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House of Assembly - Fifty-First Parliament, Third Session (51-3)
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SUPPLY BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 2191.)

Mrs REDMOND (Heysen) (16:04): It is my pleasure to make a few comments on this bill, although I do not know whether the word 'pleasure' should be applied to what has occurred in this state under this Labor government for the last seven years. In fact, I am reminded that on Friday mornings on ABC 891 they have a session called 'The Spin Cycle'. Every week we hear a little excerpt of the Leader of the Opposition, commenting on the achievements of this government since it came to office and saying, 'It is a soulless exercise.' That is a good reminder because it is very true. It is a soulless exercise. Notwithstanding what the Premier tried to say in answer to a Dorothy Dixer today, the fact is that this government has enjoyed the best of economic times. It has had unprecedented amounts of windfall, well over and above budget, and even its budget numbers are unprecedented, yet we have so little to show for it in this state.

Of course, the budget papers and, indeed, the comments of the Treasurer constantly try to make out that we are in a situation of declining incomes because of the global financial crisis. No-one would deny that the global financial crisis is reaching everywhere. On the radio last night as I arrived at a Rotary meeting, I heard the federal Treasurer saying that when he is overseas all the other countries are saying that they would like to change places with Australia. So, we have a federal Labor treasurer saying that Australia is in a much better position than most other countries.

It is important to note that, in spite of the global financial crisis over the past few months, although it may be lower than expected, our income has continued to increase. Indeed, if one looks at our situation, we have had increasing income but spiralling out of control expenses. Therein lies the problem—which will become worse because of this government's failure to manage the economy of this state. I guess no-one would mind some degree of mismanagement if at the end of the day we had some real infrastructure to show for the expenditure, but we have nothing to show for the expenditure.

Indeed, it is the case that we are now well and truly in deficit. This government prided itself on saying that year after year they were running surplus budgets. Of course, they did start out talking about being in surplus, and then they had to change the way they measured their deficits. In terms of the net lending deficit, as they used to organise it, in 2002, they said they were going to base their lending and borrowing as the measure of their budget results.

So, at first it was lending and borrowing, but, if they were still using that, by 2008-09 they would have had a net lending deficit of $819 million. Of course, that was not going to be acceptable, so then the government decided that they would change the way they looked at that, and, instead of a net lending deficit, they moved to assessing their net operating deficit. When they did that change, it was still probably in surplus, but they did then turn it over and it became a net operating deficit. But, even that, as I said, is now in deficit to the tune of $112 million. All of these have worsened, by the way, since the Mid-Year Budget Review.

We now have this deficit situation which is just spiralling and spiralling. When we look at the sorts of things that the Leader of the Opposition was talking about before lunch, the sorts of areas where, instead of actually managing this government in terms of its income, this government has become more and more dependent on receiving ever increasing amounts of income, and that is just not going to happen. So, what we now have is all sorts of areas where we have massive unfunded liability.

The unfunded liability for our state superannuation has blown out from—it is already bad enough, I thought—$5.1 billion in the 2006-07 to $9.3 billion in 2008-09. That is pretty bad. When we add to that, of course, WorkCover investments and WorkCover's unfunded liability, which, again, I think was mentioned by the Leader of the Opposition in his address this morning, their unfunded liability is already at the point of about $1.3 billion. On top of that, of course, that does not cover state public servants and the unfunded liability under that separate scheme, so we are getting up around the $1.8 or $1.9 billion when we total those together.

Then we look at what has happened to the value of investments. I agree that the value of investments is, to some extent, out of the control of the people who are charged with the responsibility of managing those investments. But, when you look at the fact that WorkCover investments have gone down from $1.3 billion, they have fallen $314 million, and Funds SA's investments of $14.1 billion have fallen by $3.7 billion. These are massive numbers.

I think it was the member for Goyder, in his address this morning, who mentioned the fact that we should never take lightly these numbers. These are massive numbers. It is very easy to slip from millions to billions, and even trillions, as they are doing on the world stage at the moment, but these are massive amounts of money in terms of this state's finances.

In the forward estimates, we are looking at a budget overall for the state in the area of $15 billion, and yet Funds SA's investments are going from not much shy of that—$14.1 billion, down by $3.7 billion. We have a situation where we now have a budget deficit. It does not matter how you measure it, this government now has us in a budget deficit, and we have these unbudgeted revenues that they have been relying on.

Even when Ken MacPherson was the Auditor-General, he said, 'Look, you need to be aware that you seem to be becoming reliant on this cash cow that just isn't going to stay there.' Anyone could have seen that the bubble had to burst at some time. Rather than putting aside for a rainy day, rather than shoring us up against the eventual burst of that bubble, what this government has done is simply rely on getting more and more money.

Now, because investments are going down, where do they look to next? They look to increasing taxes. I want to spend a minute looking at the taxes that this state government charges. It has already been pointed out by a couple of earlier speakers that we are basically the hardest taxed state. In fact, the last year that the Liberal government was in power—2001-02—was the last year that we were not the most severely taxed state.

In terms of the areas in which the taxes are levied so heavily, first of all, I want to look at payroll tax. Payroll tax is an area where I have consistent complaints to my office because of the number of small businesses upon whom this tax impacts so unfairly. I will refer to a schedule, and I will provide it to Hansard afterwards. Essentially, the payroll tax applicable at various levels is so disproportionate that it makes South Australia an almost impossible place, I think, to entice business to come to.

When you look at the fact that most of the businesses in South Australia are small to medium enterprises (SMEs), most of the 85,000 businesses in this state would come under the $1 million mark in terms of their payroll. If they were running that business in Queensland, with a $1 million payroll, they would not pay any payroll tax at all. Their payroll tax does not kick in until $2 million as the total payroll bill. And, even then, their payroll tax kicks in at well under the figure in South Australia. But, if you are in South Australia, and you have a payroll of $1 million, you are going to be liable for $22,400 in payroll tax.

In anyone's thinking, it seems to me that payroll tax can be nothing more than a disincentive for employment. Indeed, I know people in my electorate who have said to me, 'I will not put on any more staff, because I know that if I do I'm going to breach the payroll tax threshold'— which in this state is a lot lower than in the other states—'and as soon as I breach that payroll tax threshold I then have to start paying this iniquitous tax.' It is simply a disincentive for people to engage extra employees.

Payroll tax is one area. I want to look at the amount of stamp duty charged in this state compared to particularly a state like Queensland. Remember that, when Mitsubishi here was closed, Queensland made a real push to take people from here and say to them, 'We can give you a job. Come to Queensland. We'll take you from here, where you haven't got a job, and we'll give you a job in Queensland.' If they bought a house in Queensland for $400,000—bearing in mind that in this state, at least, the average price of a house is about $350,000 these days—they would pay $5,250 in stamp duty on that purchase. If they bought a house for $400,000 in this state, they would pay more than three times that amount: they would pay $16,330 just in stamp duty, just to buy a house.

