Matter of Urgency

DROUGHT

The SPEAKER: I have received the following written notice of a proposed matter of urgency from the Leader of the Opposition pursuant to standing order 52, which I have determined is in order. It states:

That this house expresses its concern that after six years the Rann Labor government has failed to show leadership by preparing the state and the people of South Australia for the worst drought in its history, and the house urges the Premier to deliver on the promise he took to South Australians at the last election that he would 'get results' and notes that, if the government's leadership failure continues, the drought may develop into a state of emergency, leaving a trail of devastation across the state.

I ask that members in support of the matter rise in their places.

Honourable members having risen:

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:24): Thousands of jobs lost, hundreds of millions of dollars in revenue lost, and wide-ranging social and community costs—that is the outlook for South Australia during this drought according to two updated, independent assessments of the impact of drought on South Australia. The Rann government was warned of some of these scenarios last year and again this year, but its response has been typically superficial. The Premier has gone missing as he covets the attention of Kevin Rudd. We have been elected in this parliament to deal with the problems of South Australia—South Australian taxpayers' problems—not to work in or for Canberra. The fact is that this drought could turn into a state of emergency as soon as the next budget. This drought may significantly damage the state budget and state growth.

Let me outline the state of this state because the Access Economics September Quarter Business Outlook is out on the streets, and I can tell the house that that report (the most recent quarterly business outlook released) has revised its estimates for South Australia and now it predicts a falling share of national output from about 7 per cent at the beginning of the Rann government's term in office to 6.2 per cent by the end of the current term. It identifies ongoing impact from drought and job losses in manufacturing industries Electrolux, Holden and Mitsubishi. I will read briefly from the subscriber's report, the wider detail of which is due for public release on 22 October, as follows:

A clear short-term negative is a lack of rain to date. The 2006-07 drought hit the state hard, cutting crops to their lowest in a quarter of a century. It looked as though the 2007-08 winter crop would see a substantial rebound, but a dry winter has taken its toll. That casts a question mark over the degree of recovery in state output from 2007-08. Access has pencilled in a substantial recovery from drought—we have now wound that back on the expectation that, although crops may lift, irrigated output will take another hit.

In the past few weeks, members of the state Liberal Party have visited key regions across the state to talk to South Australians. I have been to the Riverland, the member for MacKillop has been to the Eyre Peninsula, and other members also have been out talking to farmers and country people. I can report growing frustration with the Rann government's fascination with forecast mining booms while established industries wither and die. My colleagues the members for MacKillop and Hammond will tell the house shortly of their experiences, but there is no point in telling a family to work in mining for a couple of years if it is at the expense of the future of their family's farm and of those communities.

Last Friday, I made my fourth visit in six months to the Riverland. I met with citrus growers, Murray irrigators, wine grape growers, the almond board, fresh fruit growers, Agriexchange, the Central Irrigation Trust and the Regional City Group coordinators. I met with small business owners like Mr Rob Howie, whose property at Renmark comprises 2,200 hectares and who is looking at having to bulldoze most (or a good portion) of his orchards as soon as January through lack of water. As you come into Renmark you can see rows of citrus trees that have been turned off from their water supply. They are brown, wilted and stark symbols of some of the costs of this drought. It is serious. These trees and vines belong to families and companies that have delivered regional incomes and economic benefits to South Australia for decades. It is part of the state's food bowl and a hub of exports but, in the grip of drought and the absence of any commitment or action by the state government, the impact on the sector is there for all to see.

The warning bells are ringing loudly, I say to the government, and it must listen. Last year, the Riverland community warned this government of what was coming. The federal government responded by funding the Riverland socioeconomic impact report. That report, handed to the state government in April this year, made a series of recommendations, most of which still gather dust. The only response was a press release in June from the agriculture minister, the member for Mount Gambier, who said that steps would be taken That report is already out of date, and few steps have been taken.

I inform members today that a recently updated version of the economic review done for that very report is as alarming as the Access Economics forecasts that I mentioned a moment ago. That update, conducted by major independent accounting group PKF last month, sends a very loud warning bell to the Rann Labor government. I can release publicly for the first time today that the updated PKF report describes the direct impact on grape and citrus industries and the total impact for the rest of the economy. According to PKF, the estimated fall in jobs in the financial year just ended was 1,800 jobs, of which two-thirds were full-time. It estimates that the impact will significantly worsen this financial year, with an estimated loss of approximately 3,100 jobs.

