Estimates
Estimates of revenue and expenditure
Consideration of tabled papers
Resumed from 14 August on the following motion moved by Hon Samantha Rowe (Parliamentary Secretary):
That pursuant to standing order 69(1), the Legislative Council take note of tabled papers 316A–E (2025–26 budget papers) laid upon the table of the house on Thursday 19 June 2025.
Hon Simon Ehrenfeld (1:16 pm): It is an honour to address this Parliament with my first budget-in-reply speech. The undertaking I gave this house and to the people of Western Australia in my inaugural speech was that I would look at decisions through this prism. How does it affect our societal structure? How does it affect enterprise? How does it affect the family unit? It is in that vein that I give my reply.
Our state can no doubt attribute much of its prosperity to those who went before us, almost all exclusively but not entirely, on the Liberal side of politics. The fruition of those past decisions is now so significant that to call what we have now as luck would be an understatement. I am conscious that the government does not like to hear this, and I have seen much argy-bargy across the house over this question, but the budget surplus forecasts continue a remarkable sequence of good fiscal fortune that has befallen our state and it is largely thanks to record iron ore royalties and the federal Liberal GST fix. There was significant involvement from the state Liberal Party at the state council level and the state conference level pushing for that reform. I think it is worth reminding members of the magnitude of that change that has occurred since Labor won government in 2017. In the last year of the previous Liberal–National government in 2017, the combined revenues from the iron ore and GST was $7.3 billion. By Labor's second year, there had been a $3 billion boost to that, which brought the budget into surplus. There was no financial management involved. It did not stop Labor proclaiming that it was the guru whose financial management skills had turned the budget around. But come forward to 2023–24 and the iron ore royalties and GST combined were delivering $17.7 billion—a $10.4 billion increase on where it was at in the last Liberal government.
This is more than luck; this is the extremity of luck. For those who have followed the news, there is an unclaimed lotto win from June of $100 million. If we multiply that by 100, we get $10 billion. That is not a one-off; that is per annum. I think people in government should have gone out and bought lotto tickets had they not already won the lottery of life!
Although past Liberal governments certainly deserve the lion's share of the credit, I acknowledge that Labor governments have, albeit more piecemeal, made some contribution to that prosperity. It is a matter of record that the McGowan government worked very hard to keep the resources industry pumping during the COVID lockdown periods. The Premier had Ben Wyatt as his Treasurer, but when Mr Wyatt moved on, Mr McGowan knew one thing: he did not have anyone else he could trust with the finances of the state, so he made himself the Treasurer despite the very taxing toll that COVID had taken on his premiership. Tragically for the people of Western Australia, the very two people whom Premier McGowan did not trust are now the ones with their hands firmly in charge of the show.
The great mystery for me and others is how the government is still managing to grow state debt to $42 billion, remembering Labor's big blue debt monster when the debt was $10 billion less under us. I myself was a critic of the debt racked up under the Liberals, but at least there were plausible reasons at the time—we had a population boom; we had to build a very large number of schools and hospitals, as well as the stadium, Elizabeth Quay and the Northbridge Link; we revitalised regional centres; there was an economic downturn exacerbated by falling iron ore prices; and we had a low GST calculation from the past boom. Anyone who is a fan of the biblical story of Jospeh, which was made famous by the Lloyd Webber musical, may remember that the lesson learnt was that we save in the good times so that we have prosperity in the hard times. For that advice, Joseph went from prison to being made viceroy of Egypt and saving his people from famine. To rack up growing debt when we are experiencing such largesse is really an absolute betrayal of the next generation of Western Australians. As we reflect on these surpluses, we must recognise that they are the product not of clever management or savvy economics, but of high prices of iron ore, as well as lithium, gold and other resources. But we know that those prices can change overnight. To focus the minds of those opposite back on our accounts, let it be clear that every dollar in our coffers, every school and every redevelopment are the product of those royalty prices and the federal Liberal GST floor. The government's extreme luck has shielded it from the hard choices that other states have had to face. For example, iron ore is forecast at US$71 a tonne this year. That is surfing a wave of prosperity, not steering it. It is easy to govern when the coffers are full. The true test of leadership is what you do with the prosperity, and I do not believe this government has been successful on that front.
There is no future for this great state without families and family homes. With households across WA struggling with rising costs, the dream of home ownership slips ever further out of reach for many people. It raises for me serious questions about the government's priorities. Families search in vain for homes and young people watch their aspirations fade, yet the government pours money into vanity projects and political showpieces. That is not a mark of a government for the people. I am referring not just to misguided pet projects such as the racetrack or the excessive amounts poured into Metronet. The greatest concern for many Western Australians remains the ongoing cost of living. As I said in my inaugural speech, Robert Menzies went to great lengths to stress the importance of home ownership. I then went on to say that it was slipping away and that it must stand as one of the great challenges of our time. I repeated this in my social media, and while I knew that the issue was significant in the community, I was overwhelmed by how large the response was—far, far greater than expected.
The Liberal Party is a party of aspiration. We believe in the dignity of work, the value of home ownership and the power of opportunity. We empower individuals, not expand bureaucracy. In his famous "The Forgotten People" speech, Menzies called the home the crowning achievement of human ambition and the foundation of virtue and right living. He believed a home-owning democracy was a strong democracy, where families could dream, work hard and pass on the fruits of their toil to their children. He spoke of home ownership in three dimensions—homes material, homes human and homes spiritual. The health of the family home determines the health of society as a whole. Homes material represents the concrete expression of the habits of frugality in saving for one's own home—a piece of earth with a house and a garden to which people can withdraw, be among their friends and, indeed, not encounter strangers not of their own choosing. In other words, one's home is their castle. Secondly, he spoke of homes human, where we go beyond the bricks and mortar. It is where your family is. There is a great distinction between one's home and any other building, whether it be a stable or a hotel. It is where people have the instinct to build the character of their children so that they can become constructive members of society. In homes spiritual, our homes become the place where we can truly be strong and independent, with the freedom to accept unclouded individual responsibility and build a life based on self-sacrifice. It was perhaps a great irony that the Menzies, having given their lives to public service, relied on the goodwill of donors to provide a house when they retired. In fact, good friends of mine in Melbourne were their backyard neighbours. In any case, the Menzies accepted that home on the condition that when they passed on, the proceeds of that house would be passed on to charity.
