Andrew Nikolic (Bass, Liberal Party) Share this | Hansard source

Underlying these appropriation bills is a truism—that is, strategy without resources is an illusion. And that is an observation with great relevance to the last six years of our country's economic history. That is because our economic freedom of action has been constrained by $123 billion in accumulated deficits and peak debt approaching an unprecedented trajectory to $667 billion. And all of this in just six years of Labor and Labor-Green governments. Our loss of economic freedom of action at the national level has been exacerbated in Tasmania by the double whammy of a Labor-Green government in Hobart.

During the past 16 years of Labor government in Tasmania, the size of the state budget has ballooned from $2 billion to $5 billion. And as Tasmanians head to the polling booths on 15 March, they are entitled to ask, 'How exactly has our state benefitted from this explosion in expenditure?'

Whether it is jobs, health, education or levels of socioeconomic disadvantage, Tasmania's performance lags behind every mainland state. Tasmania has by far the worst outcomes of any state in the Commonwealth. And yet when Labor came to power in Tasmania in 1998, the path to a brighter economic future had been laid out for them. Two years previously, during the 1996 federal election campaign, the coalition had initiated a joint Commonwealth-Tasmanian review into the Tasmanian economy. The result was the 1997 Nixon report, produced by Fraser government cabinet minister, the Hon. Peter Nixon AO.

Nixon's report highlighted five critical problems underpinning Tasmania's poor economic performance. These related to governance, debt, sub-optimal educational outcomes, a business environment that was unattractive to investors, and planning processes that were too complex. Nixon detailed 122 separate recommendations and he particularly highlighted the importance of    ensuring that Tasmania's debt burden was kept manageable, that costs on business were kept as low as possible, that Tasmania's industry development policy was focused on the key strategic advantages of our state, and that local jobs were created to address outbound migration. After 16 years of hard Labor, Deputy Speaker, you will be disappointed to hear that the key problems retarding Tasmania's prosperity are very similar to those highlighted by the Hon. Peter Nixon AO. Less than three weeks out from the Tasmanian state election, the key problems dominating the campaign are jobs, unsustainable government debt, sub-optimal education and health outcomes, obstacles to investment, and over-regulation. Tasmania seems to have been stuck in a time warp for the last 16 years, where the Labor faces have changed but the problems have remained the same.

Interestingly, Nixon also reported that it was too easy for minority groups to use the system to oppose developments that would benefit our state. And again there is a sense of déjà vu here, with minority groups, like the Greens and activist groups, exercising a disproportionate influence on Tasmania's future. Two Tasmanian Greens party members have been ministers in the Labor cabinet these past four years, until the inevitable fake divorce a few weeks ago—but only after parliament had risen for the last time before the election was called. Tasmania has become a place where loud minorities with megaphones define much of its politics, to the detriment of the silent majority. Tasmania is in economic crisis, requiring a rescue mission. That is why we announced an Economic Growth Recovery Plan for Tasmania on 15 August last year. And that is why an entire section of the Governor-General's speech to open the 44th Parliament was devoted to Tasmania's economic recovery. It is little wonder, when you consider the performance of the Labor government during the last 16 years in Tasmania. The $5 billion budget in Tasmania is 60 per cent funded by the Commonwealth, and 54 per cent of the budget is spent on health and education—yet the state of our hospitals and the state of our economic performance is a distant last on national benchmarks.

It was with a heavy heart that I listened to Tasmania's literacy crisis being exposed on the ABC's Lateline television program on 19 February 2014. I listened to Dr Ben Jensen of the Grattan Institute, who has recently been appointed to the Teacher Education Ministerial Advisory Group, suggest that the literacy crisis in Tasmania could become unmanageable within the next 10 years—'unmanageable' is the word that he used. At least half of Tasmania's population cannot read or write properly—a record of neglect that constitutes a shameful Labor legacy. The latest global report card on 15-year-olds found that more than half of the state's students fell below the national baseline for maths, compared to 42 per cent nationally. Forty-seven per cent failed the minimum standard of English, compared to 36 per cent nationally. With so much money being allocated to education in Tasmania, the results clearly don't reflect that investment—despite the fact that Tasmania's teacher-to-student ratios are nine per cent higher than those on the mainland.

Just this week we were presented with a disturbing report on rising youth unemployment across the country. It was a disturbing report because many young people will now find that transition from school to work much more difficult than previous generations. It was disturbing most of all because my home state of Tasmania performed worst of all the states and territories. One in five young people in Tasmania aged 15-24 are without work: a statistic that heightens the risk of generational disadvantage, poor health outcomes, and things like homelessness. Yet on 22 December last year, the Labor Premier, Lara Giddings, was quoted in The Examiner, the main paper in Northern Tasmania, as saying, '…there will be jobs for your children. There are jobs today for your children too.' Well, where are they, Premier?

