APPROPRIATION BILL 2013

Second Reading

Adjourned debate on second reading.

(Continued from 18 June 2013.)

Ms SANDERSON (Adelaide) (12:02): I rise to speak on the 2013-14 budget that has just been handed down. The leader of the Liberal Party spoke about studying economics at university—

Mr Venning: Very well too.

Ms SANDERSON: I also studied economics at university and have an accounting degree, and certainly I find it very alarming when I look through the budget figures. In fact, one of the reasons I decided to stand for a seat in parliament was my total desperation and hopelessness that I saw under a Labor government running our state and what I saw was financially very bad decisions and their priorities being wrong. I am very thankful to be a member of parliament and hopefully will one day be a member of government where we actually have some control over the budget and bring our budget finances back into a surplus position, and somewhere where people can be proud of being a South Australian and actually create jobs.

Members interjecting:

The SPEAKER: Order!

Ms SANDERSON: From accounting practices, when you minus your expenses from your revenues you come up with either a surplus or a deficit. On seven occasions so far this government has predicted seven surpluses, yet six of these surpluses have become deficits, so I certainly have no faith in this Labor government's ability to actually predict their own figures, and we are heading towards a $1,314 million deficit prediction—the highest in South Australia's history.

South Australia's total deficit over the next three years is bigger than the budget deficits of New South Wales, Western Australia, Tasmania and Victoria combined. In context, those four states have 16 million people to serve their deficits—almost 10 times more people than in South Australia. This year's deficit alone will add $65 million in interest every year from this year forward, and that is considering that we are at the lowest interest rates experienced in many years. If this interest rate headed back up to what it was when I bought my first car in the early 1990s—around 15 or 17 per cent—that would be absolutely devastating to South Australia.

Whilst one may think it is just a deficit, it is a one-off, we have actually had six out of seven deficits, and they are adding and adding, adding to what will become a $14 billion debt. So, it is not only the highest deficit but now also higher debt than when the State Bank collapse happened. The member for Morphett yesterday in his speech mentioned that there was good debt and bad debt, and I happen to agree.

Good debt certainly would be debt that was building an asset or infrastructure, something that would recoup money either financially or be of benefit to the state. Certainly for you to consider debt to be good, you would have to have the ability to repay it. You cannot just take on more and more debt with no ability even to service the interest, which means it will spiral out of control.

It is certainly bad debt when a state government is borrowing money to pay operating costs, such as wages. That is absolutely irresponsible and, if it were a company, it would be in liquidation. Good debt is when you are building up your assets and building your state. However, this government sells all of our income-producing assets. It recently sold the forests and recently sold SA Lotteries, yet how will we service our debt when we have predicted deficits for the near future?

In fact, the government actually predicts our highest surplus ever coming up in the 2015-16 year. The only possible way that I can imagine our revenues increasing by the percentage the Labor government is anticipating is if there is a Liberal government. There is absolutely no way that I would expect a Labor government to be able to bring in a surplus, a record surplus, by the year 2015-16, because people have no confidence in this government.

Business owners are in tears in my office out of frustration and desperation under this Labor government, under which we have the highest taxes for business. Payroll taxes, since Labor has been in government, have increased by 93 per cent; conveyance duties are up 89 per cent; land taxes are up 311 per cent; and taxes on insurances are up 101 per cent. The total taxation increase since Labor has been in government is 92 per cent, or 41 per cent above CPI.

When I was doorknocking prior to the last election in 2010, people were saying to me, 'We're moving our head offices out of South Australia; we cannot continue to do business in South Australia. The payroll taxes are too high, the land taxes are too high, the red tape makes things difficult, there are so many restrictions.' These are the people we need in our state because employing public servants does not actually bring in money to the state because it is paid from taxes.

We need businesses that employ new people who pay taxes that run the state, and this government has done nothing to help those people. In fact, it reversed a decision which would have saved $120 million in payroll tax for employing trainees and apprentices; instead, it returned with an $11 million a year saving over two years, which looks a lot like an election sweetener, given that it lasts only two years—so, just after the election, very suspicious.

Businesses are really struggling in South Australia. We have had 264 insolvency appointments in the March quarter—the highest number of insolvencies since records were kept. I think we all realise that businesses are doing it tough. We know that retail businesses in particular are doing it tough: not only are they competing now with online shopping, where there is no GST on purchases under $1,000, but also we have Rundle Mall being redeveloped and all ripped up. We have low confidence. People are not spending their money. So, what does the government do to help all of these businesses in the city? It brings in a car parking tax that will make it even more expensive to go into the city.

The experience from interstate is that the car parking tax was not put on the long-term users, so there is some validity in saying, 'Well, you know, the people that work in the city 9 to 5 that take up all the early bird spots, perhaps they could catch public transport.' However, the experience interstate is that the long-term parkers' prices were not increased and it was the short-term parking that was because who would want to upset their good, long-term clients who lease on a monthly basis, or are regulars and are there early? It is a lot less work, it is less maintenance and it is less people in and out of your car park.