As I have said, for many young Western Australians, the foundation of home ownership is slipping away. Housing costs rise, supply falls and the barriers to home ownership grow ever higher. What, then, are the underlying costs of housing insecurity? What does it cost our economy? What does it cost our society? What does it cost our future? This budget is continuing to offer only crumbs to our first home buyers—professionals, apprentices and young couples blindsided by the sudden rise of costs and desperately trying to save for a deposit in a distorted market with failed supply-side policies and red tape.
I commented in my inaugural speech that we must surely have come to the conclusion by now that we cannot continue to be a one-city state in which 75% of the people live in one quarter of 1% of the area. The Australian Bureau of Statistics forecasts that by the end of this century, there will be some six million people in this state, with over five million living in the city and fewer than one million living in the rest of the state. That is not a reality that can continue; it is one about which we have plenty of notice to redirect and influence. We need not look at other countries, even though there are many fine examples. Even within Australia, other states manage to have viable alternatives to their main capitals. Those who are going to choose to not live in Perth in the long run and would like to live in a viable region should not be forced to look at places like the Sunshine Coast or the Central Coast and elsewhere; there should be many viable regional communities in Western Australia. To get those viable regions, we obviously need to address that through government activity and the provision of major services and genuine higher education opportunities. Those things obviously do not come cheaply in the short run, but the alternative will be ever so much more expensive.
Continuing with housing, it is not just an economic issue; it is a moral issue and a social issue. We are in a housing crisis of generational proportions. Vacancy rates are at a record low, builders are stretched, trades are scarce, costs are rising, social housing waitlists are growing and homelessness is climbing, yet this budget responds without the urgency or scale that this crisis demands. The barriers are numerous: the time it takes to get approvals, all the environmental green tape, all the red tape, heritage, cultural heritage, bushfire regulations, getting Western Power moving, getting water moving, insurance regimes, being able to build modular housing at scale and, critically, rebuilding the trades pipeline. These are just the tip of the iceberg. We keep hearing about the streamlined approvals process, but that is not the reality on the ground. Some of the matters that influence that are federal—we know that—but everything I have outlined is very much in the hands of the state and the state government.
One more example I will give to show that the government is not being serious about the housing crisis is the absolute proliferation of stamp duty revenue. To buy a house in Western Australia for $750,000 causes a $30,000 impost in stamp duty. Compare that with Queensland, where the same priced house incurs just $13,000 in stamp duty. If the government were serious about making housing more affordable, why would it be charging double the tax of another state like Queensland? The Cook Labor government is profiting from the pain of the housing crisis. As prices rise, so does stamp duty revenue. The public's desperation becomes a windfall for Treasury. While families scrape together deposits and young people are locked out of the market, the government reaps higher transaction taxes from the inflated prices. Rather than intervening with meaningful reform, this government keeps putting its hand out. It is cynical. Instead of addressing the root causes, the government is milking the market, profiting from people's hopes, stress and dreams as home ownership slips ever further away.
My very first question as a member of Parliament was about punitive progressive water charges that are charged on larger families in particular. Two and a half months later, I received an answer to that question. It shows that the charges are absolutely soaring and that more and more households are getting caught in that net. The response from a former Minister for Water on this question was that people should rip up their lawns. Unbeknownst to me, the ABC picked up the answer to that question last week and it was covered on the radio program this morning when I was interviewed. The ABC also interviewed someone from the Water Corp who made the statement that people should have shorter showers. That is one of the remarks I made sarcastically in my inaugural speech. I say that water money is blood money. Water is a necessity of life. It is not the government's job to extract excess profits from it. As the member for Nedlands recently exposed, that money is piling up in the reserves of the Water Corporation to be dropped in when it suits the government to do a bit of budget manipulation.
Moving briefly to the prism of enterprise in this state, anyone who checked the weekend news would have seen that the number of insolvencies in the state has jumped by 26.7% in just the last 12 months. Those numbers do not drop out of the sky; they are the product of a deeper malaise. The reasons include excessive union power, excessive tax and red tape, excessive spending that steals away private resources and a lack of vision. All those things invariably take their toll. But this is not news. A boom will cover up some of the failings, but booms do not go on forever. Just in the last few days I was dealing with a business that had traded for 28 years that is unable to even get a buyer to take over the business so that the business owners can move on with their lives. I was told by one of my business broker friends about other businesses that have been on the market. He stated that all the imposts that are now on business are scaring people away from doing business. We all go on about small business being the engine room of the economy and so forth, but I think people say that a little glibly. The truth is that the government collects all its funding from the private sector and the private sector is made up only of big and small business. All big businesses once started as a small business. Ultimately, small business, in the short and long run, feeds and supports all of us.
On this side of the house, I think it is fair to say that we offer a different path. We as a party believe in aspiration. We believe in ownership. We believe in opportunity. All that requires proper investment in trades and industries and in the regions. These are the things that will define our prosperity. Anyone who thinks that the government is always the answer has probably not asked a very good question. We want Western Australia to be the best place in the nation where people can own a home, where they can raise a family, where they can start a business and where they can live a life of purpose. We do not accept that the shortage of housing, the high water costs or increasing business failures are crises without solutions. Budgets are moral documents. They reveal what a government truly values. This budget tells us what Labor's values are and, in many cases, it is not what I value, it is not what our party values and it is not what Western Australians value.
