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the year in legislation: Western Australian Future Fund Bill 2012

7 January, 2013

Happy New 2013 to all our readers – we’re back for a new year, with an election on the horizon in Western Australia. Before we get into the election coverage, though, we’re returning to last year’s debates with our occasional ‘year in legislation’ series. First up, selections from the debate on the Western Australian Future Fund Bill 2012. We’ve featured several exchanges from this debate previously, and they are listed under the appropriate dates below; however, the discussion around this Bill was extensive and featured other ‘highlights’ which have not appeared here yet.

The Western Australian Future Fund Bill 2012 intended to establish a Future Fund for the state (of course), created by setting aside some of the revenue from the state’s mineral resources. The Bill was introduced to the Legislative Assembly on 15 August 2012 and then read a second time. The Second Reading debate then resumed on 18 September 2012:

18 September 2012

Mr W.J. JOHNSTON: […] Going forward, I can summarise the budget’s estimates as a reasonable decline in the value of the iron ore price and a moderation of the value of the dollar. It is unclear at the moment whether the dollar is unlinked from our terms of trade or not. Over the history of Australia, the terms of trade have always been basically tracked, but there is an argument now that we have unlinked directly from the terms of trade, and that argument says that the dollar will remain high, which is obviously bad for the state.

Mr C.J. Barnett: For a period, then it’ll crash.

Mr W.J. JOHNSTON: Who knows? None of us knows what will happen to the value of the dollar, and —

Mr C.J. Barnett: I just told you! You can bet your house on it.

Mr W.J. JOHNSTON: How about the Premier goes and bets his house on it? It will be interesting to see how that goes. I remember a presentation by the National Australia Bank on economics; Alan Oster —

Mr T.R. Buswell: I don’t have a house! [p. 6041]

MS R. SAFFIOTI (West Swan) [7.54 pm]: […] Thirty-five years ago my mother used to sell brussels sprouts on the side of the road and she put some of the money she earned into my glory box. Five years ago she pulled out that money and it was very sentimental. We loved it; we cried. However, was it of any use? Not really. Could that money have been better spent purchasing some land, buying a productive asset or reducing our debt? Probably. It was sentimental as we thought of those days of selling brussels sprouts on the side of the road, but did it help us financially? No. The future fund to me is the brussels sprouts —

Mr M. McGowan: Whatever happened to brussels sprouts? No-one eats them anymore.

Mr E.S. Ripper interjected.

Ms R. SAFFIOTI: They are making a comeback, as are broad beans, frankly. There are a lot of broad bean salads out there in the marketplace. As I said, it was sentimentally nice, but from an economic and fiscal perspective, the money earned from the brussels sprouts did not really make an impact. [pp. 6045-6046]

wandering horn

Mr T.R. Buswell: […] It is a great project for Western Australia. You should get on board. I am sure the member for Nollamara supports it. The member for Girrawheen supports it.

Ms M.M. Quirk: I support it further up.

Mr T.R. Buswell: Me too but I haven’t got enough money.

Ms R. SAFFIOTI: I ask the Minister for Transport to tell us how much it will cost.

Mr T.R. Buswell: I’ve told you—north of a billion dollars.

Several members interjected.

The ACTING SPEAKER: Okay, members. That is enough. We have got the point. Member, get back to the point please.

Ms R. SAFFIOTI: As I said, we have a government that comes in and puts estimates on comments made by our side.

Mr M.P. Whitely: There will be huskies and sled dogs; it will be that far north of a billion dollars.

Ms R. SAFFIOTI: It could be that far north. It could be as far north as where Santa Claus lives. [p. 6049]

Mr M.P. WHITELY: […] I believe that the government will take the money it borrows and give it to the Premier to gamble on the forex markets. If it works—it will because the emperor has perfect insight—we will not have to pay any taxes anymore because the Premier can just gamble everything we have on the forex markets. He knows everything about everything—especially the forex markets. He knows with absolute certainty that the Australian dollar will stay high for a while and then crash. He will give us a date; I am sure he is that confident. He might not give us a time —

Mr F.M. Logan interjected.

Mr M.P. WHITELY: The government will put the lot on the forex market. That is how we will do it.

