Senator WATSON (6:50 PM) —I move:

Over recent weeks we have heard much through the media that the Premier of New South Wales, Mr Iemma, is dissatisfied with the amount of the share his state is receiving through the Grants Commission. While there may be many reasons for Mr Iemma choosing to raise the issue at this time, and I suspect that many of the reasons are to do with domestic fires he hopes to dampen, he is likely to find little opposition in his state to the proposal that they should get a bigger share. The considerations which led to the establishment of the relativities between states for the return of Commonwealth funds are complex and not an easy topic for the layman to approach without a sound understanding of the history and reasoning behind the grants.

However, my own state of Tasmania is fairly well served by the current situation, receiving approximately $1.55 compared with New South Wales’s 87c for each dollar distributed. As a Tasmanian, I have no particular argument with the present relativities, nor does my colleague in the chamber Senator Colbeck. As I understand it, one of the important reasons for the differences relates to the costs of providing state government services within different size population bases.

The amount that Tasmania receives is based on determinations of what it costs my small state to provide services of a similar standard to those provided in the larger states. For example, with a smaller and more decentralised population, it is necessary to operate a large number of relatively small schools in Tasmania. A similar infrastructure is needed for a high school of 600 students as it is for a school of 2,000 students, so the cost per student is much lower in a larger school. Consequently, many Tasmanian services create few advantages of scale compared with services in states on the mainland, and Tasmania certainly cannot hope to compete in this area with large cities of more than three million residents.

While the additional money is well deserved, it is unfortunate that the Lennon Labor government in Tasmania has seen fit to spice much of this additional funding away rather than spend it on the services where it is vitally needed, especially in the areas of public health, roads and education. In addition to this enhanced situation with regard to relativities, Tasmania, along with the other states, has shared in the windfall additional funding which has flowed from our buoyant national economy and the goods and services tax. For example, GST payments to Tasmania have grown from $988 million in 2000-01 to nearly $1,500 million this year, providing an enormous and much welcomed opportunity for the state government to improve services in Tasmania. But we have seen little from the additional income flowing into state government coffers. We continue to struggle in Tasmania with substandard funding for hospitals, schools, roads and a range of community services because funds are not expended where they are needed and priorities are perversely set to benefit state Labor’s big business mates.

Even though Tasmania receives $1.55 for every 87c going to New South Wales, my state suffers from fewer public hospital beds per 1,000 people than most other states and fewer nurses per 1,000 people than any other state or territory. We also suffer the lowest expenditure per full-time student in government primary schools and the lowest expenditure in government high schools. Tasmania also has the lowest expenditure on vocational education and training—almost seven points below the national average. The problem with this situation is that it does not need to exist.

The report tabled today confirms that we are provided with the money to ensure that Tasmania can afford the same services as other states, but unfortunately the Lennon Labor government mismanages the resources so badly that people cannot rely on getting an ambulance when they need it, cannot rely on getting government dental services before they suffer ill health from dental problems, cannot expect to obtain elective surgery in government hospitals without unacceptable waiting periods, cannot get children into classes of suitable sizes and cannot expect services for mental health facilities to reach modern standards. While I believe that the system of grants noted in this report provides appropriate funding to Tasmania, it is a crying shame to see those resources so pathetically wasted by the Lennon Labor government in Hobart. I thank the Senate.