With such a transformation of our financial position due to factors beyond the state's control, members might understand why I refer to these years as remarkable times in terms of revenue flowing to the Treasury. We can see how the revenue side of the budget has improved tremendously during Labor's era, and that has provided it with the capacity to throw money in all sort of directions, albeit not some of the directions we would like to see. With that lazy extra $10 billion rolling in to self-correct the budget position, the challenge for Labor is to manage that money well. That is where I think the government, tragically, falls short. I believe that is becoming more obvious to the community. As honourable members may know, I came to Parliament to contribute to the governance of our state following a long career in private enterprise. The rules we had there do not really seem to apply to modern governments anymore in relation to having a sensible bottom line, but, ultimately, there is always a day of reckoning. Governments can keep borrowing while lenders keep lending, and the government certainly highlighted that many times when we were in government.
The budget has now finally exposed the reckless spending surge that has been occurring since the departure of Mr McGowan and Mr Wyatt. In the five years post-COVID, spending has increased by over 50%. It is understandable that significant spending occurred during those two COVID years, but I want to focus on what has happened since. There was a natural expectation that when COVID passed, life would return to normal, but in the 2023 budget, we did not see the cut in spending that was legitimately expected. It was forecast to grow by a modest 1.7%. In the same budget, the expected post-COVID budget cut forecast for the subsequent year was a drop of 4.9%, followed by a modest increase of 1.8%. At face value, Labor's budget plan looked extremely reasonable and responsible, but that was not fulfilled. Labor never seems to fulfil its promises—never. Let us take a closer look at what happened over that time. I am sorry to bore members with these figures, but they get to the point.
In 2022–23, expenditure was set to grow 1.7%, then shrink by 4.9%, and then in 2024–25 grow by 1.8%. As a result, expenditure was going to fall from $36.8 billion to $35.7 billion. It is hard to imagine how we could take such a forecast seriously when it has a habit of growing persistently due to basic cost increases like wages and growing population demand on services. Let us look at what actually happened. In reality, the 1.7% growth became 8%. The 2023–24 forecast of minus 4.9% became an increase of 7.7%. The third year was expected to be 1.8%; it was 10.6%. The result was a 28.7% increase over three years. If we bring that to dollars, which Labor forecast would be $35.7 billion, we actually ended up with $45.9 billion. That is a difference of more than $10 billion between actual expenditure and forecast expenditure over just a two-year period. Government members should be asking their leadership team: What is going on with spending blowouts? Where are the benefits and service improvements from all that largesse? With such large spending growth, one would expect most of the obvious problems to have been dealt with, whether it was health underfunding, crime, education standards, homelessness, public housing supply, power supply, rural areas or even basic things like trying to get booked in for a driving test. Undoubtedly, some government activities have been improved. After all, one cannot spend money like this without getting something right, but the rate is low.
In terms of budget management and cost control, I think that there has been a comprehensive lack of success. If one forecasts no spending growth but then delivers $10 billion, or roughly an average of 10% per annum over three years, one has failed the basic budget management test. Such an outcome is the hallmark of significant mismanagement or repeated over-optimism. Members need to be mindful that expenditure of more than about 8% will generally occur for one or two years in response to a global pandemic like COVID, and that is it. The government's poor record in managing the budget and keeping expenditure close to what it sets out in the budgets are equally reflected when we look at these past three years individually. In 2022–23, the forecast of 1.7% became 8%; in 2023–24, the forecast of 2.7% became 7.7%; and in 2024–25, the forecast of 4% became 10.6%. How does one miss those targets so widely for so many years in a row? Where is the discipline that Labor claims to practise? In the business world, we know where that would lead. It is significant that ministers do not seem to manage their agencies and instead resort to splashing money around ever so freely, for which they are obviously preparing for another election extremely early.
Hon Stephen Dawson: They're fixed terms!
Hon Simon Ehrenfeld: Yes, that is what I am saying. It is a four-year preparation; why are they doing it now?
In light of the expenditure surge over the past two years, can anyone have confidence Labor will halve the expenditure growth of 4.3% in 2025–26 as predicted? I am not confident, and I raise a further question for members to consider. Does anyone believe Labor will cut expenditure by 5.9% in the following fiscal year? It is untenable for the government to be setting the forward outlook with such figures. I invite members to look at the budget over recent years, as they will find this manipulation exercise occurring every year. Every year Labor publishes a budget forecast with laughably low growth forecasts and, in some, even has the audacity to forecast reductions—something that will not happen. I will quickly take members through these recent budgets to underscore the point of Labor's routine cooking of the books, and, for clarity, I am not talking about the Tony Buti cookbook, which was only $60,000 and barely cracked a mention.
Between 2022 and 2024, forecast expenditure growth in the forward estimates was 1.7%, minus 4.95%, 1.8% and 1.3%. These are clearly unrealistic figures, with no prospect that growth could be kept at such low levels. As I have already outlined, the actual growth figures come in much greater than those politically driven financial forecasts. In 2023–24, we had the same pattern of remarkably low expenditure growth. In that budget, Labor forecast 2.7%, minus 4.3%, minus 0.2% and 1.3%. Of course it did not get anywhere near that. Last year, 2024–25, had the same pattern of 4%, minus 4.4%, 0.1% and 2.2%. As mentioned, the 2024–25 spending growth of 4% turned into a 10.6% result. I apologise for running through all those figures, but they point to a repeated pattern. In the meantime, the forecast growth of 4.4% for 2025–26 has already turned into actual expenditure growth of 4.3—I am missing a number there; I might come back to that. There is such a massive turnaround in the space of a single year, which is evidence of the financial management I am talking about. Remarkably, Labor is at it again for 2025–26, with 4.3% this year, then minus 4.9%, 0.2% and 1.7%.
President, I have taken the trouble to put these budget misrepresentations in a graph, and I have it here. Do I seek permission of the house to have these tabled?
The President: Do you seek leave to table the document?
Hon Simon Ehrenfeld: I seek leave to table the documents.
The President: Is there more than one?
Hon Simon Ehrenfeld: I have produced them for every year from 2022–23 through to 2025–26, so there are four.
Leave granted.