I'm not sure which parallel universe Premier Giddings is living in, but the ABS monthly unemployment reports and the youth unemployment report released just in the last week highlight just how out of touch this Premier is with reality. Her performance as Treasurer was just as bad, when you consider the crisis in Tasmania's finances. In the lead-up to the state election on 15 March, the Mid-Year Financial Update for 2013-14 revealed some appalling statistics. The underlying budget deficit was estimated to be $365.9 million. This represents a $100 million deterioration since the 2013-14 budget was prepared—Ms Giddings has clearly modelled her performance on that of the member for Lilley, who has achieved similarly appalling outcomes in the federal budget. This result has effectively blown any prospect of a return to surplus in the forward estimates, which was anticipated to be a wafer-thin $9.9 million in 2016-17—again, a Swan-like result. There is a spooky resemblance between the Labor-Green government's performance in Tasmania, and that of its federal counterpart. This is best illustrated by examining the decline in the underlying budget position since the first estimate of the current budget.

Three years ago, Labor's estimate for the 2013-14 budget was an underlying surplus of $53.4 million. That has now been revised to a massive deficit of $365.9 million, representing deterioration in the budget's underlying estimate of $419.3 million. In other words, between 2010-11 and the 2013-14 mid-year update, this Labor-Greens minority government has blown the budget by $419.3 million. That is despite the fact that they signed up to a fiscal strategy to reel in expenditure as revenues collapsed on the back of deteriorating economic performance at a national level under the Rudd-Gillard-Rudd minority governments.

You may ask the question: why does this matter? Running an underlying deficit of $365.9 million in a small state like Tasmania suggests that the sustainability of ongoing operations is in peril. A fiscal deficit of $441 million represents a 30 per cent deterioration in the budget estimate, which means that the capacity of government to fund its capital expenditure is in peril. The unfunded superannuation liability in Tasmania as at 31 December last year stood at $6.173 billion—an appalling and extraordinary result.

In response to the emerging dire financial circumstances evident in the 2011-12 mid-year update, the Premier and treasurer Lara Giddings said:

… there is now no more hay left in the barn. We are living beyond our means and spending must be cut in line with our reduced income so we do not go back into net debt.

Two years later, not only is there no more hay in the barn but the barn has been burned down and the surrounding property has been sold to fund Labor's unsustainable approach to spending. Just as Mr Rudd, Ms Gillard and the member for Swan wrecked the joint federally, Premier Giddings and her Greens partners have wrecked Tasmania's economy.

In place of the damage caused by the Labor-Greens alliance in Hobart and Canberra, a different approach is needed. Tasmania is a small, sub-national, peripheral economy. While it is true that regions can change their industrial profile over time, small economies like Tasmania's are limited in achieving this due to: scope and scale challenges; labour markets, skills and investment uncertainty; and demand and supply distortions. Transition or transformation of an economy like Tasmania's cannot occur without major investment, and it happens quite slowly. Diversification in economic terms is almost always strongly linked to existing industrial structures. Transition becomes almost impossible when the very foundation for change is shut down or removed from productive capacity. For example, Labor-Greens efforts to close down native logging in Tasmania under the Tasmanian Forest Agreement is not just a political travesty but a regional development policy failure. This is what happens when unelected, self-interested groups hijack the policy process and the Labor Party allows the disproportionate policy influence of the Greens party to have its way.

A significant forest resource must be retained beyond the current lockups as the foundation for innovation and constructing competitive advantage for Tasmania. You cannot simply kill off forestry and mining, which constitute our competitive advantage, in Tasmania and purport to fill that vacuum with boutique industries like blueberries, electric cars and film making, as some Greens politicians have proposed—quite to the contrary. Innovating and connecting different but related activities in existing strong sectors of the Tasmanian economy is essential for a more prosperous future. Labor and Greens politicians in Tasmania should do some study on the concept of related variety and how that is particularly applicable to our state.

We need new business models characterised by horizontal relationships between and across sectors, not just vertical or cooperative relationships within sectors. Collaboration becomes the business model to drive the next platform of innovation for regional economies like Tasmania's that are trying to do more with less. The important role for government is in building the platforms of innovation at a regional level through a focus on related variety and collaboration.

After 16 years of stagnation under Labor, Tasmania needs a new way. It needs a majority Liberal government in Hobart with fresh ideas, empowered to drive the changes we need for a prosperous future. On 15 March, Tasmanians have an important choice to make: whether to reward Labor for its continuing failures in relation to jobs, education, health, front-line service delivery and investment or to vote for a majority Liberal government with new ideas and new vitality and finally get Tasmania off the bottom of national benchmark lists. We must do what Labor failed to do: address critical deficiencies and reset our economic course to a brighter future. I hope Tasmania seizes the opportunity for change on 15 March. I thank the House.

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