AUDITOR-GENERAL'S REPORT

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:42): Why has the Treasurer failed to adequately control expenses over the four years to 2006-07, and is the Auditor-General correct in his finding that budget integrity has only been maintained because of unexpected, unbudgeted windfall revenues?

Part C on page 6 of the Auditor-General's Report reveals that over this period 'spending has increased annually beyond that projected' and that 'net operating balance surpluses were achieved after revenue windfalls (unbudgeted) allowed for funding of initiatives and expenditure pressures to be addressed'. Chart 8.5 on page 38 of the Auditor-General's Report reveals that, since coming to office, the Rann Labor government has exceeded its budget...expenses by $2.5 billion, and notes that 'expenses have consistently exceeded original budget expense targets in the last five years'.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:43): And the alternative premier's point is? This has never been a secret; this has been explained every budget, and I just went through a seven or eight minute answer highlighting the dilemma and pressures we have.

The funny thing is that barely a day has gone by when the alternate premier, in particular, has not demanded that the government spend more money; the opposition was saying in here yesterday, 'Spend more money on the drought.' Every day I have been in office as Treasurer there has been someone from the opposition—normally the leader—telling the government to spend more money. The Leader of the Opposition said 'Build a desalination plant,' but now he is saying that we cannot afford it because there is too much in the way of borrowings. The opposition has every single position possible.

I have made no secret of the very real difficulty that a state government—particularly in South Australia—will have, and will have for eternity, in meeting the expectations and demands of its community when it comes to expenses. State governments around the nation are the primary deliverers and providers of services; the commonwealth government's role is one of transferring payments. It transfers money to the community, it transfers money to state government; but, except for defence and a few other areas, it is for the states to deliver services. I am happy that we have had windfall gains in taxes, and I have never said otherwise. If we did not have those there would be kids who would not have wheelchairs, there would be hospital beds that would be closed, there would be a lack of police officers maintaining security, there would be more kids in our schools—because that is where the money goes.

We should be spending every dollar we get to the extent that it still leaves us with a sizeable surplus to maintain our fiscal discipline. We should not be running up surpluses to the extent that we are not meeting the service provision needs of our state; that would be wrong. In our first few budgets we did pay every single dollar off debt because we needed to get our expenditure and our revenue into balance and then into surplus—and we did that. In this government every vital dollar goes two places: it goes directly to funding the important service needs of our state, or it goes towards building a sizeable budget operating surplus to protect our state's financial integrity. I am happy to put this government's financial record next to the last Liberal government's financial record any day of the week. Since coming into office, six surplus budgets—under the Liberals, deficit after deficit after deficit.