12 September | NSW Budget Estimates
Over the last few weeks, the NSW Parliament has hosted the latest round of Budget Estimates hearings. These hearings inquire into the expenditure, performance, and effectiveness of Ministers and NSW Government agencies, through detailed questioning on the decisions, actions, and advice of Ministers and public servants.
Flood recovery and mitigation was high on the agenda, particularly with a third consecutive La Niña likely to impact the state this summer. The ongoing response to the pandemic and associated health restrictions also featured heavily.
The appointment of the former Deputy Premier to the position of Americas Trade Commissioner also saw questions directed to the Premier and other senior Ministers about the process behind that decision.
In what will likely be the final hearings prior to the March 2023 state election, the lines of questioning from opposition and crossbench Members of Parliament may have given an early indication of some of the key battlegrounds that could decide the election.
The fallout of the Americas Trade Commissioner saga continued, with Secretary of the Department of Premier and Cabinet, Michael Coutts-Trotter, questioned intensely on the matter. Coutts-Trotter said he expressed a preliminary view to secretary of the Department of Enterprise, Investment and Trade, Amy Brown, that she “had not satisfactorily performed the function of secretary” and that she gave Ministers and panel members “an incomplete and hence misleading” update on candidates’ suitability for the role. Ms Brown departed her role as chief of Investment NSW in late August.
During the selection process, Ms Brown had briefed the Premier face-to-face on the suitability of candidates for the role. This occurred on the day the Premier was required to provide a response to Parliament. Coutts-Trotter noted the Premier had explicitly sought this briefing, during which Brown informed the Premier that there were no suitable candidates despite the first recruitment process deeming Jenny West and Rob Fitzpatrick suitable candidates. Then-Minister Ayres also attended this briefing.
The Premier flagged reform on first home-buyer stamp duty “very shortly”. The legislation is currently being drafted and will be introduced by the Treasurer this year and would provide a choice between full upfront or annual stamp-duty payments for first home buyers.
Perrottet expressed strong concerns about donations to political parties, and that the outcomes of political donations should be transparent. He took particular issue with RTBU donations to the Labor Party, while the Opposition pointed to Liberal Party fundraising efforts.
The Premier was questioned on perceived shortfalls of the Biodiversity Offsets Scheme, which the Auditor-General’s corresponding report noted that as much as 96% of the demand from developers for species credits had not been met by supply. The Premier committed to reviewing the report.
The Opposition interrogated the Premier on former Transport Minister Andrew Constance’s commitment to fully electrify NSW’s bus fleet by 2030. Agency officials have told Parliament this is unlikely to be achieved until 2047.
Significant attention was paid to the future of coal supply and steel production in NSW. The committee queried the future operation of the Port Kembla steelworks following recent attention given to mining operations in the Sydney Water catchment.
Toole was questioned heavily on former deputy premier John Barilaro’s appointment to the New York Trade Commissioner role, including chronological knowledge, contact history with Barilaro, former deputy Liberal leader Stuart Ayres and the Premier, and opinions on Barilaro’s suitability for the role.
Toole was asked about delays of legislation following the review of the Crime Commission Act in 2020 pertaining to unexplained wealth, encrypted devices and criminal networks. The Deputy Premier responded that future legislation needed to be interrogated thoroughly to avoid ‘unintended consequences’ for Australian banks and politicians. Encrypted communications have frustrated police investigators amid Sydney’s increasingly frequent gangland shootings.
The government’s response to the Special Commission of Inquiry into the Drug ‘Ice’ was also probed. Toole echoed Minister Tudehope’s understanding that legislation would be introduced in the five sitting weeks before the end of the year. Strip-search procedures, anti-money laundering measures and police recruitment figures were also interrogated.
Kean was on the attack throughout his hearing, accusing Labor of bearing responsibility for major train disruptions in Sydney related to the recent RTBU train strikes. Train safety features, including guard compartments, were discussed.
Questions were asked about the closure of the Eraring and Bayswater power stations. Kean said neither he nor his Department had spoken to AGL about a potential early closure of the Bayswater facility, but that monitoring of the state’s power supply continues under the energy security target enshrined in the Electricity Infrastructure Roadmap.
