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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-02-17 Daily Xml
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STATE BUDGET

Mr GRIFFITHS (Goyder) (16:54): My question is to the Treasurer. How much of the $335 million in budgeted contingency funds remain unspent in 2008-09, and for what purposes will any remaining contingency funds be used?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (16:54): It is February; there are still a few months to go in 2008-09. I am not sure what the import of the question is. We have already forecast in our mid-year review that there will be a deficit in 2008-09 and, as I said publicly, that deficit will be larger because we have now been advised of a further $800 million deterioration in what we expect to obtain in GST payments. That equals a $1.68 billion (from memory) reduction in GST revenue over a four-year period, which is a massive hit to the budget, which will slip us into significant deficit. I am going to try to work our way through that as best as I am able in this quite extraordinary time.

As I have previously explained to the member and to the house, contingencies are predominantly there for wages and we split the amount of contingencies across a number of lines, because it is not in our best interests as a state to be flagging how much money we have put aside, and there are a number of other things: water and drought, for example. Contingencies are just a natural provision that one has for budgets. If the provisions are not used for what we have notionally allocated them for—

Mr Griffiths: So, it has all been allocated out?

The Hon. K.O. FOLEY: No, I have not said that. What I have said is that the contingency is that we are still negotiating teachers' EBs, and I am sure that we are still negotiating other wage deals. We still do not know the effect of drought and water. These are for unexpected occurrences. It is a simple equation; it is simple mathematics. If we do not use the full contingencies that we have put aside it will simply mean that we will have a smaller deficit by that amount than we otherwise would have. When we are running a budget deficit we do not say, 'Oh, gee, we've got $20 million left in our contingency; let's go and spend it. Trust me on that one.' I will be wanting every possible dollar to be brought to the bottom line to improve our budget position.

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