(See paper 447.)
Hon Simon Ehrenfeld: I will start with the 2022–23 budget. Members will note on the graph that expenditure estimates were very low, particularly in the forward estimate years, yet the actual estimates come in so much higher. If we look at 2023–24, we find the same pattern, including a proposed cut to spending in the first out year; nonetheless, it has the same look as the previous graph. Then if we look at 2024–25, we see the same manufactured representations. There is supposed to be a substantial cut in the first out year, followed by some small growth. In 2025–26, again, members will work out that the final result is expected to be much higher. The latest budget has again set the same pattern for budget expenditure, with a large cut in the first out year followed by small growth.
I trust that members now grasp the point that it is not a matter of the government missing its spending targets, but a case of the government providing the Parliament and the community with such absurd and unachievable targets. These graphs expose a repeated pattern of budgetary deception. If the Labor Party is making honest misjudgements, surely by now it would have challenged the Treasury over the figures and demanded that it put in more credible and honest forecasts. As a starting point, the government should drop the pretence of major spending cuts in the first out year. We know that will not happen. These figures are clearly being manufactured for political purposes, not to give the community a true representation of our state's finances. I assert, with confidence, that Labor will not meet the expenditure growth forecasts in this year's budget. In fact, they have already blown it themselves. Members will be aware that there was an announcement yesterday to throw an extra $50 million at Sir Charles Gairdner Hospital. We are only in August, and we were told that, even in that area, a lot more will be needed.
I do not believe that the government will contain spending growth to 4.3% this year and I have even greater confidence that it will not deliver a 5.9% expenditure cut next year. How many times does this pattern have to go on? There is a saying: fool me once, shame on you; fool me twice, shame on me. I think it is now fool me three times. Labor call it doing what is right for WA. How does Labor produce such rubbery figures, especially with the big spending cuts always set for the first out year? It is because it artificially lowers the debt outlook. What is the benefit of that? Our alarming surge in debt of nearly $11 billion in just two years, despite multibillion-dollar surpluses, would grow more rapidly over the forward estimates if more realistic figures were presented. The debt outlook is significantly improved by illusory spending cuts for the first year. I challenge those on the government benches to indicate their confidence in their cabinet, and particularly their Treasurer, to contain the budget to within 1%, 2% or even 3%. I challenge government members to indicate their confidence that Labor will slash budget spending by a massive 5.9% next year. Just to put that in perspective, that is $2.8 billion that Labor is promising to cut from the budget. I suggest that Labor MPs would be as quick as anyone to complain to the Premier and Treasurer about those sorts of funding cuts across the board.
Government members may not like to hear that but what other explanation is there for the government forecasting multibillion-dollar spending cuts, including savage cuts to health spending? Let us look at that stark reality. General government net debt has risen from $19.6 billion in 2023–24 to $29.2 billion in 2025–26—almost $10 billion in just two years, and boom years at that. Suddenly it has seemed to flatline in the out years. Given the year-on-year track record, why should anyone believe this? Meanwhile, total non-financial public sector net debt has grown from $33.6 billion in 2023–24 to $45.2 billion in 2025–26—almost $12 billion—and in the out years we have a staggering net debt forecast of $50 billion. As disturbing as that new milestone is, it is probably still founded on unfounded optimism—cooking books or whatever term is preferred. The stable debt outlook would be very, very different with more reliable budget figures. Why would we believe that there will be some restraint as the government moves closer to an election seeking a fourth term? If there was an opportunity for the government to make hard decisions, it would do it now. The chance it will make them down the track is approximately zero. Applying a 5% increase in annual spending to the forward estimates, which is closer to what is really happening, we get cumulative deficits over three years of another $14.4 billion. That is a stark contrast to the $7.9 billion in cumulative surpluses that are forecast. The difference between what has been presented and the result is about $22 billion, and adding that to our net debt brings us closer to about $65 billion.
I will not go through every section of the budget, of course, but I will pick health because it is very, very stark. The health spending table clearly shows that the reduction in funding during the first term flattened out in the 2017–18 to 2020–21 periods. Then a subsequent uplift occurred. Despite Labor's eventual recognition in 2021 of the need for more health funding, it still has not made up for the damage it did early on in its term of office. In my reckoning, the government has been chasing its own health mess now since 2021. I remind members that having failed to clean up that health mess and not having put the system back in good shape, the government still forecasts about a 5% funding cut next fiscal year. I have these tables here from page 311 of budget paper No 2. I will not go through every item, but just the first two. The figure for public hospital admitted services in 2025–26 is $6.46 billion and for 2026–27 it is $6.07 billion, so there is a $400 million cut in public hospital admitted services in 2026–27. There is a further $100 million cut for the next line item, which is "Public Hospital Emergency Services". What is the government planning to do? Is it planning to ramp ambulances up to 10,000 hours? I do not know. By coincidence, there was a good article in The West Australian explaining how Labor created this health mess during its first term of office and failed to fix it through its second term, but it is somewhat disappointing that the media did not pick up on this at the time. Even though the opposition has been trying to make this case for several years, we have not quite been able to fully prosecute it. Only now are the chickens coming home to roost for the government. Maybe with a clearer grasp of Labor's responsibility in this area the community will think once more about where Labor stands on health. After all, Labor has historically argued that health is one of its biggest strengths.
From the historical facts of the budget papers we see that there is limited financial discipline and limited financial management. I think our community deserves better. We deserve budget honesty. I had always wanted to come into this house as a particularly constructive member. I understand that there is a government and an opposition and we have contentious debates on various issues, but I still always hope to be constructive. I now firmly believe that we will not see an arresting of this budgetary decline until the Liberal Party and the Nationals WA are returned to government—not from a pattern of behaviour of this many years. It may be a cliché, but good government starts with good financial management, and from that business can thrive, from that their families can thrive and from that our community can thrive.
