Estimates of Revenue and Expenditure Speech

Extract from Hansard
[COUNCIL - Tuesday, 10 August 2010]
p4904g-4913a
Hon Lynn MacLaren; Hon Ken Baston
[1]
ESTIMATES OF REVENUE AND EXPENDITURE

Consideration of Tabled Papers
Resumed from 1 July on the following motion moved by Hon Helen Morton (Parliamentary Secretary) —
That pursuant to standing order 49(1)(c), the Legislative Council take note of tabled papers 2044A–H
(budget papers 2010–11) laid upon the table of the house on 20 May 2010.

HON LYNN MacLAREN (South Metropolitan) [3.16 pm]: I will not take up too much of the house’s time
talking about the state budget. We have had a break since we last considered this matter. I would like to review
the key budget initiatives of the Barnett government, consider the challenge to create prosperity in Western
Australia’s two-speed economy, examine what a budget of the Greens (WA) would look like, and specifically
look at how we can “green” WA’s budget.

I begin by reminding members that the key budget initiatives of the Barnett government included a big spend on
health, education and major infrastructure. The $1.3 billion allocation over five years is the state’s biggest ever
injection into the health system. The Greens are not saying that that expenditure is unnecessary. However, except
for the community and child health services, the health funding will merely serve to cope with higher demands
and costs for hospitals and treatment. It does not focus adequately on preventative measures.

Another of the Barnett government’s initiatives was the increased expenditure on housing. However, when one looks at that in detail, it is mainly directed at government workers. Government workers are desperately needed in the boom towns in order to continue to provide government services. However, we know that social housing is in desperate need precisely because of the impact of the high-waged boom industry workers, who have driven house and rental prices up. Social housing received significantly less in this year’s budget.

I note that there were attempts by the Barnett government to address our two-speed economy with expanded
funding for the hardship utility grant scheme. That is helpful for those who are in desperate need. However, a
large number of middle-income earners and families continue to feel the pain of the utility price shocks. It is fair
to say that not everyone is benefiting from this boom.

I reflect on the challenge to create prosperity in WA’s two-speed economy. The question that is often asked in
this place is: are we happier now that we have a boom state? We know that family breakdowns are on the
increase; that fly in, fly out workers suffer from social isolation; and that consumerism is fuelled by “cashed-up
bogans”, as some people refer to them. The challenge is to keep up with the Joneses. I question whether that
leads us any closer to what we aspire to, which is prosperity. This is obviously an issue of global significance.
Prominent world thinkers and economists, such as Tim Jackson, who is the Economics Commissioner of the
Sustainable Development Commission in the United Kingdom, have posed the question: can we achieve
prosperity without growth?

More locally, I will quote from one of our own Australian commentators, namely Clive Hamilton. He questions
whether we can return to a more balanced notion of social progress. Many have noted the shortcomings of the
existing measures of prosperity and how we look at the economy. I will quote from Clive Hamilton’s paper
“Growth fetishism and public policy”. He harks back to someone who is well known on a world scale and is
particularly significant to American history, Robert F. Kennedy, who said that GNP “measures neither our wit
nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it
measures everything in short, except that which makes life worthwhile”. I think that is relevant to us when we
are reflecting on the state budget, because the things that the government chooses to fund may well fuel a growth
in GNP and miss entirely the point about what the economy is there to serve. Clive Hamilton goes on to say —
… that there is more to life than economic growth; that some things should not be sacrificed to the
Economy; that we need to return to a more balanced notion of social progress—and accept that these
ideas are not merely an invitation for whimsical reflection on how life could be in a perfect world, but
provide a guide as to how we must act.

Looking at how we must act, I will say that I found some guidance in Tim Jackson’s work. He recently visited
Australia and gave an inspiring speech in Melbourne. In that speech, in which he quoted from his paper
“Prosperity without growth?”, which documents ways in which we can transition to a sustainable economy, he
said —
Economic recovery demands investment. Targeting that investment carefully towards energy security,
low-carbon infrastructures and ecological protection offers multiple benefits. These benefits include:
• freeing up resources for household spending and productive investment by reducing energy and
material costs
• reducing our reliance on imports and our exposure to the fragile geopolitics of energy supply

• providing a much-needed boost to employment in the expanding ‘environmental industries’ sector
• making progress towards demanding global carbon reduction targets
• protecting valuable ecological assets and improving the quality of our living environment for
generations to come.

In short, a ‘green stimulus’ is an eminently sensible response to the economic crisis. It offers jobs and
economic recovery in the short term, energy security and technological innovation in the medium term,
and a sustainable future for our children in the long term.