We hear the Premier talk things up. Here is the reality. To put that into perspective, the employment contribution of the citrus and grape—

The Hon. R.J. McEwen interjecting:

Mr HAMILTON-SMITH: The member for Mount Gambier scoffs at the drought. The member for Mount Gambier thinks that it is a laughing matter. Welcome back; glad to see you scoffing and spitting in the face of country people. Good to see you back. To put that into perspective, the employment contribution of the citrus and grape sectors is expected to be one-quarter of that of 2004-05. That is 75 per cent of the jobs in one industry gone—and you on that side of the chamber don't get it. You don't get it, because you all represent seats in Adelaide. I can just imagine the discussions—

Ms Breuer interjecting:

Mr HAMILTON-SMITH: Apart from the member for Whyalla. The news raises further concerns for the future. The PKF report forecasts that, if the decline in industry continues, we can expect a fall in regional incomes of 16 per cent, as well as falls in activity in related sectors. I quote from the report summary:

In summary, this represents an annual average of 16 per cent decline in regional incomes and in employment opportunities over the base level of activity in the economy.

While it may in part be offset by other activities, it represents a very significant foregone economic opportunity and generates significant social and community cost. This is considered a significant problem from an individual and community context.

This damning assessment is made on the basis of some recovery in production capacity in 2009 and 2010. This is not a worst case scenario; this is the reality of what is happening in the Riverland today. The final two points of the economic report from PKF tell their own stark tale:

The consequence of the drought is estimated to result in:

1. Lost incomes to SA of approximately $780 million.

2. Lost employment opportunities of approximately 13,800 person years.

The report concludes with a salient note that it may have underestimated the impact of the drought where costs to consumers may create pressures for structural change in the wine and citrus industries. This is the real picture in regional South Australia: jobs are gone, money is gone, and we have social and community upheaval.

Yesterday, at the latest reannouncement of the government's Trade Schools program, the Premier bragged, 'Business is booming in South Australia.' Is it, Premier? Tell that to the farmers and food producers of the Riverland. Tell that to the stock and station agents around the state. Tell that to the service industries in regional South Australia that are closing their doors. By any economic growth standard, South Australia, under this Premier and this government, has failed to keep pace with national trends. The Premier should understand that every time he prances about claiming that 'business is booming', he drives at the heart of those people who are struggling through the drought, many of whom are facing ruin. Like the days of the State Bank, Labor manages to impose disaster, or fail to respond to it, where there was once prosperity. The Premier has had his hand on both collapses. This is a time for action and a time for commitment from the state, to prevent permanent losses in regional and statewide economies.

The government needs to reassess its budget bottom line and some of its budget promises. It needs to spend some money, wisely, not on tram parties or yacht marinas in Port Adelaide, but on drought related areas. It cannot afford to continue its fingers crossed, pray for rain approach—I heard it from the Treasurer a moment ago, 'Pray for rain.' We need more than prayers. The Riverland needs money and it needs water. You have an extraordinary amount of money, $4 billion more than we even dreamed of five years ago. It does not need brochures, opening parties, or a premier working on a federal election campaign. It needs a premier and a government working on the problems of South Australians. There needs to be some action.

In the absence of a plan of its own, and there is none, I urge the government to at least examine the Liberal opposition's plan and policy for our water crisis, released in August, and adopt the 10-point action plan to help food producers in the Riverland that we announced last week, and prepare for a state of emergency if the drought worsens by mid-2008. Legislation which may provide a basis or a framework for action already exists in the form of the Emergency Management Act 2004, the Primary Industries Funding Schemes Act 1998, the Rural Advances Guarantee Act 1963, and the Rural Industry Adjustment Development Act 1985, and there are many others.

The Treasurer presented to parliament a budget in June this year predicated upon 4 per cent growth based on the assumption that the drought would end. Last year's growth was around 1 per cent. If this year's growth is 1 per cent, and not the 4 per cent expected, GSP would be reduced by around $2 billion. This could have, without taking into account commonwealth grants, the impact of horizontal fiscal equalisation, an impact of anything up to $350 million on general government sector revenues. There are variables here, but we need to know what the impact will be. That is a very significant shortfall, and does not include new investment that the government may need to make to ameliorate the effects of the drought, which could require tens of millions of dollars more.

The midyear budget review needs to tell us what the impact of the drought is to have on the budget bottom line. We may need to know sooner. And the government must plan new investments to help the state through this crisis, not just flick pass the problem to Canberra in the hope that someone else will pay. Someone else may not pay. The June 2008 budget must spell out a pathway forward for the state through the valley of the worst drought in its history. This issue needs to focus the Premier and the government's attention. It must be faced today and in the weeks and months that follow.

We do not need parties at Port Adelaide announcing that $22 million is to be spent on yacht marinas for 40 sail boats. We do not need $30 million parties announcing a tramline down North Terrace and King William Street—$52 million. It would do a lot to help with the drought, it would do a lot to help people who are facing ruin. We do not need to hear about Kevin Rudd's political aspirations, from the Premier, or anyone else through Dorothy Dixers, for the next three or four week sitting of parliament. What we do need to hear are some solutions.

