Ministerial Statement

STATE BUDGET

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:05): I seek leave to make a ministerial statement.

Leave granted.

The Hon. K.O. FOLEY: Strong financial management is the hallmark of the Rann Labor government. Since coming to office, the Rann government has delivered balanced budgets, paid off public sector debt and delivered massive increases in funding to health, education, policing, and family and community services. The Rann Labor government has provided tax cuts that will be worth in excess of $3.3 billion when fully implemented by 2012-13.

At the same time, this government has invested record amounts in infrastructure, completing the Port River Expressway, the opening Port River bridges, the Bakewell underpass, the city tram extension, redevelopment of metropolitan hospitals, as well as providing substantial drought and water security initiatives across this state.

The Rann government is also delivering the 100 gigalitre Adelaide desalination plant, the outstanding Techport defence precinct (in the electorate of Port Adelaide), the six new super schools (already proving so popular) and the Marion Aquatic Centre (which will be a world leading aquatic centre).

The Hon. I.F. Evans: In which decade will that be built?

The Hon. K.O. FOLEY: It is starting now. It is underway—much sooner than when you were in office; you couldn't get it underway. I continue: the Northern Expressway, the Anzac Highway underpass, the new Royal Adelaide Hospital, the Health and Medical Research Institute (in partnership with the commonwealth), the Adelaide Entertainment Centre redevelopment, the tram extension to Bowden and redevelopment of the state's public transport infrastructure, which includes a record investment of more than $3 billion over four years.

All this has been achieved—and work is continuing—despite the impact of the global financial crisis. In June the state budget mapped out a strategy to continue our record investment in infrastructure, maintain our tax cuts and keep the state's AAA credit rating, despite the budget dipping into deficit in the short term.

The budget strategy recognised that in 2010 the state government—whether it be Labor or Liberal—will need to identify significant savings to reach the projected budget outcomes, maintain fiscal discipline and keep the state's AAA credit rating. Savings have been a feature of the budgets I have handed down. They impose a discipline on government to continue to review expenditure, making money available for emerging priorities and ensuring taxpayers' money is being well spent.

In the Rann government's first budget for 2002-03 the cabinet outlined $967 million worth of savings over the forward estimates. The second budget outlined a further $538.2 million worth of savings. More recently, following the 2006 state election, former commonwealth Treasury official Greg Smith conducted a review of priorities for the government, identifying $695 million worth of savings over four years.

These savings, contained in the 2006-07 budget, were outlined alongside new initiatives that delivered record funding for health, education, community services, and law and order. Of these savings, over 92 per cent—or $643 million—has been achieved. The remaining 7 per cent has been identified, and these savings have been removed or deferred, to be implemented in the forward estimates periods—nothing comparable to the little or nothing that former treasurer and current shadow finance minister Rob Lucas ever achieved.

In the 2008-09 Mid-Year Budget Review, released in December last year, I outlined the first part of the government's response to the global financial crisis. Part of that strategy was to reduce public sector full-time equivalents by 1,600 over three years, the first 1,200 to be gone in 2009-10 and a further 200 in each of the years 2010-11 and 2011-12. The government announced that a targeted voluntary separation package scheme would be available for the first three months of this financial year, closing on 30 September. I can say the TVSP scheme was designed to help agency chief executives achieve the 1,200 FTE separations, as well as other government savings measures.

Mr Pederick interjecting:

The Hon. K.O. FOLEY: Tough government, mate, tough times. I can report to the house that at the time the scheme closed, preliminary information shows that a reduction of around 1,150 FTEs have been achieved through the 2009 TVSP scheme. The vast majority of the targeted voluntary separation packages (at least 900) were to meet the Mid-Year Budget Review FTE reduction targets for 2009-10. From a budgetary perspective, this is an excellent result. The government is well on track to meet its target of a reduction of 1,200 FTEs by 30 June 2010, with fewer than 300 further separations now required to meet this initiative from either not filling existing vacancies or through attrition. It again demonstrates this government's economic credentials.

Certain areas were exempt from this specific process to reflect our focus on protecting and enhancing frontline service delivery. These exemptions included doctors, nurses, ambulance workers, paramedics, psychologists, teachers, school support staff, police, firefighters, and social and youth workers. However, in some cases, agencies over-subscribed their Mid-Year Budget Review FTE reduction allocation and have applied those extra TVSP applicants as a contribution to achieving other savings measures.

There has been some very good economic news recently, particularly the most recent unemployment figures. In the headline, seasonally adjusted terms, South Australia's unemployment rate fell from 5.8 per cent to 5.7 per cent, to be the same as the national figure. This is quite extraordinary and I am surprised this has not been reported more significantly—and that is by no means a criticism of the media but just an objective observation.

In the same terms, total employment rose by 15,900 in South Australia out of a national rise of 40,600, with an increase in full-time employment of 20,200 out of a national increase of 35,400. So, in the last month in the data collected, South Australia has provided the largest contribution to part-time and full-time employment in any state in any part of the nation. Part-time employment fell 1.6 per cent, or 4,300 jobs. Pleasingly, the participation rate also increased 1.1 percentage point against a national figure of 0.1 percentage points, again in seasonally adjusted terms.

This is not a time to lose focus on the fact that Australia and South Australia are currently experiencing the effects of a serious economic downturn. We may yet see—almost certainly we will see—unemployment increase in the months ahead. I have said, though, that this decline in conditions has been the worst experienced since the Great Depression. This is certainly true. The impact on government revenues and investments is a stark illustration of the difficulties being experienced across all sectors of the economy.

While we have had some encouraging employment figures, as I said, it is still too early to determine whether the state is firmly on the path to recovery. The government will provide updated forecasts in the Mid-Year Budget Review. However, the message is clear: a commitment to strong financial management is required in the future.

It is a commitment that the Rann Labor government has the experience to deliver. I make the appeal one more time to the shadow treasurer Rob Lucas and the opposition: they, too, must be committed to very cautious, careful financial management when promises are made in the lead-up to the next state election. I hope shadow treasurer Lucas adheres to that warning.