AUDITOR-GENERAL'S REPORT

Mr GRIFFITHS (Goyder) (15:11): Is the Treasurer concerned that the unbudgeted growth in employee expenses may threaten the state's fiscal position? The Treasurer's 2007-08 budget is based upon employee expenses growing, in real terms, by only 1 per cent, but the Auditor-General's Report (part C, page 33) observes that, in the four years to the 2006-07 year, employee expenses grew by an average of 7.9 per cent per year. The Auditor-General further observes that employee expenses now comprise $5.4 billion, representing the highest portion of government expenses at 46 per cent, with estimated increases of 5.4 per cent to come in 2007-08 and 2.8 per cent per year to 2010-11. Standard & Poor's, on ABC Radio on 6 June 2007, identified wage negotiations as a pressure point on the state's AAA credit rating.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:12): A very good question! In fact, we have a whole chapter in one of our budget papers (I think, again, Budget Paper 4), where we highlight, and are upfront about it, what are the ever-present risks to the budget, and wage pressures are clearly an ever-present risk. We have a certain allocation in our provisioning in the budget papers for wages, and that figure is reviewed consistently. We are yet to see it in a way that I fear (I have to be honest) because, clearly, with the skills shortage that is engulfing the nation, as we have this incredibly strong economy, at some point, wages pressure will be very difficult to control at the Public Service level. Let us take some practical examples—Roxby Downs. Let us say that we pay a uniformed police officer $55,000 or $60,000—

The Hon. I.F. Evans interjecting:

The Hon. K.O. FOLEY: Yes, the superintendent would be paid in excess of $100,000. But let us say a uniformed officer at $60,000 a year. If the mine is offering $100,000, that will be tempting to a fit, young (probably male) police officer. Let us take the example of a nurse in the Roxby Downs Hospital, to whom we may pay $60,000. There is a big demand for women to undertake a number of tasks at Olympic Dam. One of the tasks, I was advised a couple of months ago, is that they think a lot of the drivers they will get for the biggest mining trucks in the world will be women, because they drive at about 14 km/h; you cannot get lost—

Members interjecting:

The Hon. K.O. FOLEY: That was a joke—because they are safer drivers.

Members interjecting:

The Hon. K.O. FOLEY: Oh, have a laugh—got to have a laugh occasionally! They have a much better temperament than males, that they can handle driving at 14 km/h, they are better drivers and more patient, and those drivers could well be women.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: The good thing is that I know that my good friend Michael Owen will cut me some slack on that and not print that one. But the truth is that the public sector is increasingly coming under pressure on wages, and the Reserve Bank of Australia has already said publicly that the CPI is at the top end of the band, the 2 to 3 per cent band, and that is to a large extent being driven by the strong economy that is driving wages pressure. Unless the shadow minister is saying that we should put public servants on AWAs—and maybe he is saying that, and maybe we should put them on WorkChoices, is that your answer? Is that the answer of the opposition—AWAs?

Members interjecting:

The Hon. K.O. FOLEY: Doesn't know.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Again a revelation from the opposition that they are considering AWAs for the public sector.

Mr GRIFFITHS: Mr Speaker, on a point of order: clearly my question was about a completely different issue. He is misleading the house.

Members interjecting:

The SPEAKER: Order! Sorry, member for Goyder, I did not hear the—

The Hon. K.O. FOLEY: Sir, the member just said that I misled the house. I ask that he withdraw that or move a substantive motion.

Members interjecting:

The SPEAKER: Order! What is the member for Goyder's point of order?

Mr GRIFFITHS: Sir, my apologies. He is not misleading the house; he is debating the issue. My question does not refer to AWAs at all; it refers to the AAA credit rating.

Members interjecting:

The SPEAKER: Order! I uphold the point of order. The Deputy Premier will answer the substance of the question.

The Hon. K.O. FOLEY: We now have the revelation that the opposition would consider AWAs for the Public Service.

Members interjecting:

The SPEAKER: Order! The Deputy Premier will return to the substance of the question.

The Hon. K.O. FOLEY: Wages pressure puts a lot of pressure on the budget, absolutely, but I am confident, very confident, that we can accommodate fair wage outcomes and maintain the very strong operating surpluses and the very strong budget position and the state's AAA credit rating.