CHAIR – Cassie, you had one on this particular matter.
Ms O’CONNOR – I do. Treasurer, in the last three financial years we’ve seen supplementary appropriations in the order of hundreds of millions of dollars. It’s become a strategy of your government – in fact, this precedes you – to under‑budget for key services to make the budget look better, only to have to make enormous supplementary appropriations to make up the shortfall.
This Budget makes some headway in accounting for under‑budgeting identified in the PEFO, but most matters are not addressed. This includes $24 million in out-of-home care costs; $5.6 million for Ashley Youth Detention Centre costs; while $1.3 million is provided for community corrections and Magistrate Court cost complexities. That’s only for two years. The PEFO says the actual cost is in the order of $10 million. The reality is just one of these costs would make your notional 2028-29 surplus disappear.
If the glide path to surplus is based on fabricated data, the plane will still crash and burn, Treasurer. When will you start making the budget to reflect the actual cost of services?
Mr ABETZ – Look, lots in that question. Can I start at the beginning with your assertion that there was a strategy in the Budget and then with supplementary appropriations later on. I think we all know, and if we don’t we should know, that the biggest area was health. Thankfully, finally, we’ve been getting it out to the public, and I’ve banged on about this a few times at Question Time that we have 100 people that are referred to – I’m not sure it’s the most dignified way of referring to them – but as bed-blockers –
Ms LOVELL – That’s actually an offensive term. I think it’s highly inappropriate.
Ms O’CONNOR – But also, it’s a diversion from the question.
Mr ABETZ – It is used by others.
Ms LOVELL – That doesn’t mean you have to use it though.
CHAIR – It is something that you probably shouldn’t use.
Ms O’CONNOR – It is used in the hospital unfortunately.
Ms LOVELL – That doesn’t mean that you have to use it.
Mr ABETZ – It is used among professionals. We know what we’re talking about. Eighty of them cannot find aged-care places. Twenty of them can’t find disability care places. We all know federal government responsibility. We are backfilling that cost; three wards of our hospital are full with people who are medically ready to be discharged but can’t be discharged because we have a lack of support from the federal government and, if I might say, federal governments.
I don’t want to make this into a federal-Labor or whatever issue – this is federal governments over the years – have not funded aged and disability care as they should. As a result, we are backfilling and so that is a huge cost that we are bearing in the medical area.
Ms O’CONNOR – That’s one agency though. I accept at some level what you’re saying ‑
Mr ABETZ – Yes, but with the supplementaries, somebody can –
Ms O’CONNOR – but with each agency, right down to corrections, for example –
Mr ABETZ – Yes, but somebody can help me out of the supplementaries. The health bit contributed what?
Mr SWAIN – I think it was $345 million.
Mr ABETZ – Yes, out of?
CHAIR – Four-hundred-and-nintey or something, I think.
Mr ABETZ – Yes, just under half a billion. It was about – what – three-quarters in very rough terms or thereabouts. That is the lion’s share of it. Look, with the other areas, what it tells me, and hopefully informs other agencies as well, is they have got to restrain their spending and ensure that they keep within the budgets that they are provided.
Ms O’CONNOR – Thank you, Treasurer, the PEFO notes that the under-budgeting for injured workers support in the Department of Police, Fire and Emergency Management was about $14.5 million. The Budget has accounted for the full $14.5 million across the forward Estimates, but it’s not so pleasing to note that this appears to be the only example of under-budgeting identified in the PEFO that this Budget fully and consistently addresses. Why hasn’t this Budget, why haven’t you, as Treasurer, addressed all the other examples of under-budgeting identified in the PEFO?
Mr ABETZ – What that would suggest is that you would want to see increased budgeting in all those areas at the same time that –
Ms O’CONNOR – Maybe more honesty in the numbers.
Mr ABETZ – At the same time as your party voted with others to send us to an election because we weren’t engaging in budget repair. You can’t, with respect, have it both ways: demand budget repair and then demand extra expenditure in a whole host of areas.
Ms O’CONNOR – Cute deflection.
CHAIR – If you could just restate the question.
Ms O’CONNOR – Lack of courage manifests ‑ lack of courage in this Budget. Why haven’t you addressed all the other examples of under-funding that were identified in the PEFO? Will they be addressed in May?
Mr SWAIN – There are some true-ups in this Budget. Health is nearly an extra billion dollars coming off the sub-appropriation. There are uplifts in corrections, there are uplifts in at-home care, there are uplifts in parks. I’m trying to think where else, but they’re the front-of‑mind ones. We have –
CHAIR – Education, one might think.
Mr SWAIN – Yes, we have gone through and looked for patterns and sub-appropriation, additional funding, and tried to address some of those in individual budget items. It is still the case that the overall expenses are aggressive, and a lot of work needs to be done to achieve those forward expenditures.
Ms O’CONNOR – Just getting back to the sort of subterfuge that is in this Budget –
Mr ABETZ – Hah.
Ms O’CONNOR – But it is. It is. Sort of underfunding across the forwards, blank lines ‑
We have an example here of Tasmanian prison services, and there’s a line item in the Budget that talks about cost pressures. The purpose of only funding this for one year is solely to preserve the forward Estimates’ bottom lines. This is really clear, because the cost pressures in the prison system are not going to go away. What is your spin is on this one.