The SPEAKER: Order! The member's time has expired. The Premier.

Mr HAMILTON-SMITH: Hang on—

Members interjecting:

The SPEAKER: Order!

Mr HAMILTON-SMITH: Mr Speaker, there are not—

The SPEAKER: Order! The standing orders provide for 15 minutes per speaker.

Mr HAMILTON-SMITH: Well, we will cut two minutes off the next speaker, Mr Speaker.

The SPEAKER: Standing orders do not provide for that. The member can only speak for 15 minutes. The Premier.

The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (14:40): I think that all members of the house are concerned about the devastation caused by this drought. There is one thing that the Leader of the Opposition and I have in common: we cannot make it rain. To pretend otherwise I think is really a cruel hoax on rural voters. You said today that no person on this side of the house represents rural areas. In fact, there are people on this side of the house who represent a massive slice of rural South Australia. The very fact that two conservative members of this parliament sit in this government is a demonstration that the Liberal Party in this state abandoned rural South Australians, because rural South Australians saw that you were more concerned with the city than you were with all of the state. That is why this government is a government for all the people of this state not just for those who voted Labor.

I just heard the Leader of the Opposition talk about the economic figures being a disaster in this state across the board. Last Thursday I think that the Leader of the Opposition probably would have been the only person in the state who was disappointed that we had the lowest unemployment rate ever recorded, the highest number of people in jobs ever recorded, the highest number of people in full-time jobs ever recorded, and, very importantly, because the Leader of the Opposition talked about how we compared nationally, the fact that nearly half the national full-time jobs growth occurred in South Australia.

Over the past year, when I went out to fight to ensure that an independent commission ran the River Murray and supported the federal takeover, all we got was sneers and jeers from members opposite. But we won on that because it was the right thing to do. I was determined that we would not hand over from one group of politicians to another group of politicians, that we would have running the River Murray a group of independent experts making decisions on things such as water allocation on the basis of science and the health of the River Murray. It was this government that announced a commitment to two desalination plants, not the other side. And you talk about your plan!

I appreciate that today is a day of gravity. Let me read from the Liberal Party's policy at the last election. Of course, the Leader of the Opposition says that we should not have spent money on the tram. The very fact is that the Liberal opposition announced its support for the tram in subsequent election campaigns; so tell the truth, because you will not get away with that. We went to the people of this state with that commitment, and we have honoured that commitment and promise. If we had not, you would be accusing us of having broken promises. This is what you said about water on Thursday 16 March 2006. Under the heading 'SA needs water leadership', it states:

A Liberal government would create a high-level group with the expertise to consider all the options, and give direction on which option or mix of options would remove Adelaide's reliance on the River Murray.

It goes on. This is a quote from your former leader—the one to whom you were so loyal—who stated:

By 2009 a Liberal government will sign off on a strategy and timetable to remove both the reliance on the Murray and any future needs for lifestyle-threatening water restrictions.

Your plan was not what we have done, which is to commit to a billion-dollar desalination plant, to commit to improving the supply of the reservoirs in the Hills, to commit to water recycling. Your plan, which you took to the last election, is that you would develop a strategy by 2009, which shows how totally phoney you all are.

Members interjecting:

The SPEAKER: Order!

The Hon. M.D. RANN: On the issue of the drought, I have an announcement to make today—and I hope you will support this. I know what the standard response is: you will say it is too little, too late or whatever—it is so formula driven. The struggle to remain viable for many of our farmers is an ongoing battle in the face of the most severe drought in our nation's recorded history. Today I am announcing more help from this government in the form of an additional $10.9 million in drought aid. This includes funds for three new drought coordinators in the regions of the Eyre Peninsula, the River Murray and northern areas of the state. The latest assistance package boosts this state government's drought aid to nearly $71 million in total. It became obvious that, following a visit I made to the Eyre Peninsula last month, what farmers needed was an overall drought response coordinator, an expert who understood their needs, understood the region and who was experienced in all aspects of drought recovery. These drought—

An honourable member interjecting:

The Hon. M.D. RANN: The Leader of the Opposition did not go with the Farmers Federation. Never have I been so called upon to visit and, when I did, I was attacked for going early. That is how phoney that was. These three drought coordinators will be vested with the power to coordinate initiatives on behalf of the community. They will become a single point of contact for farmers to go for help. The $10.9 million will also include: funding for a young farmers' package, comprising a rural leadership program to target up to 20 leaders in drought affected regions; an extension of the Planning for Recovery initiative which provides grants of $4,000 for development of integrated business plans, plus up to $10,000 to make on-farm changes; developing through TAFE SA expanded off-farm employment and training; and accelerating the processing of EC (exceptional circumstances) applications for federal government consideration.

