House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Question Time Question Time Credit Rating CREDIT RATING Mr HAMILTON-SMITH House of Assembly Waite Leader of the Opposition CREDIT RATING Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:25): Why is the Treasurer now promoting the view that the state's credit rating is at risk of downgrade when revenues are set to hold or increase? In the recent federal budget, special purpose payments to South Australia were significantly higher than previously budgeted, more than compensating for declining revenue from GST. The Hon. K.O. FOLEY House of Assembly Port Adelaide Deputy Premier Minister for Industry and Trade Minister for Federal/State Relations CREDIT RATING The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:25): I have said before, and this now highlights the fact, that the Leader of the Opposition cannot read a government balance sheet and understand the very basics of the funding that the state receives. We have a number of sources of revenue. We have fees and charges, which are part of our own source revenue. The other component of that, of course, is state based taxation. Mr Pengilly House of Assembly Mr Pengilly: Land tax. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Yes, land tax—exactly. Then we receive two lots of money from the federal government. We receive special purpose payments from the commonwealth which, in effect, are tied grants or for a specific area of activity. Then we get GST. The Premier and I at a COAG meeting earlier this year signed the next four or five-year round of funding. One component of that, of course, is the health care agreement. That is the next stage of funding for us to continue providing the services that the commonwealth has already funded us for, plus growth money. That simply enables us to do what we currently are funded by the commonwealth to do. The next component of money is the discretionary money that we get from the commonwealth and we choose what we want to spend that on. It was previously called untied grants. That is down quite considerably—about $800 million a year—and our own source revenue is down $200 million plus. So, we are down in the order of nearly $4 billion over the forward estimates period. That is a hole. Mr Griffiths House of Assembly Mr Griffiths: What about the money for infrastructure projects? The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Infrastructure is a separate entity. Again, they just do not understand— The Hon. P.F. Conlon House of Assembly The Hon. P.F. Conlon: You don't spend infrastructure money in hospitals. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Yes. These people, eight months out from an election, purporting to be an alternate government, and the shadow finance minister says, 'What about spending capital money?' You cannot spend capital money on medical, police or education services; you get capital money from the commonwealth to spend on capital. For the Leader of the Opposition, the shadow treasurer of this state, in budget week to ask such a woefully inadequate, wrong and silly question, to suggest that the $4 billion that we have received— Ms CHAPMAN House of Assembly Ms CHAPMAN: On a point of order, Mr Speaker, the minister is clearly impugning the motive of the questioner and indulging in debate. The Speaker House of Assembly The SPEAKER: Order! There is no point of order. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: The commonwealth government has funded this state for decades through special purpose payments. That is where the Minister for Health gets his health money, separate from the money that we put in; it is where the education minister gets her money for teaching, separate from what we put in. The COAG agreement that the Premier signed— Ms Chapman House of Assembly Ms Chapman: What's the answer? The Speaker House of Assembly The SPEAKER: Order! The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: —is the continuation of those programs plus growth money. We are $4 billion down across the forward estimates over the next four to five years. That is why our AAA credit rating is at risk. That has occurred as we know in the back end of last year and the early part of this year. It has been a dramatic drop away. The IMF in June or July last year was predicating global growth of some 3.5-plus per cent from memory; it is now predicating worldwide contraction, the first time for many years. Even the leader himself on radio yesterday said when referring to the budget: …it's a very important Budget for the state this one, in the most difficult of times. So, he actually acknowledges that we are in the most difficult of times. That is why our AAA credit rating is at risk. How about this for a quote from the Leader of the Opposition? He said: What happened is that the government has an expenses problem. During the good times they failed to tighten their belt. They let things go, and now revenues are declining— He just said that they are not declining; yesterday, they were declining— and they have been caught short. The guy says one thing one day and another thing the next day—but it gets better. If members can make sense of this comment, please come up to me and tell me: It's like any other business: you must use the good times to make hay so that when things turn down you can go forward. What does that mean? 'Like a business, you use the good times to make hay,' I assume to go crazy, and then, when things turn down, you go forward. What does that mean? Honestly! That was after a two week break in the lead-up to a state budget. Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: The shadow treasurer goes on holiday; I have never known that to occur in the lead-up to a state budget. Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Anyway, he comes back— Mr Pengilly House of Assembly Mr Pengilly: One rule for yourself and another for everyone else. The Speaker House of Assembly The SPEAKER: Order, the member for Finniss! The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: I was working. But I am not in opposition. I do not think I ever went overseas in the lead-up— Ms Chapman interjecting: The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: Sorry? Ms Chapman interjecting: The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: I was not on holiday: I was seeing Moody's and banks—one week. The Speaker House of Assembly The SPEAKER: Order! Ms Chapman House of Assembly Ms Chapman: One week? The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: I was only away a week. I saw a lot of other people, too. The Speaker House of Assembly The SPEAKER: The deputy leader will come to order! Ms Chapman interjecting: The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: It doesn't bother me. All I am saying is that when I was a shadow minister we used to attack government right up to budget day. That is sort of what oppositions do. You guys went on a break for a couple of weeks. You went walkabout, and I just find that extraordinary. I would not have done that in opposition. Anyway, what it says is that the Leader of the Opposition comes back yesterday and makes statements that no-one can make sense of. He walks into this place today— The Hon. P.F. Conlon House of Assembly The Hon. P.F. Conlon: And contradicts himself. The Hon. K.O. FOLEY House of Assembly The Hon. K.O. FOLEY: —and contradicts himself from a day earlier, completely misunderstands the nature of state finances and, embarrassingly, confuses sources of revenue. To compound matters, the would-be treasurer sitting over there thinks he can spend capital on doctors, nurses and teachers. Months out from an election, as the alternative government, you are a rabble and a shambles. Members interjecting: The Speaker House of Assembly The SPEAKER: Order!