Second Reading of the Statutes Amendment (Budget 2016) Bill
Adjourned debate on second reading.
(Continued from 1 November 2016.)
The Hon. J.M.A. LENSINK ( 12:30 ): I rise to make a few remarks and raise some questions in relation to the budget bill, which is the companion to the Appropriation Bill, which has already passed. In particular, I would like to focus on the matter of the solid waste levy and the amendments to the legislation, and to the transition to Green Industries SA from what is currently known as Zero Waste SA, and to state that there are some concerns that Zero Waste has a global brand. This was actually the subject of a question that I put to the minister at some point in the current term, that Zero Waste, being a well recognised global brand, may lose some of that branding in the change to this new title.
I will start with the matter of the solid waste levy. It was anticipated, with some concern, that the solid waste levy would be increased in the budget, and that has come to pass, and there has been quite a bit of concern, particularly from those within local government. The solid waste levy, when the Liberals were last in office, was $4.88 a tonne or $5.09 a tonne; it was to go up to $62 a tonne, but as a result of the budget it will be $76 a tonne, and it is then increasing to $87 in 2017-18, $100 in 2018-19 and $103 in 2019-20, to raise an additional $63.593 million.
I would like to express some of the concerns of, particularly, the local government sector. They were not consulted, yet again, by this government on this increase, and they hold significant concerns that there will be increased incidents of illegal dumping, but also that the funds are not being used for the purposes for which they were originally anticipated. They have provided a position paper, dated July 2016, which I assume they have sent to all members, which states:
For many years now, the Local Government Association (LGA) has voiced concerns regarding the impost of the waste levy on councils and the community. Coupled with this has been the issue of collected waste levy funds being left unspent in the Waste to Resources Fund.
I have some comments on that particular matter, which I will comment on shortly. It continues:
While supportive of a waste levy and its use to improve recycling and waste management outcomes, the levy rate is now such that it imposes a huge cost on councils and communities. Since 2001, the waste levy has increased by nearly 1200%.
I emphasise again, 1,200 per cent. Continuing:
Over the past eight years, councils have paid approximately $94m in waste levy fees. It is projected that councils will pay another $122m over the coming four years. Due to the recently announced waste levy increases, this projected figure is $32m more than what was anticipated. The 1 September increase to a rate of $76 per tonne will see councils face an unbudgeted $3-$4m expense to recover through program and service cuts.
They also go on to refer to the Allen Consulting report done for the state government, which demonstrated that a waste levy rate above around $50 per tonne is an economic cost to the community.
The first matter I wish to raise is to question what new measures the government will be undertaking to deal with the anticipated problem of illegal dumping. I note that funding is being provided to local government. I think that is just a bit of a sop, really, to try to take with one hand and give back with the other. The budget release at the time, under the Treasurer's title, the Hon. Tom Koutsantonis, dated 4 July, states that:
A ll extra funding … will be reinvested into waste , environment al and climate change programs including funding initiatives to help recycle waste into more valuable commodities, accelerating new business opportunities in the resource recovery sector and creating up to 350 jobs .
If my calculator works correctly, that is $63.593 million that is anticipated to be raised over four years, and if all that funding is going create up to 350 jobs, that is extraordinary—$181,694 per job. I think we have seen this government's record in relation to the recently failed Gillman exercise and also with the matter of giving preference to overseas corporate promises in the Northern Adelaide Irrigation Scheme for the sake of a headline.
The Treasurer might have had a moment of weakness when he spoke to the Mount Barker Courier—that certainly is the only place where I have actually seen it publicly reported—the very excellent, award-winning paper that it is. The Courier reported that the Treasurer had actually told the paper that:
… the waste fund would remain mostly untouched because it would hit the 2016/17 budget too hard.
This is something, I think, that has been well known for some time, but he has finally admitted that the budget is in such a parlous state that this waste levy tax is being used to prop up his budget. He is quoted as saying:
' T he reason I ' m not taking it out is because it will hurt the budget and I need to keep a surplus ,' he said. ' I 'll gradually take a bit of it down. It will be about $86m I'll leave there. '
I think this somewhat contradicts his media release stating that all extra funding received will be reinvested into these initiatives. So, we have an increase in tax which is allegedly going to increase jobs at a subsidy of taxpayers of $182,000 per job, which may never actually materialise. The government does outline in the budget some of the things that it intends to expend our solid waste levy on. I would like to make some comments in relation to those.
I refer to Budget Paper 5, the Budget Measures Statement. On page 47, under 'Expenditure measures' it states 'Office of Green Industries SA'. In anticipation of minister Hunter getting all cute with me about this, while he could say that my remarks could have been made in relation to the appropriation—and that is true—the budget bill does refer specifically to Green Industries and the levy, so these are directly relevant, and the budget bill expands the purposes for which the levy can be spent to enable some of these initiatives to take place. I will put that on the record in case he tries that one on.
Under Office of Green Industries SA it says that there will be some local government programs, that is, some $13 million or $14 million over four years; waste infrastructure, investment and innovation of a similar amount; and then a scrap metal recyclers' rebate scheme of $1.2 million in 2016-17 and 2017-18. One of my questions relates to that particular item under 'Scrap metal recyclers rebate scheme'. That is not detailed in the budget papers, and I would like some comments from the minister as to what that particular item is.
I think 'Local government programs' is probably reasonably clear. I assume 'Waste Infrastructure, Investment and Innovation' relates to other changes to mass balance reporting and those sorts of matters that we have discussed in the past, but the amendments have not actually come to parliament yet. If the minister could confirm whether that is the case, I would appreciate that. It has this sort of sop to the local government sector.
