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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-11-20 Daily Xml
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STATE BUDGET

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:12): I seek leave to make a ministerial statement.

Leave granted.

The Hon. K.O. FOLEY: Strong financial management has been a hallmark of the Rann Labor Government.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: The Rann government has consistently delivered strong budget surpluses, repaid debt, delivered nearly $2 billion in tax relief, invested heavily in our hospitals, schools and police, and, after a decade of budget neglect, is reinvesting in our state's infrastructure.

Today I have great pleasure in tabling the 2006-07 final budget outcome. The outcome shows that the state continues to be in a strong financial position, and a much stronger financial position than when this government was elected. The outcome shows a net operating surplus of $209 million for 2006-07, up from the projected $38 million surplus at the time of the 2007-08 budget. The significant improvement in the 2006-07 net operating surplus is due to lower operating expenses of $80 million, along with higher than anticipated revenues of $92 million.

The net lending surplus was $71 million in 2006-07, up from the projected deficit of $176 million in net lending at the time of the 2007-08 budget. The improvement is due to the higher net operating surplus and also $68 million worth of capital project slippage in 2006-07. It should be noted that some of the underexpenditure, as well as the capital slippage, will be carried over into the 2007-08 year. General government net debt has also improved, compared with the budget time position, as a direct result of a higher than forecasted cash surplus.

Members interjecting:

The Hon. K.O. FOLEY: Trust me, you had slippages all through your budget periods. Net debt as at 30 June 2007 is negative $24 million—which is, therefore, a surplus—and a $175 million improvement on the level projected at the time of the 2007-08 budget. This means that, for the second year running, this government has delivered in the general government sector a debt-free position.

The state's balance sheet has also strengthened significantly. The general government sector net worth has increased by some $2.4 billion to $22.1 billion. Superannuation earnings were very strong in 2006-07, contributing $657 million to a reduction of over $1 billion in the unfunded liability from 30 June 2006 to 30 June 2007. The strength of the state government's balance sheet is important to note. This strength has given the government the ability to reinvest heavily in much needed infrastructure. The strength of the state finances is what the rating agencies look for when considering our AAA credit rating. Having strong operating surpluses means that we can afford to run net lending deficits—deficits that reflect the state government's investment in infrastructure. As the Auditor-General noted in his report last month:

Maintaining forecast net operating balance surpluses represents overall good financial planning, providing some flexibility and buffer against unfavourable influences and events that may affect Budget outcomes.

His report also noted:

The state's balance sheet is expected to strengthen over the four years of the 2007-08 budget as measured by net worth. Net financial worth however, declines due to the growth of financial liabilities. Both these trends are consistent with borrowing to build infrastructure.

The Rann Labor government has done the hard work to rebuild the state's finances. We have delivered—

Members interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I don't know: five budgets, five budget surpluses—eight budgets, eight budget deficits. And they had to sack Rob Lucas because he was no good. We have delivered strong financial management and strong budget results each and every year, and we have delivered tax cuts and increases in spending while being able to deliver those very strong budget outcomes—

The Hon. P.F. Conlon: Which is why Greg Kelton said that you were an outstanding Treasurer.

The Hon. K.O. FOLEY: He did, did he?

The Hon. P.F. Conlon: Yes.

The Hon. K.O. FOLEY: Can you say that louder?

The Hon. P.F. Conlon: He did, he said that.

The Hon. K.O. FOLEY: What did he say?

The Hon. P.F. Conlon: You're an outstanding Treasurer.

The Hon. K.O. FOLEY: Thank you, Mr Speaker, I will conclude on that point.

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