My concern is that the increases will hit the very people who we want in the city: the short-term shoppers, the people visiting the lawyers, the dentists, the doctors. As the member for Hammond said, people in the regions do all of their shopping and all of their lawyers, dentists and accountants are usually in the city, so they make a trip of it. They cannot just catch public transport, they have to bring their cars in and it is these people who this car park tax is hitting.

If you look at the other side of this, the bringing in of a car parking tax, I believe the government is hoping that people might catch public transport, yet we have consistently had a reduction in users of public transport. In fact, I was calculating earlier the reduction in users: there has been a decrease of 600,000 trips in the last year and there has been 5.5 million less trips since the year 2009-10. If you times 5.5 million trips by an average of, say, $3 (if they are all on multitrips), that would be $16.5 million. So, you would not need a car park tax if you sorted out your public transport. Why don't we make it reliable, on time, clean, that you do get a seat and that you do get to work on time and then perhaps you would not need a car parking tax, and you would not have the congestion in the city because people would have faith in the public transport system.

It is not just businesses that are suffering under the Labor government, it is householders. Every day my office receives calls from people who are beside themselves when they receive their bills. They are unable to live in their homes anymore. Property charges have increased at twice the rate of CPI. State taxes have increased at three times the rate of CPI. Electricity bills have increased greater than five times the rate of CPI and are up 150 per cent. Gas bills have increased at seven times CPI, which is a 108 per cent increase. Water bills have increased a staggering 11 times the rate of CPI.

Households are paying an extra $536 more per year for water than they were in 2002. A lot of this increase in cost comes as a direct result of the government's economic mismanagement and because of the decision to double the proposed size of the desalination plant at a cost of $2.2 billion. This went against independent advice. There was no economic modelling. There was no reason to do this, and now that plant is being mothballed.

These are not the only things that are affecting householders. Multitrip tickets are up, increased at above CPI. Vehicle registrations have increased greater than CPI. Speeding fines have increased greater than CPI. Fines for driving unregistered cars will treble from $300 to $1,000. This is, of course, after removing the stickers from everyone's cars, which helped them to actually remember when to register their car. That was another cost saving of this government. If they could manage their own budget they would not have to remove the stickers because they could actually afford them.

I think that nearly every resident or driver in South Australia would prefer to have a sticker on their car, as would I, because it was a permanent reminder of what month you needed to look out for registering your car. So, now not only have we removed the sticker, the government is going to increase that to a $1,000 fine. Fines for driving uninsured are about to double from $750 to $1,500 and the liquid waste levy is up from $11.60 a kilolitre to $35 a kilolitre. So householders are suffering under this government.

There are also other projects going on in my electorate that show the economic mismanagement of this Labor government, and the Royal Adelaide Hospital is one of them. I believe it is one of the main reasons I was elected, because people in the Adelaide electorate could see that the Royal Adelaide Hospital was a bad economic decision. This government originally said that the new Royal Adelaide Hospital, or the Marjorie Jackson-Nelson as it was to be called at the time, would cost $1.7 billion. We see that that has already increased to $2.8 billion, and that does not even include the remediation of the existing Royal Adelaide Hospital site.

Anyone who has had a business where they have a lease knows that, when you move to another office, it is always in the terms of the lease that you must make good where you are leaving. Any business person would always include the cost of remediating where they had left and leaving it ready for another use in the cost of the move or the cost of the rebuild. The costs of this hospital are increasing exponentially.

The Liberals argued that building on the existing Royal Adelaide Hospital site had the benefits of collocation. The medical school was there, the Hanson research centre was there, the IMVS was there, the university was there; everything that supported that teaching hospital was there. Now we find that bit by bit every one of these services wants to move down to the west end of North Terrace. We have Adelaide University and Uni SA having another building. Members might say 'Well, it's not state money,' but it is certainly state land, and it is Parklands. It is federal money, but they are still the same residents, the same taxpayers, so it is still their money.

It was very misleading to say 'We'll just build this hospital and nothing else will have to move.' This move of the hospital will end up costing us billions and billions of dollars. The IMVS will want to move next, and what about the Hanson research centre? Of course it will want to be at SAHMRI or in the vicinity; why would it want to be left at the eastern end of North Terrace when every other medical service has been moved to the other end?

So this so-called $1.7 billion new Royal Adelaide Hospital is getting out of control. We even have the Women's and Children's Hospital saying that it would also like to be collocated with the new hospital. When will this cost end, and how will we pay for it? Generations of South Australians will still be paying off decisions which sound as if they were made on the back of an envelope and which will have implications for many decades to come.

There is also the question of Adelaide High School. The election promise was that Adelaide High School, along with three others, would be expanded by 250 places, that it would be ready by the school year of 2013 (which has come and gone), that it would expand the zone to include students in Prospect and Walkerville (the zone has still not been released), and that it would not encroach on Parklands (which it almost entirely does). None of the promises are coming to fruition.