Following Kean’s departure from the hearing, Treasury deputy secretary San Midha was questioned over an $8 billion shortfall in earmarked capital expenditure for 2022/23, mainly due to market constraints. Capital expenditure commitments had previously totalled $30 billion.
Sydney’s rail strikes dominated the hearing, with Elliott flagging unspecified “radical” contingencies if agreements with the RTBU could not be reached (though the Minister ruled out ‘shredding’ the enterprise agreement at the time). It was suggested that under a worst-case scenario, the industrial action could continue for another six months.
Elliott indicated support for Stuart Ayres’ bid to raise the Warragamba Dam wall as part of flood mitigation efforts.
The Minister was questioned extensively on various Sydney Metro projects and alleged cost blowouts.
The final business case for Parramatta Light Rail Stage 2 will include a quota of local manufacturing. Per the State Infrastructure Strategy, Stage 2 will begin with construction of the Wentworth bridge with a target to begin works in 2024. Federal funding has not yet been sought for the project, though Elliott stressed its progress is not conditional on Federal funding.
While expected business like elective surgery wait times, hospital beds, COVID reinfection figures and ‘long COVID’ featured prominently, NSW’s representation to the Australian Health Protection Principal Committee for a reduced COVID isolation period was also raised. The national isolation period was recently dropped from seven to five days. Acting Chief Health Officer Marianna Gale was keen to note that reduced mask compliance on public transport was problematic when infected individuals can be infectious up to 10 days after a positive test.
Amid the backdrop of the ice inquiry report discussed in previous hearings, Hazzard expressed his disapproval for pill testing facilities but suggested people consuming small quantities of drugs should be treated medically rather than criminally.
Regulation of cosmetic surgery featured heavily following ongoing reporting on improper practice in the industry by underqualified surgeons. Hazzard praised the federal Health Minister, Mark Butler’s timely engagement with state counterparts on the issue but did not express support for a royal commission into the industry.
A $19 million budget commitment to opening ‘long COVID’ clinics in NSW was discussed. The committee heard again that vaccination remained the safest and most viable option for protecting public health at large.
The Minister highlighted his department's significant movement of resources towards enhancing infrastructure in regional areas. Notable programs to achieve this included the Road Resilience Program, Great Western Highway Upgrade and Fixing Country Bridges program.
Farraway also spoke of expanding the transport network into rural areas. According to the Future Road Transport Roadmap, 13 out of the 16 planned regional cities now have additional buses operating.
He also emphasised current efforts to compensate taxi plate owners.
The committee meticulously probed timelines and procedures during the 2019-2020 Black Summer bushfires. They began by questioning attendees on the process leading up to the crash of an air tanker near Canberra during the Black Summer bushfires, and whether the aircraft should have been deployed in the first place.
The Minister and NSW Rural Fire Service Commissioner Rob Rogers faced intense questions over a $10 million benevolent fund sourced from an online donation campaign raised during the bushfire crisis. The Opposition took issue with the three-year wait on the fund’s rollout to bushfire victims. Cooke expects that full establishment of the fund’s managing organisation will occur by the end of this year.
Flood recovery and preparation constituted the greatest themes of the hearing, with departmental officials providing statistical and policy updates on these priorities. The two-year-old Resilience NSW body faced questions over its short and long-term responses to the recent flood crises, including temporary housing provisions. Cooke noted a dozen Northern Rivers temporary housing sites were either under construction or in the “final stages” of negotiating lease agreements.
The hearing focused on incident management at various NSW schools, including a radioactive substance found at Randwick Girls’ High and alleged violence against staff and students, poor attendance and poor academic results at Walgett Community College. The Minister was grilled on the effectiveness of the Connected Communities model in such settings.
Asked about merged classes, supervision constraints and the Teacher Supply Strategy (supporting the Government’s commitment to hire 4600 additional teachers), the Minister noted that sick-leave rates in 2022 were 60% higher than pre-COVID. Departmental staff, retired teachers and final-year university students have been used to fill staffing gaps.
