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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-02-28 Daily Xml
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FINANCIAL MARKET INVESTMENTS

Mr GRIFFITHS (Goyder) (14:37): My question is to the Treasurer—

Mr Koutsantonis: Is it grubby?

Mr GRIFFITHS: No, it's a good one.

The SPEAKER: Order! I warn the member for West Torrens. And I have to say that I am a bit tired of these accusations of grubby from one side of the chamber to the other. The member for Goyder.

Mr GRIFFITHS: Can the Treasurer rule out any increases in motor registration and compulsory third party insurance premiums, reduced superannuation pensions or other cuts to government services as a result of the impact of the financial market shakeout on government investments?

Queensland Premier, Anna Bligh, last week confirmed that the Queensland government had investments that were exposed to the fallout from the subprime market. The Queensland Premier went on to warn that 'it will be a year of belt tightening', and warned Queenslanders that 'no new services would be funded across a range of departments in this year's budget'.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:38): We will have to see what is in the budget, but what I can say is this: as to the effect, and I have said this previously to the house, my advice has been that we have not suffered any losses as a direct result of investments in the subprime market. So let's put that furphy to bed—which I have done before, but I will do it again. That was at the initial point. I was advised by Funds SA as a normal matter of business they may take advantage of the subprime collapse by entering the subprime market at collapsed prices. There may well be opportunities there, whereby any diligently run fund would look for opportunities—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: How are you, member for Mitchell?

Members interjecting:

The Hon. K.O. FOLEY: Economics 101! I said 'direct'. It is important that we distinguish between direct investments in subprime products, as against the effect, the contagion effect, of the subprime crisis as it affects world financial markets. I do not know whether the Leader of the Opposition has any ABC child care centre shares in his massive portfolio. I think he sold his business to his good friend at ABC. Do you have any shares in ABC?

The SPEAKER: Order! The Treasurer will return to the substance of the question.

The Hon. K.O. FOLEY: Sorry, sir. But that's the markets—

Members interjecting:

The Hon. K.O. FOLEY: Sold out at the right time. But the matter is that markets are volatile at present. Losses are being incurred in some part, but, equally, in other investment products we are—

Mr Griffiths interjecting:

The Hon. K.O. FOLEY: Do you want me to answer the question or do you—

Members interjecting:

The Hon. K.O. FOLEY: Some investment classes are performing well. We will see—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Sir, I have no intention of trying to talk over them; either they want to hear the answer or I will not bother. The end year result for Funds SA will see whether we had a positive or a negative return for the year. I will not pick a particular period now because we had a very strong period leading into the current contagion effect of the subprime market, and it may well be that the strong period leading into the current financial difficulty was sufficient to ensure that we were in positive territory for an end year result. I would hazard a guess that we probably will be in positive territory, but I will not say that until we see the final results.

As it relates to the Motor Accident Commission, and as members opposite know, the only years I can remember when there was a decrease in compulsory third party insurance was under this government. I think at least twice—I could be wrong, but I think in at least two years of the last two or three—we actually reduced the real value of compulsory third party because of the performance of the equity markets and the performance of the management, and the outcomes of the Motor Accident Commission saw us decrease CTP premiums. If the question now is whether we will have to increase CTP premiums, my guess is yes—just as they were increased under each year of this government until we were able to decrease them, and just as they were increased in most years under the former Liberal government. However, what that increase will be is a factor to be determined and I do not have that information to hand.

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