Building has finally started, but it probably will not be ready until at least 2015 if not 2016. The zones have not been released, so people in Prospect and Walkerville are really worried about where their children will go to school. People will want to move just to get into the right school zone. It is ridiculous that people in my electorate do not have access to Adelaide High School, which is the closest high school to my electorate. Other than Adelaide High School there is not a single high school within the boundaries of the state seat of Adelaide.

It is absolutely ridiculous that we have been waiting now for over three years for these zones to be released. Even worse, with five years in a high school 250 places is the equivalent of only 50 new places. So in 2015 or 2016—whenever it is finished being built—only 50 new year eight students will enter that school. This does not solve the problem of students in Prospect and Walkerville who do not have access to a school. It will not help when you are expecting 30,000 people to be living in the city in the future, it does not help if you say that you want all these people working in the city to create a vibrant city, because they will want their children to go to school in the city.

This is another example of a bandaid fix that was not well thought out. In fact, I believe that it was released less than a week before the last election, after about eight years of all of the primary schools in my electorate petitioning the then minister for education and nothing being done. So, a week before the election, finally something was done. Again, it looks very suspiciously like an election bid to win a few votes. What we need to do is to return our budget to surplus, we need to grow our economy through supporting small business, and we need to make South Australia a great place to live.

In conclusion, what Labor has given us is the biggest deficit ($1,314 million) in South Australia's history; it has given us the highest debt ($14 billion) ever seen in South Australia, even higher that the State Bank debt of $11.6 billion; it has given South Australia, with its AA credit rating, its worst credit rating, the worst in Australia; and it has given us the worst consumer confidence in 16 years. Our economy is going backwards; businesses are going badly; jobs are being lost; the cost of living is going up; fees, taxes and charges are going up; and projects are blowing out and being delayed.

South Australia cannot afford this Labor government. This budget is bad for families, it is bad for business, and it is bad for South Australia. This Premier cannot be trusted to manage the state's economy, he cannot be trusted to deliver what he promises, and he cannot be trusted to manage our state's future.

Mr PENGILLY (Finniss) (12:21): Once again, I find myself in this place condemning the state budget for what seems a number of years in a row. I thought about getting out previous budgets—

The Hon. P.F. Conlon: Don't worry, it seems even longer to us.

Mr PENGILLY: Well, sunshine, if you want to have a say, you can get up in a minute. I could read out the same speech, but there would not be much point in it. I really do not want to go over all of the numbers that have been put about this place in the last day or so. I do not see much point in repeating those, but I will make a few general comments in relation to the budget.

I regard it as a creepy-crawly Labor budget, slimy around the edges with not much in the middle for anybody apart from Labor-held seats. I hope the Liberal Party is successful in getting elected next March and sitting on the other side of the chamber in government and listening to howls of derision coming from Labor Party members as they come to grips with being in opposition and whingeing and whining about the first Liberal budget.

I feel particularly hard done by on behalf of rural and regional people. There is little or nothing in this budget for anyone outside of the metropolitan area, quite frankly. I do support the announcement of $8 million in the next financial year for a primary healthcare centre at South Coast District Hospital. That is a good initiative, and I am supportive of that; that will be most beneficial to the rapidly increasing population down there.

That is one thing but, in the same breath, I draw attention to the government's failure to come to grips with the doctors' issues, both at Victor Harbor and on the south coast more generally and also on Kangaroo Island. This is a festering sore that has been going on and on and not being resolved. The health minister seems unable to deal with it. I find interesting that the health minister was given the health portfolio to sort it out and things seem to be going backwards at an even greater rate of knots at the moment.

This creepy-crawly budget really does nothing for my electorate. There are no major projects, apart from that primary healthcare project. There may be money ferreted away in government department budgets, which will no doubt come out over the time of the estimates committees, and we will look forward to that.

I am concerned about policing, as indeed are, I am sure, metropolitan and country members. We seem to have increasing numbers of police; however, what they are doing is simply filling out more and more paperwork. They complain to me regularly about the amount of bureaucracy that is thrust upon them and the amount of paperwork they have to do and, if they arrest someone, the amount of time they are there dealing with that paperwork just to take someone into custody.

Overwhelmingly, the biggest concern for most members of my electorate is the cost of living; it is just killing them financially—it is absolutely killing them. The cost of water, the cost of electricity, the cost of fuel—it goes on and on and on, ad infinitum. I do not blame the government for everything, but there are a few things there that I do blame the government for, particularly water. It is outrageous what has happened with water, and it is only getting worse.

The government seems unable to bring SA Water to heel, and they seem dependent on the drip-feed of dividend from SA Water which helps them over the line. There has been a litany of disasters, in my view, that has been inflicted on the poor old taxpaying sector in South Australia, and on families who are just trying to survive.