Mitchell faced questioning on raising the status and prestige of teaching in NSW, a point pressed by Chair, Mark Latham. She acknowledged evidence that stagnant pay across teaching careers has threatened teacher retention.
The Opposition promptly raised the $8 billion capital expenditure slippage which featured in the earlier Treasury hearing, and its particular impact in the Roads portfolio. The Minister did not name specific projects likely to be delayed.
Ward faced intense questioning on whether revenue streams from the Sydney Harbour Tunnel and Harbour Bridge would be privatised.
Flood mitigation was the order of the day. The importance of strategic planning and resetting of flood plain levels by the Department of Planning and Environment was discussed, with particular emphasis on planning proposals and agriculture in vulnerable areas.
Staffing and resourcing for regional hospitals and mental health services constituted the Opposition’s biggest lines of questioning.
The Minister was asked about conversations with the Premier regarding a potential department for regional health. She clarified that she preferred the Regional Health Division model she announced in April 2022 to a full department, citing NSW Health’s strong results in coordinating with local health districts during the pandemic.
Concerns of a ‘culture of fear’ within NSW Health were raised numerous times. A parliamentary inquiry into regional health services last week recommended a new Health Administration Ombudsman be established to investigate bullying and preventable deaths, though Taylor maintained that the Health Care Complaints Commission and the NSW Ombudsman already held appropriate authority.
Three weeks into his Tourism portfolio, the Opposition probed a rumoured offer by Destination NSW to host the Logies in the state. Destination NSW CEO Steve Cox neither confirmed nor denied an attempt to pull the Logies from Queensland.
The Opposition sought updates on community infrastructure developments throughout the hearing, particularly concerning the Powerhouse Museum. The renewed Ultimo site will include new and upgraded exhibition spaces, and an educational academy to support regional NSW students. The Parramatta Powerhouse site is expected to be completed in late 2024.
Throughout the hearing, the Opposition pressed the Minister and officials on establishment of an Indigenous cultural centre and the demise of a $600 million 2014 proposal for a Barangaroo site by then-Premier Mike Baird. The current Premier noted in his later hearing that he has never believed Barangaroo should host a cultural centre.
The involvement of Aboriginal Community-Controlled Organisations in addressing First Nations homelessness rates was addressed. Franklin conceded more needed to be done to see ACCOs lead solution-reaching, but pointed to the half-a-billion dollars in the NSW Budget for Aboriginal Housing, including climate resilience and energy-saving upgrades, to improve tenancy overcrowding and quality of life.
TAFE enrolment figures were a major talking point throughout the hearing for the Opposition, which highlighted a drop of 70,000 enrolments in 2020 on 2011 figures. As in previous Budget Estimates hearings, the Opposition asked Henskens whether the sale of 19 TAFE campuses could be ruled out. Henskens noted he has not received a brief of any plans to do so and that the position is unchanged from the last round of Budget Estimates when similar questions were put to the previous Minister for Skills and Tertiary Education, Geoff Lee.
He reiterated the Government’s record funding of skills and training for a future-focused TAFE, and the prospects of skilled migration for the NSW economy.
A $2.5 billion state investment in science and technology was emphasised as an opportunity to attract greater Commonwealth and commercial funding to the sector in NSW. Questions were asked of whether this could be seen by the Commonwealth as voluntary cost-shifting, a suggestion heavily countered by Henskens.
Speakman was questioned about the introduction of section 22B into the Bail Act in July 2022. The new section states that an accused person who is convicted and appearing to receive a full-time prison sentence will not receive bail before sentencing, potentially limiting access to rehabilitative programs while a person is held in remand.
Relating to NSW’s Crimes Legislation Amendment (Coercive Control) Bill commencing by proclamation, Speakman noted that time was required for the judiciary, police, frontline workers and the community to be trained and informed on the legislation before it became active in order to properly resource it. He expects an appropriate period between assent and implementation to be approximately 12 months. Questions were also received on alignment of the bill’s contents with national definitions of domestic violence and coercive control.
The Special Commission of Inquiry into the Drug ‘Ice’ delivered its report 30 months ago. Speakman said he intends to bring forward legislation to address the report before the end of 2022, though it is unlikely any statutory or primary legislation will be required.