Three weeks ago, I updated the house on the current drought affecting much of South Australia and the devastating impact it is having on our rural communities. I advised members of this house of the work this government had done to help with drought aid, including committing more than $60 million in assistance to our farming communities.

The process of finding suitable people to fill the role of drought coordinators for the three regions identified has begun. They will require outstanding leadership capabilities and be locally and community driven. Cabinet has decided that our 2006 Planning for Recovery program, which provides grants to farmers to develop integrated business plans and to make on-farm changes, will be extended to support a further 570 farm enterprises. It will effectively—and this is important—double the number of places available in the program and extend by 12 months the time in which current participants can spend their funds—a recognition of the increasing demands being placed on both landholders and farm consultants by the drought.

Building on the success of our experience with the Lower Eyre Peninsula bushfire recovery program, for which this state's action has now been highlighted nationally as the benchmark standard for dealing with a regional crisis, this Planning for Recovery program assists farmers to make decisions that result in their improving their profitability, changing their enterprise, changing their management regimes or leaving the industry with dignity. It provides a holistic and planned response to drought recovery and focuses on improving preparedness for the next drought.

The young farmers' package (developed by PIRSA and Country Health SA) is designed to help young farmers provide leadership in their communities and industries, which, in turn, will help address leadership succession problems currently facing many rural communities. The government will fund travel and support costs for up to 20 farmer participants to participate in a special drought edition of the SA rural leadership program. If you come out and attack this, let me tell you this: when we went to Wudinna, Minnipa and the West Coast of this state on the Eyre Peninsula, with the Acting Minister for Agriculture, these are the types of programs for which they asked us. It is very interesting that the Leader of the Opposition did not go on the Farmers Federation trip but, rather than a media circus, we talked to farmers and, more importantly, listened to farmers.

The second component of the package will train some of these new leaders as mentors to provide help and support for other farmers in drought-affected areas. It will link young farmers involved in this project with the more experienced farmers involved in the Farmer Peer Support Program. It will enable them to network on mental health issues and self-help strategies so that they are better able to support their peers and the wider community. I am also told that the Australian government has agreed to loosen the exceptional circumstances eligibility criteria and accelerate the processing of EC.

A faster turnaround puts cash into the pockets of eligible producers and small businesses—faster at a time where cash flow is a significant issue, particularly in relation to water purchased by irrigators, washing-out contracts associated with the forward selling of grain by croppers and securing feed supply for livestock producers. The Minister for Agriculture will write to key financial institutions proposing to convene a banking leaders' forum (which will include grain traders) to discuss how best to support farmers through their current circumstances, especially those who have entered contracts to forward sell their grain.

TAFE SA is planning to provide regionally-based training to farmers so they can more easily access supplementary employment, particularly in the mining and transport industries. Training and accreditation in obtaining forklift, front-end loader, tele-loader, dump truck operator, semi-trailer, B-double and heavy vehicle licences would enable farmers and workers to obtain other part-time, full-time or off-season employment. Furthermore, PIRSA's Executive Director, Minerals and Energy, has been charged with facilitating discussions with key mining companies to develop innovative solutions to address rostering issues to enable people to continue living on their farms while working in the mining sector.

This government will work with the mining companies on this new approach to the mutual benefit of all rural communities as well as the mining sector. This government, together with its relevant departments, is diligently working with farmers, their communities, the Australian government and local members of parliament to ensure the survival and wellbeing of our regional communities. It is not about scoring political points—and that was the message we got on the Eyre Peninsula.

People are sick and tired of games. What they want is people to listen and to respond. This government's commitment to drought-affected communities began in 2002. For five years we have been engaging with farming communities and visiting rural areas to see first-hand the hardship being experienced. By the same token, some of these visits have been inspirational. We met young farmers who told us what they were doing in terms of changing practices with direct drill seeding, low till and no till. They were doing everything right. They told us that they wanted to stay in their communities. What they want from us in government and in parliament is not political games but understanding and support, and there is the difference between us. There is the difference. Rather than playing games and politics with people in a rural crisis, knowing that none of us can make it rain, what they want from us is support, and they will get that support from this side of the house. They will get it from this government—nearly $71 million worth of support, and we are proud to support them.

Mr WILLIAMS (MacKillop) (14:53): We cannot make it rain, but we can still make a difference to communities suffering from drought. That is—

An honourable member interjecting:

Mr WILLIAMS: I am reading that. That is a quote from the Victorian Premier. That is what the Victorian Premier said a couple of weeks ago about the drought in that state. He said that we can make a difference to the communities that are suffering from the drought. Over the last two years the Victorian government has been working to make a difference to drought-affected families and communities across that state. For well over 12 months the opposition has been complaining that the response to the drought by this government has been far from adequate, and that our cousins across the border in Victoria and New South Wales have received a reasonable response from their state governments, whereas the state government of South Australia has relied heavily on the response of the federal government and, at times, has called on the federal government to step in even more heavily because of its lack of action.