I have increasing numbers of people coming into my office and complaining about the cost of living: people who have finished their working lives and are trying to survive on the age pension but cannot survive, despite limited concessions; young families with kids at school who want to go and do all those things that we did with our kids but are having trouble; the list goes on and on and on.

While I am talking about this, I think I also need to say in this place that I am also critical of what local governments are doing with rates. I will probably get some applause from both sides of the house on that. I think it is outrageous that local governments are putting up rates, in many cases by 5, 6 or 7 per cent, well above the CPI, saying that they are factoring in growth factors, and that they doing this and that.

I have no doubt that they have cost pressures on them like everybody else does, whether it be state government, federal government, families, businesses, whatever; but, I do not think that local governments have woken up to the fact that they need to cut their cloth to fit their suit. I believe that the government has a succession of ministers at the local government level who have failed to come to grips and do anything about it.

I think it is about time that something was done about it, and that they were ripped into gear. I wanted to make my thoughts known. I am sure that other members in this place also have ratepayers come in grumbling about their respective councils—

Members interjecting:

Mr PENGILLY: Can I have a bit of quiet?

The DEPUTY SPEAKER: Order!

Mr PENGILLY: Sir, I am sure that other members in this place have ratepayers grumbling about activities within their respective councils. I am even further annoyed by the fact that local government in South Australia is spending a million dollars supporting the 'Yes' case at the referendum. I think it is obscene, quite frankly. They are my personal views; I do not think it is right, and I think it is totally out of order. At the end of the day, the thing will get done over anyway, so I think there is some room to move on that.

The education sector seems to be going through yet another transition under another minister. The former minister has disappeared off into the sunset, and the current minister is trying to grapple with a department that is controlled from Flinders Street. I know that the government are not game to take them on, but they ought to try to sort them out a bit.

Flinders Street is a dictatorship which preaches and tells schools what they should be doing. The regional control seems to have gone, not only in education, but also in health and other areas. You take all the direction and control out of regional areas and stick it back into an office in the city and you lose the impetus and the ability to make local decisions, which should be done. I just do not like it at all.

I know the leader referred to that sort of thing in his speech yesterday. We have seen it with hospitals, where the boards are disappearing. There are well-meaning people in HACs, but the HACs have no control over anything, and are expressing frustration. I also see it in education. Our children are critically important to us and they deserve the very best, and I do not think they are getting the very best currently in some areas. I am close to the vast majority of schools in my electorate and speak to them regularly, so I get good feedback both from staff and from parents involved in those schools. It is my job to listen, not to preach to them, and I do listen and raise their concerns in this place.

This creepy-crawly budget does not do a lot for me at all. I will be very interested to see what happens, as we have a rapidly decaying federal government, and Blind Freddy can see what is going to happen there, despite whatever happens in the next week, if anything. We have a government in South Australia trying to attach itself to the shirt tails of the federal Gillard government. They want to be very careful about divorcing themselves from that, as well, I think, as they ought to make their own way in the world.

I just want to relate a couple of necessities in my electorate which I view seriously and which must have attention. Whether it be by this current government or by us if we are fortunate enough to be elected in the future, there have to be some major decisions made on the Adelaide to Victor Harbor road, particularly the Cut Hill section. A lot of the road is okay, let me say that, and I pay tribute to what has gone on there. The former minister, the member for Elder, had quite a bit of work done down there and I am very grateful for that.

The Cut Hill section is a disaster, in my view, and it will only be the scene of more and more accidents and more and more frustration as the numbers grow on the south coast, and that worries me. The Myponga to Yankalilla road is also a nightmare and, with increasing numbers of people living in the Yankalilla and Normanville area, that road also needs serious attention. There has to be some long-term planning for both these roads—and it needs to happen pretty quickly, let me tell you.

I turn my attention now to the Kangaroo Island Futures Authority, which is a creature of the Deputy Premier. A couple of years ago, we had a lot of puff and blow from former premier Rann, of blessed memory, when he announced that $24 million was going to be invested on Kangaroo Island. Well, I am still waiting. It seems a classic case of a grandiose announcement and not much guts to follow, quite frankly. I know that a couple of million dollars of funding is being put into roads on the island—dirt roads. I might say, the road that was—

The Hon. P.F. Conlon: Recurrent, Michael.

Mr PENGILLY: I beg your pardon?

The Hon. P.F. Conlon: A couple of million recurrent. You've never had it before.

Mr PENGILLY: Well, if you let me finish, you might hear that. The $2 million that was spent last year is breaking up. My view is that it should be project managed by the Department of Transport, but that is another story. I am grateful for the money, do not get me wrong, and I understand that it is recurrent funding, and I appreciate that as well.

However, KIFA itself has swallowed up $3 million in the last two financial years. It has another $1.5 million put on the budget for the next year, and it has achieved what Paddy shot at, quite frankly. It is a complete waste of time, it is another bureaucracy, and it is achieving little if anything. I am highly critical of it. All it has done is produce a glossy brochure called Paradise Girt by Sea, and not much else.