Mr T.R. Buswell: He is the L. Ron Hubbard.

Mr M.P. WHITELY: That mob the Treasurer is on about has some funny views. Are they the ones who sniff chairs? No, that is not them; that is you! I always get them confused. That mob you go on about—what are they called?

Mr T.R. Buswell: The ones who paid for your trip to America?

Mr M.P. WHITELY: They are the chair sniffers, are they not?

Mr T.R. Buswell: The one who gave you the signed Tom Cruise poster.

The SPEAKER: Order! This is the Western Australian Future Fund Bill 2012. I presume that is what the member is talking to.

Mr M.P. WHITELY: Indeed I am, but I just got confused because the member for Vasse, who has a keen interest in that organisation, perhaps because he shares similar values—I might check to see if they do that sort of thing —

Mr T.R. Buswell: They never paid for my trips.

Mr M.P. WHITELY: And I never got in the back seat of the car in the car park with Noel Crichton-Browne to talk about what I might be doing tomorrow.

Mr I.C. Blayney: You never got asked.

Mr M.P. WHITELY: No, I never got asked to get in the back seat with Noel Crichton-Browne. Did the member for Geraldton get asked?

The SPEAKER: Order, members! It is that time of the night; I appreciate that. Some people here would like to advance the Western Australian Future Fund Bill 2012 in a different way. I will give you the opportunity, member for Bassendean, to return to the substance of the bill, not other extraneous matters that you may think are relevant. I ask you to return to the substance of the bill.

Mr M.P. WHITELY: I certainly will return to the substance of the bill, but if we are to have inane interjections from the member for Vasse, he will get as good as he gives.

Mr T.R. Buswell: Really?

Mr M.P. WHITELY: I have plenty of ammunition. There are things that I have not told about that story yet, fella, and I can do it any time the Treasurer wants. We can talk about the true motivations for the member’s actions that day and the reason he did it if that is what he wants to talk about. Otherwise I will talk about the bill before the house. If that is what the Treasurer wants me to talk about, that is what I will talk about. [pp. 6057-6058]

Mr M.P. WHITELY: […] I think I have been usurped by the front page of The West. They are all off! I should not have drawn attention to the front page of The West; I have lost my audience. I am going to lose it permanently soon; they are already running out. What are they doing to me? It is the “Enemy Within”.

Ms L.L. Baker: I am listening!

Mr M.P. WHITELY: There have been torpedoes launched! I will not go on about that; I will let them read it. [p. 6058]

Mr M.P. WHITELY: […] People might understand the argument that the previous government was irresponsible because it did not put up rates and charges such as electricity charges if we had run massive budget deficits and had galloping debt. But we did not; we ran eight budget surpluses in a row and debt was under control. This government has pulled off the reverse two-card trick.

Several members interjected.

The SPEAKER: Member for Southern River, I formally call you to order for the first time today. Member for Cockburn, I will refer to the record.

Mr F.M. Logan: Zero!

The SPEAKER: Plus one! I call you to order for the first time today. I do not want you to miss out, member for Cockburn. [p. 6059]

MS L.L. BAKER (Maylands) [9.22 pm]: […] I had to ask one of my colleagues what the Premier’s interest is in the beer market, but I have been informed that forex is an abbreviation of foreign exchange and not a reference to the Queensland brand of beer! I am feeling much more informed about macroeconomic policy now, but my interest is more in microeconomic policy. [p. 6060]

The debate resumed on 19 September 2012

motion sickness

Mr P. PAPALIA: […] I think the most colourful and, in many respects, accurate analogy drawn was that of the member for Mindarie, although I am inclined to appreciate the member for West Swan’s brussels sprouts story. She told us that for many years her mum sold brussels sprouts at the side of the road, dedicating herself to creating a dowry for her beloved daughter and putting that money away in a chest.

Mr M.P. Whitely: Completely ungracious, she was.

Mr P. PAPALIA: She was fairly ungracious; I must say I have some sympathy for her mum! [p. 6143]

MR T.G. STEPHENS (Pilbara) [1.43 pm]: […] There is still an argument about what went on from 1890 to 1905. Why do I know a little about this issue of such things as the future fund? It is because almost on the day that I was elected to Parliament I was subjected to constant lobbying by a Pilbara resident at the time —

Mr M.P. Whitely: It wasn’t because you were here in 1905?