There is also an item in this same budget paper at page 50 under 'Trade Waste Initiative'. That is not something that has received much publicity. I am told that people who are supporters of green industries are reasonably annoyed at the fact that our levies have been put towards trade waste initiatives which are actually being funded via SA Water. My questions for the minister on this matter are: can he explain what is the Trade Waste Initiative? Is it being managed by Green Industries SA? How much funding to date has been provided to SA Water for this particular program, whether it is under this program or under another program measure? I am surprised that the government has been able to get away with using the solid waste levy via SA Water in such a manner.
We also had the minister tell us on radio, and again it is in the budget figures, that these solid waste levy increases were to assist in the case of disasters, and I note that that is actually in the bill. I think the estimates process is for most people, particularly when you are in opposition, a rather unedifying exercise in that the minister will filibuster and deliberately be rude. That was no different this year, unfortunately.
The question which was put to him then was: what advice the government had received that disaster events are not already covered by the state government's existing programs and insurance policies? I would have thought that SAICORP would cover a lot of that. So, I put that question again to the minister. Perhaps he could try to be more constructive in this instance than he was in estimates in trying to supply us with some information on that. Those are some of the programs that have been referred to.
If I turn now to the contents of the bill, we have at part 13 how Zero Waste SA is to become Green Industries SA. As I said, there have been concerns in the community that lots of branding will lead to a diminution of recognition of that organisation. Clause 110 is where it starts. Clause 116 provides that Green Industries SA may carry out the functions referred to in subsection (1)(d), and under subparagraph (b) it provides:
(b) indirectly via an agent that funds, administers, represents or otherwise supports other businesses in carrying out those activities.
My question for the minister is: what specifically does that clause anticipate? Further, at clause 117(2)(c), can the minister please explain what that particular clause relates to, where it says:
may make use of information obtained by the Environment Protection Authority in the administration or enforcement of the Environment Protection Act 1993…
and so forth? Part 3 raises the matter of the green industry fund, which is to be the new name of the Waste to Resources Fund. There has been some discussion on talkback radio, through estimates and also in this parliament, that the minister has seen fit to expand the purposes, I think to give him a fair bit of leeway, in relation to a whole lot of programs that should have been funded by other means.
In relation to 128(2)(b)(i), the amendment of what is to be known as the green industry fund, it provides, 'towards the payment of costs of climate change initiatives, including research and development'. When the former member for Ramsay (Hon. Mike Rann) was premier, he had quite a unit within his section to deal with climate change.
I note that for people who might happen to live anywhere in South Australia, whether it is at Port Pirie, Christie Downs, in the Riverland, or anywhere in suburbia, their solid waste levy is going to be supporting climate change efforts. I do not think that is necessarily what people would have anticipated, and the government, in its wisdom, has seen fit to limit this to the CBD. I think the minister at the time said in estimates, 'Well, you can't put a ring fence around climate change.' He undermined his own argument because limiting it to programs that are within the CBD certainly limits its application to areas that may well benefit from it. Section (ii) states:
towards the payment of costs of managing waste or debris, or harm to the environment, following an identified major incident, a major emergency or a disaster…
I think this is almost like the emergency services levy, whereby every time we see some sort of incident or event take place, the government is going to seek to raid this fund rather than fund things out of general revenue or SAICORP, as per my previous question. A number of items ought to be covered generally by government from other means, but perhaps the minister can attempt to respond to that. The clause beneath that, new clause (5a) provides:
(5a) Without limiting the form that payment of amounts from the Fund may take for the purposes of subsection (5), such payments may take the form of—
(a) a grant of an amount to a person or body ;—
I think we are familiar with those—
(b) with the approval of the Treasurer—
(i) forming, or acquiring, holding, dealing with or disposing of, shares, units in a unit trust, interests in such shares or units or other interests in or securities issued by, bodies corporate; or
(ii) entering into a partnership, joint venture or other profit sharing agreement.
I would appreciate if the minister would expand on that to explain what he anticipates those particular things might entail. I would just like to finish in relation to this particular bill by placing on the record the way in which environmental levies now fund the environment portfolio. This of course relates to NRM as well as the Zero Waste levies. I have a spreadsheet that I have kept for several years.
In 2008-09, the appropriation from Treasury was for all the agencies, so this goes to the old DEH, the old department of water, land and biodiversity conservation, NRM funding, EPA funding and Zero Waste SA funding. In that year, 2008-09, the funding from Treasury was $258.3 million, and there were some FTEs for all of those agencies of somewhere over 2,000 people.
The funding from Treasury has slipped progressively over the years. In 2012-13, it dropped from $258 million to $188 million, and has continued to slide. Again, there was a big drop in 2014-15 to $107.478 million (and these are the government's own budget figures), and in 2016-17 that has now dropped to $75.6 million (the amount provided by Treasury).
All the rest of it comes from the solid waste levy or NRM funding, which I think is quite extraordinary and is not something that has been highlighted much in the media. I think it is acknowledged that the environment portfolio has had some very big cuts, and I outlined, several budgets ago, the funding those agencies had undergone. The FTE count for DEWNR (as it is called), NRM, EPA and Zero Waste SA is well under 2,000 FTEs now.
I think the environment has become a taxation agent for this government in particular. I find it rather extraordinary that the minister can come in here and have any sense of proportion about his government's contribution to the environment, and we will continue to monitor those impacts that are taking place, particularly through the solid waste levy, which is now the green levy and which will continue, clearly, to provide more funding for this government to prop up its budget line. With those comments, I conclude my remarks.