Then we come to the area of land tax, where the figures are so disproportionate compared to the other states that it is just ridiculous. If, for instance, you have land in this state valued at $2 million in total, you are going to pay nearly $50,000 in land tax—$48,420. I will not go into the detail of some of the iniquitous provisions regarding multiple holdings and the Land Tax Office assessing what the building might be worth on the basis of its assessment—untrained as it might be—and what its commercial rental value might be, and so on. Nearly $50,000 just to pay the land tax, whereas, in Western Australia, for instance, you would be up for $5,700. It is just an astonishing difference in terms of the taxes levied in the state. It is no wonder that it is well known that South Australia has the most punitive tax regime of all the states.

That is clearly how this government has come to the conclusion that it should raise its revenues. It has decided that, if it cannot get them from somewhere else, it will just have to keep increasing taxes. I am sorry to say that I think that is the wrong way to go, and I think this government should be held accountable for a lot of what it does.

I want to talk a bit about payments from SA Water because, like a number of areas that I will come to in a minute, SA Water is a cash cow for the government. It is a cash cow which has already, since 2002-03 (the first full year of this government), stripped from SA Water customers a total of $2 billion—and it is expected to be $2.5 billion by the 2010 election. That has been taken from the consumers, from the taxpayers of this state who are paying their water bills. I am sure that they would not mind as much if $2.5 billion was actually being redirected into infrastructure to improve the water and the water situation.

If anyone watched the news last night, they would have seen that in one of our suburbs—I think it was around Rostrevor, from memory—a man was shown standing in his garage sheltering from this huge spurt of water travelling many metres into the air and many metres across the street. They had only just finished putting it all back together. They had fixed the leak, put it all back together, got the road back in place, and the same pipe sprang a leak virtually next to where it had been already. So, clearly the infrastructure is ageing and it needs that sort of investment. In fact, the Auditor-General in 2005-06 said:

For the corporation to maintain or increase the level of capital expenditure, it will have to increase its level of borrowings. Put simply, the corporation's ability to generate cash from its operations is not sufficient to fund its payment commitments to the government and maintain its current level of capital works.

So, the Auditor-General was already highlighting that back in 2005-06.

One other thing that I want to discuss in a general sense before I get onto matters of the electorate—and they might have to wait until my grievance on this matter—is the issue of shared services. For anyone who does not understand it, shared services is this idea that, if you bring everything in and bureaucratise it in a central bureaucracy, it will be cheaper. The reality turns out to be exactly the opposite everywhere it has been tried, I think.

I am in favour of the small is beautiful principle. In fact, I have an economics book from about the 1950s called Small is Beautiful. I adhere to that principle because the bigger you make an organisation, the less efficient it becomes. At this stage, in terms of shared services, what is going to happen, theoretically, is that we are going to centralise payroll and all those sorts of functions into a central repository. Everyone has been guaranteed that they will keep their jobs, but it will all be done centrally. Not only will that rip the heart and soul out of a lot of regional communities because they just will not have sufficient people for offices there, but it is actually a form of cost shifting.

I can tell you that, if you are a pay clerk in some suburban organisation—be it a hospital, or whatever—and you have been guaranteed that you will keep your job, the upshot of these so-called shared services reforms is going to be that you will now have to travel into the city instead of your local suburban area. Although you are guaranteed a job, you will not get an increase in your pay, and you are going to have some very significant extra expenses in terms of the cost of going to work. Probably more importantly, you will be spending probably an extra hour to an hour and a half every day going to and from work. So, you will lose precious time that could have otherwise been spent with your family or doing whatever away from work.

So, in my view, shared services is very much a cost-shifting exercise, where costs are being shifted onto individual public servants. All of that could possibly be justified if it was actually going to lead to an improvement in services which, thus far, from every public servant I have spoken to, is certainly not happening. Furthermore, it is already running—I think the last figure I heard was $32 million—over budget in terms of its implementation. Again, according to the Auditor-General's Report:

Whereas over the forward estimates shared services was intended to save $250 million, there is a savings shortfall of $103 million.

So $103 million just disappeared out of those savings. So, already, we are heading towards a situation where the cost of implementing shared services is rapidly escalating, the benefit to be derived from shared services is rapidly degenerating, and those two, in my view, are going to cross before or very soon after we actually see full implementation.

In the meantime, we have decimated communities, we have imposed extra cost and extra time on the individuals involved, and we have basically achieved nothing which is going to benefit anyone except a government which, because of its Labor philosophy, decides that everything has to be in a big bureaucracy. The government has done it in disability services. I have spoken before about the fact that, in my view, we have made a huge error in going from a separate Julia Farr Centre, a separate Independent Living Centre, a separate Intellectual Disability Services Council—all of those things have been got rid of.

A whole lot of small organisations, which were there to support specific disability groups, have been abandoned in terms of ongoing funding so that the government could produce Disability SA. The upshot of Disability SA is that we have a lot of well intentioned and hardworking public servants who simply do not have the expertise or detailed knowledge in the areas that they need to provide advice on. So what do they do? They have to go back out and ask the very people who have now been defunded if they can help because the Disability SA people do not have the expertise to deal with the problems which are arising. It simply does not work.

In my view, it is just a nonsense to try to centralise everything. What we should be doing is encouraging our communities—and I will speak more about that and about the community of Heysen, in particular, in the grievance part of this debate—to do everything they can to keep everyone out there working, out in the communities, out in the small organisations. I can guarantee that a dollar spent in a small organisation in the suburbs is worth about three times a dollar spent funding a giant government bureaucracy. One of the problems that this government has had is the number of public servants that it has over budgeted for and employed.

The Hon. I.F. EVANS (Davenport) (16:24): It gives me some pleasure to have the opportunity to speak to the Supply Bill. Normally, I would go through a list of items that I would like to see funded in my electorate. However, the house will be pleased to know that I do not need to do that this year because, if they refer to my speech last year, none of the items have been funded and the list is exactly the same. Rather than give exactly the same speech as last year and the year before, I will simply say to the house and to the electors of Davenport that if you want to know what the government should be funding in Davenport you should refer to my contribution on this debate last year.

I want to comment on two points. I want to continue the theme raised by the member for Heysen and that is on the costs in relation to the Rann government. The Rann government speaks with forked tongue and I want to give two highlights to the house. One is on the issue of cars. The Premier and others have been running around GMH telling all the workers how much they support them in their time of need and that we are all somewhat concerned about the cutting of shifts at GMH in response to car sales in Australia and worldwide.

However, I was a bit surprised when it came to my notice that Fleet SA had been instructing agencies not to use six-cylinder cars and, when they finished a lease with a six-cylinder car that they should transfer over to four-cylinder cars. That means, of course, that they would be buying non-South Australian cars because Holden, as yet, does not make a four-cylinder South Australian vehicle. What Fleet SA was saying was that government agencies that were currently buying South Australian made vehicles should not buy South Australian made vehicles.

This has happened only in the past two weeks, during the time that GMH were cutting shifts. The reason that Fleet SA and the agencies were given, in relation to why they should adopt this policy, was that the six-cylinder cars cost around $60 a month extra to operate and, over a 36 month lease, that was something a bit over $2,200 extra per car. That meant that, as a cost-saving measure, this government had planned not to buy South Australian made cars.

Apparently, the excuse the government came up with—and this matter became public yesterday to the government—was that this was a budget measure and cabinet did not understand the implications of the budget measure. That says something about cabinet and the advice to cabinet on what its decisions mean. However, it did surprise me that the government, during GMH's hour of need, had deliberately planned not to buy South Australian made cars. The cars of choice, according to Fleet SA, were to be Toyota Camry, Toyota Corolla and Ford Focus. None of them are made at Elizabeth.