They have successfully alienated many of the government agencies on the island, severely upset the Department for Education people, the Department of Environment, Water and Natural Resources people, and they have met their match in a number of those areas. They do not listen, they do not want to listen, and they will not listen. They think they know everything. They have been trying to insert themselves over and above the local authority, in my view, and they are an abject failure. I would much rather that $1.5 million actually went into something of substance, such as the roads, and achieved better outcomes.

They have all these projects running at the moment. I get the newsletter from Eco-Action, which is the environmental lobby on the island. I am not particularly close to them, I might add; however, I get their brochure when it comes out. They send it to me, which is good. I see in there that they are very grateful for the KI Futures Authority and that the general manager of KIFA is assisting them in their protest against oil and gas search off the west end of the island. I thought, 'Well, what's all this about?'

The next day I picked up The Advertiser and there was a three quarter-page spread from minister Koutsantonis, applauding oil and gas search in South Australia of which we are fully supportive on this side of the house—we are at one on all of that, there is no question about that. When I raised the subject with the Deputy Premier, he nearly blew a fuse. So I seriously question why on earth we are using taxpayers' money doing that sort of thing.

The issue that KIFA should be dealing with is the cost of getting across the water between the mainland and Kangaroo Island. Now they are not dealing with it—whether they have been warned off it or will not go near it or what, I do not know. They are doing some work on the power issue. The former minister the member for Elder and I had some discussions about the cable a couple of years ago and I am at one with him on that, and we were at the time—quite rightly so—but they are fluffing around the edges on that.

I hear more complaints about the issue of getting across that water and the cost of getting back and forth to the island than anything else, quite frankly. I am inundated with complaints from locals, and that includes locals on the Fleurieu. I am inundated with complaints from the tourism industry; and the list goes on. Freight operators do not walk away from this; it is the number one issue. Yet KIFA will not deal with it and it is ridiculous. That is probably enough said on KIFA, but I am not satisfied that they are justifying their existence and I just think at the moment that it leaves a big gaping hole, which is probably only exacerbated by the loss of the Kangaroo Island development board a few years ago when they went to the RDAs.

Now the RDAs are in a fair degree of trouble and not guaranteed of funding in many areas. I understand that the RDA in the Riverland is working quite well according to the member for Chaffey and I applaud that. However, there are many others that just do not know where their funding is coming from and they are in a bit of a mismatch about it at the moment.

Let me turn to small business in my concluding remarks. Small business is the engine room of the economy of South Australia, along with primary industry, of course. It is the employer and it is not getting any support whatsoever. I was bemused to hear the Premier say he used to own a small business—or he used to run a small business. The only comparison I can give is that, when he finished, it was probably even smaller than when he started. However, the costs on small business are a killer; the payroll tax issue is a killer and it goes on and on.

Small business needs a break. I listened to the radio with interest this morning when big business in General Motors was talking about wanting to make cuts in payroll across the board just to keep going. Mr Camillo from the union was on there, loudly objecting to any drop in wages—which is his job, I might add—but if we want to keep these industries here, we have to accommodate how they can proceed in South Australia.

Finally, the primary industry sector needs some time spent on it in this place. The primary industry sector, including farming and fishing, complement the tourism sector in my electorate. I have 2.9 million people, on the last count, go to the Fleurieu Peninsula each year—and that is not all my electorate—with over one million visitors alone going down to Victor Harbor.

Tourism is an industry where the employers need good people. Farming and fishing complement one another; they sit alongside one another and they are great industries together. People come to see the scenery; they like to drive along the roads and look at sheep and cows and crops and feel as though they are still part of the country, even though they may live in a metropolitan area somewhere. The farming sector is doing it tough. The dairy industry is doing it extremely tough, although there is a bit of light at the end of tunnel with milk prices in the near future—but they have been doing it very tough.

Apart from the high dollar, what really impacts on the farming sector's ability to go about their business and make a good profit at the end of the day is overbearing government red tape and bureaucracy. They are fed up with filling in forms, they are fed up with being told what they should be doing, they are fed up with not getting support and they are fed up with having PIRSA's budget cut year after year, as is tourism. Be in no doubt that tourism is fed up with having its budget cut. They are convenient whipping boys. Tourism is a big employer and, more conveniently, the government seeks to make it a minor industry and a minor player, despite the protestations.

The government likes to go out and applaud everything that happens in Adelaide in March or in the wider regions, but you cannot go on cutting the guts out of PIRSA and the tourism budget. It is cutting off your nose to spite your face. I am not impressed with the budget at all. As I said, it is a creepy-crawly Labor budget. I will have to support it for obvious reasons, but I do not have to like it.

