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Rising Cost of Living in Tasmania


Cassy O'Connor MP

Cassy O'Connor MP  -  Wednesday, 4 May 2022

Tags: Cost of Living, Housing Crisis

Ms O'CONNOR (Clark - Leader of the Greens) - Mr Deputy Speaker, if Mr Winter had stood up and laid out a plan which he rightly points to Tasmanians needing for reducing the cost of living, we might be able to support this motion. But we cannot support this motion. I want to flag an amendment, which I will read into the record now:

Mr Deputy Speaker, I move -

That motion number 3 be amended by omitting part (3) and inserting the following:

(3) calls on the Premier, the honourable Jeremy Rockliff, to act on cost of living by -

(a) introducing legislation to limit the use of whole properties as short-stay accommodation in tight rental markets.

(b) introducing controls on unreasonable rent increases and remove provisions allowing tenants to be evicted solely on the grounds of lease expiration.

(c) fund free public transport.

(d) invest in programs that relieve food insecurity.

(e) eliminate student fees and charges for TasTAFE students.

(f) fund all school costs for children and young people from households in poverty.

(g) enact a program to expand government concessions to all Tasmanian residents who live below the poverty line.

(h) provide free household energy efficiency upgrades for low income Tasmanians.

(i) adopt a housing first approach to homelessness and housing insecurity.

(j) fund these programs through increased corporate property taxes, including one of more of the following -

(i) increased casino tax rates and/or;

(ii) a 10 per cent royalty on the gross value of salmonoids grown in state-owned waters;

(iii) a 75 per cent betterment tax on any increase in the value of land that results from a change in the allowable use of the land, and/or;

(iv) a 1.0 per cent of unimproved value tax on residences left vacant with the exception of legitimate uses such as shacks, and/or;

(v) reversing the last two years of cuts to land tax rates.

I point out that Labor supported the cuts to land tax rates. I will shortly give a copy of this amendment to the Clerk.

Labor is paying lip service on cost of living. It is particularly galling to listen to Mr Winter talk about cost of living when he led the opposition support for the gambling bill. It has driven up the cost of living and will do so for generations because it will maintain poker machines in pubs and clubs across this island for generations.

It is very disappointing to see such a tepid, lazy and populist approach to cost of living from Labor. Rather than propose sensible and meaningful reforms to improve cost of living for those who need it, they have reached for low-hanging fruit, a bit like they did in question time today.

I note that they have taken up the issue of petrol prices before. The Attorney-General clarified at the time that the consideration of legislation to address this matter would be in circumstances where price gouging or anti-competitive behaviour by fuel retailers was taking place. This would involve examining consumer law frameworks. She also noted that external factors like the war in Ukraine are contributing to fuel price increases. Would that we could, Mr Deputy Speaker, but Tasmanian legislation cannot reduce the price importers pay for fuel. On the matter of price gouging, there is no doubt that historically Tasmanians have been overcharged for fuel, but I note that in September 2021 the ACCC, or Australian Competition and Consumer Commission, released a petrol price monitoring report which noted Hobart had the largest fuel price decrease in any Australian capital. The RACT noted this shows a closing gap of fuel prices and that Tasmanians were now getting a fairer deal.

I also note the Australian Government introduced a six-month reduction in fuel excise which of course was a political exercise designed to time into the federal election campaign. Nonetheless, putting aside the question over whether this was an efficient means to reduce cost of living, the ACCC has recorded that between 29 March and 26 April this year, the average daily regular unleaded petrol price decreased by between 25 cents and 48 cents a litre in Canberra, Hobart and Darwin. There was also a decrease between 29 cents and 32 cents a litre for diesel.

Mr Deputy Speaker, perhaps if Labor believes further action is required by the Tasmanian parliament, they should outline precisely what legislation should be introduced rather than a general ask for legislation to reduce petrol prices. Legislation is not a magic wand that can address any and all extraterritorial economic forces.

On to the next matter of the waste levy. I remind the House that Tasmania was the only jurisdiction in the country that did not have a waste levy in place. Labor erroneously and cynically describes this as a bin tax. First I note that if Labor is asking the House to pass a motion calling for legislative repeal, they should probably use the correct terminology. There is no bin tax.

In terms of the impact on cost of living, some context is important. As I understand it, based on average household waste generation, the cost is projected to be on average somewhere around $20 per year for ratepayers. This is a ridiculously small cost for Labor to be carrying on about, like it is some sort of flagship policy for cost of living, particularly given their total disregard for the financial and health costs of the pokies legislation Labor waved through this parliament on behalf of their donors. Please, spare us the hypocrisy.

Tasmania's average rates are about $2900 per year, so this waste levy is less than a 1 per cent increase on these costs. It should also be noted that the benefits that will be generated in respect of waste management will improve the health and wellbeing of Tasmanians and of course our environment.