Hon Tim Clifford (1:58 pm): I rise to speak briefly on my budget contribution today. There is a lot to say about budgets and priorities, but there is more to the budget than the money that has been put forward. As the previous speaker alluded to, a lot of figures have been thrown around—billions of this and billions of that—but at the end of the day we can look at some of the laws that have been implemented in the state to make sure that people are not impacted by cost. I am talking about the way in which markets are regulated. There is a lot to say about the housing crisis, which is obviously a market failure, to be honest, and really needs an intervention. There are regulatory frameworks around the Residential Tenancies Act that could save the government a lot of money. The repeated nature of how governments have acted in the past continues to concern me. I remember standing in this place in 2020 when the government at the time, the McGowan government, put forward more first home buyer incentives. I think even the Liberal Party at the time talked about throwing fuel on the fire of the housing market. Five years later, we see dozens of people rocking up to home opens and being outbid, especially by investors, because of inadequate laws in the federal space. There has been a lot of talk about negative gearing and so on.
During my time outside Parliament, looking at the recent reforms made to the Residential Tenancies Act, I did not believe that the government was doing enough. I do not believe that the recent residential tenancy reforms went far enough. Let us be serious: a lot of organisations, such as the Real Estate Institute of Western Australia, have vested interests when it comes to property. I am pretty sure some of its members were on the phone when they knew the Residential Tenancies Act was going to be reformed. I do not think the minister went far enough.
I note that the Airbnb register was launched this week. I believe that is one of the measures that did not even touch the edges. It is ridiculous that when we have a market failure in housing—it could be local or interstate investors pushing for no change—in effect, that is the status quo. The status quo has pretty much failed. The number of Airbnbs available is growing at an exponential rate. We have a register that tells us how many Airbnb properties there are in certain areas. I looked at the register this morning. It did not really give me much. It gave me numbers. It gave me figures across the state, but no interactive map was available. I will look into exactly how much was spent on the register because it pretty much just shows a few dots with the numbers. I looked around to see whether there was a comparison site and whether any other body was measuring the number of Airbnbs, who is involved, what is the uptake and how many individuals own Airbnbs and how many they own. I looked at the Inside Airbnb site and an article titled "Adding data to the debate", which is quite comprehensive. Members should look at it. The government's Airbnb register literally has no dropdown menus. It just has a bunch of numbers versus the Inside Airbnb site, which provides a breakdown of room type and the individuals or organisations that own Airbnbs, with up to 100 in some cases, which is really significant. When we compare WA to the rest of the country, our register does not go far enough. I note that some of the frameworks have been handballed to local governments to deal with. Only last week the City of Vincent put forward some regulations only allowing Airbnbs to be within 100 metres of a tourist destination, which is a welcome measure. There are virtually dozens of councils across the state that, firstly, are not taking up the measures put forward by the City of Vincent but, secondly, are carrying the regulatory burden of putting these measures forward and monitoring them, which costs money. That is money that is not being identified or spent in the state budget.
I thought I would start my speech by comparing WA to the other states because surpluses only take us so far; it is about what it costs the people of WA. I have a chart, which I am pretty sure was reported on by the ABC recently, which provides exact figures relating to the increase in rents in WA and compares that with the increases in each capital. If we look across the country, we can see what residential tenancy laws have been passed. Perth rents rose 5.2 times faster than they did in 2020. They have gone up 79.2%, which is quite significant. They are actually the worst in Australia. Rents in the ACT rose 1.1 times faster. It has better regulations. I understand that the ACT has indexed rent caps and has been more proactive in its Airbnb space. It is looking at measures to deal with the crisis and it is willing to upset folks. That is what I think a government should be willing to do. At a state and federal level, especially in WA, there is this notion that we can build ourselves out of this crisis. Yes, we need to build, but we also need to be able to regulate and pass laws in this state that deal with the market failure that is right in front of us.
In the housing space, we are looking at rents and no-cause evictions. People are experiencing housing insecurity. If someone was lucky enough to live in the same rental from 2020 to the second half of 2024, their rent may have gone up 79%. A lot has been said in politics about working families. Someone on a medium income who was paying a few hundred bucks a week only a few years ago would now be paying over $1,000 a week, so their rent has gone up 79.2%. We wonder why people cannot afford to buy or save to buy a house. I agree with the government and I agree with the housing minister when he talks about trying to move heaven and earth to make sure that homes are built in order to provide for people and to be creative. I support what the housing minister has done in East Perth, looking at how we can be creative and making sure that unoccupied dwellings are occupied. It is also about being brave and the government being willing to stand up to developers and to the folks who have an interest in Airbnbs and say, "We're going to regulate this failed market to make sure that the people of WA are not bearing the cost of this thing." Just on the weekend I saw a video of 92 people who had rocked up to view a rental property. It was quite surprising. To have 50 people turn up is shocking, but 92 is absolutely abhorrent. That is where we are at in WA. These are the things that we need to look at and these are the things that are actually impacting people. When the Treasurer talks about a surplus, people ask, "What is the surplus for if the government is not doing all the other things necessary to make the cost of living a little bit easier on us here in WA?"
The public sector has a role to play. It usually picks up the tab when the private sector fails. But if both fail or are not working as they should be, that is when people end up homeless, especially in the housing space. I recently read the Bankwest Curtin Economics Centre report, published a couple of months ago, entitled Housing Affordability in Western Australia 2025: A long way from home, which stated:
Nearly 25,000 clients in WA accessed specialist homelessness services in 2023–24, up 18 per cent since 2011–12
The report also stated that, according to surveys, over one-quarter of renters now regard their rent as being unaffordable, which is unsurprising. The evidence is shared on social media when we see lines of people rocking up to homes, desperately hoping they can live in the home that they are seeing in front of their eyes. Heartbreakingly, some people just do not get a response because, to be honest, real estate agents are not required to respond to everyone and they know they will get away with it scot-free in this failed system. I am pretty sure they had an interest in the residential tenancy reforms that were put forward last year and were quickly on the phone to the minister or the Premier at the time, Premier McGowan, about any regulation or reform.
