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 HAMILTON-SMITH House of Assembly Waite Leader of the Opposition SOUTH AUSTRALIAN ECONOMY Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (15:55): As a supplementary question, given that a further fall in GST revenue is anticipated, can the Treasurer indicate what programs, projects or jobs may now need review or possible cuts? 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) (15:56): I am not in a position to make those observations. We are in the process of formulating the budget. As my Treasury officers often tell me: the easiest dollar saved is the dollar not spent. Clearly, one of the instruments to respond to this will be—and I can predict this—a very tight budget on the expenditure front and little capacity for us to embark upon new pre-election spending. My plea to opposition members is that they are faced with the same reality that we are and there is little capacity at all to offer new expenditure. The government, as it does in the budget process, will look at obvious saving options that it has available. But, it has to be said that in our Mid-Year Budget Review we outlined a significant and very tough and strong array of saving measures that will see a reduction in the number of FTEs and a number of other saving measures. One thing that we need to be mindful of is that this is a cyclical downturn, and it is fair to accept that there is a cyclical reduction in GST revenue. GST revenue is experiencing a cyclical downturn, and one would hope, obviously, that it is not a structural downturn; that is, when economies recover, the GST revenue will rebound. It is obvious that, as we go into deficit for a reduction in the cyclical downturn of our revenue stream, we will project forward, and those projections forward hopefully will see us coming back into strong surplus. The point of that comment is this: we cannot lock in unsustainable spending because history shows that, if you lock in unsustainable spending during this period, when the revenue rebounds and you still have the unsustainable spending it has a net negative effect on the budget. I accept that this downturn is cyclical and the budget papers will make note of that when we present them in June.