Finally, on the matter of TasWater charges, I presume Labor is referring to TasWater's price and services plan number 4, or PSP4, for the period between 2022 and 2026. It should be noted that the office of the Tasmanian Economic Regulator makes price determinations for regulated water and sewerage services. There is good reason for this independence. We only need to look back to Tasmania's history of water infrastructure management to see what happens when charges do not reflect the necessary cost of delivering quality, safe drinking water. It should also be noted that in many respects, contemporary charges reflect the cost of addressing historic poor management of water and sewerage assets. In other words, short-term thinking has passed costs on to future ratepayers.

On that point, I did not hear anything from Mr Winter about the fact that TasWater will have to spend in the order of $240 million to upgrade its Bryn Estyn plant up the River Derwent, principally because we have allowed salmon hatcheries to pump salmon waste and faeces into the River Derwent and the Florentine. That has created enormous odour and quality issues which are most certainly part of the reason that TasWater is having to spend $240 million at Bryn Estyn, and of course that money will come out of the pockets of the average Tasmanian.

The risk of putting these decisions in the hands of those in the political sphere is manifest in Labor's motion today. Populist decisions to reduce charges and fees for short term political gain can have serious ramifications in the future; someone will always have to pay. If TasWater is not able to invest in asset maintenance and renewal, the health and safety of people and the environment is put at risk. This is more likely to occur in remote or regional communities. TasWater's PSP4 limits cost increases to 3.4 per cent per annum. We recognise that that does place extra costs on people's bills, but TasWater needs to be a sustainable entity. This is the maximum upper threshold. This equates to maximum increases on the average household bill of about $17.50 a year. This is also assuming Labor's position is to fix the maximum rate at 0 per cent; they conveniently have not provided their specific position.

It is also worth noting that the most recent year average Consumer Price Index change for Tasmania has been about 4.2 per cent, and the Reserve Bank of Australia forecasts for Australia are between 2.75 per cent and 3.755 per cent over the next couple of years. It is plausible that the rate increase we will see under TasWater's PSP4 out to 2026 will be lower than CPI. This is a relatively small saving to make to put the health and safety of individuals and the environment at risk, not to mention the fact that the costs would likely be passed on to future ratepayers. If Labor is really concerned about the cost of living, a far more sensible approach would be to call for the increase in water and sewerage concession eligibility criteria and/or the value of available concessions. Labor's proposal is not targeted to the most vulnerable and in fact they pay lip service to the economically and socially vulnerable. We saw it in their vote on the future gaming markets legislation. This is by design. It is a populist move to capitalise on resentment towards water and sewerage bills.

Mr Deputy Speaker, back to fuel prices. It is unclear what Labor's proposal for fuel price capping is in Tasmania. As of today, ULP fuel prices in Tasmania are at an average of 185 cents to 186 cents per litre and the terminal gate prices are 174 cents per litre, a margin of 11.8 cents per litre. Nowhere in Mr Winter's contribution did we hear any policy about the need to continue this island's transition to electrification, to make sure that the Government is seeding the second-hand vehicle fleet with electric vehicles so that the average Tasmanian can afford to buy an electric vehicle and therefore make consistent long-term savings on petrol, while also contributing to a cleaner Tasmania. This margin is relatively low in terms of recent history, although these margins have been quite high since 2015-16. If we assume Labor would like to see price margins reduced to the long-term average of 9.5 cents per litre, this would be roughly 2.3 cents per litre on current average prices. Looking at ABS data of average passenger vehicle fuel consumption per kilometre and average annual kilometres travelled, this would equate to an annual savings of about $27 a vehicle.

If we make generous assumptions about what Labor is asking for, we are looking at a maximum of about $65 or $64.50 saved in costs per year, or $1.24 a week. These may be back-of-the-envelope calculations but they are also quite generous. It is also the case that the majority of these savings would only be realised by property owners, and would be on bills where there are currently concessions available. This cost-of-living package, if you can call it that, is poorly articulated, ill-considered and does not go anywhere near the real cost-of-living issues facing Tasmania, most notably rental costs. It is a cost-of-living package largely targeted at property owners, not renters. That is why we have sought to amend this motion so that it would deliver genuine cost of living measures that provide genuine cost of living relief to people who are economically and socially marginal.

Why did we not hear Mr Winter advocating for short-stay accommodation to be reined in? Why will not Labor, and indeed the Liberals for that matter, support our moves to bring in some restraint on unreasonable rent increases like they have in the Australia Capital Territory? It is good workable policy that can deliver genuine cost of living relief.

We could, as a state, fund free public transport. There are places in the world like Portland, Oregon, that have free public transport in the heart of the city. It has activated the city; it has led to greater social mobility and inclusion. It is just about the choices that government makes.