The Advertiser reported today that the Premier had intervened to reverse this. The Premier should never have intervened to make the decision that he signed off in the budget in the first place, that allowed Fleet SA to adopt a position of not buying South Australian cars. I am glad that I raised the issue yesterday and got the government to reverse its decision. Hopefully, it will have some employment impact for those who are employed by GMH at Elizabeth.

The other issue where the government speaks with forked tongue is that South Australia is a cost-competitive business environment and a low-cost state to do business. Many people would know that before coming into parliament I was a builder and worked in the building industry for some time. I follow matters in the building industry with some interest because that was my trade, if you like, before coming into this place. For three or four years the government has been chatting away behind the scenes to the housing industry about bringing in national occupational health and safety laws.

According to the latest Building News magazine, the CEO of Housing Industry Association, David Gaffney, is about to write to all the cabinet ministers expressing the housing industry's displeasure at minister Caica's proposal (or SafeWork SA's proposal) to bring in across South Australia the national standard occupational health and safety laws for the building industry.

You might ask: why would they be opposed to this? The reason they are opposed to it is that the occupational health and safety laws essentially are based in the Eastern States and primarily are designed for the commercial building industry, not the housing industry. The problem that the government has, and the problem that I have with the proposal, is the cost imposts onto those who are going to build homes.

I can tell you are very interested in this, Madam Deputy Speaker, so I will just outline for you the costs that are going to be imposed on South Australia as a result of the government's proposal to impose uniform occupational health and safety laws in the building industry. According to the Housing Industry Association, they sent the proposal to one of their committees and they looked at the occupational health and safety laws and the cost impact. They did this over a series of months and they broke down the cost impact. What will it mean?

For a single storey dwelling, the committee assessed the extra cost of complying to be $14,240 per home—nearly $14,300 per home. That went up to nearly $16,000 ($15,940) if there was going to be a solar hot water service and an evaporative air conditioner, adding an extra $1,700 and taking it up to about $16,000. That is $16,000 per home in extra costs just to adopt a uniform, national occupational health and safety standard.

The government, federal and state, has been running around introducing first home owner grants and a whole range of incentives to get young people into homes; yet, at the same time, they are seriously considering bringing in laws that are going to add somewhere between $14,300 and $16,000 per home.

If you are designing and building a double-storey home, the committee assessed the cost of complying to be $20,900 and, with a solar hot water service and evaporative air conditioner or cooler, the total cost increase would be $22,600. So, the Rann government, through minister Caica and SafeWork SA, has been negotiating now for two to three years. Minister Caica might not have been the minister all that time, but that ministry has been negotiating for two or three years behind the scenes with the housing industry about this concept.

The housing industry is strongly opposed to the introduction of the occupational health and safety national standard because they say that it should apply to the commercial sector, not the residential sector. An extra $14,000 to $23,000 on every home is a huge impost. That would nearly make up the deposit for some people on a home if going for a loan.

The reason I raise it is that this matter will be dealt with more than likely if the government proceeds. According to the Building News magazine, through SafeWork SA, the government is about to consider a cabinet submission on this issue. If it proceeds with this measure, this will be a huge cost impost on the ordinary everyday South Australian to the tune of $16,000 to $22,000 per home. If anyone is interested, they should go to SafeWork SA and ask them for their costings of what they estimate the cost would be on their impost.

The point I make is that I come from the building industry, and the building industry can be a dangerous industry to work in. You have power tools, bricks and rubbish everywhere; you have to deal with heights, and a large number of people are on the site. However, I challenge the government to release the injury data that justifies this proposed regulation because the housing industry in South Australia is one of the best housing industries in Australia, both in terms of occupational health and safety and competitive prices for home buyers. In other words, generally, we have a cheap housing market when compared to the rest of Australia.

All this regulation is going to do is push up house prices between $14,000 and $23,000 depending on what you build. I argue, as does the Housing Industry Association, for what benefit? At the end of the day, what is the benefit of this? I do not think the government or the parliament should fall for the trap of signing off on these OH&S regulations without its going to the appropriate parliamentary committee. We have an occupational health and safety committee of the parliament.

Before they even sign off on it, this matter should go to that committee so that the politicians can call in the Housing Industry Association and others and listen to them about what they believe the cost impact will be and what the injury benefit (that is, the reduction in injury benefit) would be to the housing industry. They are just a couple of issues where I think the governments speak with forked tongue. They are walking on both sides of the street and, hopefully, the ministers concerned will deal with those issues so that there is less cost to the South Australian taxpayer.

The Hon. G.M. GUNN (Stuart) (16:37): I am not sure how many of these debates I have taken part in during my stay in this particular institution, but having been sent here on 12 successive occasions I have participated in a considerable number. It is important on this occasion when we are discussing the appropriation of $2,750 million of hard earned taxpayers' money that some of this money is appropriated to better use in my constituency.

As I probably will not be speaking in another one of these debates, I should reflect a little on my time here. This morning I went into the lounge and counted up the number of people I have served with. If my counting is correct, I have served with 166 members of the House of Assembly, not including myself. I had a look at my photo and my appearance is slightly different from what it is today. However, it has been a most challenging, interesting and, I hope, fruitful time for my constituents.

In speaking to the Supply Bill, when I first came to this place there were fewer facilities. When you look at the constituency and the community I came from, my telephone contact was a party line. We had no faxes, no laptops or mobile phones, and the bitumen finished at Lincoln Gap. Now the bitumen goes right through to Western Australia but, back then, the bitumen did not go north of Port Augusta. There have been improvements in communications, the education system has improved, and certainly the ability to move around the electorate has been enhanced.

The services available to members are far better, as they should be, but there are one or two things that I think need to be improved. This idea that members of parliament should be continually starved of resources and should be on the lower end of the economic structure is a nonsense of the highest order. People ought to be encouraged to offer themselves as members of parliament from all strata of society. You should not set the barrier so low that people in highly paid positions are not encouraged to offer themselves.

I have also seen a number of premiers—when I came in here my leader was an ex-premier—all of whom have had different characteristics. One described me as a troglodyte, and I did not actually know what that meant. However, I understand that he was not particularly pleased with my views on social issues, and he told me that I voted against every piece of progressive legislation put forward.

I must have done something right because I have won 12 elections. I am fairly confident that, if I tried, I could come back here again, but I think people should know when it is time to move on. I have been very fortunate to be in this place. When I finish I will have been here for a fraction under 40 years. I came here when a number of people's fathers were in this place, and that is a bit frightening when one thinks about it. I knew the families of a number of people in the other place, too. I am the furthest person west ever to have been elected to this august and esteemed chamber.

One of the things that I hope members always continue to do is to protect the rights and privileges of members. They should not be bullied or coerced by bureaucrats or ministers into taking away people's rights, because if they do then the community at large will suffer. This particular institution is, in many cases, the last hope for people to try to get justice when they are the victims of either unscrupulous people or bureaucracy, because the greatest threat to democracy is unfettered and unbridled bureaucracy.

