State Debt

The Hon. S.C. MULLIGHAN (Lee) (14:58): Can the Premier explain to the house why this debt increases over the forward estimates by over three times the value of new capital expenditure in the budget?

The Hon. S.S. MARSHALL (Dunstan—Premier) (14:58): I am pretty sure I answered that about one minute ago, but the reality is that—

Members interjecting:

The SPEAKER: Order! We have had the question.

The Hon. S.S. MARSHALL: —when you spend more on capital, unless you are going to fund it out of massive surpluses, then it has to basically come from debt or flogging off assets that you might have. Those opposite—

Members interjecting:

The SPEAKER: Order!

The Hon. S.S. MARSHALL: —literally made an art form of flogging off everything that wasn't nailed down. As it turns out, there is not much that we could sell off even if we tried.

Mr Pederick interjecting:

The SPEAKER: The member for Hammond is again called to order.

The Hon. S.S. MARSHALL: That was a low point for the previous government, but it certainly gave us much cause for jocularity for quite some time. The reality, though, is that we are very careful in our consideration of increasing the debt of the state. The cost of that capital at the moment makes it a far more attractive investment for our state at the moment. If we had to wait and post massive surpluses for South Australia to fund that capital investment I think, quite frankly, that we would be really slowing down our state even further from where it has been.

Historically, over the last 16 years we have had very sluggish economic growth. We don't accept that. We see some very nice green shoots for the South Australian economy at the moment. It is only early days, but we were very heartened by the state final demand figures which came out for the December quarter and which show that South Australia is growing four times faster than the national economy. It is early days and they are very small green shoots, but we believe as the government that we are heading in the right direction.

We are not prepared to put the handbrake on. Those opposite, in the lead-up to the state budget, were out there with their typical pre-budget smear campaign and fear campaign, saying that somehow the new government was going to come in and turn the tap off in terms of infrastructure investment in this state. In fact, some believe—

Members interjecting:

The SPEAKER: Order!

The Hon. S.S. MARSHALL: —that we still have. But the reality is that we very significantly increased our investment in infrastructure in South Australia. We do that with pride. Yes, it's increasing the debt, but the careful selection of the projects means that we will get a return. This is exactly the same way that a businessman looks at a capital investment or a family looks at a capital investment: they look at whether or not it will provide a return.

When a piece of equipment is purchased, or a new building is purchased for a business, the business shareholders look very carefully at what is the investment and what is the cost of that capital, the servicing of the loan over that period and what the benefit is going to be. That's exactly the same rationale that we have applied for the projects that we have announced in our first budget. I look forward to announcing our new range of capital investments in June this year.