In a state as wealthy as ours, nearly two-thirds of single female renters aged above 55 years are in poverty, and half of those are facing severe poverty. Western Australia's median weekly advertised rent rose by $320 between June 2020 and December 2024, from $420 to $740. As I have mentioned before, that is a rise of over 70%. That is where we see an impact on people. Of course, outlawing rent bidding was put on the table during the recent reform process, but when 92 people are turning up, they can basically slap nearly any price they want on a house and someone will be desperate enough to try to claw together whatever they can to pay whatever figure has been put on the property.
I would also like to mention that, in the housing space, whether a person is a buyer or a seller, they are being impacted by the housing crisis. In places like Victoria, where underquoting is illegal, I am pretty sure they are required to advertise the price of a house. In WA, there is no requirement. Sellers can ask for expressions of interest. If you go on realestate.com right now and bring up a map, you will see advertising with "expressions of interest". What is the pricepoint of the house? We are artificially inflating prices and creating bubbles. In the end,
it impacts first home buyers, who everyone is supposedly concerned about. We can at least put in a basic measure to make sure that an agent is required to put a price on a house. It is like bait out in the ocean to try to attract fish. They get everyone into the house, so they are outbidding each other for the house and eventually overpaying because they are desperate. We can see the fear of missing out in nearly everything. The West Australian, for example, has an interest in housing, and it is the one saying, "You're gonna miss out." Every day there is a sponsored ad saying, "You better get in now; it is gonna be unaffordable." On the other side of things, when people go on realestate.com they see that over half the places in some suburbs do not even have a price on them, and when they call the real estate agent they are told, "Well, you know, if you offer this much." Internal auctions are going on. WA is a place where not many auctions take place. That is probably because the auction is happening behind the desk, on the phone, or as we say in this chamber, "behind the Chair". It is easy for real estate agents to do that. They make their profit, take the money and walk away.
I chatted to my sister about this. She spoke to a real estate agent in the north of the city who said the last 12 purchasers were interstate investors and some of them bought properties sight unseen with cash. I saw a story a couple months ago about a house in Armadale with, I think, a dead rat on the ground in the picture, and it still sold for over $450,000. If that is not a failed market, I do not know what is. I really think that if we want to talk about surpluses—I am talking about the way budgets are framed—we want to also talk about the cost of not regulating or the cost of not putting in measures. It is just commonsense stuff. It is not like the iron fist of the state coming down on top of anyone; it is making sure that a failed market, like our housing market, is fairer for people. I despair when I look at tweets, or formerly tweets, now X or whatever, or the reposts of the former CEO of the Real Estate Institute of Western Australia on how great everything is. It is great for some but it is not great for a lot of people. It is great for interstate investors who are jacking up the price of houses and for real estate agents. There are good people who work in industries like that, but there are also people who are there just to make as much money as they can and get the hell out before the downturn happens. By the way, we are actually compounding a downturn because we are allowing things like not advertising the price of a house to continue.
I mentioned underquoting and that I am pretty sure that is illegal in Victoria because Victoria understands what it does to markets. It distorts them. Investors and agents get away scot-free. Of course, peak bodies across the country like REIWA and equivalents in the ACT, New South Wales and Queensland will argue the same points such as do not regulate Airbnbs and do not put any requirement on agents to put a basic price on things. What people are getting for their houses because they are bumping up the prices so much and how they are assessed by the bank are probably two starkly different figures. I would like to see the narrative that if we are going to talk about a surplus, we should also talk about what else we are putting in place to save the public money, whether it is for the renters, buyers or sellers.
I do not agree with the sentiment around stamp duty; it is ridiculous. We need to make sure we have a lot of measures in place to deal with the issues in front of us. We are just not doing that now because we are too afraid of these industries that have more access to our Parliament than a person rocking up to compete with 91 other renters or the stream of buyers who rock up to houses in Maylands, Bayswater and Armadale advertised as open expressions of interest. It is an unfair playing field. I would like to see the government upset. I would like to see the government come out with an announcement tomorrow and just say, "We're going pass these laws and we don't care because it's going to help renters and it's going to help kids and single parents." People are terrified that their next letter will say their rent is going up another 25% because that would literally force them out of their houses.
I have doorknocked across many places in the state, including Fremantle, Maylands, Bayswater, out towards Midland, Victoria Park and the Curtin electorate, and heard a common theme from people regardless of where they sit politically, how much money they have or their background. I spoke to a wealthy couple who are semi-retired who had all three kids in their 30s back at home because they cannot afford to buy a house or cannot find a rental. I went doorknocking down on the peninsula and a single parent on disability said to me, "My rent increase is coming and I have to move. I don't know whether I can move even out to Midland because the rents have gone up too high. I'm going to have to look at sleeping in my car with my kids or couch surf." That is because we have very poor regulation that does not do enough to deal with the issue in front of us.
I will go to some of the funding that has been put forward or allocated by the government. It has a narrative around building itself out of this problem. In order to increase supply, the government allocated $246 million to build 548 social and affordable homes. I note the Common Ground developments in East Perth and Mandurah, which are based on the Housing First model made famous in Finland, which the Greens agree with. We would like to see more resources for that.
The differences between Western Australia's Housing First model and the Finnish model is that Finland's is ramped up exponentially with funding to meet the need to address what is happening. People want to see the money put in front of those programs and ramped up exponentially to take pressure off the rest of the system, along with all the other things I mentioned that could help regulate a failed market and bring it back into line to be fit for purpose. Given the constraints being experienced by the building industry, such as a lack of materials and tradespeople, it might be true that the government is doing as much as it can to build new housing, but building, as mentioned before, is not the only thing the government can do.
The government plans to spend $92.2 million this year on homelessness services, which sounds like a lot of money, but compare the spending to the problem; namely, $92.2 million divided by 9,700 homeless people, according to the 2021 census, which is way out of date by now, gives just over $9,500 per year to spend on each person, minus administration costs. Members should bear in mind that these citizens are unable to pay for accommodation, the biggest expense that anyone can experience in a lifetime, if they can find accommodation because there is none out there.