I think the committee system that we have currently is very worthwhile and a great improvement on when I first came here. I said today to the chairman of one of the committees that I thought his wise chairing of the committee may not have improved his chances of getting further promotion, but he had done a good job. I do not think the bureaucrats would report back favourably to their ministers on his questioning of them, but it was an interesting challenge.

I want to make one or two comments about things in my constituency which I think are important. There is a very important project which needs funding, and that is the upgrading of the Yorkies Crossing road at Port Augusta. That is a road which is there to take exceptionally heavy traffic—it is the bypass. If it is wet or boggy and people cannot go through there, that is a problem. If something happens to the bridge, that is the bypass.

It is terribly important that this road is upgraded, widened and sealed in cooperation with the City of Port Augusta. I know that the Port Augusta Corporation and the mayor are very keen to have this road upgraded, and I support that. I understand that it is going to cost a bit over $15 million, but it is an important issue and it needs to be done.

There is another rather important road that I would like to see sealed, and that is the road that goes from Parachilna to the hills going up to Blinman. It is a terrible bit of road. Blinman is a wonderful little community. I do not know how many members have been there, but I can thoroughly recommend that, if you spend a night there at this time of year, you will enjoy yourself. I am looking forward to going there in the very near future. It is very important that that road be upgraded. I know the proprietor of the Parachilna Hotel would like it, the community in general there would like it, and it would certainly assist the tourist industry.

Of course, I am looking forward to seeing the continuing work on the road to Marree, which is terribly important. I would like to see it go a few kilometres north of Marree, to cut down the dust. I would also like to see some work done around Oodnadatta, because the people who live in those isolated communities certainly need and are entitled to have some taxpayer funds spent in those areas.

If Lake Eyre fills up or gets a lot of water in it, we will see many tourists. I understand that people are starting to go there now, and that highlights the urgent need to improve and upgrade the airstrip at William Creek. I have flown in there on a number of occasions, and when it is flooded (and you do not need much rain) you cannot get in or out. The same applies with respect to the airstrip at Oodnadatta, which also needs improving. The airstrip at Marree was sealed—and that is a great thing—as was the one at Balcanoona. There is also a need to seal the airstrip at Innamincka. These are important tourist facilities. Thousands of people fly into those areas, and the worst thing in the world would be for them not to be able to get out again. Of course, we also need the flying doctor to be available at all times. So, they are important projects.

Earlier this week, I think I upset the head of Business SA, Mr Vaughan. Can I point out to Mr Vaughan that there are people who live outside the metropolitan area, in rural South Australia, and their views are entitled to be taken into consideration just as much as the those of the business community. The extension of daylight saving this year has been a thorough nuisance, most inconvenient and unnecessary. I know of no-one except Mr Vaughan who wants it. As far as Mr Vaughan is concerned, he can make all sorts of comments and refer directly or indirectly to me, but I am not going to lose an ounce of sleep and I will continue to promote what I believe to be fair, reasonable and just.

I accept that we are stuck with daylight saving. Even though I do not like any of it, we are probably stuck with it, but the extension is taking it too far. It is unnecessary, and most people in rural South Australia have reservations about it. So, I would suggest to Mr Vaughan and to other people that they should try to strike a happy balance and just apply a bit of fairness.

We have received all sorts of letters of recent times. I received a submission today from people who are unhappy about the Cheltenham racecourse being cut up for housing. I have to say that I share that view. Every time I go there I cannot understand why, in a huge urban society, we want to cut up every bit of open space. I live on a farm and I like open space: I am rather attracted to it. Every time I drive past the racecourse I think to myself, 'Why do you want to deny the community the opportunity.' I think that, in the long term, the racing industry will need more than one racetrack. I know that they are going up to Gawler, but that is a fair way. I was particularly interested in the correspondence that I received today.

I do not wish to say a great deal more on this matter. It is important that we have resources to ensure that the services required by the people of South Australia are maintained in a reasonable, effective and efficient way, whether it is in the area of education, which is terribly important, the road system or the health system, which is also very important. The need to maintain the hospital system in rural South Australia and to attract doctors is a matter of the highest priority.

All I can say to the minister is that I sincerely hope he will not allow entrenched bureaucracy to get in the way and make it difficult for small communities to continue to have a strong say in the running of their hospitals and the maintenance of their existing services. That is fundamental to the continuation of those small communities, and it is absolutely unreasonable to expect people to travel unnecessarily huge distances for very specialised treatment.

Everyone accepts that the community is well served by the Flying Doctor Service, which does great things for the whole of Australia, and I commend all those involved. However, I am concerned that a gradual contracting of services is taking place, and I think it will mean the end of some small communities. If you take the hospital and the school out you really have struck a death blow to those small communities. We really need to make sure that all this money that we are about to agree to is properly targeted and going in the right direction.

I could talk about a lot of other issues, but I think that on this occasion I will save my comments. This is certainly not a valedictory speech. I was privileged to see on pay TV a motion moved in the New Zealand parliament. I do not know how many members here who have pay TV watch that program, but I think that people asking and answering questions would be interested in having a look at it. I do not think they would like some of the rulings of the Speaker.

As we have the Minister for Education here, I will give an example. The Speaker of that parliament (who went to the University of South Australia) directed the New Zealand Minister of Education to answer a question. She had one minute, and she did not look very pleased. However, the Speaker said, 'You have had three goes at it. Now answer it.' I thought it was an interesting ruling and I was looking forward, Mr Speaker, to you applying it to the Treasurer. It appeared to me from watching that TV program that the Speaker was not one to have his rulings questioned. Everyone seemed to be pretty happy with him, and the business kept flowing.

What I wanted to say was that a motion was moved by the Prime Minister congratulating Helen Clark. She said that she was going to make a valedictory speech and she hoped that she had unlimited time, and I hope that will apply to me in the future.

I support the second reading of this bill. I look forward to the funds being appropriated for the good purposes of the running of the government of South Australia. Can I say to the Premier that, when he is putting together the state budget, there are problems in relation to land tax and it is really affecting rental accommodation and other things in places such as Port Augusta. It is not encouraging people to buy more, and it is having an effect on the tourist industry.

The level of taxation has to be carefully balanced. I clearly understand the government has to have sufficient revenue to provide services, but it has to be fairly based and taxes should not be regressive and put in place in a manner which will stop people investing, improving and continuing to expand their operations. I support the second reading.

Mr PISONI (Unley) (16:53): I would like to make some remarks in regard to the Supply Bill. I will spend most of my time speaking about the way education has deteriorated under the Rann government. It is becoming a mess in this state, particularly for those who choose to send their children, as I do, to government schools. Parents, students and teachers are paying the price for this minister's and Premier's disinterest in education.

I think we can all remember that Mike Rann's aspiration was to be the education premier. I think we heard time and again when he was in opposition how he wanted to be known as the education premier. It is obvious he has forgotten that pledge and his commitment to education in South Australia.

The message I get from people in the education community—from education professionals, stakeholders and parents—is that the government and this education minister are way out of touch and disinterested in education. Interest has only been rekindled by an injection of federal funding. We have seen some announcements by the Premier and education minister—not about their role in education in South Australia, but more about the Rudd government's role in education in South Australia.

