1 - 011B, 670 Chapel St South Yarra VIC. 3141

My contribution to the debate on the governments recent rate capping Bill

Mr DAVIS (Southern Metropolitan) — I am pleased to rise and make a contribution to the debate on the Local Government Amendment (Fair Go Rates) Bill 2015. I note in the first instance that the coalition will not oppose this bill.

It is important to understand some of the background to this bill. It is important to understand the sequence of events by which this piece of legislation has been arrived at by the government. It is important also to understand that this bill does not do what it claims to do.

This local government amendment bill, the so-called ‘fair go rates bill’, is not in fact a fair go rates bill. It is a bill that singularly fails to achieve the primary objective that the government set for it. In May last year the then Leader of the Opposition in the Assembly, Daniel Andrews, made an announcement. He promised that, if elected, Labor would introduce a very simple policy to cap council rates at the CPI. Unfortunately this promise has already been breached in this financial year. The policy did not say that the government would cap rates at the CPI but in the first instance let councils run free for a year with higher rises than the CPI.

In this financial year the average rate rise statewide is 3.8 per cent; the CPI to 30 June was 1.1 per cent. Make no mistake, there is an enormous and growing chasm, a bigger one than has existed in previous years, between the CPI and the rate rise that has been put in place around the state.

I have enormous sympathy for our councils. I think they do a very good job across the state, which is not to say that every councillor or council provides the perfect outcome for their community. By and large most councils do a very good job and are focused on delivering services for their community. Councils provide a whole list of different activities and base services, some statutory ones, others that they choose to provide at a local level and still others that are subsequent to agreements with other levels of government in terms of the services that they provide.

Labor’s policy from 5 May 2014 was:

Victorian Labor will force councils to cap their rates at consumer price index … and justify any further increases.

Councils wishing to raise their rates above CPI must appeal to the independent Essential Services Commission … and justify any rate increases.

Under Labor, councils increasing their rates will be accountable for how they spend ratepayers money.

There is a legitimate case for assessing the impact on families of council rating policies; they have a significant impact on family budgets.

Ms Shing — So you don’t support it?

Mr DAVIS — What I support is the government delivering its election policy, which it is not doing.

Ms Shing — Do you support rate capping?

Mr DAVIS — I support the government delivering its election promise, which it has not done yet and does not do in this bill. What I say is that rate capping, as promised by the government, is not being delivered in this bill. The government is setting up an arrangement that is very different from the CPI. The community understands exactly what the CPI is; it is published by the Australian Bureau of Statistics (ABS) from time to time.

Ms Shing — And by the Department of Treasury and Finance and the Reserve Bank.

Mr DAVIS — Unfortunately it is not published by Treasury and Finance. The one that the community understands is published by the ABS, and that is a key point on which I think the community will in general agree with.

Let me say something about the actual rate rises that are put forward this year by councils. This is under the government’s election promise. The government has delivered in Murrindindi an 8.19 per cent rise; in Wangaratta Daniel Andrews has delivered a 6.99 per cent rise; in Whitehorse he has delivered a 6.84 per cent rise; in Mitchell he has delivered a 6.82 per cent rise; in South Gippsland he has delivered a 6.63 per cent rise; in Monash, a 6.46 per cent rise under Daniel Andrews this financial year under his election policy. In Ballarat it is a 6.16 per cent rise, in Hindmarsh a 6.12 per cent rise, in Moyne a 5.73 per cent rise and in Buloke a 5.68 per cent rise. These are the rises in rates under the arrangements that Daniel Andrews has put in place under his policy after his election announcement.

Ms Shing — Which is yet to begin.

Mr DAVIS — He said that he would cap rates at the CPI, and this is not the CPI. The CPI is at 1.1 per cent to 30 June, and he has ratcheted rates up more than that.

Daniel Andrews has gone further. He has cut funding to local government by $38 million in this year, and not just the country roads and bridges program. If we look at the budget papers, we can see very clearly that the payments to local government fall by $88 million, with $50 million added in in terms of the interface councils, bringing it to a net 38 per cent cut statewide by Daniel Andrews.

Let us be clear here so that the community will understand what is going on. You cannot with one hand cap rates while the other hand tears money out of local councils. Daniel Andrews has made the decision to rip money out of local government — $38 million is extraordinary — at a time when he says he is capping rates at CPI.