Mr GARDNER (Morialta) (12:40): I will take the opportunity to speak about the 2013 budget and, more particularly, on the Appropriation Bill. Today we are debating the appropriation of $12,245,316,000 to run the budget from October through to June next year. This is in addition, of course, to the supply of several other billion dollars that we have already appropriated. I will touch base first on the headline figures. For the current financial year we are looking at a $1.314 billion deficit. That is the largest deficit in South Australia's history. This, of course, was supposed to be a $304 million surplus. When Labor first put this year in the forward estimates, we were looking at a $300 million surplus and they have managed to turn that into a $1.3 billion deficit—it is extraordinary.

This deficit, and those that have come and those that will follow, will lead us to a debt for South Australia in the 2015-16 year of $13.7 billion—the largest debt in South Australia's history. It is a debt that dwarfs the debt of the State Bank fiasco. It is a debt that dwarfs all those that have come before. There will be $13.7 billion of debt, plus the unfunded superannuation, the WorkCover and all of the other liabilities that the state government has responsibility for, which takes our total liabilities to over $30 billion—it is extraordinary.

This debt has a very clear and present danger not just for our next generation, as the Leader of the Opposition said, but indeed for next year. Next year's budget is going to be constrained by the choices that cannot be made any more because of the increased interest that the deficit and the debt has put on the people of South Australia. Indeed, at that peak debt in the 2015-16 year our interest payments will reach $952 million per year. That is $952 million that cannot be spent on schools, hospitals, police, tax cuts or debt reduction. That is $952 million just to tread water, before we have paid for a single nurse, teacher or doctor in South Australia. We will spend more on interest payments to meet our obligations for our debt, which this government has created, than we spend on the entire police budget.

We all know that Labor's election promise was to create 100,000 new jobs by the 2016 year. We were told 100,000 new jobs and yet, since the current Premier came to power, there are 14 per cent more unemployed South Australians, and there is more jobs pain to come, with job ads having fallen for 25 consecutive months. In our northern suburbs we face a 41 per cent youth unemployment rate. To meet that 100,000 jobs target, which we ask the Premier about on a pretty regular basis and which he consistently confirms is still Labor's promise, they need to create 2,400 jobs each month. That is such an increase on the trend over the last three years that it defies credibility, and it goes directly to the credibility of the government.

Why do we have such a problem? The government argues consistently that it is because of a drop in our revenues, that it is all out of their hands and that it is not their fault. It is because the global financial crisis has been terrible and very difficult, and our revenues have dropped. If only that was the full story. There are some facts that need to be introduced to this debate. The fact is that revenue has actually grown by 3 per cent per year for the last four years. The fact is that there has been $3.8 billion of unbudgeted spending under state Labor. The fact is that South Australia's GST revenue will still grow by 3.1 per cent a year over the forward estimates, and that is above inflation. The fact is that the federal budget says that federal specific purpose payments to South Australia have increased by $285 million since the federal Mid-Year Economic and Fiscal Outlook. That is an extra nearly $300 million coming from the federal government that was not in the budget at the Mid-Year Budget Review.

The facts of the matter are that the government has a spending problem not a revenue problem. The Premier, in question time yesterday, defended the position of the budget. He said that it meets the targets that they have set. He said that the assumptions on which the budget is predicated are conservative assumptions, they are credible assumptions and they are believable assumptions. He talked about independent commentators from all sides and all newspapers agreeing with him, and this interested me because I had a look at the newspapers on budget day and the days shortly thereafter. In The Advertiser I noticed the lead from Jessica Irving, National Economics Editor, who started out by saying:

This budget is banking on the hope of an economic recovery that has so far failed to materialise.

In The Financial Review, Matthew Dunckley said:

...he [in referring to the Premier] will, like his counterparts in other states, chase rainbows into the forward estimates courtesy of optimistic rebounds and revenue and promises of cost cutting. He may be right but, as Standard & Poor's noted quickly, he may be wrong.

'Chasing rainbows into the forward estimates' is what the economic commentators think of this budget's assumptions. In The Australian, to complete the triad, Judith Sloan asked the question:

Can Australia afford two Tasmanias?

And she was not saying it in a good way, talking about the beauty of their mountains or the passion of their people, she was talking about the economy. In particular, Judith Sloan went on to write:

And be particularly suspicious of the prediction that the budget will return to surplus in 2015-16—pigs might be flying over the redeveloped Adelaide Oval and the new Royal Adelaide Hospital by then!

It is not a bad question to ask because this budget is not based on conservative assumptions as the Premier would have us believe, this budget is based on particularly heroic assumptions. It is heroic to assume that this deteriorating budget will turn around. It is heroic to assume that because over the last four years we can see that the very opposite has occurred. In fact, when all of the last four years' budgets have put surpluses and deficits into the forward estimates, nothing like what has been predicted has come to pass.

When the 2010-11 year was put into the forward estimates, it was supposed to achieve a $278 million surplus. The fact of the matter is, when it came to pass, we ended up with a $53 million deficit, a $330 million turnaround. In the 2011-12 year, when it was put into the forward estimates, we were supposed to achieve a surplus of $424 million, and what came to pass was a deficit of $258 million—more than $600 million—nearly a $700 million turnaround in the budget position.

