AUDITOR-GENERAL'S REPORT

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:09): I seek leave to make a ministerial statement.

Members interjecting:

The Hon. K.O. FOLEY: You will say and do anything, you lot.

The SPEAKER: Order!

Leave granted.

The Hon. K.O. FOLEY: Yesterday the Auditor-General handed down his annual report for the year ending 30 June 2007. As it has every year, the report analyses and often critiques the way the government of the day and its agencies manage their finances.

An honourable member interjecting:

The Hon. K.O. FOLEY: No, I am happy to take questions. The report also thoroughly examines the state budget, its settings going forward, and its results for the previous financial year. The report makes some key observations. Regarding the budget settings, the report states:

Maintaining forecast net operating balance surpluses represents overall good financial planning, providing some flexibility and buffer against unfavourable influences and events that may affect budget outcomes.

It also states:

The state's balance sheet is expected to strengthen over the four years of the 2007-08 budget as measured by net worth. Net financial worth, however, declines due to the growth of financial liabilities. Both these trends are consistent with borrowing to build infrastructure.

That is the important point. Yesterday and this morning we heard the Leader of the Opposition state the following:

The Auditor-General flagged and he's saying...you better watch out for that AAA rating if that happens.

I have read the documents, I have read the reports, and I cannot find that quote anywhere. But I could find the following quote—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Well, you cannot misrepresent and think that you can get away with it.

Mr Williams interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I did find the following quote:

South Australia has had a AAA credit rating since September 2004. The rating was affirmed in August 2007.

That is right, Mr Speaker, after analysing the budget papers, examining revenue and expenditure settings, and going over the government's capital investment program for the next four years, both Standard & Poor's and Moody's have reaffirmed South Australia's AAA credit rating.

Mr Hamilton-Smith: With qualifications.

The Hon. K.O. FOLEY: With qualifications. He yet again misrepresents the facts, sir: there is no qualification.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Good; go right ahead, because then for once we might see whether you are telling the truth.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: Well, you have not to date. The Rann government is reinvesting in our schools—

Mr HAMILTON-SMITH: On a point of order: that is unparliamentary. I think it is offensive, and I call on the Treasurer to withdraw it.

The SPEAKER: What is unparliamentary?

Mr HAMILTON-SMITH: He is virtually accusing me of lying, and saying it is untruthful. Mr Speaker, if you want to maintain standards, here is an opportunity.

The SPEAKER: Order! I heard howls of accusations from members on my left that the deputy was making misleading statements, which I let go. I have not heard the Deputy Premier say anything that is unparliamentary.

The Hon. K.O. FOLEY: I have got thick skin, Marty.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Yes; go right ahead. The Rann government—

Mr Hamilton-Smith interjecting:

The SPEAKER: Order! The Leader of the Opposition will come to order. The Deputy Premier has the call.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: I tell the truth on radio. The Rann government is reinvesting in our schools, our hospitals, our prisons and our roads. The Auditor-General points out that one of the government's primary fiscal targets is:

To achieve net lending outcomes that ensure the ratio of net financial liabilities to revenue continues to decline towards that of other AAA-rated states.

It is true that there is a slight increase in our ratio of liabilities to revenue brought about by increased borrowings to fund our investment infrastructure. With a strong balance sheet, this is an appropriate and prudent thing to do, and it is plain wrong to say that it threatens our AAA credit rating—it does not. Standard & Poor's reinforced this when it said in its ratings direct analysis of South Australia in August this year:

South Australia's capital program to fiscal 2011 is not expected to appreciably weaken its balance sheet.

An honourable member interjecting:

The Hon. K.O. FOLEY: That is interesting because Moody's rating outlook in their latest credit opinion issued this week—this week—with all the information available to it, says:

The stable outlook reflects Moody's assessment that the state is well positioned to manage a more complicated fiscal environment over the medium term—including a slowing in property-related revenues and rising expenditures—given prudent financial management and a positive debt profile.

Ms Chapman: Provided Foley is not in charge.

The Hon. K.O. FOLEY: They have been pretty happy with our work to date.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: You still haven't got over losing the election in 2002, have you? You go around talking about yourself as the 'alternate Premier'.

The Hon. M.D. Rann interjecting:

The Hon. K.O. FOLEY: He goes around calling himself the 'alternate Premier', not 'Leader of the Opposition'.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order! The house will come to order. The Leader of the Opposition is warned.

The Hon. K.O. FOLEY: Sir, the Leader of the Opposition said:

Basically we're spending more than we're receiving, and that's a problem.

This is yet again plain wrong. If the leader had read the Auditor-General's Report more closely, he would have come across this statement:

The 2007-08 Budget Papers show that the Government financial operations for 2006-07 are on target for a budgeted net operating balance surplus...

Further, ‘One of the Government's primary fiscal targets’—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Mr Speaker, if they put wrong statements to the public, I have to correct the record. The Auditor-General continues:

One of the Government's primary fiscal targets is the achievement of net operating balances every year. This means that revenues are covering expenses, including interest and depreciation.

Mr Williams: Yes; revenues include borrowings.

The Hon. K.O. FOLEY: Sorry?

Mr Williams: Revenues include borrowings.

The Hon. K.O. FOLEY: They do not.

Mr Williams interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: A shadow minister, sir, has just said 'Revenues include borrowings.'

The SPEAKER: Order!

Members interjecting:

The Hon. K.O. FOLEY: Are you serious?

Mr Venning: I presume you're spending it!

The SPEAKER: Order! The Deputy Premier will take his seat. The house will come to order. Members on my left will not interject. If they want to respond to anything that the Deputy Premier is saying, there are means available for them to do that. They must not do it by continuing to disrupt the Deputy Premier's statement. He has been given leave to make the statement; he has the leave of the house to make the statement; he must be allowed to do that without being interrupted. I also ask the Deputy Premier not to respond to interjections, because it just encourages them.

The Hon. K.O. FOLEY: Thank you, sir, but I just add that I find it extreme, and I am happy to give the member for MacKillop a lesson in Treasury matters, if he is making statements as he just did—'revenues include borrowings'.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: Six surplus budgets, I am pretty happy with that. The Leader of the Opposition has got it wrong. The budget is in surplus, and I can confidently predict it will be across the forward estimates. Later this year, the government will be handing down (as normal) its midyear budget review; and I can say to the house that it will show that the budget position remains strong and will do so across the forward estimates, notwithstanding the misleading and ill-informed comments of the Leader of the Opposition.

Members interjecting:

Mr Hamilton-Smith: It is all right for them but it is not all right for us, is that it, Mr Speaker?

The SPEAKER: Order! The Leader of the Opposition is very close to being named. He has made such statements on a number of occasions, but I will no longer let them go. The Leader of the Opposition should perhaps talk to the member for Stuart about what is available to the Speaker in dealing with members who continue to ignore the Speaker's rulings.