A key point here is that Daniel Andrews has also embarked on a course of jacking up charges and fees elsewhere across the system. He says on the one hand that he wants to cap rates at the CPI. He is taking money out of local government. At the same time he is putting more responsibilities on councils without the proper support, and he is preparing the way for a rise in fees and charges across the local government sector. The community should understand what Daniel Andrews said in the election period, and I am going to quote him because Daniel Andrews and Tim Pallas, who is now the Treasurer, were very clear in what they had to say about taxes, fees, charges, levies and debt at that time.

On 4 September 2014 Daniel Andrews was asked by Jon Faine:

Are you going to put taxes up?

Daniel Andrews replied:

Of course we’re not. We’re not going to tax our way into — we reduce taxes, Jon, we reduce WorkCover premiums. We ran a AAA budget, that’s the fact of the matter.

On 5 November 2014 a member of the public called into Jon Faine’s show and said:

Morning, Jon. Mr Andrews, if you don’t get the federal funds, will you either cut your infrastructure program for public transport or will you raise taxes?

Daniel Andrews said:

Well, David, we’re not — thank you for your call, firstly, David. I’m not interested in raising taxes.

On 5 November, at a press conference, Mr Andrews was asked:

You’ve said there won’t be any new fees or fines. What about changes to new fines, fees, what about increases?

Daniel Andrews replied:

There is an indexation arrangement …

The questioner asked:

Besides indexation?

Daniel Andrews replied:

No, we’re not interested in making it harder for Victorian families, we’re about delivering common sense, fresh thinking, new ideas, practical plans that will improve the services …

The questioner asked:

So that’s a rock-solid commitment that fees and fines, charges, none will go up other than indexation over four years?

Mr Andrews replied:

That’s exactly right, and we will provide.

On 19 November, at the Sky News election forum, journalist David Speers asked Mr Andrews:

So any higher taxes, levies?

Mr Andrews said:

Absolutely not. We’re not in the business of trying to solve problems in TAFE and schools … higher taxation will not fix those problems.

David Speers said:

I just want to nail this list down …

Mr Andrews said:

The answer is a very simple one: no increases. And the question also related to new charges; I have no intention of introducing new charges.

I could go on and on and on. Even after the election, Mr Guy asked the Premier what would occur in terms of taxes and charges, and Mr Andrews replied:

I again make it very clear to him … to all members of this house … we intend to honour each and every one of the commitments we have made.

The problem here is that the government is now moving towards an increase in fees and charges at local government level — statutory fees and charges. Whatever the merits of these things, they fall squarely within the government’s gamut.

Recommendation 17 of the Essential Services Commission (ESC) report on rate capping states:

The commission recommends that the government consider amending the Local Government Act 1989 to require that service rates and charges must reflect the efficient costs of providing the underlying service.

The response:

The government accepts the recommendation to consider amending the act to require that service rates and charges must reflect the efficient costs of providing the underlying service …

We know also that the Minister for Planning, Mr Wynne, has ordered a review of statutory planning charges, and it is clear that statutory planning charges are about to surge. On the one hand the Premier is saying he is going to cap rates at CPI, but then he brings forward bogus legislation. On the other hand Mr Andrews is preparing to jack up charges, to increase charges and to increase fees on families through local government and through other sources.

If a rate capping regime is to mean anything, it also means holding at indexation levels those fees and charges. The problem for Daniel Andrews is that he made solemn promises to the people of Victoria that he would cap rates at CPI. He also promised he would keep increases to charges and fees at no more than the indexation levels, and instead of that we have already seen a number of cases where new taxes and new fees and charges have been put in.

There have been things like the fire services levy; there have been massive increases across the state. It is important again to put on the record that statewide there has been a 7.2 per cent increase in the fire services levy. This is a huge increase. It is nearly seven times the CPI, and that is despite a solemn promise that statutory charges and fees and levies would not go up beyond indexation. The solemn promise made by Mr Andrews has been breached in that respect as well. He is a tax-and-spend Premier. He is a Premier who is going to hit families with charges, hit them with fees, hit them with levies and hit them with a whole range of different ways of scooping money out, at the same time as cutting government funding to local councils while expecting councils to pick up the slack, to pick up the difficulty.