We need to ask ourselves the fundamental question: do we, or do we not, want to continue to have a farming community and viable regional communities across South Australia? When we ask ourselves that question we must also ask: what is the importance of those communities to South Australia? The Premier himself in a ministerial statement several weeks ago in the house—and I might say that his speech today is a rehash of that ministerial statement—said that the agriculture, food and fishery industry is one of South Australia's most valuable. He said that annually it produces about $3 billion in production.

That is correct, but when one goes to the South Australian Food Scorecard, one sees that the value adding that is put on top of that $3 billion a year in production takes the total food sector worth to over $10 billion annually for the state of South Australia. It is an important industry and an important sector. That is why the opposition believes that the state government's response should be considerably more than it has been. That is why we ask whether this government has the will to do something. At present, it has not demonstrated that it has the will. It has not demonstrated that it is doing effective things in regional and rural South Australia to support those communities.

I question whether the government has the ability because of its mismanagement over the last five years. We know the budget is under pressure. The Auditor-General in his report that was tabled a few minutes ago points out that SA Water has to borrow to pay money to the Treasurer when it should be building infrastructure to save us from the drought and the present situation. I question whether the government has the ability to do that, having taken on an extra 10,000 unbudgeted public servants which equates to about $700 million a year. Does this government have the ability to do what a state government should do? Possibly it does not. It is possible that therein lies the answer to the question before us. It does not have the ability and, therefore, it cannot express its will. Unfortunately, the future of South Australia is at stake.

I did spend a week on Eyre Peninsula at the request of the Farmers Federation which arranged a significant series of meetings from one end of the peninsula to the other in various communities, some of which are not so badly off and some of which will be devastated. I sat down day after day, in the morning, at lunch time and in the evening and heard similar stories from one end of the peninsula to the other. I wished at the time that the Premier or a minister representing the Minister for Agriculture, Food and Fisheries was there representing the government, because they might have heard stories different from what the Premier heard on his flying visit.

He decided to make that visit when the Farmers Federation took umbrage at his refusal to accompany them to Eyre Peninsula. I met the couple with whom the Premier was photographed. The photograph appeared on the front page or near the front page of The Advertiser. They had one hour's notice that the Premier was going to call on them and that they had to prepare a cup of tea and some nibbles for 12 people. They said that the Premier was amiable. As the Premier knows, that aged couple has sunk their life savings back into their farm in the past two to three years. They have put back into their farm in excess of $500,000 in the last three years to maintain the farm as a productive enterprise for their son so that it can continue to produce for this state.

Down the road at Cleve we talked to people who no longer have a GP. The Minister for Health talks about the gulf between his philosophies and our philosophies on health. I wish he was talking to the people on Eyre Peninsula—like the people at Cleve—who no longer have a GP. They do not have a GP and they have not had obstetric services for some time. If you are a young woman in the Cleve district and you are having a baby, you have to go to Port Lincoln or Whyalla.

The Hon. J.D. Hill interjecting:

Mr WILLIAMS: Yes, blame Tony Abbott. Blame the federal government. That is all you do. So, the situation is, not only do they have to travel long distances to have their baby, but also there are no post-natal services in their local communities, so they cannot return to their local communities but have to spend the few days after they have had their baby in hospital. Community facilities—those things that I refer to as I go about my electorate and other parts of regional South Australia as the social infrastructure—are breaking down from one end of the state to the other once you get outside of metropolitan Adelaide. Why? Because there is a lack of confidence and a lack of support by the government.

Communities right across Eyre Peninsula are crying out. Not only are they in trouble now, but what are they going to do next year? I do not know how many times I heard a farmer say to me, 'I don't know how we are going to borrow another $300,000 to plant next year's crop', because that is what it costs the average farmer over there to plant a crop by the time they buy thousands of litres of fuel, at great expense to transport it across to Eyre Peninsula because they do not have a decent port at Thevenard. I am sure when the Premier went to northern Eyre Peninsula someone mentioned the port of Thevenard. I am sure someone mentioned that, but it is not in his statement. He chose not to talk about that. I am told that, not only would that impact significantly on the cost of putting in next year's crop, but it would be worth about $15 a tonne for every tonne of grain on the northern Eyre Peninsula. That could equate to something like $40,000 per farm, another farmer told me.

The Hon. P.F. Conlon: Would you sell the port of Thevenard, wash your hands of it?

Mr WILLIAMS: No, that would not stop. We also sold the port at Port Adelaide and it was dredged out after it was sold, and you know that, minister. That is a pathetic argument.

