MARJORIE JACKSON-NELSON HOSPITAL

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:41): My question is again to the Premier. Will the proposed Marjorie Jackson-Nelson Hospital definitely proceed as he has promised and, if so, will it proceed as a public-private partnership (PPP)? The Auditor-General states in his 2007-08 report:

The credit market crunch...may be a significant risk to the fundamental premise of whether a PPP provides a net benefit to the public compared to conventional public sector procurement.

Tasmanian Labor Premier David Bartlett this morning announced that his government will reconsider the business case for its new $1 billion hospital on Hobart's waterfront. I note the Premier was making hay about that yesterday. Mr Bartlett said he would not rule out rebuilding the Royal Hobart Hospital. He said:

There is no point, in my view, saving for the new Porsche if you're not putting meat and three veg on the table each night for the kids.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:42): He's coming right back at me. Yesterday the Premier of WA, Colin Barnett, said that he will put hospitals ahead of sports stadiums, and we did not see any reaction from the opposition. But, so what?

Mr Hamilton-Smith: Well, if you are going to literally—

The SPEAKER: Order!

The Hon. K.O. FOLEY: What is it you are saying?

Mr Hamilton-Smith: Try to answer the question. If you want to be in opposition, come back over here.

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order! The Deputy Premier will take his seat. These juvenile exchanges across the chamber are completely out of order. I will not tolerate them. The Deputy Premier.

The Hon. K.O. FOLEY: So what? I have not said anything different about the Marjorie Jackson-Nelson Hospital than this from day one: that it is the government's preferred model of delivery that it be a public-private partnership. But, as with all public-private partnerships, they have to give value for money when compared to the public sector comparator.

The Leader of the Opposition may conveniently try to put this out of mind, but what we have seen since, following on from the Liberal government's initiating the PPPs for police stations and courthouses—that we then delivered—is a total meltdown of the world's financial markets. There has been a massive increase in the spreads that are available for money that is borrowed, hitting the private sector more than the public sector, although we are experiencing a high cost debt overseas. We are seeing foreign banks repatriating to their home countries up to $75 billion worth of borrowings currently placed in Australia as those banks that are protected and supported by their governments are playing to the chorus of what their constituents want with that money.

Of course, if we were going out today to the private sector to borrow $1.7 billion to build the Marjorie Jackson-Nelson Hospital it would be very difficult—no surprise. But the Marjorie Jackson-Nelson Hospital will not be scheduled to pull its capital together until well into next year and one would hope that, by this time next year, relative normality has returned to the world capital markets. If it has not, and if the public sector comparator says that it is a better option for government to borrow the money and build it ourselves as a design and construct, we will. I have said that from day one. For a PPP to have value for money—

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Sorry? We have said from day one that our preferred model of delivery is a public-private partnership. We have been working towards delivering this as a public-private partnership. However, as I have consistently said, they have to give value for money when compared with traditional procurement. It makes no sense to procure a hospital or any other piece of infrastructure by a model that is more expensive or more risky or not of better value. That is the nature of a PPP; that is the benefit of a PPP.

We are currently in the midst of the world's most significant financial meltdown in history—you can raise your eyebrow, Vickie, but that is the truth—and we are not insulated against it. It is the cheapest form of parochial doomsday politics for an opposition leader, bereft of any intelligent question, to be—

Ms CHAPMAN: I rise on a point of order, Mr Speaker.

The SPEAKER: Order! Yes, I—

Ms CHAPMAN: That is quite outrageous, clearly debating and insulting.

The SPEAKER: Order!

Ms Chapman: You've answered the question. Sit down and—

The SPEAKER: Order! The deputy leader will come to order. The Deputy Premier.

The Hon. K.O. FOLEY: No, I do not think I have even begun to answer the question. I might stand here for 20 minutes giving you my views on the world's financial markets.

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: The truth of the matter is that these are the most uncertain financial and economic times the world has ever seen. As I have said before, the government, a sovereign state government—every single state government—is having trouble with its borrowings.

Mr Pisoni: Yes, because you are all Labor.

The SPEAKER: The member for Unley will come to order!

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: There is a drought. There is a contraction of available credit on the world market. The world banking system has collapsed. The Leader of the Opposition himself knows that, because he was told that when he was in New York. I was there when he was briefed on it.

We are not acting in isolation to what is going on in the rest of the world, and that has given us a level of complexity with these deals that no-one envisaged even three months ago, let alone a year ago. My expectation is that we will still deliver this project as a public-private partnership, because there will be a return to normality to world capital markets in a year's time.

However, I will say this. If world capital markets have not returned to normality in 12 months' time, if we are still confronting the tightness of credit, the cost of credit and the underpinning and underwriting of banks that we do today, we will have a hell of a lot more problems to worry about in this state than whether it is a PPP for the Marjorie Jackson-Nelson Hospital, because that will mean that the world's economy has hit a low point which has never been contemplated before.