Also, I take this opportunity to remind the house that the South Australian state Liberal Party, on the day of the announcement of the federal funding for schools, supported that package, despite our differences with the federal Liberal Party. In South Australia, we welcome every expenditure on schools, whether that be federal or state money. We had a point of difference with the federal parliamentary party about the expenditure in our schools and the minister knows that and, if she represents it in any other way, she is deliberately misrepresenting the South Australian Liberal Party.

The facts are the South Australian Liberal Party came out and supported the federal funding in our schools under Rudd's digital education revolution. However, she will not admit that whenever she is criticised.

The Hon. J.D. Lomax-Smith interjecting:

Mr PISONI: When I am out there spruiking for schools and supporting schools—not only in my electorate but also throughout the state—and saying, 'You are not doing a good enough job, minister,' her only way of justifying her performance is to attack the opposition with untruths and fabrications. She will not debate the facts.

The Hon. J.D. Lomax-Smith interjecting:

Mr PISONI: As a matter of fact, she continues to interject now because she does not like what I am saying. The minister has plenty of time to twitter away while she is in here, and she can have her say later if she wishes.

I think the minister's lack of interest in education came to a head and we saw how her disinterest is affecting her job when, back in June last year, she was asked by Tom Richardson, the Channel 9 political reporter, what views she had. New South Wales, Western Australia, Victoria and Queensland all said $1,000 per computer is not enough money to get these computers plugged in, and she was asked for her view. Her answer was, 'I don't know what they were doing in the other states. I was watching Dr Who.' So she was lost in the Tardis! It was extraordinary. Channel 9 still has the footage. It is an extraordinary admission of the lack of interest that this minister has in her portfolio.

Of course, when we were talking about violence in schools she went on air and said, 'It is all about Australia's Funniest Home Videos. They're the ones that are responsible for violence in schools.' That is what she said. That is what she told Leon Byner, that it is because of Australia's Funniest—

The Hon. J.D. Lomax-Smith: It's true.

Mr PISONI: Now she interjects that it is true! While other states—Victoria and Western Australia—are discussing this issue with universities and calling forums about cyber bullying, this minister says all we need to do is stop the show Australia's Funniest Home Videos going to air and that will be it—cyber bullying will be finished. It is a very interesting analysis of her approach to her portfolio.

We always hear about the record spending in education by this government, but the minister fails to talk in relevant points. When Labor came to office, 25 per cent of the budget was spent on education and, now, seven years later, 25 per cent of the budget is spent on education. So we can see that there has been an overall growth in the budget but there has been no extra percentage expenditure in the—

The Hon. J.D. Lomax-Smith interjecting:

Mr PISONI: The minister interjects that there has been a 52 per cent increase, and she is right, but the budget has grown by 58 per cent, so where is education's share? The overall state budget has grown by 58 per cent, so we have less. According to the minister, education has actually received less—a smaller share of the budget than it received previously.

The tourism budget is the same. I think one of the big things that the minister did when she got the job in tourism was cut the budget by $11 million. Of course, she knows how wrong that was at the time because we suffered enormously.

She had a target of $5 billion for the tourism industry in South Australia. A five year plan was released to grow South Australia's tourism industry to $5 billion. Five years later, it is $4.2 billion—so we are $800 million short—but she says, 'Don't worry about that plan, we will throw it in the bin and announce a new one to take it to $6 billion.' Nowhere in the plan has she described how she will do it. What we are seeing from the minister at present is like Stalin's rolling five year plans.

Of course, there is announcement after announcement about trials in schools but nothing is happening. We do not see anything rolling out for the entire school community. We see selected groups being used as guinea pigs for trials of programs that the minister has seen in her travels around the world, but we never see them implemented for the whole school community.

There is a lack of innovation. There was a time when South Australia was a leader in education, but under this minister and this Premier we have fallen way behind. One only has to look at our NAPLAN results for last year. Of course, the tests were designed by the former federal coalition government. Of course, anything done by the former federal coalition government was opposed by this minister on ideological grounds, because it was not from her side of politics and she was not interested in it. Now, of course, the Labor government is proposing the same things that Howard was proposing and it is a great idea. The minister is on record as opposing it when it was a Liberal idea and supporting it when it became a government idea.

We have a situation where, as a result of our national testing results, the minister is in full-blown damage control. Four months after receiving the results, the government came up with a response that was purely a press release—no funding, just a press release. Members should ask the principals about how they tried to access funding for the minister's solution for students in this state failing in 17 out of the 20 categories. Under this minister they failed to reach the benchmark in 17 out of the 20 categories. The minister will talk about inputs all the time, but we on this side of politics are interested in outcomes for our children.

We have seen a series of funding cuts under this minister. Spending cuts of more than $25 billion have been ordered in the education budget as part of an efficiency drive across all state government departments. It is in the budget. As the Premier would say, 'It's in the budget'. The CEO, Chris Robinson, admitted in estimates that under the new efficiency measures the department will have to find $2.5 million in 2009-10, $7.6 million in 2010-11—which is after the election—and another $15.1 million in 2011-12. Isn't it interesting that the biggest cuts in the budget will be seen after the election and there are much smaller cuts before the election.

This is a budget that is presided over by our education Premier and our disinterested, twittering education minister. This is on top of the cuts of $153 million over four years, which were ordered in the 2006-07 budget. Schools are closing or they are unable to get the funding they need for basic maintenance. Members should talk to Port Pirie West Primary School. Salt damp work was started when Rob Kerin was premier, but they have not received additional funding to finish it in the whole of the time that this government has been in power. For 12 months now 30 per cent of the girls' toilets have been boarded up, not just temporarily but, rather, with brackets screwed into the door because they are broken and there is no money to fix them; so the girls at a regional primary school in Port Pirie cannot access 30 per cent of their toilets.

The Treasurer has bragged about the 2008 budget and an increase of 50 per cent in the per student spend since coming to office. An objective analysis reveals a much more modest pace of only 1.8 per cent a year above inflation, but still below overall growth in the budget; so education has received a much smaller share. Furthermore, if the component of staff wages is removed, there has been an average real term decrease of 2.5 per cent in the education budget. We have seen a reduction in the number of teachers and increases in the costs of salaries, and so forth. Wages have increased right throughout the public sector, as well as in the private sector, but it has given us an end result of a 2.5 per cent reduction in the budget. Those figures are from the South Australian Association of State School Organisations' report, which has analysed the situation.

In relation to capital works, it is no wonder the Rudd government intervened in capital programs in our schools. When this government came to office we saw capital works expenditure of $97.4 million for our schools. In 2008-09 the capital works budget was $71 million. It is not even keeping up with the dollar figure. If we were to keep up with inflation on the $97 million figure, we should be spending $118 million this year to keep up with inflation. We must remember that the state budget has grown by 58 per cent in the same period. In effect, we have seen capital expenditure receive historically low funding from the so-called education Premier.

Facilities in our schools are a disgrace, as described by Stuart High School principal, Ian Kent. Many country schools cannot afford air conditioning, forcing them to send students home on hot days. Many schools have totally outdated and inadequate technical studies workshops. At my own children's school, Unley High School, the classroom air conditioners have to be turned off on very hot days because they cannot hear the teachers over the air conditioners. It is an appalling state of affairs. Of course, for some reason, the Rudd government's Education Revolution does not allow schools to spend money on air conditioning, because air conditioning does not generate jobs. Try to tell Sealy manufacturing in South Australia that air conditioning does not generate jobs. It is an absolute nonsense. Tell those people in Burra Primary School, who are in an historic, heritage-listed building, who do not have air conditioning, that air conditioning is not important to them.