The Premier mentioned Wirrulla. I am sure he heard about the two brothers at Wirrulla whom I spoke to. They said, 'One of us would love to go off and get a job in the mines to supplement our farm income, but we cannot because the water supply is such that we are both flat out repairing pipelines to keep our livestock alive.' Did you hear about that one, Premier? We heard the Premier the other day, and more recently, saying everyone wanted a coordinator. He said, 'That is what they all wanted when I talked to them.' I never had one farmer suggest to me that they want a coordinator. I suggest the Premier solicited that response.

In his statement to the house a few minutes ago, the Premier put down seven points and, if time permits me, I will go through them. The first was to extend the planning for recovery, and he mentioned that again today—the program that provides integrated business plans. But he also let slip that there is no extra money for that, the $8 million. He mentioned the number of 570 farms today. The money was already there: it is not new money. The Premier's next point was initiating a young farmers' package. Well, hello, Premier—the young farmers' package has been around for a long time.

There is no initiating there. The Premier also said he would lobby the federal government and his lobbying was on a matter that the Prime Minister had already announced three days previously. He would organise for the Acting Minister for Agriculture and the PIRSA chief to meet with financial institutions. When I met with them three to four weeks ago, the first thing they said to me was, 'It is great that we are meeting with the opposition. We are wondering where the government is, because no-one has contacted us.' So, the whole range of the Premier's initiatives amount to nothing that will help the people across rural and regional South Australia. He has failed.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:05): I am not sure whether that contribution was in keeping with the motion, but I would like to address the earlier contribution by the Leader of the Opposition. I want to say from the outset that he admitted that he was quoting from an Access Economics report. One thing that I think Access Economics knows today, which is something I have known for some time, is that you cannot trust the Leader of the Opposition. This is an embargoed report. The Leader of the Opposition has been provided with an embargoed report. The Access Economics report is embargoed until Monday 22 October.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: My guess is that members of the media would have a copy, also under embargo. I have had a read of the section—and I read it the other night and I have just had another look at it—and I will not be held exactly to these numbers, but I think that there are about six or seven lines of negative comments out of two pages and the balance is quite positive about our economy. So, it is very easy to put a shockwave of fear through the community. The Leader of the Opposition, or as he likes to call himself 'the alternative premier' as he did at the Police Association today, is very good at the negative, the critical, and highlighting the problem but almost non-existent in the ability to offer alternatives.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Let me have a look at the context of this Access Economics report. It starts as follows:

South Australia's economy has seen a relatively steady expansion in recent years...That degree of recovery in the state's fortunes was more evident earlier this decade, as population growth began its climb, the business investment spend by corporates jumped sharply, retail recovered and the unemployment rate fell.

But there is still a clear and lingering strength in pockets of our economy. The report states:

...housing starts are still strong...the growth in retail is up there with the excellent Australian average, housing prices are making solid gains, and commercial building approvals are lifting modestly.

It goes on to state, and this is the bit that the leader focused on, that there is bad news too. Anyone who has read an Access Economics report would know that it is normally all bad and every now and again you get some good words about South Australia. This is what it says about the bad news, and let us put it into its full context:

Yet there is bad news too. A clear short-term negative is a lack of rain of late. The 2006-07 drought hit the state hard, cutting crops to their lowest in a quarter of a century. It looked as though—

This is Access Economics saying this, as has our Prime Minister, I might add—

the 2007-08 winter crop would see a substantial rebound, but a dry winter has taken its toll. That casts a question mark over the degree of recovery in state output in 2007-08. Access had pencilled in a substantial recovery from drought—we have now wound that back on the expectation that, although crops may lift, irrigated output would take yet another hit.

That is a relatively sensible and sound observation of the impact of a drought. We cannot make it rain. We cannot supplement the lack of rain—

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: In all of these situations we must have calm, effective and controlled management of the economy, not the hysterics of members opposite. The leader quoted subjectively about job losses from Electrolux, Holden and Mitsubishi, but what he did not say (unless I misheard him, and I may have) was the preceding sentence, as follows:

The strength in resources is pulling people, materials and capital out of SA while raising costs from manufacturers by pushing up exchange and interest rates. So far the impact of that on South Australia has been mild rather than wild...

Then it goes on to talk about job losses from Elizabeth. I do not think the leader mentioned that bit in his preamble.

The Hon. P.F. Conlon: No, he didn't say any of that bit.

The Hon. K.O. FOLEY: He did not say any of that bit. It is mild rather than wild. It continues:

But it is equally true that South Australian manufacturers have done well through this cycle so far. Profits are notably higher than four years ago and the Air Warfare Destroyer Program promises spinoffs. So too does the lift in mining investment of late. That is being seen in higher output (such as gold and copper from Prominent Hill) and the potential promise of expansion of Olympic Dam.