Mr T.G. STEPHENS: You’re an unkind man, member for Bassendean! [p. 6152]

Mr J.C. KOBELKE: […] The Premier likes the idea of having a “Barnett future fund” so he can go out and tell people who know nothing about finance or the structure of the fund that he has done something for the state’s future. As incredible and ridiculous as that sounds, we see this Premier do it on a fairly regular basis. He goes out and says things that are simply untrue or that are on the basis of just a thought bubble: “We’re going to have a stadium at Burswood. Don’t know the price. Don’t need to compare it with the one that was designed for Subiaco. It’s just a good idea.” He does not take account of a proper analysis and of the cost differential in making a decision based on facts. He simply says, “That’s where I want it because I can put my name on it. It was planned by the Labor government to build it at Subiaco and we can’t have that, so let’s go to Burswood.” Then there are problems with transport. “Let’s have a pedestrian bridge over the river that people can walk on. It might take buses; it might not. We don’t know how many lanes or how big it will be; we don’t know how much it’ll cost, but it’s a great idea. It builds the imagination.”

Mr E.S. Ripper: It’s visionary!

Mr J.C. KOBELKE: It is visionary; it is a state on the go. I was in Adelaide a few weeks ago and that state government has decided to build a bridge over to the new Adelaide cricket ground, and there is a huge controversy over that. Compare the Torrens River to the Swan River. There is controversy over how much that bridge will cost, but do not worry—we have a Premier with imagination! The trouble is that the imagination is all about his arrogance and there is no reality to it. I think the people of Western Australia are starting to get onto that idea and realise that when this Premier says something, it does not necessarily stack up and it is not necessarily true.

MR A.J. WADDELL (Forrestfield) [8.47 pm]: Somewhere deep in the basement of this government is a whiteboard that has the word “Vision” written on it with a big fluffy cloud around it with little points beside it that says, “Ideas” and underneath it someone has written “The Big Picture” and drawn a big black line under it. That is pretty much the brainstorming that seems to have occurred somewhere, probably as a result of some focus group that was formed somewhere. It seems that this government has lots of big ideas, but very little in the way of detail. [p. 6203]

MR M.P. MURRAY (Collie–Preston) [9.11 pm]: […] Again, it comes back to the health system. It will be under pressure because of obesity, as kids are not involved in sport. All those sorts of things will go back onto the health system. The Minister for Health smiles, but how much of the state’s budget is now used in health?

Dr K.D. Hames: Twenty-five per cent.

Mr M.P. MURRAY: It is huge, is it not? It is far too much, in my view, because we can cut it off at the bottom end to some degree. We will never stop it. We should be putting in place programs that will encourage people to be fitter and not be a burden on the health system. They will not have heart attacks when they are in their 50s; they might be able to get to their 70s, or they might drop off the perch before they have one.

Dr K.D. Hames: The reason I am smiling is that I look at your tummy and I feel mine, which doesn’t pass the grab test. I think there are a few of us around.

Mr M.P. MURRAY: We have to look at all those things, do we not? [p. 6208]

MR J.N. HYDE (Perth) [10.23 pm]: I am —

Dr K.D. Hames: Let us see how the member for Perth will spend the money. Everyone else who has spoken so far has spent that money fully in their own area. Let us see if the member can do the same.

Mr J.N. HYDE: I thank the Deputy Premier for the challenge, and we shall see what emanates.

Dr K.D. Hames: No more borrowing. Let us not borrow any money but I can spend all this money in my area.

Mr J.N. HYDE: We need to get on track, Deputy Premier, and look at exactly what is this future fund that the Western Australian Future Fund Bill is proposing. What the Deputy Premier is proposing is very much a credit card. This is not a true future fund. This is not a true investment fund. [p. 6216]

Mr J.N. HYDE: As the Deputy Premier is not going to make mistakes and keep asking me questions, Mr Speaker, I draw your attention to the state of the house.

[Quorum formed.]

Mr J.N. HYDE: As the only member of Actors Equity in the house, I am delighted that I have an audience facing me.

