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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-04-10 Daily Xml
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MARJORIE JACKSON-NELSON HOSPITAL

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (14:59): My question is again to the Premier. When does the government expect financial sign-off on the tender to build the Marjorie Jackson-Nelson Hospital, and will it occur before or after the 2010 election?

The Hon. J.D. Hill interjecting:

Ms CHAPMAN: It does not show it in there. It is not in there.

Members interjecting:

The SPEAKER: Order! The deputy leader has asked the question. The Treasurer has the call.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:00): The contract signing, we are hopeful, will be in 2010. We are not certain whether it will be prior to or after. It may well be after the election. What will have occurred is that substantial moneys will have been spent on the site relocating the railyards. An enormous amount of money will have been spent on the due diligence—

An honourable member interjecting:

The Hon. K.O. FOLEY: Sorry?

Members interjecting:

The Hon. K.O. FOLEY: We will be doing all we can to have it signed prior to the 2010 election, but we will have to see what occurs. I want to take this opportunity to correct errors that the Leader of the Opposition is continually making about the financing of the Marjorie Jackson-Nelson Hospital. It indicates that the leader has no understanding of public-private partnerships. He talks about these being like car financing deals.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: That is what they are? Well, can I say to the leader that that is not true.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: Righto. At 3.30pm today the Deputy Leader of the Opposition and the member for MacKillop are being briefed, I understand, by the Under Treasurer on PPPs, because they want to learn and understand what PPPs are. I think that is a good thing, and the more information we can give the opposition the better.

When you make a decision to use a PPP you do a piece of work to decide what is the best financial option for procurement for taxpayers. You actually do a piece of work to decide whether to traditional build, that is by government borrowing off its own balance sheet the funds to build, or whether or not you engage a private sector consortia to build, design and maintain the facility, and to finance the facility. It is an approach that we have used with the prisons and the schools.

The business case has demonstrated that it is in the financial interests of the state to use a PPP model than direct procurement. This suggestion that we are going to be paying off the hospital for 40 years as being some sort of financial tidal wave of debt of moneys that are going to hit the state is just nonsense. If you build a $1.7 billion hospital, you borrow $1.7 billion. The Leader of the Opposition has this weird notion that your surpluses are strong enough that you can actually pay for all this out of your current expenditure.

Mr Williams: With good management you probably could.

The Hon. K.O. FOLEY: Good management you probably could.

The Hon. P.F. Conlon: Which they could never do.

The Hon. K.O. FOLEY: They could never balance a budget and they are trying to tell me that good management could.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: It is a financial impossibility to fund the $1.7 billion build of a hospital from recurrent expenditure—a financial impossibility.

Mr Williams interjecting:

The SPEAKER: Order! The member for MacKillop will come to order.

The Hon. K.O. FOLEY: A financial impossibility. You either borrow the money through public borrowing or you use a financial model that has the private sector providing the capital (the finance). There are only two ways to do it. For the leader to be running around saying that PPPs are akin to car financing is a further embarrassment, demonstrating his lack of understanding of public financing.

I urge the leader to come along with his deputy and the member for MacKillop and have the Under Treasurer explain this to him. Why don't you go along? Or, as I suspect, the leader likes to be ignorant of these things so he can keep making false statements. He does not actually have to fall back on the fact that he has been provided with advice.

I will reinforce what the Minister for Health has said. We did a piece of work, because why would the government want to spend more money on a new Royal Adelaide called the Marjorie Jackson than build on the existing site? We have not done that on a whim; we have not done that because we think it is a good idea. We undertook a detailed piece of analysis by independent advisers, asking: what is the best business case, the best case for government—to build on the existing site or to build a greenfield site? Anyone who knows anything about public construction—

Members interjecting:

The Hon. K.O. FOLEY: I actually worked in the industry for 11 years.

An honourable member interjecting:

The Hon. K.O. FOLEY: Sorry?

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Look at my CV.

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: A lot more than you did.

The Hon. P.F. Conlon: Of course, it doesn't compare to a childcare centre.

The Hon. K.O. FOLEY: No, it doesn't. All I did was provide steel for some of the most substantial construction projects ever seen in this state. That was my role in a previous career. Anyone can tell you that a greenfield site is a much better proposition than an existing brownfield site.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: What that advice showed the government was that there was roughly a $300 million difference in the Marjorie Jackson-Nelson compared to the Royal Adelaide, but the critical factor was the time it would take to build on the greenfield site compared to the brownfield site. It would take many, many more years to build on the existing site, and we would be condemning—

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Well, it is true, Vickie. This is not us: this is independent experts. Independent experts have said that the Royal Adelaide would be a construction site for 15 years and it would be reprehensible of a government to commit workers, doctors and patients to having to survive and sustain their occupation in basically a construction site for 15 years. We were given the advice and we have accepted that advice.

Mr Hamilton-Smith: Let's see the advice.

The Hon. K.O. FOLEY: Let's see the advice! Mr Speaker, what I will now gladly make available to the opposition is the senior public servants involved in the decision-making: the Under Treasurer, the head of the Health Department, and their appropriate advisers—

Mr Pisoni interjecting:

The SPEAKER: Order! The member for Unley will come to order.

The Hon. K.O. FOLEY: —to brief the Leader of the Opposition—

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I am prepared to have the opposition briefed on the rationale behind our decision. I will make available to them, whenever they like, the most senior public servants in the state to explain to them exactly what they explained to us.

Members interjecting:

The Hon. K.O. FOLEY: You've heard it? They've had the briefing. Fair dinkum, I give up. They've had the briefing and they are still asking the questions!

Members interjecting:

The SPEAKER: Order!

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