It is very interesting to see exactly what the fire services levy means in certain areas. In the Alpine shire there has been an 8 per cent rise in the fire services levy this year. When people get their rates notices, they will see an 8 per cent rise in the Alpine shire, and they will have expected their rates and their rates notice to be going up by no more than 1.1 per cent — the CPI. It is a question of what the council does in terms of the overall charges, but the state government has to lead by example. It is clearly not leading by example in Ararat, where it is 6.3 per cent. In Ballarat it is 8.5 per cent; in Banyule it is 9.3 per cent; and in Bayside it is 12.5 per cent. In Boroondara, where I live, there is 12.7 per cent surge in the fire services levy. There is a 10.8 per cent surge in Casey, and there is a 10.2 per cent surge in Gannawarra.

These are entirely controlled by the state government. This is the responsibility of Daniel Andrews. His failure to run things efficiently and properly is seeing a hit on families, a hit on their budget and a hit on their hip pocket, and Mr Andrews has the temerity to lecture councils and to lecture the community about costs and charges. Let me tell you, members of the community will very soon find out. They are already finding out with these rate notices as they go out. They can see the increases, they can see that Daniel Andrews has broken his promise to cap rates at the CPI, and they can see that he has broken — —

Ms Shing — On a point of order, Acting President, Mr Davis is in fact misleading the house by referring to an alleged broken promise by the Premier on a rate capping policy that has not actually commenced, which does not commence until 1 July 2016, by indicating, to quote him, that ratepayers are expecting to see rates capped at 1.1 per cent, at CPI. He then went on to refer to various other charges that in fact have no bearing on the policy as it stands at this point and is yet to be introduced.

Mr DAVIS — On the point of order, Acting President, this is firmly within the gamut of the bill. Furthermore, in response to the comment that was made, which was longer than a point of order — —

The ACTING PRESIDENT (Ms Dunn) — Order! Mr Davis, I will just take it at that, because this is not a time for debate. Ms Shing, there is no point of order. I am satisfied that Mr Davis is talking to the bill before us.

Mr DAVIS — The key point here is that the Premier said he would cap rates at CPI, and he has not.

Ms Shing interjected.

Mr DAVIS — He never said that. He never said ‘from 2015’. He said he would cap rates, and he has not. He has not capped rates at the CPI, and even this bill will not do so either. That is the key point here. The bill will amend the Local Government Act 1989 and the Essential Services Commission Act 2001 to implement a system so that the annual council rate increases will be capped by reference to increases in the consumer price index, unless a council has obtained approval for a higher increase from the Essential Services Commission. It will be this particular system that the government claims will have certain impacts, but I do not believe it will. To be completely clear, this bill gives all power, total power, to the minister.

What the bill does is lock in an arrangement where the wage price index (WPI) will be a key determinant of council rate rises. The wage price index is not the CPI; it is a separate matter from the CPI. So even in the legislation itself it is clear that the CPI is only a factor and is not the primary determinant of what will occur.

The primary determinant is the whim of the minister. The minister can take advice — she is required to take advice — but then she or a future minister could do precisely what they wished. They could cap rates at a high level or they could cap rates at a lower level, and if people were prepared to read section 185B of act as it stands today, they would see that the minister has powers now to do these things. She could have capped rates at the CPI, pursuant to her promise, already. I will read out section 185B of the Local Government Act for the benefit of the chamber so members can understand:

Minister may give directions concerning rates and charges

(1)   The Minister may, by Order published in the Government Gazette, direct a Council specified in the Order that the Council’s general income in respect of a financial year —

(a)    is not to exceed the Council’s general income in respect of a specified previous financial year; or

(b)   is not to exceed a specified percentage of the Council’s general income in respect of a specified previous financial year.

(2)   The Minister may specify a percentage of more than, or less than, 100% under subsection (1)(b).

The minister has directing powers already for rate capping and has chosen not to use them this year. She has chosen instead to hit family budgets across the state, and that is Daniel Andrews’s decision. He has decided to breach his election promise and to clobber people across the state, despite the position he took to the election. This is a fundamental breach by the Labor Party of its election promise. It is a fundamental breach with the community of Labor’s proposal to cap fees, charges and levies, and the fire services levy is the key point I would make in respect of that.

It is interesting to read sections of the second-reading speech. If anyone doubts that wages will be the primary determinant here, or a key determinant, the second-reading speech says:

Providing for the cap to be adjusted above or below the forecast change in the CPI —

note that it is not the actual CPI but the forecast change —

provides flexibility for other matters such as wage pressures or efficiency dividends to be taken into account where appropriate.