As identified in the budget, the government is spending additional money on construction, but we know that construction rates are not keeping up with homelessness. I talked briefly before about identifying vacant properties. I am pretty sure the Premier said last year that the government would lean on developers to identify adequate properties for them to put their money into to help with the issue. So far, leaning on developers has not helped us deal with this crisis. Why would we lean on developers to give advice about solving a problem that they literally do not make any money from? It is a really basic concept. If anything, we should say to developers that 20% of their new builds must go to public housing. That is what I would do if I were the government. That may not make Satterley or Dale Alcock happy, but I am pretty sure it would put people in houses and the developers would still be walking away with a huge profit. I am sure my colleague Hon Dr Brad Pettitt will talk more about planning later. This is the most stretched city in the world. It suits developers. I was in Butler not long ago and I could see the houses all lined up. Developers are making a mint out of these poorly designed 200-square-metre properties on the fringes. People are pretty much living in communities from which they have to drive miles to get to work, and their expenses are just going up. I find it laughable.
I reflect on a comment I saw under a post about the housing crisis. A real estate agent was talking about how if they were not there, things could be worse. I thought: "Jesus, there were 92 people out there on the weekend, so how could it be worse?" It is insane. To be honest, it is disgraceful. The rate that our rents have gone up in the last five years is the worst in the country. Measures could easily be put in place to fix that, and it is something we need to do. A few people recently asked me about the spend on housing compared with the spend on AUKUS. This goes to the core of the government's priorities. I have spoken to folks who are aware of people living in tents in nature reserves around the metropolitan area who have been moved on by local government officials because they are sleeping in tents. They are not backpackers looking for cheap accommodation; they are people in our community who are probably going to work every day. Some of them are probably too embarrassed to say they do not have a home to go to. They sleep in tents in nature reserves and get moved on. They never thought they would be in this situation. They might walk past a newsagency and see a newspaper or read on their phone that as these tent cities are forming in our parks and gardens, the federal government is spending money to house 700 United States military personnel near Garden Island. The priorities are so far removed from where they should be. Of course, housing military personnel to get the AUKUS program off the ground is a given, but when the government needs to find people to construct something, they construct it. It is a good example of why we should tell Nigel Satterley that 20% of his new builds should go towards public housing, and I am pretty sure he would have to build them.
As a party, we have spoken a lot over the years about funding and subsidy priorities. I spoke at length in my previous term as a member of Parliament about the fossil fuel subsidies that were being put forward. We are still handing out subsidies and we still have a budget surplus of a couple of billion dollars. We should turn off the tap for fossil fuel subsidies and turn the tap on for subsidies for building houses. I think it is pretty straightforward. We should make sure that people can trust their government, because, to be honest, a lot of people have lost faith in government. I saw an article about sovereign citizens and all that kind of stuff. I think that is a symptom of the broader societal concerns about governments failing to deliver things for us; therefore, people are looking in different places to be confident about what might be delivered to them. We are nowhere near the United States as we have a totally different system and all that kind of stuff.
We are doorknocking folks and speaking with the community. People who do not even support the Greens—I refer to Liberal and Labor supporters and all that, who have built a fairly comfortable life for themselves—are saying that they cannot afford to find their kids a home. I think that is a real tragedy. We need to really analyse what we are doing in this place and analyse where the money is being spent because surpluses are being thrown around like it is the 1990s. It is like the Howard era when the government thought that people cared about surpluses. People care about what is actually being delivered to them, not about the word "surplus". It means nothing to people when they are sleeping in a nature reserve and waiting eight or nine hours to see someone in a hospital emergency department.
I looked at the ramping hours; it was 1,900 hours in 2019 and 7,000 hours today. If members spoke to anyone in an emergency ward and asked, "Hey, what do you think about the surplus?", they would say, "I don't care; I just want my leg fixed." It is pretty simple. We have our priorities all wrong. We can talk about billions of dollars and all these other things, but I want to see many houses being built. How many houses are being built with suitable regulations to increase supply and actually address the issue?
I do not want to see the responsibility for regulating Airbnbs handballed to local governments, although it has happened. I want to see a government turn around and say, "We prioritise the people in this state." It is not just about putting out numbers that make us feel better about ourselves, because it does not matter now. What matters more is what people see in front of them, such as whether they have a roof over their head or can go to the hospital, or whether their kids are not having to pay 70% of their income on a rental in the outskirts of the most stretched city in the world. That is what I see. I know that we have estimates next week and I will be asking quite a few questions in that forum, but really, at the end of the day, I think we can do better as a state. We have to stand up to the vested interests in the state, whether it is the real estate industry or all the other companies that are basically writing the regulations for us or leaning on the Minister for Housing and Works to make sure the minister does not put regulations on the places where they get to play and make all their profits. I want budgets that care about people first, that care about our environment and that not only prioritise the people at the bottom, but also gives them the opportunity for upward mobility. They should be able to live in a community where they can say it actually cares for them and not be just a figure that is thrown away in a press release. Thank you.
Hon Philip Scott (2:31 pm): Instead of thinking of the state's future, I feel that the Cook Labor government is more focused on the maintenance of power and the election cycle. This is not a problem that is unique to Labor; we have seen it with the Liberal Party. We need a long-term vision in this state that promises the next generation a brighter future. We are the wealthiest state in Australia. We are the California of Australia and we should be driving the national vision through policies that reflect this. We heard last week from Hon Dr Steve Thomas, who is away on urgent parliamentary business, along with most of the opposition bench, about the "Lucky" Phil government. In a sense, he is right, because the state government is benefiting from the mining royalties and iron ore prices. I feel that he should have channelled Dr Phil and said, "What are we thinking?", because as Hon Tim Clifford just recently alluded to, where are our priorities? Where is the vision and where is the money going? Our focus should be on the future. We should be planning for projects that create future prosperity. I am not convinced that this budget totally addresses those issues. As a state, we need to be self-sufficient. I think COVID really exposed where we are with vulnerable supply lines of food coming into the state. That should have woken us up, but I feel that we are asleep at the wheel again when looking to the future. It is great that we have maintained a strong AAA credit rating, but achieving that is like passing an exam by learning the answers or memorising them when we really do not understand the full subject matter. We can do better.
