Leader of the Liberal Party
Leader of the Opposition

Malvern Media


Shadow Treasurer's Budget Reply 

Appropriation (2018-2019) Bill 2018

Mr M. O'BRIEN (Malvern)  —
I am pleased to rise to speak on the Appropriation (2018–2019) Bill 2018. Budgets
are about choices. Budgets reflect the priorities and the values — in some ways they actually reflect the soul — of a government. What we see in Labor's budget is that Labor choose their mates over the vast majority of Victorians — Victorians who work hard, Victorians who find it harder to get to and from work, Victorians who find it harder to pay the household bills than they did before and Victorians who feel less safe now than they did four years ago.

This Premier and this government look after their mates with special deals. Big government, big unions and big business — that is what they care about. Everybody else is at the back of the queue. The happiest person in this state with this budget would have to be a United Firefighters Union member who has got shares in Transurban and actually likes going to the footy at Etihad Stadium. 

This budget reflects a series of budget cons that makes this document about as believable as a Labor electorate officer's time sheet. This budget is based on a series of cons that makes it literally unbelievable, relying on a population Ponzi scheme that takes all the short-term revenue of population growth without any of the provision of infrastructure or services that is required. Labor has no plan for decentralisation — none. They rely on unsustainable population growth concentrated in Melbourne to generate short-term tax revenue. That is all this budget is built on. That is no way to run a budget, and it is no way to govern a state for this generation or for those that follow.

In George Orwell's book Nineteen Eighty-Four he coined the phrase 'doublethink' to mean the capacity to hold two mutually contradictory thoughts at the same time without acknowledging the contradiction. This is a budget that is based on doublethink.

This budget requires you to believe that private sector wages will strongly grow so that payroll tax will strongly grow. But it also requires you to believe that public sector wages will restrain so that expenses will restrain. It is an absolute joke. It is literally unbelievable. They want you to consider wages up for higher payroll tax but wages down to hold back expenses at the same time, in the same document. This is a doublethink budget that literally relies on Orwellian deception to make its numbers appear to add up — or to put it in modern cricketing terms, this Treasurer is the Dave
Warner of budget assumptions, not for his prowess with a bat but for his
tampering skills.

We turn to the claims the government makes about this budget, and let us look at infrastructure. The government likes to boast about the size of its infrastructure spend, but what we see when we look at this document and at this government's track record is that they actually regard cost blowouts on infrastructure as a positive. Why spend $9 billion on Melbourne Metro when you can build the exact same project for $11 billion and say you are spending more money? Why say you are going to do level crossing removals for $5 billion when you can do them for $8.3 billion — the same number of level crossings, mind you — and claim it as a win?

Let us have a look at some of these other budget blowouts that this so-called record infrastructure spend relies on. Labor came to office claiming the West Gate tunnel was going to be a $500 million project. It is now $6.7 billion. You can look at the Victorian Heart Hospital. It was supposed to be $150 million. Now it is $543 million. You can look at the Hoddle Street upgrade — a promised cost of $60 million, now $109 million.

Again no extra value, just pure cost blowouts, waste of money and nothing for taxpayers at the end of the day. That is what we get from Labor.

Of course who could forget the greatest of all cost blowouts, the zero cost, which was the cost of ripping up the east–west link contracts, which turned out to be a $1.3 billion cost to taxpayers. We all remember that the contract was not worth the paper it was written on and it would not cost a dollar to rip it up. But $1.3 billion later Victorians are still stuck in traffic. The end of the Eastern Freeway is worse than it has ever been, and this government only has a plan to make it even worse by building the north-east link before they fix the end of the Eastern Freeway by building the east–west link. It is absolutely ridiculous. This government also likes to boast about its jobs. It will not tell you this: for 18 of the last 19 months Victorian unemployment has exceeded the national average. We have been worse than the rest of the country, as measured by the average, for 18 of the last 19 months. We lag behind New South Wales consistently, and why would that be? We are the highest taxing state in the country. We have got a higher cost of energy than New South Wales.

We have got a higher cost of doing business. We have got more red tape. We have got more green tape. If you are a business looking to set up shop in Australia and you are comparing a New South Wales government that actually welcomes business and a Labor government down here that wants to tax you and regulate you, of course you might look to go north. This government's record on jobs is absolutely nothing to be proud of. I would remind members opposite that when we were last in office, Victoria created more jobs than any state in the country because we know how to grow the economy and we know how to grow jobs. 

Let us look at education. This government are great at playing politics with children's education. They fund schools based on margins, not on merit. We see no improvement in standards and no improvement in outcomes. If anything was iconic about this government's approach to state education in Victoria, it would be the proposal to establish an ice injecting room 37 metres from a state primary school. Nothing could better sum up Labor's commitment to ideology over the interests of our kids.