Note the significance of the wages there and the links of the government to the local government union. It is very clear that the government is going to use a wage price index to justify increases that are far beyond the actual CPI. The wage price index is a major determinant that is listed in the bill. The government has accepted this formula from the Essential Services Commission. It has said that it accepts this in principle and will implement it for the first year. That is a very important point, and if you look at recommendation 4 from the Essential Services Commission and the government’s response to the Essential Services Commission final report, the recommendation from the Essential Services Commission is that the annual rate cap should be calculated as — and I am going to read this because the community should understand precisely what will make up this bogus index that is being created here:

Annual rate cap

= (0.6 × rate of increase in CPI)

+ (0.4 × rate of increase in WPI)

the wage price index —

where: CPI = DTF’s forecast published in December each year —

note the forecast, and the Department of Treasury and Finance (DTF) has a shocking track record on predicting this —

WPI = DTF’s forecast published in December each year

The efficiency factor should initially be set at zero in 2016–17 and increase by 0.05 percentage points each year from 2017–18. The commission will undertake a detailed productivity analysis of the sector to assess the appropriate long-term rate for the efficiency factor.

The government’s response says:

The government accepts in principle the ESC’s proposed approach to the calculation of the cap in the early years of the system —

whatever that exactly means. It goes on:

However, in the government’s view, flexibility should always be retained by the minister to consider different factors or weightings to be taken into account at the outset of the system and as circumstances confronting the sector evolve.

To make it very clear, this bill gives the minister supreme power to set the level for each council — high, low or in between — as she sees fit. She is required to consult and she is required to take on board the points made by the Essential Services Commission, but she is not required to implement them. But this point here states:

The government notes the ESC’s rationale for recognising the limited capacity for councils to adjust their wage costs immediately and therefore for taking the WPI into account in setting the initial cap.

Here you go: those are actually the government’s own words. The government is going to implement a system that does not cap rates at the CPI. It does not cap rates at the CPI; it caps them at a different rate with a huge weighting for salaries — salaries that are way beyond what is being paid in the private sector in fact, salaries that are way beyond what the community was to expect in terms of the CPI. It is fundamentally that breach in promise by Daniel Andrews that will come home to haunt him.

The government also notes the inclusion of an efficiency factor. It is a very small efficiency factor, but whether it is needed in this particular form is a different question altogether. The government goes further. It is worth reminding the community that wages have increased in the local government sector well beyond the CPI. That is worth noting. I will put some of these on the record to give people some flavour of the increases in enterprise bargaining agreements (EBAs) in the local government sector.

I make the point here very strongly that I think most council workers do a stunningly good job, and I think they deserve to be well remunerated. I think they deserve to have decent enterprise agreements, but we should not believe that you can jack up wages in the local government sector and not pay for them. If you are cutting state government funding to councils and loading councils with more responsibility, like Daniel Andrews has this year with a $38 million cut to local government, it is very hard for councils to adjust. They have fixed arrangements with their EBAs which are well beyond the CPI and ought to have been known to Daniel Andrews before he ticked off on a policy that said Labor would cap rates at CPI.

Let me read some of these. In the case of Ballarat council, its EBA expires on 30 September 2016, but on 30 September 2013 the salary increase in the EBA was 3.6 per cent, or $35. On 30 September 2014 it was 3.6 per cent, or $35. And on 30 September this year it was 3.6 per cent, or $35. How do you, as a local council, where perhaps half, or in some cases more, of your costs are in staffing, deal with these matters when you have got an EBA that has locked in arrangements at a particular figure — 3.6 per cent, or $35, on 30 September. At Banyule it was 3.35 per cent annually in 2014 and 2015 and will be 3.3 per cent in 2016. In the case of Bayside City Council it is 3.5 per cent annually, or $35. In the case of Benalla it is 3.8 per cent, or $38. In Cardinia it is 3.2 per cent. In Casey 3.9 per cent is the figure. In Corangamite it is 3.4 per cent. In East Gippsland it is 3 per cent. In the case of Frankston it is 3.25 per cent. In Glen Eira it is 3.7 per cent. In Glenelg it will be 3.9 per cent in 2016 and is 3.8 per cent this year.

I am giving the community and the chamber the very clear flavour of the increases that are in salary arrangements at our councils. In Geelong it was 3.3 per cent last year and 3.5 per cent this year and on 9 July 2016 there will be a 3.5 per cent increase. In Greater Shepparton it was 3.05 per cent in 2015 and it will be 3.05 per cent in 2016.

