Ms O’CONNOR – Back to something – through you, Treasurer – that Mr Swain said, and it confirms what we’ve been arguing. Mr Swain said there’ll be more and more money required to service interest costs and that means, I’m paraphrasing here, there’ll be less public servants. It is confirmed that there’s a connection between profligate spending, borrowing to cover debt servicing and an erosion of public services.
Your government can say, we will leave the frontline alone – there’s never been an adequate definition of what the frontline in service delivery is – but what we’ve just had confirmed is because of profligate spending and the debt that accrues and what we have to borrow to pay our interest payments, there’ll be less public services.
In that context, can’t you see how incredibly irresponsible it is to load another $1.8 billion at least to the state’s debt over the next 10 years because you want to build this stadium we don’t need?
Mr ABETZ – You have put all your provocative language into that question –
Ms O’CONNOR – You’re welcome.
Mr ABETZ – Which I will try to avoid.
CHAIR – Or respond to but just answer the question if you could.
Mr ABETZ – Exactly. Albeit if the question allows it, the answer should allow it as well, Chair, but on this occasion, I will seek to restrain myself.
Ms LOVELL – Rise above it.
Mr ABETZ – I will seek to restrain myself. When a government borrows, if it borrows for something which is economically enabling, which also attracts $360 million from the AFL that if we if don’t grab it, Darwin will or another team in Western Australia will. The federal funds of $240 million which is for the development of the precinct. if we don’t go ahead with the stadium, there’s no plan ‘b’ with that precinct.
CHAIR – That’s irresponsible.
Mr ABETZ – Then-
Ms O’CONNOR – There is a plan ‘b’; there was a master plan.
Mr ABETZ – The Eden Project, how could I have forgotten?
Ms O’CONNOR – How ridiculous. There is actually a Macquarie Point Master Plan, widely consulted with broad community input.
Mr ABETZ – There is the borrowing for your everyday needs, and there is borrowing that will assist in bringing other capital in like another hotel or two and provide a precinct which will be an attraction in its own right. Therefore, an economic enabler and cultural, et cetera enabler which cannot be overlooked. In the total Budget, in the total scheme of things and as was written in your local – no, not in your local newspaper – sorry, in the Chair’s local newspaper:
killing the stadium will do little to fix our debt.
Will there be extra costs associated? Of course there will be, like with every other borrowing that the government undertakes.
Ms O’CONNOR – It is pretty lame to have to rely on an editorial in The Advocate to back up your argument to set the state into massive debt for a stadium we don’t need.
CHAIR – That’s a statement. Have you got another –
Ms O’CONNOR – It’s pathetic.
Mr ABETZ – That’s a statement.
CHAIR – I am going to stop that. If there are specific questions, we’ve done the stadium to death, almost.
Ms O’CONNOR – We haven’t, actually.
Ms THOMAS – You’re not going to get the answers that you’re looking for.
Ms O’CONNOR – We might, I want to talk about Homes Tasmania if we want to talk about a budget risk. Page 84 of budget paper 1, just as the PEFO did, identifies Homes Tasmania’s growing debt burden which will be over a billion dollars by 30 June 2029 as a significant risk. Noting that, in this Budget, the papers state there is no specific equity contribution to Homes Tasmania. There is a specific equity contribution though towards the stadium.
Do you acknowledge that Homes Tasmania’s financial situation is unsustainable? Do you acknowledge what the PEFO says about Homes Tasmania, estimating it will require extra funding of around $10 million a year, indexed to cover increasing unavoidable property-holding costs, this money is not accommodated for in the Budget as far as I can see it. Will the state be covering those equity cost requirements of Homes Tasmania? Just below that in the PEFO, Stadiums Tasmania indicates it’ll require additional funding of around $11 million a year to operate and maintain its assets. If you had to choose –
CHAIR – Answer the question about Homes Tasmania.
Ms O’CONNOR – Do you agree that the state is gong to have to cover Homes Tasmania’s extra unavoidable costs and that they cannot afford to do that on borrowing or on the income that is generated from housing rents?
Mr ABETZ – On page 102 of Budget Paper 2, Vol. 2, provided in the table that’s there, the second-last line in the table, ‘property holding costs: additional support’, and you can see that increasing over the forward Estimates.
Ms O’CONNOR – Can Mr Swain or you tell us the source of that extra funding? Is it coming out of the rents generated by Homes Tasmania’s property holdings?
Mr CRAIGIE – Homes Tasmania is a PNFC entity (Public Non-Financial Corporation), so PNFC entities aren’t directly funded from the public account. In this case, that funding is appropriated to State Growth to provide as a grant to Homes Tasmania.
Ms O’CONNOR – It’s a grant that is about half of what they suggested is required to cover their costs, and so can we assume that additional support for property-holding costs for Homes Tasmania will increase in the out years in order to meet the unavoidable costs that they’ve identified?
Mr ABETZ – Once again, that is hypothetical.
Ms O’CONNOR – It’s what they said they need.
CHAIR – I think we can ask this question of the Minister for Housing and Planning, because we’ll have the Homes Tasmania people in front of us then.
Ms O’CONNOR – I know the decision ultimately rests with Cabinet, but for you, the Treasurer, this is a Public Non-Financial Corporation that to some extent you are responsible for. There’s money going into a stadium and not really going into Homes Tasmania, and it’s been saddled with debt.
Mr ABETZ – The reason that I am more able to talk about Macquarie Point as opposed to other elements of the Budget is that I also wear another hat as the minister responsible for the Macquarie Point Urban Renewal, and so I have more day-to-day knowledge of that as opposed to Homes Tasmania, and a whole host of other elements in the Budget.
Ms O’CONNOR – Homes Tasmania’s situation has been identified by Treasury as a future risk. You must be across that. Take an interest in and be concerned by that, and be thinking to the future how you’re going to deal with it.
Mr ABETZ – Yes, and we have a very capable minister for housing, Mr Kerry Vincent, who serves in your place as the member for Prosser, and I’m sure he will be able to provide you with the detail as to how we’ve arrived at those figures.
Ms O’CONNOR – This will be my last question on this line of questioning. PEFO has identified Homes Tasmania as a risk. The model that it was set up under by legislation loads it up with debt and there will be interest repayments of $50 million a year within a few years. Do you agree that there are question marks, at best, over the sustainability of the financial model for Homes Tasmania?
Mr ABETZ – I’m not going to answer that question ‘yes’ or ‘no’ as you would like me to. Suffice to say the government will always monitor these situations exceptionally carefully and take advice and watch that which is occurring. I’m sure that under the stewardship of Minister Vincent, Homes Tasmania will be looked after exceptionally well.
Ms O’CONNOR – You’re sure of that.
Mr SWAIN – There is some work going on in that space, I believe, led by State Growth.
Ms O’CONNOR – What space? The sustainability of the model?
Mr SWAIN – Yes, in relation to Homes Tasmania.
Ms O’CONNOR – It’s almost as if they are set up to fail, Mr Swain.
Mr SWAIN – I was alluding to –
Ms O’CONNOR – The fact that it’s being looked at.
Mr SWAIN – You may then want to ask questions about that.
