AUDITOR-GENERAL'S REPORT

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:48): My question is to the Treasurer. Why is the government, on current estimates, unable to achieve one of its primary fiscal targets, the continuing decline in the ratio of net financial liabilities to revenue towards that of other AAA-rated states? The Auditor-General has confirmed that the government is unable to achieve this fiscal target and selected savings targets. On 9 August 2007, on ABC Radio, Standard & Poor's Danielle Westwater said:

The rating could be put at risk if the state government doesn't achieve the goals of its savings program.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:49): Again, absolutely correct. The Leader of the Opposition comes into this place today with some shock revelation that our financial liabilities to revenue ratio is slightly increasing over the forward estimates. If the leader (the shadow treasurer) was actually diligent at his job he could have levelled that allegation at me the day the budget was brought down, because it was there in black and white, and I have acknowledged it publicly ever since. It is actually in the table presented, I think, in Budget Paper 4. It shows the ratio slightly increasing. I mean, hello, where have you been for three or four months? What an example of an alternative treasurer who needs to get a report from the Auditor-General and say, 'Shock, horror!' when it has been in the public domain for four months. I am happy to address the question, but the Leader of the Opposition now has egg on his face. He is now sounding and looking silly. He should have asked that of me 12 months ago, because it was there in the budget papers. What has occurred, Mr Speaker—

An honourable member interjecting:

The Hon. K.O. FOLEY: Well, I have signed an answer to you; you should have it by now. The situation is that, with a strong balance sheet and with the need to build infrastructure, you borrow money.

Mr Hamilton-Smith: You build a surplus.

The Hon. K.O. FOLEY: Well—

The SPEAKER: Order!

Mr Hamilton-Smith: Costello could do it: Foley could not.

The SPEAKER: Order!

The Hon. K.O. FOLEY: Nor could Brown, nor could Baker, nor could Olsen.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: There is probably only one state government that is able to fund its capital needs from its revenue—WA. Queensland, with its capital needs, has the biggest borrowing program of any state. Every state government with the acceptance and tick from the rating agencies and from the Reserve Bank—I think we have a comment somewhere from the Reserve Bank—knows that it is prudent, in good economic times when you have the revenue available, to take on modest borrowings to build capital. The Leader of the Opposition said, 'Let's build a desal plant.' Were you honestly suggesting that you would not borrow money to build that? Is that what you are suggesting? If that is what the leader is saying, he would have to find a billion to a billion and a half of budget cuts. He would have to decimate the budget sector. He would have to close schools, close hospitals and close police stations. If you want to build a $600 million prison, are you suggesting that you would cut $600 million of expenditure? Is that what you are suggesting?

Mr Koutsantonis: Silence.

The Hon. K.O. FOLEY: Silence. Because he does not have the answer, because he knows that what he is saying is absolute financial and economic nonsense.

Mr HAMILTON-SMITH: On a point of order, Mr Speaker: the minister is clearly debating. I ask that you draw him to an answer to the question.

The SPEAKER: The Deputy Premier is straying into debate, and I draw him back. The member for Little Para.