Dr K.D. Hames: The member for Mandurah should be a member of Actors Equity because he performs every time he gets up.

Mr J.N. HYDE: He should be. He actually was at one stage. [p. 6218]

Mr J.N. HYDE: […] If ministers, including the Minister for Culture and the Arts—who I did not see at the fashion festival launch this evening with the Premier; I looked for him—

Mr J.H.D. Day: You looked in vain because I was here!

Mrs L.M. Harvey: You wouldn’t give him a pair.

Mr J.H.D. Day: But I will be at one of the events on Friday.

Mr J.N. HYDE: Excellent; I think I am at two, so hopefully I will see the minister at one. [p. 6219]

big business

Continuing on 20 September 2012:

MR R.H. COOK (Kwinana — Deputy Leader of the Opposition) [11.20 am]: I think the year was around 1977; my grandmother assembled my family around the dinner table one evening and proudly distributed bank account books to each of her grandchildren. She distributed savings account bank books from Perth Building Society, each containing $100. I was 12 at the time, and it seemed like an extraordinary amount of money. We were all very excited about what we could do with this amount of money. She explained to us that, upon leaving school, we would have access to these savings accounts and we would benefit from the interest that had accrued. I am not sure whether something was lost in translation at the time my grandmother applied to the bank for these accounts, but the money was invested at a low rate of return. When I was eventually able to withdraw the money, I think it had grown to about $150. Of course, that was around 1982 or 1983; the $100 that had seemed so much in 1977 had by then been whittled away by inflation and, in relative terms, by the loans I had taken out from my parents to participate in a very expensive rugby union tour of the UK. So there I was, proudly holding my five or six years’ savings of $150, comparing it with the debts I had racked up with my parents to undertake that sports tour.

This anecdote relates to where we are at in respect of the future fund. The future fund has been set up for a 30-year growth curve to deliver a $230 million dividend.

Mr C.J. Barnett: Can I just say about your grandmother’s very generous act that she would, I imagine, have been of that generation that lived through the Second World War and probably grew up in the Depression years. That generation did have that sense of saving for security. My parents were certainly like that; probably of a similar age. They had seen tragedy and disasters. When my parents passed away we found these little bank accounts all over the house!

Mr R.H. COOK: Premier, I would love to be able to say I learnt from those lessons, but I have a credit card bill that is the envy of many a small Third World country! But I do have my savings account, and my accountant has pointed out to me on many occasions the folly of my small savings account versus my credit card bill, which is so large it almost has its own orbit! [p. 6305]

Mr P.C. TINLEY: […] What we see actually is an erratic set of unstructured choices. A high school in a marginal electorate will get a massive injection at the cost of every other high school; for example, Willetton Senior High School versus John Curtin College of the Arts and schools in my patch.

Dr M.D. Nahan interjected.


Mr P.C. TINLEY: I thought there was an interjection but I was not sure.

Mr T.R. Buswell: That was me!

Mr P.C. TINLEY: Did the Treasurer have his hand up the member for Riverton’s jacket or back? The Labor Party has always supported education in this state. The member for Riverton of all people should know that he cannot dissemble an argument like that from there—another member’s seat! [p. 6315]

secret squirrel

Mr J.R. QUIGLEY: […] At the same time, the National Party member for Central Wheatbelt decides to move to another electorate—the seat of Pilbara—and he is giving lashings of money out all over the Pilbara and abandoning the wheatbelt.

Mr T.G. Stephens: He gives lots to Narrogin!

Mr P. Papalia: Lots of glossy posters.

Ms M.M. Quirk: Lots of corflute!

Mr J.R. QUIGLEY: So there are lots of glossy posters and corflute! [p. 6330]

the drugs don’t work

Mr M. McGOWAN: […] As we all know, building infrastructure earlier is cheaper than building infrastructure later. We all know that is the case.

Mr C.J. Barnett: What—in the middle of a construction boom in the resources industry; I would not have thought so!

Mr M. McGOWAN: Maybe I should seek an extension, so I can finish.

Mr M.P. Whitely: He used the “boom” word.

The ACTING SPEAKER: Member for Bassendean!

