Debate resumed from 29 May; motion of Mr O’BRIEN (Treasurer).

Mr PALLAS (Tarneit) — It gives me pleasure to rise to speak on the Borrowing and Investment Powers Amendment Bill 2013. In so doing, I desire to move:

That all the words after ‘That’ be omitted with the view of inserting in their place the words ‘this house refuses to read this bill a second time until the impacts of the measures and timelines of the bill have been referred to, and considered by, the Economic Development and Infrastructure Committee’.

In speaking both to the bill and to the reasoned amendment, the opposition is concerned that through this bill the Treasurer is asking to be given a power that has until now belonged to this Parliament, and that is quite a substantial and indeed profound erosion of the manner in which the arrangements in respect of the borrowing of both Melbourne Water and the State Electricity Commission of Victoria have been managed. It effectively enables the Treasurer to determine the amount of debt that can be taken on by Melbourne Water and the State Electricity Commission of Victoria. To present the bill in the way the Treasurer has as merely a perfunctory amendment in line with expectations is quite frankly to obscure the significance of the changes that are being made here.

The government is trying to sneak the bill through, and we want to refer it to the Economic Development and Infrastructure Committee so the implications of these changes and their implementation can be fully appreciated.

As a consequence of the advice we received today from the Public Accounts and Estimates Committee we know state debt is being appreciably increased under this government’s watch. That is an issue every Victorian would be concerned about. Before the last election members of the current government gave an ironclad commitment to the people of Victoria that through the financial management policies they circulated — they put their hands on their hearts and assured Victorians — they had a rock-solid commitment to ensuring that debt did not increase. However, the Public Accounts and Estimates Committee — an all-party committee and, might I say, a committee dominated by government members — has told us that debt is going to continue to rise from about 5.8 per cent of gross state product to about 6.6 per cent of gross state product by 30 June 2015.

In terms of the base it is coming off, the 2010 pre-election budget update document, otherwise known as PEBU, shows on page 18 that as at 30 June 2010 state debt was $8 billion.

At that time the projection for state debt, the 2014 estimate, was up to $15.6 billion. These figures were sourced from the Department of Treasury and Finance. The profound increase in state debt overseen by this government lacks clarity or explanation. The government says it has a debt reduction strategy. If it is a debt reduction strategy, it is in reverse. Through the increasing percentage of gross state product in absolute terms we see that this is a debt-consumed government. It is a government that does not have a strategy to deal with debt.

In the bill before us today we see a government that seeks to take away what scrutiny this Parliament has over debt levels in regard to two specific government authorities. The government seeks to ensure that in future those authorities will not be the subject of scrutiny, their actions will not require explanation and this Parliament will have no capacity to scrutinise what is occurring and whether it is appropriate that such debt levels be put in place.

To present the bill this way, as something superficial and of no great moment or weight, is to obscure the significance of what is happening to state debt, which is increasing under this government’s watch. Victorians have every right to ask why state debt is rising so high at a time when the government’s infrastructure spend is not, as government members like to pretend, at a record level. If one takes out the long tail of investment by the previous government, one finds that state capital spending is quite substantially deflated.

More worryingly, the outward projections for future spending in respect of infrastructure contained in the report of the Public Accounts and Estimates Committee would probably be a source of great concern to every Victorian. Page 24 of the Public Accounts and Estimates Committee report says:

… it is expected that the proportion of the government’s asset investment that can be funded from sources other than borrowings will increase from 50 per cent to the full amount.

That will not come as a great comfort to Victorians, given this government’s track record of increasing debt. The report continues:

This change reflects the government’s expectation of higher operating surpluses and reduced asset investment over the forward estimates.

Nothing could be a greater condemnation of this government than the fact that in the forward estimates period it does not have a plan to reinvigorate and reinvest in our education system or our hospital system. It is a government that is saying through its government-dominated Public Accounts and Estimates Committee that it has a reduced asset spending profile and strategy.

The SPEAKER — Order! This is an appropriate time to stop for lunch. The member will have the call when this bill is next before the house.

See Tim’s speech in Hansard here.