In reflecting on these comments from Tim Jackson, I say to our esteemed Premier and the members of cabinet
who determine what we spend in our budget: how has our state grasped the opportunity of this global economic
crisis to invest in sustainable and long-term solutions that deliver stability in the long term? Looking at that
question, I examined our state budget this year. If we looked at what we have spent money on or what we are
going to spend money on over the next 12 months, how would a green budget look if we took into account these
sustainability factors in this direction towards a sustainable economy?

There is an example here in Australia in the Tasmanian Labor–Green budget of how the Greens would
implement such a budget. We saw there that they delivered more money for public housing, and that they
delivered more money for climate change and public transport. They established a taxation review. They made a
massive investment in rail. They made a significant investment in parks and wildlife. They made a big increase
in funding for tourism marketing and events promotion—I believe the Liberal state government has just made a
significant announcement in that regard in Western Australia. They also established a cost-of-living strategy.

The Tasmanian budget, which was influenced by these ideals of the Greens and the green economy, was
criticised for not having enough funding for mental health—our state government did put more money into
mental health—and for not having enough money for education; our state budget had more money for education.
It was also criticised for not having a great enough response to affordable housing. There we can see that our
state budget again made some inroads, but, as I have pointed out before, and will continue to reflect in this
speech, it was not enough.

I looked in particular at what we could do in this budget to make it more green, for instance. There are eight
ways that I identified in my areas of portfolio expertise, or, shall I say, portfolio responsibility. One is to invest
aggressively in the creation of new housing options in Western Australia. It is my view that we should build
more housing for people who are experiencing disadvantage and people who are earning a low income. When
we look, it does not take long before we find that people in our state have estimated what kind of investment is
required. Indeed, they continually ask for this year after year when the government asks for budget submissions.

The Western Australian Council of Social Service estimated that an investment of $568 million would be
required to increase social housing stock to solve this problem of homelessness. That would create 20 000 new
dwellings by 2020 if we started making that investment today. I argue that that is a wise investment, and I call
for the state government to consider that to establish a sustainable economy in WA. The other thing I suggest is
that we offer incentives for developers to build smaller homes and diversify our housing stock. I believe that the
housing minister is looking at ways to do this. I hope it is in conjunction with the planning minister. However,
we have ideas on the boil for doing this.

The second way in which I would like to see WA’s budget go green is to improve energy efficiency in all our
buildings. This is economically sensible. We need to establish retrofitting programs. I suggest it should start with
the lowest-income households. It really is a no-brainer for members of Parliament to look at this, because by
making our houses more energy efficient, we not only cut our household bills, but also reduce the government’s
requirement to produce energy, because the government can produce less energy and meet our needs. Therefore,
that is a saving in the budget. The second way in which to improve energy efficiency in buildings is to set higher
building standards for commercial and residential buildings. The third way is to complete the electricity smart
grid and invest in programs to encourage the take-up of renewable energy technologies. Just before the
Legislative Council rose on 1 July, we considered a new bill that the Greens put forward to paying for renewable
energy that households create. That, of course, is an income to the state, in that by producing energy from
renewable sources in homes, the state to produce less of its own energy through its very offensive coal-burning
power stations.

The third way in which we could make the WA budget a bit greener is to shelter the homeless and the
vulnerable. I am sure that many members will know that the social and economic cost of people who are falling
off the edge into despair and homelessness is enormous. We see it every day, not just in our neighbourhoods, but
also in the media. To be outcast from the community is a great social loss, and without shelter, people need more
health services and can get caught up in the justice system, which is a great cost to both the state budget and
society. Our state budget has had to invest more in the justice system to deal with people who are falling off the
edge. A home is the single most important factor necessary for holding down a job, getting an education, and
maintaining health and wellbeing. A home is a simple thing we can deliver for Western Australians. The Greens
(WA) have budgeted for it, and it makes economic sense to do this; we should not have so many homeless
people.

The fourth thing that we could do to green the Western Australian state budget is to generously fund effective
early childhood intervention programs. The focus on early childhood development and programs for intervention
has proved to be the most important factor in flourishing our society. Research has shown that prisons are full of
people who started to fall by the wayside by four years of age. The Council of Australian Governments agenda
on early childhood states that children develop most of their intellect, personality and skills by five years of age.

The COAG early childhood agenda states —

The early years are critically important for children, and learning is most effective when it begins at a
young age and continues to adulthood. Helping young Australians realise their potential is ultimately an
investment in Australia’s future and needs to start early.
I acknowledge that the government has expressed its at least philosophical support for early childhood
intervention, and I would say that it would be great if it was funded more generously.

Hon Michael Mischin: How much?
Hon LYNN MacLAREN: Hon Michael Mischin asked me how much; I charge the cabinet to come up with that
figure. The cabinet has the resources to come up with that figure, and I am sure the Western Australian public
would like to see it work on that.

The fifth way is greater funding for health prevention.

Hon Michael Mischin interjected.