We could deliver more in terms of food security, we know that on this island some people live in healthy food deserts. Too many Tasmanians struggle to buy quality food. Thank goodness for the organisations that are working with our neighbourhood houses to provide that food security relief. In those families, it is the difference between eating and not. It is the difference between making sure your kid goes to school with something in their stomach.

We could make a choice to eliminate student fees and charges for TasTAFE students. We could open up TasTAFE to more and more Tasmanians. We could deal with some of those training deficits and challenges that Ms Dow talked about in her contribution on the previous motion. But it is a choice that we have made not to do that, as a state. We could fund all school costs for children and young people from households in poverty. We could do that, as a state. But it is a choice that has been made by the Government not to do it. And it is a choice that has been made by Labor not to recognise that as a significant and effective cost of living relief measure.

We should enact a program to expand government concessions to all Tasmanian residents who live below the poverty line. We know there are tens of thousands of Tasmanians who live below the poverty line whose lives are so stressful because they cannot make ends meet, no matter how hard they try. We could make a choice to provide relief to those families and those individuals.

We could do what the Labor-Greens government did between 2010-14 and deliver large-scale, free energy efficient upgrades to low-income households, community groups and small businesses - an immediate cost of living saving that, for a household, can lead to savings of up to $1000 a year. That is real cost of living relief at a relatively small cost to government. The difference it makes in the lives of people who have their house insulated and made more energy efficient is profound. Not only does it lead to cost of living relief, it makes their homes healthier, warmer, less mouldy and less drafty.

We must adopt a housing first approach to tackle homelessness and housing stress. They do this in places like Wales, where the first response to a person who is homeless is to provide them secure accommodation. Then you wrap some supports around them and you work through so that you can deliver them secure, affordable, stable housing. We should be funding these measures by making sure Tasmanians are getting a good return on their assets and resources. As a state, we give the corporations a free ride. Much better that we give young Tasmanians from rural and regional areas a free ride on public and passenger transport. Much better that we give Tasmanians a fair return for their wealth. It is their wealth. It does not belong to the corporations. It does not belong to the government of the day. It is the shared wealth of all Tasmanians. Tasmanians should receive a fair return on that wealth.

We regard this as a highly cynical and populist approach from Labor. It is not evidence-based. It is not about targeting the most economically and socially vulnerable. More than anything else, it is about targeting government.

This morning in question time I was reminded of those pictures I have seen of monkeys in the zoo, flinging poo everywhere knowing that some will stick. This Labor Opposition came into the first question time of this parliamentary session and they did not talk about cost of living. They did not ask a question about that poor man who rang an ambulance and died while he was waiting. Grubby politics. We should be looking for the common ground. I know it is difficult to find, particularly in a Westminster parliament like this, but we should be looking for it. Of course, there are things we disagree on, because we come from different philosophical places. However, there is plenty of common ground. We all know Tasmanians need genuine cost of living relief. Our constituents tell us that. We hear from our constituents on a daily basis who cannot afford their rent, their groceries or petrol.

We have put an amendment forward that we think is the foundation for a real conversation about cost of living relief. These all measures that we are proposing that come from a foundation of evidence. We know they can work.

The stuff Labor has on the table is not about providing cost of living relief. Otherwise, you would not focus on what you call a bin tax. You would not try to force TasWater to operate at a loss. You would not pretend that the state can do anything meaningful about imported fuel other than start the transition to the electrification of our transport, or looking or what we can do on-island to produce our own fuels that are cleaner.

It is really disappointing to have someone of Mr Winter's intellect and capacity come into this place and pretend that what he put forward is an actual cost of living motion. It is not.

Mr Winter - Yes it is.

Ms O'CONNOR - It is not. It is populism. It is cheap politics.

We will not be supporting the motion in its form. I commend our amendment to the House. Our amendment would deliver tangible cost of living relief. It would liberate many Tasmanians from the high stress of poverty and disadvantage.

Together, this suite of measures could transform the island for people who live on the margins of our society and the economy. I remind Mr Ellis, who is not here at the moment, that we do not live in an economy. We live in a society. We are an island community. There are no jobs on a dead planet. We do have to look after the place, and we have to look after each other. It has been quite difficult for people who live on the margins during the pandemic to know that they are consigned to the margins in many ways.

If you are a person living with a disability in Tasmania now and over the past decade you have listened to governments and community leaders talk about the importance of inclusion and access and you see now what is happening, you will be heartbroken and scared. We live in a community and it is our connections to each other that help to make a good life. But it is very hard to have a good life when you are deeply poor. It is very hard to have a good life when you are so stressed and your body is so full of cortisol that you cannot make good decisions. It is hard to have a good life when you cannot access the support that you need. It is impossible to have a good life if you do not have secure, affordable housing and you cannot feed your family.

There are things we can do. It is all about political will but we do not advance this debate on cost of living with falsehoods and populism and that is what we have had out of Labor in here today.