When China coughs, Australia catches a cold. When iron ore prices fall, our credit rating will likely fall with it. We need to concentrate on manufacturing here in WA—processing, smelting and doing it here locally. A good government balances the books. Socialist governments tend to spend, and there is nothing wrong with spending. Sometimes we need to spend, but it is how, when, how much and where that money is directed. I feel that we need to spend money on the fundamentals that our people expect us to spend money on. I know Hon Simon Ehrenfeld talked about water, and rightly so. I feel that this has become a form of indirect taxation by the government. As Paul Murray mentioned in his article in The West Australian a few weeks ago, I would have liked to see those dividends from Western Power and Department of Water and Environmental Regulation reinvested in those areas to alleviate the cost of living for families. We cannot continue to tax our people excessively; it is a form of legalised theft. Payroll tax is a great example and a disincentive to small business. Excessive council fees continue to feed the monster of government. Credit rating agencies factor into their assessments environment, social and government (ESD) risks and targets. That means our credit rating is boosted by ticking boxes on net zero emissions, pledges to the United Nations and green subsidies. ESG targets please overseas institutions, but not necessarily West Australians. The same industries propping up our rating are the same industries ESG aim to phase out in the future. That does not bode well.
We cannot maintain genuine sovereignty while letting foreign interests own and run critical infrastructure, nor can the government boast gold-standard transparency when there is lack of public visibility into how the investment funds allocate who gets the money. Royalties from WA's gas exports remain minimal compared with iron ore. The North West Shelf regime delivers only a fraction of its potential. Our gas powers nations abroad while local families face higher bills. We need reliable base power that underpins a government that invests in AI infrastructure. I am a boomer and usually behind when it comes to technology, but when we see what is happening in the United States with the money that is being thrown at AI, we are going to get left behind. It will affect business, defence and so many aspects of our day-to-day living. We require the same level of commitment to compete with the rest of the world. The current infrastructure is woefully inadequate. I think we need to wake up to this.
The government boasts about creating 340,000 jobs since 2017, but when we look into this, we can see that 50% is in the public sector. There is nothing wrong with public sector jobs; sometimes we need them. However, it is not real economic growth. It is paid for by taxpayers and not driven by market demand. As we have seen with the recent revelations in the state's health services, a greater bureaucracy does not always deliver greater results. Real economic resilience comes from private enterprise, skilled trades and global competitiveness. I welcome the government's support of apprentices, which is something that we desperately need. The $13 billion in energy and water infrastructure includes hundreds of millions for renewables, hydrogen hubs, solar and wind farms, all of which are subsidy-driven and import-dependent. The panels are made in China. The turbines arrive by sea. Our local benefits are speculative at best. We have seen the collapse of recent hydrogen projects because, even with the funding, the production costs are unviable. That is taxpayer funding meeting cold market realities. Some of that money could well have been used to alleviate poverty in this state. When discussing fiscal matters, we cannot afford to overlook families, as they are the foundation of our society.
In particular, I was disappointed that the KidSport health vouchers were decreased from $500 to $350. Sports clubs suffer ongoing increasing costs from local councils for ground maintenance and public liability insurance, and many families did not avail themselves of the KidSport voucher either because it was not accessible to them or they were not aware of how it operated. The money from the KidSport vouchers for a rugby club, for instance, would cover the registration of one child but it would not cover the headgear protection, mouthguards and other peripheral equipment that is needed. For a large family, participating in sport is a huge expense.
It is good that there is provision for women's health, but we need to support men battling mental illness and alienated fathers. There is a desperate shortage of good male role models or, rather, we have a lack of male teachers in schools. Boys without fathers potentially face high rates of crime and despair. Equality should uplift everybody. As we know, stronger families reduce crime and dysfunction. I think those of us on the right of politics—I actually believe that most people are a blend of left and right—have forgotten that it is not just about bare economics; social justice is important. Hon Tim Clifford talked about the lack of housing, which has an impact on schooling. One of my research officers is a teacher of 40 years standing and he tells me of the absenteeism rate that is affected by children not having a home to go to. That affects the whole of society.
It is amazing that a wealthy state like ours has a health system that is in crisis. It is not as though we have not had time to plan. We saw yesterday's government announcement of $50 million, just two months after the budget was handed down. Labor has been in power for a decade and it cannot just pass the buck to the federal government.
Water is becoming a precious commodity. If only we had heeded the late Hon Ernie Bridge's vision and corralled water that flowed and irrigated the north of our state to create jobs for Indigenous people in remote communities.
We need to ensure that multinationals pay their share and that we do not allow political donations to dictate government policy, just as property developers do in this state. I found it surprising that the electoral reforms in this state did not ban donations from property developers to political parties, as is done in many states in the east.
Economic diversification means a return to local manufacturing and processing, and not being reliant on mining. However, Labor's diversification is still mostly about mining, and even green minerals is still extraction.
The regions have been forgotten, as was exemplified in the last term of Parliament when the government abolished regional representation, which was an act of political bastardry. We need to upgrade our regional airports, like Busselton. We need train lines. We need to reopen the Albany line. We need to leverage our resources and geography to meet the real needs such as investing in regenerative agriculture, water and onshore food processing. Sovereign food security is national security. We need to build real dividends for real people. WA can build its own destiny that is sovereign, durable and decentralised. Let us not borrow blueprints from abroad. We are not a colony or a branch office; we are the engine room of the nation. The future is right here. Let us build it.
Debate adjourned, on motion by Hon Lauren Cayoun.