In the 2012-13 year, the current year for which we have a predicted figure based on most of the year, it was supposed to be a $304 million surplus. The truth of the matter is that we are seeing a $1.3 billion deficit, a $1.6 billion turnaround in the fortunes of this state's budget.

The next couple of years are faring no better. Next year the 2013-14 year was supposed to be a $480 million surplus when it was introduced into the budget paper forward estimates, and now we are looking at a $911 million deficit, again a $1.3 billion turnaround—nearly $1.4 billion.

The 2014-15 year was supposed to be a $840 million surplus and is now headed towards a $431 million deficit. Why on earth would we believe this government when they predict a surplus for the following year when six out of the last seven years they have predicted surpluses and delivered deficits? It is not credible. It is heroic to assume that Labor will turn the budget around. The assumptions they have made are really the problem we are facing.

It is heroic to assume that Labor will deliver their promised savings with no blowouts given their record in this area. They promised a Royal Adelaide Hospital would cost $1.7 billion and it has blown out to $2.8 billion. They promised Adelaide Oval would be not a penny over $450 million and it is already skyrocketing northward of $600 million. They promised the Southern Expressway duplication would cost $370 million and we are at over $400 million. The water interconnector was to be $300 million, and it is over $400 million already.

They promised no increases in taxes and charges, and no new taxes, yet that promise has been scrapped too, with the new car park tax, and the River Murray levy that they introduced. The gambling tax is up, the mining royalty is up, and there is a raft of other increases to taxes and charges.

It is an heroic assumption to believe that Labor will come anywhere near meeting the savings that they have promised. It is an heroic assumption to believe that stamp duty revenue will grow at an average of 12 per cent per year over the forward estimates—that is double the stamp duty growth over the last 10 years. It is heroic to assume, as this budget does, that GST revenue forecasts in the budget are accurate, given that they are $1.5 billion higher than the forecasts in the federal budget for how much the federal government expects they will be giving us in GST. The state government expects to get $1.5 billion more than that.

It is heroic to assume that even this year state final demand will grow by 1.25 per cent as the government presumes in the budget, given that in the first three quarters of this year the decline in state final demand has been over 3 per cent. It would take a record turnaround that has been unprecedented in South Australia's history for us to go from the position of decline over the first three quarters to a growth of 1.25 per cent in the final quarter and for us to meet that target.

It is heroic to assume that Labor's spending will not balloon from here as well, given that over the last seven years there has been a turnaround in their budget fortunes of $5.6 billion—$2.6 billion of promised surpluses, $3 billion of delivered deficits. It is absolutely heroic to assume that any of these things will come to pass and, even if they do, we will still be in the absolutely dreadful position that the Labor Party predicts we will be in. It is heroic to presume that we will be in a dreadful position. God knows what they are actually going to deliver if they get the opportunity to stay in power.

What are we doing with the $12 billion? Of course, it pays for all of the public services that we support and it pays for a number of new investments. There is $100 million in this budget that has come from the Motor Accident Commission to pay for some transport projects. A number of the transport projects are good projects, which we support, but the way that the money has been delivered for this rather than general revenue and rather than out of the transport capital budget is through taking $100 million from the state's motor insurance reserves. The way that this has been done is quite curious because it was only 12 months ago when then treasurer (the current minister for health, the member for Playford) described such an action as being 'the equivalent of me going to the Motor Accident Commission and raiding its reserves in order to prop up the budget.' About 12 months later we have a new Treasurer and a new approach to what is an appropriate way to deal with government.

The car park tax forms a central part of the government's budget despite the fact that it goes very much against their stated claim of pursuing a vibrant city agenda. They have the electrification of the Gawler line in this budget, but not to Gawler, only to Dry Creek, and it is not going to carry a passenger. The rail yard hospital is in here for $2.8 billion. One thing I noticed was $295 million of what is described as contingencies for which we only assume that is the bank that will be raided to pay for Labor's election promises, whatever they may be.

For the constituents of Morialta, I am happy to report that there are one or two things that will be positive. Magill and Glynburn Roads get a $4 million upgrade, and I congratulate particularly councillor Vincent Tarzia, the Liberal candidate for Hartley, who has worked very hard on this, and he has been out collecting signatures on petition for months on this.

The Hon. C.C. Fox: As has the member for Hartley.

Mr GARDNER: For months Vincent Tarzia has been working his jacksy off to get this project up—

The Hon. C.C. Fox: His what?

Mr GARDNER: —to draw to the attention of the government the sincere need for improvement at the corner of Magill and Glynburn Roads.

The Hon. C.C. Fox: Sorry, member for Morialta, what did you say he worked off?

The DEPUTY SPEAKER: Order!

