Labor Government Funding

The Hon. D.W. RIDGWAY (14:36): My question is to the Treasurer. Can the Treasurer please outline the actions being taken by the government to recover taxpayers' funds that might be potentially lost as a result of either loans or grants made by the former Labor government, of which there are two ministers sitting opposite listening?

The Hon. R.I. LUCAS (Treasurer) (14:36): I thank the honourable member for his question. This particular issue has attracted some recent widespread publicity in relation to actions that the government has had to take in some circumstances, in other circumstances other creditors have had to take, such as banks, in relation to businesses that received either significant loans and/or grants just prior to the last election in a cash splash by the former government in a desperate attempt to get re-elected. I am told that 932 financial packages in the 12 months leading up to the state election were offered to different businesses—$420 million in loans and grants in that 12-month period.

I think all members will recall that, in the weeks and months leading up to the election, there was almost a daily press statement that new jobs were going to be created because the government had generously provided millions of dollars in grants or loans to, as I said, up to 932 different businesses in South Australia.

The Hon. D.W. Ridgway: That's three a day.

The Hon. R.I. LUCAS: It's a very large number, that's right. Sadly, two or three years down the track we are starting to see the first signs of action having to be taken to try to retrieve taxpayer funds significantly at risk. Sadly, the Ellen Hotel in Port Pirie is one example of that, where a considerable sum of money was loaned to that particular business and the government, after a long period of time of trying to come to an arrangement about the repayment of that particular loan by extending the provisions and making other arrangements from a generous viewpoint to try to encourage repayment, was eventually forced to appoint receivers.

As I said, there has been recent publicity on regional radio about this particular issue, and the government's receivers, KPMG, have indicated publicly that they will be placing the hotel up for sale within the next two weeks to try to recoup some of the considerable taxpayer funding that is at risk. Another example is Somark, which was given $4 million in loans and $1 million in grants to establish a base at Tonsley Park. They were to employ up to 50 people. I am told in recent times they have terminated all 50 staff, so that there are no longer any staff employed in South Australia as a result of that $5 million in grants and loans.

Members interjecting:

The PRESIDENT: Order! I can't hear the Treasurer, and he is not being assisted by members of his backbench.

The Hon. R.I. LUCAS: The government is desperately trying to see whether or not we can—

The Hon. E.S. Bourke interjecting:

The PRESIDENT: The Hon. Ms Bourke!

The Hon. R.I. LUCAS: —retrieve any of the $5 million in grants and loans that are potentially at risk in relation to that.

The Hon. J.E. Hanson interjecting:

The PRESIDENT: The Hon. Mr Hanson is not helping.

The Hon. R.I. LUCAS: As I said, contrary to the former Labor government's announcements that 48 full-time equivalent staff would be provided in terms of much-needed jobs, all the staff have been terminated. I am advised that there isn't a single employee left here in South Australia for the $5 million offered by the former Labor government, of which, of course, the Hon. Ms Bourke was a very significant and senior adviser in relation to their policy direction, so I am advised.

Sadly, the third example in relation to trying to retrieve government funding—there are quite a number of other examples. I won't go through all of them; perhaps those two for the moment, because Australian Fashion Labels has already been much publicised. This was the much-spruiked $50 million Unlocking Capital fund that former Treasurer Mr Koutsantonis spruiked as being the job saviour—a $50 million program.

The member for West Torrens loved the Australian fashion label industry sector, it gave him plenty of opportunities for attending important A-list functions in Adelaide in the period leading up to the election. Sadly, again, almost $2 million of taxpayers' money is now at risk because the bank involved in that particular case has brought in administrators because of the inability of the business to be able to repay the loans, and of course the taxpayers' funding is at risk.

Time doesn't permit, and nor would I waste too much more time of question time to list many, many other examples, at the moment, of taxpayers' funds at risk as a result of the former Labor government's reckless pursuit—unsuccessful, thankfully—of trying to win an election on the basis of splashing cash and picking winners. Sadly, we are having the taxpayers pick up the cost.