The Liberal Party believes that there should not be a distinction between the quality of education in the country and in the city. It is obvious, in the examples that I have given today and in the examples we read about in our country newspapers every day, that, for this government, there is a big divide between the country and the city, despite the fact that there are Independent members of parliament, who represent rural electorates, who have moved into the city and into bed with the Labor Party. That is the outcome that we have under this government: a neglected regional South Australia.

Tell those seven TAFE teachers in Mount Gambier, who have lost their responsibilities but are still on the payroll, because the government does not know how to deal with them. Tell those families in Mount Gambier who have lost their jobs because of shared services that this government cares about regional South Australia, and I will tell you that they will not agree with you. They have been let down by an Independent member of parliament, who joined the Labor Party in government.

Of course, through Building the Education Revolution, the federal government has been forced to intervene due to the way state Labor governments have run their infrastructure and public education. It is interesting that intervention was called for after long periods of Labor state governments across Australia, an historic time in Australia for the Labor movement, where every government—state and territory and federal—was a Labor government. What was the first thing that the federal Labor government did when it came to office? It intervened in the education system, admitting that it had failed under Labor governments.

Jim Davies from the South Australian Secondary Principals Association has commented on the need to fast track projects, to spend $1 billion allocated as part of South Australia's contribution to long-term national debt. He stated:

The reality is all our secondary schools have significant backlogs of maintenance and there are jobs in the queue waiting to be done.

We know that there is a long backlog of maintenance jobs, and we know that many school principals have given up even putting those projects forward. That is why we have a situation now in South Australia, which is unique compared with other states, where schools cannot have their own specific projects. They have to take something off the plan, whether that is a 10 year old science lab or whether it is a school hall that is too big for the allowable space. The school may not have enough room, but it is the only one that can be funded under the Education Revolution program. There is just no flexibility, no self-management for schools.

School communities know best what they want, not the bureaucrats in Flinders Street and not those in the department of Treasury. That was what was so fantastic about the Howard government's Investing in Our Schools program: schools could actually determine their own projects without being told what to do by bureaucrats in Flinders Street.

We saw the bungling of the Building the Education Revolution with the whiteboard scenario last week, where the federal minister, Julia Gillard, had to intervene and overturn the rejection by the department of whiteboards in several schools, and not insist that those whiteboards be part of the general rejuvenation of a classroom. In the end, the schools did not have to get carpet, but the original information was that they could not get those whiteboards unless they got new paint, new carpet, washed the windows, adjusted the window frames, and got some new furniture, even though they did not need any of that.

Time expired.

Mrs PENFOLD (Flinders) (17:13): South Australia now carries the second worst budget deficit in the nation, with only New South Wales being in a more unenviable position. By the end of eight years in power and with a GST income bonanza, the Rann Labor government will have saved nothing and provided little for the long-term future of our children but debt. So, the cycle goes around again.

In 1993, when the Liberal government took office, the state could not pay, from the income it received, all the interest on the debts left by the Labor government. In my view, we were technically bankrupt. The new Liberal government was forced to appraise all state assets, and chose to lease electricity assets. These assets were badly run down because profits from the business had not been reinvested in power infrastructure and maintenance. Instead, profits were put into general revenue, which is exactly what is happening now with the government's monopoly, SA Water.

The Liberal government of the day had no money to upgrade power assets, whereas the new owners immediately injected multimillions of dollars into upgrading them. The lease also enabled wind energy companies to enter into what had been a closed government monopoly electricity market. This helped our state to lead Australia in renewable energy. The Rann government's Mid-Year Budget Review reveals that it again has a major expenditure problem, and, once again, has been living above the state's means.

Despite the economic downturn all over the world, this state should have been in clover, well buffered because state revenues actually went up more than $180 million in the months since the June budget. However, when Labor should have been cutting costs, its expenditure continued to spiral up even faster to an astronomical $453 million more, and it was not, unfortunately, for projects with a return on investment and long-term jobs. Only city projects featured in this state government's application to the federal Infrastructure Australia funding.

The western half of South Australia, including Eyre Peninsula has a lack of physical infrastructure without which this huge region will not fulfil its potential to assist South Australia to meet its economic, social and environmental goals. Eighty per cent of the mineral exploration in South Australia in 2006-07 was undertaken in the Gawler Craton mineralisation which underlies much of the area. However, mining royalties last financial year in South Australia were only $165 million, a fraction of the $3.6 billion in Queensland and the $3.4 billion received in Western Australia.

The Gawler Craton contains world-class minerals now recognised and in strong demand by countries around the world but unable to be developed until the necessary infrastructure is put in place. The Eyre Regional Development Board Annual Report 2007-08 stated that expenditure by companies on mineral exploration in South Australia during 2006-07 was $188.9 million, with $152.2 million expended within the geological province of the Gawler Craton alone.

The priorities to develop the significant potential of this very underdeveloped region are: a power ring main; a 20 metre deep water port near Port Neill; the upgrade of the Port of Thevenard; the upgrade and extension of 680 kilometres of narrow gauge railway and connection to the Australian rail system; desalination plants at Ceduna, Streaky Bay, Elliston, Port Lincoln and Port Augusta; the construction of the Wirrulla to Glendambo Road will also provide the route for the power and water (and eventually a rail connection) for the northern mining developments to Eyre Peninsula ports capable of taking Cape Bulker size ships for exports; the upgrade of the Port Lincoln airport (which is the busiest airport outside of Adelaide, but unable to take jets) and also the upgrade of the Ceduna airport.

The western half of the state of South Australia has very little development with few jobs and very few people. The rich resources that could alleviate these problems remain largely untapped. There is massive unemployment, particularly in the Aboriginal populations, leading to poor education and health outcomes.

Despite an enormous amount of mineral exploration, very few mines are coming into production. Companies ready to start to export are working in isolation with one another and, unless pulled together by an organisation—such as Infrastructure Australia or the state government—with the clout and knowledge to do so, companies will continue to struggle on, taking many years (if ever) to become profitable, particularly now that we have had the economic downturn. They could be employing lots of people and paying large royalties to the state.

Adelaide—our capital city—is 600 to 700 kilometres away. The region has been predominantly for sheep and grain farming, fishing, aquaculture and some tourism, until aeromagnetic surveys and other modern technologies showed what the Gawler Craton mineralisation contained.

There are proponents already willing and able to undertake the construction of the ring main, a 400 megawatt wind farm, the hot rocks, solar/gas power supplies, desalination plants and numerous mines. However, without essential power, water, export ports and road or rail transport infrastructure, it will be a long time before these projects will be able to progress. Billions of dollars of export income and thousands of jobs will continue to be forfeited if this infrastructure is not put in place.

A power ring main is required to stabilise South Australia's power supply and enable the input of more than 400 megawatts of wind energy and significant megawatts of hot rock power into the grid. This significant green energy source will enable off-takes, particularly by northern mining companies, including BHP's Roxby Downs expansion, which will require 400 megawatts of power alone, as well as processing and desalination plants.