When it comes to training, there is a lot of patting on the back and spinning about this budget's measures. How many more or how many fewer students are enrolled in government-funded courses since the Premier came to office? That is the test, because all Labor's spin and all Labor's rhetoric is exposed when that simple question is asked and answered. The answer is that there are 151 000 fewer students in government-supported training now than when Labor was elected. It is an absolute record of failure on the part of Labor, and all the spin doctoring and all the free TAFE courses cannot turn around that simple failure: 151 000 fewer young Victorians and older Victorians in training now compared to when those opposite came to office.

When we look at health in this budget, there is nothing for a new hospital in Warragul. The coalition knows there is a great need in Warragul for that new hospital. The coalition is serious, and it talks about decentralisation. That means providing infrastructure and services to people who live in regional cities and towns right across this state. Labor cannot find a dollar for a new Warragul hospital, but it can find $225 million to give to the AFL to renovate Etihad Stadium. Labor can find funding for a new ballroom to host the Brownlow Medal but not a new operating room to save lives.

That is their legacy, and that shows their values.

When we come to sport, as we exposed in question time today, this is a Labor government that provided $225 million as a free kick to the AFL and Docklands harbourside land with an unknown cost because the Treasurer refused to answer the question. This is a huge free kick to the AFL, but if you are a community football club, netball club, soccer club or hockey club, you may, if you are lucky, be able to take out a loan with interest that has to be repaid. Nothing could sum up more this government's appalling attitude towards the community. Nothing could sum up more this government's appalling attitude towards sucking up to the big end of town and letting the grassroots of the community suffer as a consequence. It is almost worthwhile reviving Malcolm Turnbull's comments about Bill Shorten knocking knees with billionaires, because that is the way this government does business. If you are
big business — if you are a company like Transurban, and you have made $6 billion
in revenue over the last three years but have paid not a dollar of corporate tax — Premier Andrews has got a deal for you. If you are the AFL — a multimillion-dollar
profitable business that does not pay corporate tax — those opposite have got a deal for you.

If you are the East Malvern Knights footy club, bad luck. That is the way this government does business.

Let us come to tax. It is hard to talk about tax in this budget without reminding the house of the solemn promise made by the Premier the night before the election.
Honourable members interjecting.

Mr M. O'BRIEN — I am glad you asked. It was on Channel 7 news on 28 November 2014. He was being interviewed out the front of this place by Peter Mitchell. This is the quote:

Peter Mitchell: Daniel Andrews, all the polls say that you will be Victoria's next Premier. If you are, do you promise Victorians here tonight that you will not increase taxes or introduce any new taxes?

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

What a complete lie that turned out to be. We have seen not one, not two, but 12 new and increased taxes and charges. We have seen the tripling of coal royalties which led to the closure of Hazelwood and which led to power prices going up. We have seen new stamp duty on off the plan purchases.

We have seen the new so-called vacant home tax, which actually hits farmers who have got an apartment in Melbourne. We have got the new annual property valuations to increase land tax; new stamp duty on property transfer between spouses; the new Uber and taxi fares taxes; the new city access tax for the West Gate tunnel; the new point-of-consumption gambling tax; the new land tax, subsequently tripled for absentee owners; the new stamp duty surcharge, subsequently increased for foreign purchasers; and the increased fire services levy. That does not even get onto the increases in the growth areas infrastructure contribution, the increase in property transfer fees or a whole range of other gouges that we have seen under this government.

There has been a $6.2 billion increase in taxes since the election; a 35 per cent increase. I cannot think of too many people in this state, those who get their bills in and worry about paying them, who have seen a 35 per cent increase in their incomes over the last four years. But the Premier thinks Victorian taxpayers are a bottomless pit, and he just takes money out of them left, right and centre. This all has a consequence, because Victoria is now clearly the highest taxing state in the country, based on state taxes as a ratio to gross state product. This is a government that genuinely believes it can spend Victorians' money better than Victorians can. It is arrogant, it is reckless, it is careless, it is wasteful. Well Premier, you have made Victoria the highest taxing state in Australia. That is not a badge of honour; that is a mark of shame.

Before we hear members opposite talk about their minor tweaks to payroll tax in the regions that will cost the budget a piddling $40 million a year, let me remind the house that this Treasurer is taking out in payroll tax alone an extra billion dollars a year compared to when he was elected. Payroll tax is up by $1 billion or 20 per cent; stamp duty is up by 60 per cent; land tax is up by 77 per cent. As I said before, this is a budget based on a population Ponzi scheme concentrated in Melbourne but relying on unsustainable growth in Melbourne without decentralisation.

Despite all these new taxes, despite the massive increase in GST that has been received under this government, the extra $14 billion, despite all the money that has been flowing in from asset sales — including $9.7 billion on the port of Melbourne, $2.1 billion on selling off Victoria's share of Snowy Hydro, potentially $2 billion on the land titles office — despite all that extra money, this budget sees an extraordinary
increase in borrowings and debt. In 2016–17 Victoria's debt was $15.7 billion. By 2021–22, in just five years time, that debt doubles to $31.4 billion. There have been record taxes, record GST, record asset sales, and now there will be a doubling of debt in just five years. Who knows how much further it will go?