Mr M. McGOWAN: The member for Bassendean should get another opportunity to speak. The member has picked the Premier up a couple of times. He did use the boom word. It is a bit like Twitter; the Premier has forbidden all his ministers from using Twitter, yet I see a Twitter account with the Premier’s name on it. The Premier has forbidden everyone else to use “boom”, but he is using it!

Mr C.J. Barnett: It is another untruth.

Mr P. Papalia: You know you told ministers not to use Twitter; that is true.

Mr C.J. Barnett: People can use Twitter. That is not true. People have not been banned.

Mr M. McGOWAN: I do not think the Premier knows what Twitter is. [pp. 6344-6345]

The Second Reading debate continued on 26 September 2012:

That same day, the debate entered Consideration-in-Detail:
the look of love

Mr T.R. BUSWELL: […] We have just spent two hours talking about matters associated with risk and a desire to deliver a rate of return that is greater than the cost of funds and a whole range of factors, and I have absolutely no idea how this amendment impacts on that. There will be no speakers after this, Leader of the Opposition, and we will come back with that advice and provide that advice to the house. Clearly that will be in a couple of weeks.

Mr J.J.M. Bowler: Mr Treasurer, I apologise.

Mr T.R. BUSWELL: No, no.

Mr J.J.M. Bowler: I should have let you know before so that you could consider it.

Mr T.R. BUSWELL: I am heartbroken! What I will probably do is when we get that information—we will be having a break now—I will make sure the member for Kalgoorlie gets a full briefing on that. [p. 6622]

Consideration-in-Detail resumed on 27 September 2012

Mr W.J. JOHNSTON: […] The intergenerational donation we are making is two completely contradictory gifts. One is a relatively small amount of money that will generate a tiny level of income; the other is this huge debt that needs to be repaid.

Mr E.S. Ripper: It is like a gift from a Nigerian scamster!

Mr W.J. JOHNSTON: Don’t give them your BSB number! [p. 6755]

hold on to your friends

On 17 October 2012, the Bill was read for a third time, and then transmitted to the Legislative Council. In the Upper House, the Bill was introduced and read for a second time on 18 October 2012. The Second Reading debate resumed on 25 October 2012:

Hon KATE DOUST: […] I am not too sure where the shadow spokesperson is.

Several members interjected.

Hon KATE DOUST: Let us just see how we go. Do I get unlimited time as acting leader, or is that a quirk in the standing orders?

The DEPUTY PRESIDENT (Hon Alyssa Hayden): I do not think so.

Hon Simon O’Brien: You’re battling to get us to afternoon tea!

Hon KATE DOUST: I think I can do that. [p. 7669]

The debate then resumed on 6 November 2012:

Hon KEN TRAVERS: […] Clause 11 is approving changes to the GST base, which requires the support of the majority of the commonwealth and the states, and clause XII is considering ongoing reform of commonwealth–state financial relations. Clause 45 says that they have all to be by unanimous agreement.

Hon Ed Dermer: Does that mean that if we were to change the arrangement that disadvantages Western Australia, those states currently being advantaged at our expense would have to concur with that change?

The PRESIDENT: Order! With that interjection I think Hon Ed Dermer will have his opportunity at a later stage of the debate to make those points himself.

Hon Ed Dermer: I am looking to gain from Hon Ken Travers’ wisdom.

Hon KEN TRAVERS: I think the member is interjecting on me to use me as his research assistant for his upcoming speech!

The PRESIDENT: This is a debate through the Chair, not a conversation. [pp. 7776-7777]

the wager

The debate continued briefly on 7 November 2012 before resuming on 8 November 2012:

HON SIMON O’BRIEN: […] I am advised that the analysis of the historical data available from the WA Treasury Corporation shows —

[Interruption from the gallery.]

The DEPUTY PRESIDENT (Hon Jon Ford): Order, members. I would just like to mention to the people in the gallery, the young enthusiastic witnesses up there, that this is the Parliament of Western Australia and we need to have people record these minutes. It is very difficult to hear if other people are talking. We are very happy to have you in the gallery, but if you could be there in silence; I know it is very difficult at your age, but if you could do that for a few minutes, I would appreciate it.