This is important, because this is the context of the whole report. It goes on to say:

Apart from the modest, short-term downward revision of 2007-08, amid another disappointing year down on the farm, our longer term view remains much the same.

That is, to paraphrase the last bit of the report, South Australia's economy continues to perform well. That is a sound, balanced and objective assessment of a strong South Australian economy that is suffering the effects of the hardest and worst drought that this nation has ever seen. As the Prime Minister himself said in February 2007, 'It's a very bad drought; it's the worst in our living memory.' The Prime Minister's website says today:

We are praying for rain to break the worst drought in 100 years, but that is the extraordinary thing about the weather in our country: it can change very dramatically.

I do not know what the member for MacKillop expects the government to do because, believe it or not, there have been conservative governments in the state that have presided over periods of drought and poor weather. I have been around long enough to remember the Farmers Federation in this state leading a national push to have drought not declared a national disaster but, indeed, to be a recurring event in the farming cycle of our nation. That was a debate we had in the 1980s, and the National Farmers Federation, and its local branch here in South Australia, wanted to educate farmers that droughts are, tragically, a recurring and cyclical theme in our nation's economy and environment. We are doing as much as a responsible government can do. It is easy for—

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Well, what? We have put over $70 million already into the drought-affected areas.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: They talk about the marina. That $20 million unlocked the $1.5 billion urban development, and it would have happened under John Olsen as part of his vision. The opposition has become the most carping, whingeing and negative opposition that this state has ever seen.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I really hope that when members of the media review the Access Economics report, they will see that the Leader of the Opposition's presentations were akin to Anne Moran's contribution in recent days about the events of the Adelaide City Council as it relates to Victoria Park—a mass distortion of the truth and nothing that bears out the reality of the report. I conclude on a few very important and salient points. The September Business SA survey of SA business expectations indicates that business confidence for both the Australian and particularly the South Australian economy remains at a record high. Business confidence in South Australia has been trending upwards since December 2006. The Bank SA state monetary report released on 29 August showed confidence levels remain at its second highest point since February 2005. The recent National Australia Bank business confidence index states:

SA again holds the mantle of businesses that are the most confident even above Western Australia.

So, let's be proud of our economy and let's be proud of this state's achievements, but let's be sympathetic to those in our rural community who are doing it so hard and so tough. Their interests will not be served by an opposition that wants to state the obvious, an opposition that wants to trade on the misery, the plight and the crises facing many in our rural community. An opposition should be prepared and able to stand in this place to proudly support the strength of this economy and acknowledge that this economy has never performed better with unemployment lower, and to engage constructively in assisting those most in need and not resort to base-grade politics and making politics out of other people's misery.

Mr PEDERICK (Hammond) (15:14): The thing that seems to be lacking in this time of exceptional drought is real leadership. Farmers accept the vagaries of the industry (fluctuating prices, demand, markets, competition and changeable weather) but this is an extraordinary time which, despite assertions of this being the worst ever drought, many saw it coming and have warned of it for years. The Murray Mouth closed over completely for the first time in 1981, yet water allocations across the Murray-Darling Basin have increased since then. Plantings and production have increased substantially, benefiting the state's economy, but what real planning has the government done to sustain this growth into the future?

They have a bold vision to increase the state's population by up to a third. People are like crops, they need water to survive. In promoting population growth without a clear plan to secure water from somewhere other than the Murray this government is adding to the ever growing overallocation problem. Talking to my people around the Lower Murray and Lakes one finds that constant themes emerge, and perceptions about how little their survival seems to matter to the city folk, perceptions on the level of real government assistance, and contempt held for many people whose real understanding of their situation and needs is shallow at best. Families whose knowledge of the land and best farming methods are irreplaceable are breaking up. Some have sold out despite falling values. They are the lucky ones. Others cannot find a buyer. Sons and daughters are leaving the family unit, leaving the industry and leaving the area, many never to return.

Farmers accept that reality but their real lament is that nobody else seems to care, government in particular. Many of these people have wrestled with the elements and market forces and they are battle hardened survivors, but this time it is different. One woman told me that she had noticed a worrying change at meetings recently. The menfolk just sit silent, which is more than the Attorney-General does, with empty faces. It is the women who are fighting on, but they are not fighting for their livelihoods, they are fighting to keep their families safe and together. Yet they still see water being pumped to Adelaide. One family I can refer to has about one week of stock water left. They are rated among the top 10 per cent of dairy farmers in Australia for quality milk.