You might ask, 'Where has the money gone?'. While taxes have risen by $6.2 billion, employee expenses have blown out by over $7 billion in the same period. That is a 38 per cent increase in the public sector wage bill. Public sector wage policy under this government basically involves ringing up the union and asking, 'How much do you want?'. We know this government lies about where the money goes. They claim it goes into frontline services, but the Victorian Public Sector Commission report tells us the truth.

This government is presiding over a massive blow out in highly paid bureaucrat executives. There were 162 extra executives last year alone, a 23.4 per cent increase, with an average salary of over $213 000 each. Under this Premier the proportion of executives to the rest of the public service is now the highest in recent history. The Premier is the fat cat's friend, there is no doubt about it.

But the trouble is that all the new authorities and all the new agencies created by this government, at great expense to taxpayers, are not improving the lives of Victorians. Despite Labor funding Public Transport Victoria, Transport for Victoria, VicTrack, Active Transport Victoria and the Level Crossing Removal Authority, the Premier still cannot get the trains to run on time.

You have to wonder about a budget forecast that assumes that after years and years and years of public sector wage blow outs, they will finally get religion, they will finally get budget discipline and they will keep those increases down to a reasonable level in the future. Unless medical science can create a backbone transplant for this Treasurer, there is no chance of that happening, and taxpayers as always will be the ones to pay the price.

There is a better way. This government's belief in bureaucracy is so enormous that they ripped up and destroyed one of the great agencies of this state that relied on private sector expertise to help Victoria achieve its goals. The Victorian Major Events Company (VMEC) was created by Joan Kirner, who appointed Ron Walker, former Liberal Lord Mayor and Liberal Party identity, as its inaugural chair. No doubt that was a decision that caused a lot of raised eyebrows on the Labor side.

But the knowledge that we needed to encourage private sector expertise to put Victoria on the map, to bring in, attract and keep the major events that keep this state ticking over was understood by the former Labor government. It was maintained and expanded by the Kennett government. It not only survived but thrived under the Bracks government, the Brumby government, the Baillieu government and the Napthine government. This was a great body that did great things for this state.

When you look at what the VMEC achieved, it is hard to understand why anybody would not be supporting it. Look at some of the events the VMEC has brought to Victoria: the Australian Formula One Grand Prix, White Night, Presidents Cup golf, Liverpool versus Melbourne Victory at AAMI Park, the Melbourne Winter Masterpieces series at the National Gallery of Victoria, the Grace Kelly exhibition at Bendigo, State of Origin rugby at the MCG, the Cadel Evans Great Ocean Road Race and Wicked
and The Book of Mormon, just to name a few. Victoria is better off because of the VMEC, because we had people from the private sector and from the business world who were prepared to put their time, their effort, their contacts and their connections to work for the service of the state.

Ms Asher interjected.

Mr M. O'BRIEN — Indeed. The member for Broadmeadows's brother was a member of the VMEC. It was extremely bipartisan. But the Premier killed it off. He killed it off in favour of creating yet another government bureaucracy where the entrepreneurial spirit that underpinned the VMEC could be drained away. We have seen how that ended up when the VMEC was lost and Visit Victoria was created. When you cannot even keep the Logies in Melbourne you may as well just pack up and go home. We have made it clear we will take a very different approach. We will re-engage and re-establish a revitalised Victorian major events company under a Liberal-Nationals government. Moreover, we will give a new VMEC a specific mandate to attract major events — major cultural events, major sporting events — to regional Victoria as part of our decentralisation agenda. We will make sure that Victorians the length and breadth of this state get the opportunity to see, to participate in and to work in the very best of what the world has to offer. We will make sure we get this done.

Labor's Treasurer said last week that of his four budgets this was the one of which he was most proud. I agree that in many respects it is a traditional Labor budget. We see over the four years taxes up 35 per cent, cost of living through the roof, debt doubling in just five years, public sector wage explosions, infrastructure costblowouts and special deals for Labor mates. That does sum up what Labor is all about. In six months time this government will be in caretaker mode and the election campaign will be in full swing. Victorians will be asking themselves, 'Compared to four years ago, am I better off? Under Labor has my cost of living gone down or up? Has my trip to work become easier or harder? When I get home at night do I feel safer or less safe?'.

These are the questions that will determine who forms the next government of Victoria, and with the Leader of the Opposition and our united team on this side of the house we are giving Victorians a real choice. We offer Victorians a government that will be tough on crime, not because a focus group tells us to but because we believe in it. We will offer Victorians a government that will respect taxpayers and their money by taking as little of it as possible and using it carefully, not rorting it to run our election campaigns. We offer Victorians a government that will be open for business, that will get our natural gas flowing again, that will get our traffic flowing again, that will get our trains working again and that will bring back the VMEC to get our major events crown back again. We offer Victorians a better alternative to the tired, incompetent and dishonest group of rorters that currently occupies the government benches. I am very optimistic that this will be the last budget that Victorians have to endure from the Andrews Labor government, and the sooner it ends the better off Victoria will be.

Contact Michael
Michael O'Brien MP

313 Waverley Road

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

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