Currently, the very old 132 kV line without a return that services the Eyre Peninsula cannot even take all the power from the 70 megawatt Mount Millar Wind Farm and the Cathedral Rock Wind Farm on Eyre Peninsula in case it collapses and takes out Adelaide's power. The existing power supply from the Flinders coal-fired power station at Port Augusta is no longer acceptable technology, and the possible introduction of a carbon tax will make this power source unviable in the future.

Infrastructure in Port Lincoln is under pressure just coping with grain trucks and the expansion of the city. It is increasingly obvious that a modern multi-use port on the east coast of Eyre Peninsula, north of Port Lincoln and south of Port Neill, is needed to provide for the future imports and exports of Eyre Peninsula and the west of South Australia, arising from the commercialisation of the extensive and varied Gawler Craton mineralisation that covers the region. The current mining debate highlights just how inadequate the present road, rail, port and even the air infrastructure is for the future development of the region and also for the social, economic and environmental advancement of our state.

Port Bonython at the top of Spencer Gulf near Whyalla is poorly located in an area that is very environmentally vulnerable. The Whyalla port is fully utilised by OneSteel, which is refusing access to other companies and requires barging. Private enterprise could build a new port on a greenfield site in conjunction with an extended and upgraded railway, improved road network and possibly slurry pipelines to provide for minerals and grain exports and any imports as required. Value adding before exporting our commodities should be undertaken where possible, and the inclusion of an iron ore pellet plant incorporated in the initial port plans is a must; however, state government support is required.

The Port Lincoln airport is the busiest regional airport in South Australia, with 150,000 passengers annually. It is owned and operated by the District Council of Lower Eyre Peninsula and has a district population of 4,402. The City of Port Lincoln, with a population of 14,500, is the closest major city to the airport, approximately 15 kilometres.

Council has indicated that it has a broad strategy to enable the airport to be extended and is planning to upgrade most of the airside facilities, including the taxiway, apron and lighting this financial year. It has also set aside funding for concept plans for a terminal upgrade and has recently finalised a business plan for the airport to plan for future operations and development. However, the benefits of a jet service is something the small district council will have to consider carefully, because the capital expenditure and recurring maintenance costs on a new upgraded terminal and associated security requirements is significant. Again, help from the state government is probably a necessity.

If the Port of Thevenard is not upgraded then the new port south of Port Neill would become the only major port to service the whole of Eyre Peninsula and an area west of the Western Australian border. Minerals from the north and west would need to be transported a considerable distance for export. Thevenard currently handles a greater tonnage of product than Port Lincoln, namely, grain, salt and gypsum. Additional exports, however, are now in the process of development, including Minotaur's kaolin deposit near Streaky Bay; Iluka Resources have indicated massive deposits of high-grade mineral sands; and Adelaide Resources have mineral sands, uranium and ore deposits. Existing exports of grain, salt and gypsum would also be under threat without an upgrade to cater for larger ships.

A new railway line or an upgraded standard gauge line needs to be redirected along a new section approximately 30 kilometres from Ungarra to a new port to take all freight, including grain and minerals. Water continues to be one of the biggest issues throughout the nation and no less so than on Eyre Peninsula. Access to SA Water pipes must be enabled for desalinated water to be utilised throughout the region. Quantities of potable water are needed urgently to enable mineral sands to be processed locally. Presently, they are to be shipped to Western Australia, I understand, for processing due to the lack of water available in the region. Kaolin also needs about three gigalitres of water.

The Wirrulla-Glendambo Road should be the responsibility of state and federal governments to fund. It is becoming increasingly busy with traffic from the many outback mining activities and hundreds of tourists. Tragically, there have already been deaths on this road and it is increasingly impacting on the local community who are called to assist when there is trouble. The wear and tear on this road is significant as it was not built for the volume of traffic that is utilising the transport corridor.

The current global financial crisis has become a convenient ruse for the Labor government's mismanagement and incompetence in their disastrous mishandling of the state's economy. The Premier and the Treasurer have again landed South Australia in a financial pickle. This, perhaps, should have been expected given the honourable members' history in virtually bankrupting the state when previously in office and in charge of the state finances.

The government has spent much of the windfall revenues on unbudgeted items. It has not paid off the debt or put money away—quite the contrary, in fact, with unfunded superannuation and WorkCover debts both now back in the very dark red. A symbol of eight years at the helm will be the non-functioning mini wind turbine atop a state administration centre that the government no longer owns; trams that do not suit our climate; and traffic jams on North Terrace, making an important connecting road into a negotiating nightmare for traffic. Taxis and motorists are avoiding the road wherever possible. It is hardly an endorsement for a government dealing with 21st century traffic in an expanding city.

The expenses blow-outs are driving this state's liabilities to a level which may well jeopardise South Australia's hard-won AAA credit rating, a fact already acknowledged by our Treasurer. Returns on the government's invested assets under management—that is, Funds SA, WorkCover and the Motor Accident Commission—were all negative in 2007-08. This should have sent serious warnings to the government that its financial management was not up to the task.

In 2007-08, Funds SA incorporated Motor Accident Commission funds under management, as well as a couple of other funds, which masked their total losses. Since 30 June 2008, notwithstanding revenue into and out of the funds, Funds SA investments have fallen by $3.7 billion while WorkCover's investments have fallen $314 million, together making a loss of $4 billion. This has all happened at a time when revenue has actually increased.

The Auditor-General's Report for 2007-08 Part C, page 54, stated that the net financial liabilities to revenue ratio is not, however, declining towards that of other AAA rated states as required by fiscal strategy. However, despite the increase in revenues the Treasurer, on 14 October 2008, as recorded in Hansard, blithely blamed 'the crashing of revenue' for the worsening state's financial liabilities to revenue ratio.

From 2002-03 to 2007-08 the Premier and Treasurer incompetently underestimated revenue collection each year, collecting a massive $3.7 billion more than expected. The Auditor-General noted that these unbudgeted receipts masked unbudgeted increases in expenses. Compared with other states the severity of South Australian taxes is confirmed by the Commonwealth Grants Commission. South Australia has been the highest taxing state in each year under the Rann Labor government. The last year of the previous state Liberal government (2001-02) was the last year when South Australia was not the highest taxing state.

The 1993 Liberal government took over a bankrupted state and managed to keep South Australia competitive on a national field. However, under this Labor government, South Australia taxes more heavily on land, stamp duty, gambling, insurance, heavy vehicles and motor vehicle registrations and transfers than any other state.

Land tax revenue, one of the many taxes on business, increased a massive 265 per cent under the Rann Labor government's seven years in power. Payroll tax, which is a tax on employment, is higher in South Australia than other states. These taxes are a significant disincentive to doing business in this state and account for businesses moving their head offices interstate.

It is significant to remind this government that 94 per cent of business undertaken in this state is by small businesses. Small businesses are the major state employers. They provide jobs, keep people employed and keep our state vibrant, yet this government is hell-bent on making life as difficult as possible for small business owners.

