COUNTRY HOSPITALS

The Hon. J.S.L. DAWKINS (14:50): I seek leave to make a brief explanation before asking the Leader of the Government questions about country hospital procurement contracts.

Leave granted.

The Hon. J.S.L. DAWKINS: In recent weeks the government has announced that it will introduce new procurement arrangements for stores, equipment and services for country hospitals, providing bulk acquisition and centralised distribution from the South Australian Distribution Centre at Camden Park.

The Minister for Health and his senior officers have repeatedly stated publicly that this will be more cost-effective. The opposition is now receiving correspondence and complaints from country small businesses whose equipment or services contracts have expired and will not be renewed.

An example of this is a small business in Port Lincoln that provides cleaning equipment and supplies, including chemicals, to hospitals throughout Eyre Peninsula. The loss of contract will have a devastating financial impact on the viability of this business and will result in a loss of employment and a loss of sponsorship for community groups around Eyre Peninsula. This example is replicated in many other communities, including Whyalla, Balaklava, Mount Gambier and the Riverland. My questions are:

1. Will the leader indicate whether a regional impact statement was prepared for and considered by cabinet before the decision to centralise procurement for country hospitals was made?

2. Was this policy referred to the Regional Communities Consultative Council for comment before being adopted?

3. In the leader's role as Minister for Small Business, was he consulted about the impact that this mad example of centralisation would have on regional small businesses?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:52): In relation to the detail of the first two questions, I will refer that to the Treasurer. In relation to the third question, obviously, these matters are discussed in cabinet. As Minister for Small Business, I have input at that level, but I am not proposing to breach the confidentiality rules of cabinet in relation to the details. Generally speaking, the honourable member needs to understand that, in the current economic environment, we have seen revenues from GST alone dry up by several billions of dollars over the coming forward estimates period, and state revenue has also declined.

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: On the contrary, in this government's last budget there was a surplus of something over $500 million—the largest surplus, I believe, that the state has ever produced, and the first time in many years. It is somewhat of a contrast to the eight years between 1993 and 2001, when over $2 billion was added to debt outside of asset sales.

Members interjecting:

The PRESIDENT: Order!

The Hon. P. HOLLOWAY: Over $2 billion was added, while this government has had surpluses every year.

Members interjecting:

The Hon. P. HOLLOWAY: This is a line that the opposition has been coached to run, although it has not done too well with some of its lines in recent days. We had the Leader of the Opposition in the other place making some incredible claims about Scientology yesterday. One really wonders—

Members interjecting:

The Hon. P. HOLLOWAY: Yes; we hope the honourable member will tell you. Given it is a total set up, I would not be surprised if the Liberal opposition has been totally set up by—

The Hon. B.V. Finnigan: Probably Rob Lucas.

The Hon. P. HOLLOWAY: Yes; I must admit that the thought had crossed my mind. He is not here today to confirm that, so we will show some respect.

To get back to the question, we are facing a significant reduction in government revenues in the order of $1 billion or so a year according to the latest estimates. When you have that sort of revenue deficiency, clearly the government has to take hard decisions. This government has taken hard decisions in the past. That is how we turned the deficit budget we received into a surplus in our first year and, up until last year, we ran surplus budgets every year, including a record surplus in the budget last year.

Clearly, given the economic situation, we have to take hard decisions and that includes making sure that our government processes, including procurement, are as efficient as they possibly can be. It is all very well to say that jobs will be lost there but, if we do not have an efficient economy, experience and history show that we will lose even more jobs elsewhere.