Are you actually suggesting there is a world where corrections staff pay cheques come due and the government doesn’t pay? And if not, why does your Budget keep this option open other than for the purposes of deceiving people about the bottom line?
Mr ABETZ – OK, ‘subterfuge’, ‘spin’, ‘deceiving’ ‑ all those are words that are conducive to getting objective information, but I will take that on notice, unless somebody’s got some. Yes, I will –
Ms O’CONNOR – Just on this line of questioning: the line item reading health demand allocates $231 million. The Pre-Election Financial Outlook Report puts the actual cost at $345 million. Can we look forward to a supplementary appropriation, for example and this goes to Ms Lovell’s question to cover that extra $114 million shortfall in the future?
Mr ABETZ – Well, I have answered in relation to my approach to supplementals, but-
Ms O’CONNOR – Well, what we’re trying to get to the bottom of here is just consistent underfunding to make the bottom line in the budget look better ‑ then we end up with the supplementary appropriation.
You claim a flimsy $5.6 million surplus in the final year of the Budget. So far in the questions that I’ve asked you, we’ve discussed about $179 million in expenses per year that your government will accrue but hasn’t budgeted for. How do you explain that and how are you going to cover it?
Mr ABETZ – Well, it’s interesting with all this that we were sent to an election on the basis of budget repairs –
Ms THOMAS – You weren’t sent to an election.
Ms O’CONNOR – This is a deflection.
Mr ABETZ – No – and each and every time, all I’m being told about is ‘underfunding’, which would suggest you want extra money in the Budget, which would be for –
CHAIR – Can you reframe – just re-pose the question? Just the question.
Ms O’CONNOR – The question is: given that in this Budget it is clear that there is consistent underfunding in order to make the bottom line look better and I’ve just given you some examples of an extra $179 million in costs –
CHAIR – The question?
Ms O’CONNOR – Well, the question is: why are you trying to hide the true costs of government operations in this Budget?
Mr ABETZ – I don’t accept the premise of your question and I reject that which you asserted at the end. This is a Budget that is interim. I have indicated that the interim Budget is the foundation on which we are going to build for the future sustainability of our budget. Let’s be clear: that will require some tough decisions. Nobody likes doing that which will be required; but if you want budget repair, I would just look forward to some genuine examples of how we can get the budget back into shape, keeping in mind that two‑thirds of our revenue we aren’t the masters of. One third is ours, so the real area for us to deal with is on the expenditure side.
Ms O’CONNOR – It would be fair to say, though, wouldn’t it, that the forward Estimates in this interim Budget lack credibility?
Mr ABETZ – I’ve just been assisted: after the 2024-25 supplementary appropriations, we have put that there for everybody to see, and we are now doing a re‑calibration exercise. I think the secretary, in fact, spoke to that.
Mr SWAIN – Yes. There are a couple of things going on in the Budget. There’s true-ups of individual line items, which I did speak to. There may be some where there’s further work to do. There are also global savings measures that have to be applied and have to be transferred into outcomes. Just if I could, the PEFO is a statement of Treasury’s view, applying a particular methodology of what outcomes will occur without intervention. From a Treasury point of view, what we want to see is –
CHAIR – Intervention.
Mr SWAIN – a credible diversion from PEFO numbers in future budgets.
Ms O’CONNOR – Treasurer, do you acknowledge that that flimsy $5.6 million fourth‑year surplus relies on the supposition that your government will elect not to continue funding for a wide range of commission of inquiry recommendations, as well as your own election promises like the school lunch program?
Mr ABETZ – No, I don’t.
Ms O’CONNOR – That’s what the numbers indicate in the interim Budget: all those dotted little flat empty lines.
Mr ABETZ – Yes, and the full picture, as we said in the interim Budget, will be painted in May.
Ms O’CONNOR – It’s likely to be an ugly picture, though, isn’t it?
Mr ABETZ – It’s not going to be as rosy a picture as one would like, but it’s a task that we should be, and need to be, committed to, and we, as the government, are up for it. We look forward to the support of all those that have been talking about budget repair actually coming up with some suggestions of budget repair.
Ms LOVELL – With all the advisers we have.
Mr SWAIN – In relation to improving the accuracy of expense forecasts, that does go two ways. There are the adjustments that I’ve talked about, but there are also situations where the money can’t be spent, and Treasury will be advising the Treasurer that where that is demonstrable, that funding should be reallocated to other things. That is particularly the case in capital, where there’s been a significant under‑delivery this year, for example, about a 30 per cent under-delivery, so there are funds that are not going to be spent.
I’m picking up the part of your question relating to the commission of inquiry in a very general sense. There are also changes to budgets that are not about a change in position; they’re about a recognition of what agencies can actually get out the door.
Ms O’CONNOR – The powers under the Financial Management Act to reallocate funding – we were talking before in the context of the health budget, for example – have they been exercised by government before, where you use the funds from one agency to top up or complement –
Mr SWAIN – Yes is the short answer.