They have 30 years of genetics in their herd, with some animals worth up to $1,200 each. They have used the lowest quality river water to produce the country's best milk. Now they are lucky to get $300 an animal at the meatworks, but who really cares? This family has a daughter in the hills. She is constantly amazed by the careless attitude of neighbours and workmates who insist that they will not let their lawns and gardens die. So their frustration and anger is heightened. Who does care? They need a mains supply in their area and they need it now. The government chose not to put a main in for fear of it becoming a stranded asset, just like they would not move on desal because they were frightened it might rain. Well, how wrong they were. What sort of stranded assets have we got now?

The Hon. P.F. Conlon interjecting:

Mr PEDERICK: You haven't got any assets. Some of the most efficient dairies in the country will be gone. And where is action man Mike Rann? Nowhere to be seen. Just when they need a main man. Another irrigator from the Lower Murray has broken up their herd. One hundred and fifty have gone to Victoria, 40 have been parked on another property, and 100 have gone to the meatworks. Lot-feeders cannot take calves because they cannot afford the grain. It is not feasible to convert their dairy from irrigated to dry land because the cost of hay and grain and power and operating costs just rules it unfeasible. This family has not found Primary Industries particularly helpful in parking stock and giving advice. Their perception is that minister McEwen is only interested in the South-East, as the only place for dairying and for operating a dairy industry.

They believe very little traded water is coming below Lock 1 and they say the industry will be gone by Christmas, and again there is the overriding perception that the government does not care. Where are our leaders they ask? And all the while managed investment schemes suck water by the damful, and what for? Thousands of hectares of new plantings. Consider this: it takes 13 megalitres per hectare of water to establish new almond trees, while it takes 7 megalitres per hectare of water to produce 20 tonnes of dry feed for dairy cows. Where is the equity, where is the commonsense, where is the prioritisation of a limited resource? It is out there in bucket loads when it comes to supplying the city. But most of all where is the leadership? People want real assistance. They do not want more workshops.

The SPEAKER: The Minister for Agriculture, Food and Fisheries.

The Hon. P.F. Conlon: Welcome back, Rory.

The Hon. R.J. McEWEN (Mount Gambier—Minister for Agriculture, Food and Fisheries, Minister for Forests) (15:19): Thank you. Mr Speaker, governments can do very little about drought. They are not my words; they are the words of the shadow minister. Why would the shadow minister, on behalf of the so-called alternative government in this state, believe that governments can do very little when it comes to drought, and then have the audacity to contribute to this stunt in this house today? What is far sadder than that is that the farming families and businesses in rural South Australia who rely on farming families do not expect what they received in this place today. They do not want this place to play politics with drought, and they know it. What they want—

Mr Williams: They want leadership.

The Hon. R.J. McEWEN: —is leadership from all South Australians and everybody in this place. Do you know, Mr Speaker, that I have not had one practical suggestion from those opposite, as we have now put together seven packages in our response to complement federal drought initiatives across southern Australia. But, again, I am quite happy to invite those opposite today to make practical suggestions, and every single one of them will be considered on merit. On behalf of this government, I have gone to all the community leaders across the state—the business leaders, the social leaders, NRM leaders—and said to them, 'Talk with us about what we can do to mitigate against the enormous damage drought will cause across southern Australia.'

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. R.J. McEWEN: It is important to put in perspective the packages that are available presently. Across a two-year period, an average farming family eligible for Centrelink and interest rate support subsidies and the complementary state government packages would receive about $130,000. That is not insignificant. In some cases it will not be enough, even for viable farming families, to maintain them on the land. We must continue to work with them and the private sector in terms of managing debt and equity, managing arrangements to move into more viable times for those farming families who will remain on the land.

As a consequence of this drought, droughts before and droughts in the future some farming families will leave the land. We must also complement the federal government's response in terms of allowing those families, with dignity, to leave the land. I compliment the federal government on its next response. Again, we will continue to work at a state level to complement, as we have with all state ministers, as we continue with minister McGauran (who has done an extremely good job and been prepared to continue to review the rules) to give every possible person, farming family and farming business and every business that relies on farming businesses for more than 70 per cent of their own business the support that we can.

When it is considered by the opposition that governments can do very little, I would say that that is a significant contribution, but you will never say that you are doing as much as you possibly can for everybody. Certainly, there are casualties of drought. As a consequence of drought there will be a cash drought; as a consequence of a cash drought businesses will struggle and businesses will fail. That is the reality of operating in this environment as a farming enterprise. We cannot avoid that. Yes, it is a tragedy. Farming families in South Australia are suffering two droughts: a drought in this state because of lack of rain and a drought because of lack of inflows. We have never had those joint whammies to the point that we have them today. I ask the opposition: can we all as South Australians please work together in terms of putting practical suggestions on the table? But please do not do what the shadow minister did and scoff at suggestions that rural communities make. Do not scoff at the suggestion about the drought coordinator—

Members interjecting:

The SPEAKER: Order! The time for the debate having expired, the matter stands withdrawn.