Hon LYNN MacLAREN: If Hon Michael Mischin would like to offer me some resources to draw up a budget,
I would be happy to accept that—no worries!

The PRESIDENT: Order! I suggest that the honourable member address her remarks through the Chair and
disregard those unruly interjections!

Hon LYNN MacLAREN: Thank you, Mr President; I will take your guidance on that.
The fifth of the eight measures I have identified to green the budget is increased funding for health prevention
and significant investment in programs that prevent health conditions. Rather than putting the money into acute
health care, we should be putting more money into health prevention. One of the programs that really works is
Living Longer Living Stronger, which is a Council on the Ageing program. It can prevent a wide range of health
conditions, such as sarcopenia, osteoporosis, arthritis, hypertension and diabetes. Living Longer Living Stronger
is an example of a health prevention program that should have very good funding; and this budget has provided
funding for another year. We would like to see more stable and consistent funding for that, because that is a very
good, worthwhile program. Over 6 000 people are enrolled in it across WA. Participants have to be over 50 years
of age, and they participate in this individually supervised strength training program in over 70 locations. The
benefits of this kind of investment are not just a reduction in long-term acute health costs, but also a reduction in
social isolation and improvement in the quality of life and fitness. That is the kind of prosperity that Western
Australians deserve.

Health prevention reduces the funding required for our hospitals by avoiding expensive medical treatment for
preventive conditions and supporting people in being active participants in community and family life. The
Minister for Health and Ageing, Hon Nicola Roxon, put out a Preventative Health Taskforce discussion paper,
which articulated that prevention can reduce the personal, family and community burden of disease, injury and
disability; allow better use of health system resources; generate substantial economic benefits that, although not
immediate, are tangible and significant over time; and produce a healthier workforce, which, in turn, boosts
economic performance and productivity. The paper cited a recent United States study, “Prevention for a
Healthier America”, that showed that for each US dollar invested in proven community-based disease prevention
programs that increased physical activity, improved nutrition and reduced smoking, the return on investment
over and above the cost of the program would be $US5.60 within five years. A significant investment in
preventive health is needed, and I would like next year’s budget to include a bit more money for preventive
programs and some stability in that funding for preventive programs. We will lobby for that.

We also require a significant investment in mental health and mental health early intervention programs. The
Greens (WA) note the $60 million investment in the new Mental Health Commission, which was welcomed by
the sector and was a very good move by this government. It is important to acknowledge this government
making a really good decision about how to spend our money wisely.

I have only three more points. We would like to see a greater investment in habitat protection. The WWF
Australia Fund is currently campaigning—members may have been approached—to double the available
funding for on-ground conservation action. It would be great if this government could find money to do that, as
well as protect wildlife corridors through programs to compensate private landholders, such as farmers, for
permanently conserving parts of their land. That is a direction that this state government must take towards
protecting threatened species. When we first started sitting, the Auditor General handed down a report that was
quite damning of the inaction of this state government on the protection of threatened species. When we are
living in a boom time, it is important to invest in setting aside these really important wildlife corridors so that
threatened species do not go onto the endangered list and possibly into extinction.

Of course the gender pay gap should be addressed. We need to implement policy to ensure that women workers
are fairly paid and to reduce the gender pay gap.

The final point I want to make about the Greens’ view of the state budget is that we would really like to see
investment in a new transport plan for Perth. There would be so many benefits if we shifted away from freeways
to a transit shared-traffic approach and there would be cost savings. The state government has, as we know,
budgeted $550 million for the proposed 5.5-kilometre freeway extension through the Beeliar wetlands, and we
should compare that with the cost of a light rail system in Perth, which we have estimated at $15 million a
kilometre. If we established a light rail network that really did answer some transport needs in this state, it would
benefit not only consumers and commuters, but also the environment, as there would be no need to build roads
through wetlands. The Greens would like to see the state government fund a feasibility study into light rail and
prepare a submission for federal infrastructure funding to build this rail system.

I have identified these initiatives from a relatively cursory glance at the WA state budget. They show that there
are ways that we can improve the budget for sustainability purposes that will lead us to greater prosperity in this
state, a prosperity not just based on the exploitation of minerals and the export of our tremendous wealth, but one
in which there is investment in social infrastructure. These initiatives would make Western Australia a place
where people feel prosperous and are not on that treadmill of making money to pay the bills and put food on the
table and getting really tired with their efforts in doing so.

I will finish on those comments and say that this is a great opportunity in our state to look at our finite resources
and make really careful decisions about how we spend money to benefit all Western Australians and ensure a
sustainable future without losing wealth, threatening our plant or animal species, or allowing human beings to
fall by the wayside due to homelessness or the lack of health and wellbeing, and aim to ensure that our children
have a positive future in Western Australia. Thank you.