Ms Shing — On a point of order, Acting President, I wish to draw Mr Davis’s attention to the fact that all of the rates he has just listed were in fact removed as weightings for wages in the minister’s response to the Essential Services Commission report at the beginning of November, so I would ask that you ask Mr Davis to bring himself back to the content of the bill at hand.

The ACTING PRESIDENT (Ms Dunn) — Order! That is not a point of order.

Mr DAVIS — I will endeavour to resist the carry-on and focus on the details of the bill. The key point here is that in all of these council areas the EBA pay rises are significantly over the inflation rate, remembering that to 30 June the inflation rate in the Melbourne area, which is the major population-significant zone, was 1.1 per cent. This government proposes to entrench payments of a much greater character as part of its accepted formula. The government uses that formula and tries to pass off this bogus, made-up index that nobody has heard of before — it has been created as an absolute fiction — to try to claim that it has capped rates at the CPI. In fact it has not capped rates this year. It will not cap rates under these arrangements. It will not cap rates even remotely near the CPI if these sorts of arrangements are entrenched, as the government itself says they will be.

Entrenching these will make it more difficult to achieve good outcomes for households and businesses in terms of their rates. I think it is legitimate to look at council efficiency and I welcome examinations of productivity across councils around the state. Many councils have taken very significant strides to improve their productivity. We heard in the chamber today of a measure the Daniel Andrews government introduced which worked directly against efficiency and productivity. We heard that the government put in place a public holiday on grand final eve, and the figures I have seen from peak bodies in the local government sector suggest that the hit in direct costs and on productivity of the grand final parade public holiday was between $13 million and $14 million.

Local government has got to suck up that cost. There is no supplementation proposed by the government for the cost burden it has imposed on local government through this extra holiday. The government expects local government to deliver a so-called ‘rates capped at CPI’ policy while it imposes all of these additional burdens and costs. Certainly I, as I have moved around the state — and I think many others in this chamber will have also — have seen local governments looking closely at what is important to their areas and what they ought to provide. They are obviously looking at their statutory requirements and the statutory services they must provide. They are looking at the services they have agreements with the state and the commonwealth and other agencies to provide. Then they are looking at the other important services they provide.

It would be interesting to see how many people could list the long list of local government services. It is a huge list. The number of services is well over 100. I pay tribute to the significant commitment and ability of local government to provide for its community, but this is being challenged by the Daniel Andrews government and its set of policies. I do not think that the rate capping policy should be used in operation. You have to view the cuts by the state government and the freeze by the federal government and, importantly, the additional burdens that are loaded on to local government as the government’s policies go forward.

This is going to make it difficult for local government. Local government around the state is looking closely at services. We have heard some country municipalities say, ‘We may not be able to continue to provide all the school crossing supervisors that we provide’. It would be a sad outcome if Daniel Andrews’s cuts to key programs had that effect in country Victoria.

In country Victoria the country roads and bridges program was a very important program — $40 million a year across 40 councils times four years. If the coalition government had been returned, that program would have been renewed, but this government has not renewed it. It has put in place a program which is not a copy of the country roads and bridges program, is not paid directly to local government and does not particularly focus on those council roads that are such an important part of our system in country Victoria.

Councils had certainty, predictability and a significant fillip for their budgets that enabled them to focus long term on those key country roads and bridges. Without those supports the quality that we have come to expect of country roads and bridges will be diminished. There is no question that that is what is going to occur. The cutting of the country roads and bridges program by Daniel Andrews has had an enormous effect in country Victoria. Wherever you go, people talk about that program. It should have been protected. It should have been renewed. It should have been put in place for the longer haul so that councils across the state could continue to provide those services that their communities so much need.

Our councils are a diverse group. Think about the larger metropolitan councils and the enormous range and complexity of services they provide. Think about the interface councils that manage the enormous growth that is occurring, whether that be in Whittlesea, Hume, Wyndham, Casey or Cardinia. The interface councils carry a huge burden. They have growing revenue because they have growing populations, but they also have very significant challenges in managing that population growth. Victoria’s population grows by almost 100 000 a year, and a significant proportion of that is in the interface councils. Whilst these councils make the point that when they get more population they get more revenue and that that assists them, at the same time they have to provide more services and more infrastructure, and that is a challenge for them.

