House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Question Time South Australian Economy SOUTH AUSTRALIAN ECONOMY Mr GRIFFITHS House of Assembly Goyder SOUTH AUSTRALIAN ECONOMY Mr GRIFFITHS (Goyder) (15:52): Does the Treasurer believe that South Australia will go into recession in light of the current economic turmoil? The ANZ Bank has forecast one quarter of economic decline nationally. However, ABS data confirms that South Australian economic growth has consistently underperformed national growth in recent years. South Australia's foremost domestic demand growth has been lower than the national average since September 2003. The Hon. K.O. FOLEY House of Assembly Port Adelaide Deputy Premier Minister for Industry and Trade Minister for Federal/State Relations SOUTH AUSTRALIAN ECONOMY The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:53): The Leader of the Opposition recently— An honourable member interjecting: The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: No, I have my dockets; I am doing a bit of paperwork to make some use of question time. The opposition criticised me for some comments I made which, on reflection, may have been a little honest and upfront but, when compared to what many people have been saying about the current situation, they were, in fact, quite consistent. We are in a very difficult economic environment. The Leader of the Opposition attacked me for irresponsibility and recklessness for talking down an economy. Here we have the shadow finance minister talking about South Australia going into a recession. Talk about talking down an economy. Talk about reckless, ill-considered questions—that is one of them. Mr Williams House of Assembly Mr Williams: He gave you an opportunity to talk it up and you failed. The Speaker House of Assembly The SPEAKER: Order, the member for MacKillop! Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Treasurer. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Sir, they are losing it over there. They have lost it this question time. Look at him. Mr WILLIAMS House of Assembly Mr WILLIAMS: My point of order is relevance. The opposition finance spokesman asked a question about— The Speaker House of Assembly The SPEAKER: Order! The member for MacKillop will take his seat. The answer is relevant, but it is debate. The Treasurer needs not to debate the question—however relevant it might be—and simply answer it. The Hon. P.F. CONLON House of Assembly The Hon. P.F. CONLON: A point of order, sir: it is completely out of order to interject but it is also out of order to interject when you are raging up and down the corridor and, if he does not do that, it is less likely that the Deputy Premier will need to enter into debate. He should just calm down. The Speaker House of Assembly The SPEAKER: I ask all members to behave with dignity in the chamber. It should not be too much to expect. The Deputy Premier. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: What is required during this very difficult period of time is leadership and management of the finances and the economy with calmness, a cool head and a confident ability. Just imagine members opposite and the shadow treasurer with his performance today where he has clearly misrepresented within a matter of two minutes one thing he said— The Speaker House of Assembly The SPEAKER: Order! That is— The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Sorry, sir; I brought it in with the context of the fact that managing a state or a national government during a difficult financial crisis does take some calmness, confidence and— Ms Portolesi House of Assembly Ms Portolesi: Ability. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: —ability, yes. I just say that members opposite are not demonstrating that. No, I do not believe South Australia will enter into a recession; I do not believe Australia will, but what I cannot say is what lies ahead of us over the next six, 12 or 18 months— The Hon. P.F. Conlon House of Assembly The Hon. P.F. Conlon: Because no-one can. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: —because nobody knows. The truth of the matter is—and I was accused by members opposite of being an alarmist a few months ago when I first raised this issue—this is the most substantial and most difficult financial time arguably the world has ever seen. It is quite a different situation in many parts than what occurred in the Great Depression because in those days we did not have the social policies and the social safety nets that we have in civil society today. But the wealth destruction that has occurred globally is quite extraordinary. We see what is happening with the automotive industry in the United States. We see overnight that the United States government has guaranteed Citibank to the tune of $300 billion—I think the words are of 'toxic mortgages'. What an extraordinary development! You have President-elect Barack Obama, apparently by some reports, considering a further $700 billion fiscal stimulus to the United States' economy. The Hon. P.F. Conlon interjecting: The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Yes, there was a substantial UK injection into fiscal policy. Of course, the Premier and I travel to COAG on Thursday, Friday and Saturday—we are meeting all day Saturday—and we will hear there hopefully the intentions of the federal government as it relates to states' finances and further fiscal stimulus. This is a period of economic meltdown and uncertainty for which none of us, least of all a state treasury, has a capacity to see what is going to happen in the next six to 12 months. The best we can do is to brace ourselves and to position ourselves to the best of our ability to withstand the economic and financial shocks if and when they arrive. We have certainly seen a banking crisis, we have seen a financial crisis, we now see what occurs as it rolls out through the real economy. I cannot with any confidence predict the future but I am very hopeful and I have been given no advice that would suggest to me that we are going to head into recession.