. If we do not build the infrastructure in line with our growing population, we shall simply see life in Victoria becoming more congested, more crowded and more frustrating. We are seeing the consequences in Melbourne today. Our roads are getting busier: every day the peak periods extend, while Saturday morning traffic is now as bad as any day of the week. Our trams and trains are packed. Our public hospital waiting lists are growing. Our state schools, especially in growth areas, just cannot keep up with local demand.

The very thing that attracts so many people from other states and other countries to seek to settle in Victoria — our unique quality of life — is at grave risk if we do not act now to manage population growth and develop our infrastructure accordingly. But this budget has no plan for managing population growth, no plan to build the infrastructure that our rapidly increasing population demands and no plan to encourage migrants to this state to see Victoria as so much more than just Melbourne.

But why would we expect a Labor government that has shut down the regional living expo to have any idea about promoting regional Victoria as a place to live when we have Labor's Minister for Training and Skills describing Geelong as, and I quote, 'Melbourne's biggest regional city'? Victorians who live beyond the tram tracks know that Labor just does not care about them. Instead this government views population growth as an ATM for tax revenue rather than as an obligation that must be managed. This budget has no credible plan for building the infrastructure that our growing state needs. A plan without funding is just a wish list, and that is all we get from this Labor government — an infrastructure wish list.

The hollow words of the Premier and Treasurer before the election, the promises that all of their infrastructure promises were fully costed and fully funded — those words have turned to dust. Where in this budget is the claimed full funding for the $11 billion Melbourne Metro project? Here we see that the Andrews Labor government has far more in common with the governments of Cain and Kirner than it does with those of Bracks and Brumby. The Treasurer appears to be engaging in accounting tricks to shift the Melbourne Metro project off the general government sector balance sheet. Labor appears to be trying to hide its debt funding of Melbourne Metro by the use of dodgy accounting tricks that would be more at home in Panama than in Treasury Place.

Despite this funny-money debt funding, the Andrews Labor government still wants the Prime Minister to write it a multibillion-dollar cheque on the basis of a paper thin business case. This is what the planning minister said, and I quote, 'We invite the Prime Minister to come on a journey with us'. Come on a journey with us? Will somebody please tell the minister Melbourne Metro is an $11 billion rail project, not a reality TV show. This government cannot produce a serious business case, but it thinks greeting card slogans will get it over the line.

The Premier also wants to cut South Yarra station from the Melbourne Metro project despite the massive development and population growth happening right on its doorstep. What is the Premier's excuse for ditching South Yarra station? He claims, 'We can't afford it'. This from a Premier who has never put the words 'we' and 'can't afford it' in the same sentence. Where in this budget is the funding to match the Turnbull government's $1.5 billion roads package for Victoria? No funding is set out. Where in this budget do we see the full funding for the removal of each of Labor's promised 50 level crossings? Nowhere. When it comes to state-shaping infrastructure, the Andrews Labor government's greatest claim to fame is that it wasted $1.1 billion of taxpayers money to not build a desperately needed road — the east–west link.

And what of Infrastructure Victoria, the supposed independent infrastructure watchdog so proudly trumpeted by this government? It turns out the infrastructure watchdog is actually an infrastructure lapdog. Infrastructure Victoria has been confined to the kennel with a muzzle on. What is the point of taxpayers paying $10 million a year to establish an infrastructure body that has not examined a single project of this government? What has the Andrews government got to hide? Why does it refuse to have its projects assessed by Infrastructure Victoria? It is a joke. If this government expects there to be any level of bipartisan support for the work of Infrastructure Victoria, it needs to put it to work and allow it to prove its worth, not simply roll it out as a convenient smokescreen when it suits the government.

When it comes to moving Victorians around this state, it is not enough that the Andrews government fails to build the infrastructure that we desperately need. No, this government even wants to prevent the private sector from providing services to move Victorians around. This government loves to trumpet its so-called progressive credentials when it comes to putting sexual politics into school curriculums, but when it comes to Uber, Labor is about as progressive as Cobb & Co. The transport minister has been looking at this for so long you would think Uber was one of those Magic Eye puzzles, and still the minister cannot see the bigger picture. The consumers of this state are way ahead of the minister, and it is time that she and her government caught up and acted to put Uber on a proper footing in Victoria.

The first duty of any government is to protect its citizens, and on this fundamental issue Labor has failed Victorians. In just four years the former coalition government massively boosted sworn Victoria Police numbers by over 1900. In addition the coalition hired 950 Victoria Police protective services officers, who are making such a vital difference to safety around train stations throughout Victoria. In less than 18 months Labor has cut frontline police numbers and closed or cut back on police stations across Victoria.

To nobody's surprise, except perhaps the government's, these cuts have delivered a significant increase in crime. Under Labor this year's Moomba transformed from a fun, family-friendly festival into a no-go zone for everyone except rioters, thieves and gang members. Under Labor we are seeing violent home invasions and carjackings become a regular feature on our nightly news bulletins, instilling fear into law-abiding families whether they are in their homes or on the roads. Under Labor we are seeing the no-pursuit policy leave Victoria Police officers on the front line feeling frustrated, disempowered and helpless.

Today's budget provides little relief for Victoria Police or indeed for Victorians. Police stations that have been closed by Labor remain closed. The number of sworn police officers remains far too low to cope with our growing population, and this means that crime will continue to rise. Considering this Treasurer is rolling in billions of dollars of extra tax revenue, why will he not fund Victoria Police properly? This tells us a lot about Labor's priorities. Labor can find money for a new logo, but not enough for police. Labor can find money for private ministerial offices at train stations, but not enough for police. Under Labor there is money for penguins, but not enough for police.

This budget is swimming in extra revenue from booming stamp duties, population growth and GST — yet Labor hikes taxes to hurt hardworking Victorian families; yet Labor sits back as police stations close across our state; yet Labor fails to develop a jobs plan while our car industry shuts down and New South Wales continues to power ahead of us; yet Labor refuses to tackle the unmanaged population growth that jeopardises the quality of life that sets us apart as Victorians. This is a budget of poor decisions and missed opportunities. It is a story of a government that cannot control its spending and has the wrong priorities for this state. Victorians deserve better than this budget, and they certainly deserve better than this out of touch Labor government.

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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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