Hon SIMON O’BRIEN: Thank you, Mr Deputy President. I share the view that it is a pleasure to have visitors come to the public gallery. Indeed, if people find it hard to remain silent when they hear some of the things that are said in this place, I have a huge amount of empathy for them because I sometimes feel that way myself! Welcome to our friends in the gallery. They are going to love this matter we are discussing right now, I should think!
I was talking about the analysis of the historical data by the WATC in connection with those return objectives and the risk objectives. […]
On the face of it that impact would appear to be sufficient to offset the historical average five–basis point margin on the future fund’s investment returns relative to the WATC’s costs of funds.

[Interruption from the gallery.]

The PRESIDENT: You have driven them out of the chamber, minister!

Hon SIMON O’BRIEN: Someone was bound to say that, sir; and I am glad I had the benefit of the advice from the Chair! [p. 8153]

That same day, the debate entered the Committee of the Whole phase:

Hon KATE DOUST: I appreciate the minister’s indulgence with our first speaker. Unfortunately, I have been away on fantastic urgent parliamentary business, minister.

Hon Ken Travers: Fantastic urgent parliamentary business.

Hon KATE DOUST: Absolutely. In fact, I have been at the 2012 Western Australian Innovator of the Year Awards. I had hoped to talk about that this afternoon as part of the discussion on this bill because I thought it fitted in quite well with references to science and technology in this legislation, but given that I will have only a short period in which to speak, I might save that for a later stage of today’s sitting or perhaps another debate. [p. 8157]

Hon SIMON O’BRIEN: […] It has a very broad catalogue of all sorts of parts of the built environment—not only buildings such as public schools, public hospitals or whatever, but also other structures such as bridges, railways, works for the connection of the supply of water to a city, wharves, ferries, piers, jetties, parks and gardens, and even public cemeteries. We are all familiar with the definition of “public work” contained in the act.

Hon Ken Travers: Are you suggesting we are preparing your burial plot with this, minister?

Hon SIMON O’BRIEN: With a suitable epitaph! I hope we would get —

Hon Ken Travers: What shall we put on it—“The road to hell is paved with good intentions”?

Hon SIMON O’BRIEN: I would probably borrow something from Spike Milligan such as “I told them I was sick”! [p. 8162]

Hon Ken Travers: What we are asking is: How do you define science infrastructure? Where does the boundary end on what is and what isn’t science infrastructure? Is the database for an epidemiological —

The DEPUTY CHAIR (Hon Jon Ford): Order, members. I would prefer it if members got to their feet and asked those questions so that Hansard can define who was on their feet and who was not. It is not just a little interjection, it is a long-ranging one.

Hon Ken Travers: But it helped!

The DEPUTY CHAIR: That is a debatable point! [p. 8162]

The Committee stage resumed on 14 November 2012

Hon MAX TRENORDEN: […] Hon Lynn MacLaren has got it right. She might have a couple of things wrong about live sheep exports, but she is right on this matter!

Hon Ken Travers: Now the National Party and the Greens are giving the tick of approval to the Liberals’ financial management!

Hon MAX TRENORDEN: No, I need preferences! [p. 8535]

house of cards
the long game

Further debate took place on 15 November 2012:

Hon SIMON O’BRIEN: […] I do not at all resent the honourable member putting forward this amendment for discussion, and I hope I have answered his proposition in a way that finds favour with members; 20 years is the time frame that we have been debating, both here and in other places, and 20 years is the expectation that has been engendered in the community. For that reason, 20 years is the time period that the government insists is, in its view, preferable. The extension to 50 years is an interesting proposition, but then again, I hope we will not get down to considerations of 25 years or 27 and three-quarter years, or anything like that! There is no suggestion that we do go down that path.

Hon Ken Travers: Twenty-seven and eight months!

Hon SIMON O’BRIEN: Let the record show that the honourable member interjecting has a grin on his face and is doing so with a twinkle in his eye! As I have already indicated, I do not think it is a good idea to legislate on the run, and I certainly will not be doing that sort of horse trading at the committee table. So, thanks, but we will oppose this amendment. [pp. 8666-8667]

true blood

Finally, the Bill was read for a third time on 15 November 2012 and returned to the Legislative Assembly without amendment. The Bill was assented to 29 November 2012.


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