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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-10-18 Daily Xml
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INFRASTRUCTURE SPENDING

Mr KENYON (Newland) (15:26): I would like to comment on the remarks made over the last few days by the Leader of the Opposition and his view of spending on infrastructure. It is an interesting view on life in saying that basically you should fund all your infrastructure spending from savings that you make in the budget, so you should be able to shell out all your infrastructure spending just from cash that you have lying around.

Mr Pengilly: That's nonsense.

Mr KENYON: It is a nonsense, as the member for Finniss says, and I am glad he agrees. I am glad that he has said that because the whole concept that that is how you pay for infrastructure is a nonsense.

For the benefit of the Leader of the Opposition and members opposite, I will explain how it really should work. You can go about it a couple of ways. You can, as the Leader of the Opposition suggests, just pay for it out of the money you have lying around, and that tends to mean that you have to have very large surpluses, which constrains the amount of money that you can spend on everyday things. So, generally, in a budget, you would be spending on everyday stuff—namely, wages, services, buying cars that you might need for PIRSA, for instance, where officers might need a four-wheel-drive to go out and do their mining inspections—then, ideally, you would be paying back loans, and you use loans to buy infrastructure that is long lasting. Anything of a day-to-day nature you pay out of your budget and anything that you expect to hang around for 50 years or 100 years is generally when you borrow and pay it over time.

The reason you do that is because you are trying to get people who are using the services to pay in general terms and for immediate services that are provided—for example, public servants, all the equipment and tools that public servants might need—and you pay them out of your budget because you use them every day, and people who are here and now and paying taxes are using those services. You pay for infrastructure over a longer period because a lot more people will use it. If my children will be using the Bakewell Bridge or the underpass, their children will probably be using it as well. You need some sort of financing arrangement that is going to stretch out the payments over time so that everybody who uses that underpass pays for it; that is why we have it.

So this ridiculous notion that the Leader of the Opposition has come up with, that you should pay for all your infrastructure completely out of your budget, is unfair and not only is it going to place enormous burdens on the budget and not only does it mean you have to have massive service cuts out of the budget, it also is unfair. I would really like to know, and perhaps the Leader of the Opposition can explain it some time, precisely what he plans to cut from the budget? What services will he cut? Which hospitals and schools will he close? Who is going to suffer and how many? In what time frame are people going to have their services disrupted? I think there is the challenge for the Leader of the Opposition to come here, first, to learn how budgets should work and, secondly, in the event that he chooses not to go about them in an effective or fair way, to explain what he is going to cut.

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