Mr GARDNER: I think he needs to be congratulated for that and I certainly do so in this place and commend him for achieving a result. Before he has even had the opportunity to go to a state election, he has achieved results for the constituents of Hartley. The Britannia roundabout has been something that members on this side have been fighting for for many years. After initially in 2004 announcing an $8 million project to fix that roundabout, then going back on it, the government then came out later and said that we could never fix that roundabout because it would cost $100 million.

They have now come forward with a $3.2 million proposition to fix that roundabout which will be of benefit to some constituents in Morialta and those who travel around it. I hope that the solution works. I am not a traffic engineer and I do not pretend to be. At $3.2 million it is cheaper than those promises offered before. I just say that I hope it works but we are pleased that some attention is being paid to this significant black spot.

There is not much else for people in Morialta. There are 10 fixed location speed cameras—actually the government calls them road safety cameras now. It is one of those Orwellian doublespeak things. They are speed cameras and they are going to be around the place, so people can look out for those. I look forward to finding out where they are going to be. There is some payroll tax relief, totalling $21 million over the next two years.

Unfortunately that does comes after payroll tax relief of $100 million was ripped away from small businesses to be put back into government coffers last year. But that is a small snap of several thousands of dollars that will help those small businesses. We just think that it should be much more. Budget Paper 6 does identify one other item that will be relevant to people in Morialta: $3 million for the Magill Training Centre, to pay for what is described as:

…demolition of the existing buildings, completion of a site contamination audit, all associated environmental works for the area that the buildings occupy, and security and maintenance of the site during the sale process.

The Magill Training Centre sale has been on the cards for four years. It would have been nice if the government had noticed that those things would have to be progressed before this year. They have known about it for four years. I think we knew that the site was going to have to be cleaned up and the buildings knocked down; nevertheless, that is relevant to people in Morialta.

What is particularly important for people in Morialta, though, is that the cost of living is going to rise as a result of this government, as a result of its decisions, as a result of the decisions in this budget. Since Labor came to power, we know that payroll tax has gone up 42 per cent. This is after CPI; this is in real terms. Conveyance duty is up 39 per cent, land tax is up 203 per cent, other property taxes are up 17 per cent, taxes on insurance are up 48 per cent, and motor vehicle taxes are up 26 per cent. The cost of living is skyrocketing and it is the government's fault.

Just this year alone the impact on the cost of living of Labor's decisions is that property charges have increased at twice the rate of CPI, state taxes have increased at three times the rate of CPI, electricity bills have increased at greater than five times the rate of CPI, gas bills are up seven times the rate of CPI, and water bills a staggering 11 times the rate of CPI, as a result of the bad decisions of this government.

In addition to the cost of living, the cost of doing business is very high in South Australia. Sometimes we hear from the government that South Australia is a low taxed state. It is not believable; it is not credible. I am pleased to say that the Commonwealth Grants Commission is saying what the government refuses to, although the government has included in Budget Paper 3 on page 54 its table that identifies tax effort ratios by jurisdiction. South Australia has the highest tax effort of all states and territories. We come eighth out of eight, including the two territories. South Australia—108.3 per cent on the index, which compares extremely unfavourably with states like Victoria, which is just above the national average, at 101.5.

Queensland is something to aspire to, at 92.2 per cent. That is what businesses are dealing with in Queensland, as opposed South Australia. Of course, when it comes to government procurement, when they put out these big contracts and everyone in Australia can bid for them, those businesses in South Australia are competing against businesses in Queensland, New South Wales, Tasmania and every other state and territory in Australia which has a lower tax base on which to base their business costs. It is harder for South Australian businesses to get these government contracts because they have a higher cost base.

The Liberal approach is quite different. We want to get the budget into surplus as soon as is plausible. We have announced policies that will help this. We have announced a productivity commission that will help get maximum efficiency, maximum bang for our buck, out of the Public Service. We do not want to have cuts, but we do need reform. By taking advantage of the great wealth of skills in our Public Service, we think we can get a better bang for our buck. We need to grow the economy, which we will do through bodies like Infrastructure SA and by abolishing the car park tax and focusing on small business so that we can improve the procurement processes, improve the grants and pay our bills on time.

We need to have an attractive state for young people to build their future here in South Australia, through creating more jobs, more prosperity and more confidence in our economy. As the member for Bragg said yesterday, this government spends, borrows and wastes too much. We need a government that is going to instil confidence in our business community. We need a government that is going to have an efficient Public Service and we need a government that is going to make sure that those 32,000 people who have left South Australia for other states over the last 10 years on a net basis have a future in South Australia that they may be interested in coming back to.

Most of them are young people; most of them are school and university graduates who do not see a future in South Australia. We need a government that is going to create a future for them, their families and their careers, and one in which they can have confidence. We support the bill, but I hope that next year we will be able to do a lot better from the other side of the aisle.

Debate adjourned on motion of Hon. C.C. Fox.

[Sitting suspended from 12:59 to 14:00]