Think about the important group of peri-urban councils, which have been very much forgotten by this government. They are rural councils with significant nodes of population growth that bring many of the challenges of the interface councils. Surf Coast, Golden Plains, Baw Baw and Murrindindi are in the peri-urban group of councils. Moorabool faces a significant challenge. A really significant growth node like Bannockburn in Golden Plains requires enormous infrastructure and focus for the council. At the same time it does not have the level of support that it needs from the state government. More has to be done.

The coalition made a policy statement recently that as part of the refresh of Plan Melbourne, if it were elected, there would be much greater recognition of those peri-urban councils. It is important that their contribution to the growth of the state is recognised in forward planning documents like Plan Melbourne but also in terms of financial support by the state government. What has this government done? It has cut the country roads and bridges program, which was a direct hit to those councils. It is going to make it very difficult for them. They already have dispersed populations with population growth nodes but still relatively low population densities, bringing unique challenges for those councils.

Then we look at the straight country municipalities. I have visited many of these municipalities, and I am grateful for the encouragement and generosity of people around the state as I have moved around, the good spirit and good sense that they respond with, and the ideas and the preparedness to knuckle down. To the north of the state I look at shires like Buloke, which has faced really significant challenges in terms of natural disasters over recent years and population decline. What does this government reward such shires with? Cuts to country roads and bridges — that is the primary take out. What has this government done to support them? Very little, and it needs to do much more.

It is interesting that, as many members of the Liberal Party and The Nationals supported by-election campaigns in the south-west of the state, a constant theme that came through was the cut to the country roads and bridges program. I think this government has misjudged it. The idea that this problem could be solved by creating some other badged program and then spending the overwhelming bulk or a large proportion of that new program not via councils in country Victoria but in the surrounds and hinterland of Mulgrave was not the right way for the state government to go. While Daniel Andrews, who represents the Assembly electorate of Mulgrave, might be happy on a local member level, the community of country Victoria will not be happy with him at all.

My point in commenting on the enterprise agreements is that there is one group of them that is now set for a number of years, but other enterprise agreements are due to expire in the forthcoming period. For Bass Coast 30 September this year is the nominal expiry date; for Mansfield it is 7 November. I am giving some examples here. Yarra Ranges is this year, Ararat is October 2016 and Ballarat is September 2016. The forthcoming period when these EBAs expire will be significant for whether the government can manage costs and rates if the EBAs allow very high rises and then incorporate the surge in costs through the formula that the government has now ticked.

The government has incorporated a wage price index into that index, creating a funny new index that nobody has ever heard of and which the government sort of claims is capping at the CPI. No, that is not right. We know that is not right, and the community knows that is not right. The community knows what the CPI is. If we were to walk down to Bourke Street now and ask, ‘Who puts the CPI figure out?’, we would universally get the answer, ‘It is the Australian Bureau of Statistics’, a national independent body that provides the CPI on the basis of data collected and actual results, not on some Treasury boffin model — not on some funny money calculation that has a wage price index in it to fatten it up that you twist around and, hey presto, if you put it in a big black box and turn it a few times, out pops a funny number we are going to use. Does the community really think that a funny number arrived at through a black box formula with no validity whatsoever is the way it is going to go? I think the community will think this is not the way to go.

We know what the CPI is, and we know what the government promised. My view is that the government did promise that and that the community did hear that. It was not our policy before the election, and the community voted on that. The job of the opposition and indeed opposition parties is to hold the government to account for its promises, to ensure that the government implements its promises to the letter and to ensure that the government is held to account for the outcomes of those policies as well.

I want to make another couple of points before I conclude, because I think people have got the flavour of what I am saying. If you look at the bill itself, you will see that the government entrenches in it a definition. In clause 3, ‘Definitions’, on page 3 it says:

CPI means the forecast Melbourne consumer price index, as published in the budget update prepared under the Financial Management Act 1994 …

The government bells the cat on itself here. This is not the CPI as laid out by the Australian Bureau of Statistics (ABS), which must by necessity be a historical figure and must reflect what has actually happened. We all understand how Treasury works. Treasury officials are responsive when ministers talk to them directly, and they are responsive when they are lent upon to get certain outcomes. We understand that Treasury does not accurately predict the CPI in every budget year on year. There is no mechanism for proper correction if it overshoots or undershoots or shoots in some different direction. The point is that this is not — I repeat, not — the CPI that is understood by the general community.