Further fracturing its credibility, this state government has reneged on its promise to abolish agreed state taxes in exchange for GST revenue. It will continue to levy two taxes on business transfers for an extra three years to lever an extra $142 million from long-suffering businesses. Authorisation for this from the Rudd Labor government demonstrates the latter's lack of concern for the viability of business and, therefore, the jobs of South Australians. It makes a joke of the Premier's statement of being unashamedly pro business—which I read in The Australian on the weekend.

This massive increase in various commonwealth grants has hidden the debacle in the handling of the state's finances but, even so, South Australia will still receive more GST revenue over the forward estimates than the Treasurer had budgeted for when he was elected in 2006-07.

Water, as I stated, is a universal and crippling topic in this state, and Labor's financial mismanagement is highlighted in the story of SA Water. Total dividends and payments to the state government from SA Water are budgeted to be $273 million in 2008-09. Since 2002-03, the government has stripped $2 billion from SA Water customers. Little of this has been made available for infrastructure spending and certainly not on the Eyre Peninsula where it is badly needed and incursions from the sea are, as I understand it, getting into some of our southern basins.

However, according to the Treasurer, these record SA Water contributions are not enough even to fund the proposed desalination plant for the city which was an initiative of the Liberal opposition as a practical response to our city's water crisis. The Auditor-General has highlighted repeatedly that the Rann government is treating SA Water as a cash cow. The state's own water utility is being starved of money to carry out capital projects even though the state is going through a drought and has water restrictions.

The Auditor-General's Report 2005-06, Part B, Volume IV, page 1232 states that SA Water will have to increase its borrowings to maintain or increase its capital expenditure. In other words, the corporation is borrowing money to pass on to the state to make the state's finances look better than they are while being unable to fund necessary capital works or even to maintain existing infrastructure. Again, this was emphasised in this year's report as follows:

In four of the last five years net cash generated from operating activities was sufficient to cover the net cash used in investing activities...but insufficient to pay the level of dividend and return of capital required by the Department of Treasury and Finance. To meet its payment obligations to government and finance its capital works programs the Corporation's net increase in borrowings has risen significantly in 2007 and 2008.

When it comes to state debt the statement 'You ain't seen nothing yet' covers Labor's approach. The government has previously announced that the prison PPP will be delayed by up to three years. The honourable Treasurer's 'rack 'em, pack 'em and stack 'em' policy must have to be revised. Perhaps the government will legislate for prisoners to be accommodated in overcrowded, under-resourced prisons by sleeping in shifts: 'rack 'em, pack 'em, stack 'em and triple shift 'em' every eight hours.

Then there is the enormous unbudgeted increase in public sector numbers, which have risen by an additional 14,842 from 2001-02 to 2007-08. Contrary to Labor claims that these are in health, education and policing, only 4,414 are nurses, doctors, teachers or police officers.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (17:34): I rise to speak on the Supply Bill and I indicate that, as convention demands, this bill will be supported by the opposition. The bill facilitates the appropriation of $2,750 million from the consolidated account for the continued provision of the services provided by the government and its agencies and for the administration of funds for which they are responsible.

I do not do so in any way because I am confident that these funds will be appropriated by the government—in particular, by the Treasurer—in any responsible, judicious or equitable manner but because it is recognised that the positions of tens of thousands of public servants are in situ and require to be continued at the very least until the budget has been handed down by the Treasurer in a month or so.

The international environment is concerning, to say the least, and we have a level of economic instability which is, at best, unsecured. Couple that with the federal government's cash extravaganza, which it has come to see as necessary for fiscal stimulus at a national level. Given the current international environment, it is even more alarming to consider where we may find ourselves after the effects of any irresponsible financial management at a national level. Clearly, in the end, our major provider of revenue is the commonwealth government, and that may be at risk not only as to maintenance of the current appropriation on which we have become reliant but also for future special projects and extension of funding.

Given that commonwealth funds (GST being independent of that) are a major provider of revenue for the state, the behaviour of the federal government has a significant impact on our state. The stated position of the federal government and state governments is to have some relationship where there is no blame game operating between them, that they are going to end some era of competition and criticism of each other and that we are moving into this new era.

I see it as a new era of complete stagnation, because the commonwealth is a major revenue source for the South Australian budget and, in particular, it allocates much of the funds for health, comprising hundreds of millions of dollars in financial support in order to sustain our health services.

We can look at the historic agreements in relation to the ratios of funding that are contributed to the budget, where almost 30 per cent of the state budget's provision to health is coupled with the significant funds for families and communities, child protection and right across to housing. This forms a significant part of the budget.

The first thing I bring to the attention of the parliament is my absolute despair at the fact that as we approach the anniversary of two years of the current federal government, we still do not have a signed health agreement. This was an agreement over a triennial period which expired on 30 June 2008. It was temporarily extended to 30 June 2009, which is now only weeks away, and yet we still do not have a health agreement signed between the state, territory and federal government for the future funding of this very significant part of the budget.

I bring this to the attention of the house because this is a matter which was given significant attention by the state Minister for Health when the Liberal Party was in government federally, and there was constant criticism of the inequity in the proportion between the state and federal contribution towards health costs. In particular, criticism that they had moved away from a 50/50 funding model and that progressively the states were expected to pick up more. Yet here we are, nearly two years into the current federal government and there is still no resolution of that issue, which was something that was very important to the state minister before.

I am very concerned about this. We can tinker around the edges on all sorts of things, but unless we get this right, South Australia, along with other states, will be significantly disadvantaged if that agreement is not signed up, and signed up with some favourable terms, including ensuring that there is an annual increment provision, taking into account what is called a healthy inflation factor, which depending on who is writing the article is most commonly somewhere between 8 per cent and 9 per cent, and sometimes 10 per cent, the annual increase required just to be able to continue to provide the services, with workplace technology and equipment costs escalating at a much higher rate than CPI.

The second aspect that causes me great concern is the general level of mismanagement at the state level. I have only been following this in any detail over the last seven years, a period over which this state government appears to have been drowning in money. That is not to say that other governments around the country (state and Liberal) have had the benefit of a period of time where there has been an extraordinary amount of revenue generated, for a multiple of reasons. At the end of this, though, we are now found wanting, particularly when we are facing a difficult period.

The reason it is particularly concerning is that it seems that the Treasurer in this state does not seem to understand the problem that he faces. Just today he came in to talk about the expected loss of revenue from GST that is being predicted. That is not an insignificant issue. But what the Treasurer does not ever seem to explain is that he does not have a revenue problem, even with those factors taken into account. His problem, as disclosed by his own Mid-Year Budget Review, reveals that he has an expenses problem.

Despite the fact that the Treasurer continues to claim that declining revenues are caused by the global financial crisis, the numbers actually tell us a very different story. The revenues, in fact, have improved in the seven months since the June budget last year. It is the expenses, on the other hand, that have continued to spiral. So, when the government appears ignorant of even the most obvious—even disclosed on its own documents—it is very concerning.

The government has come up with some ingenious ideas about how it is going to get us out of this. First, it is going to sell buildings. We have noticed that one of the buildings it is going to sell it does not even own, but having identified that it will obviously have to go back and do the figures there. It is going to sell up government employee houses, when it is probably the worst time to start selling property, and it is going to defer infrastructure, such as the new prisons.

In this regard, it is sometimes necessary, when a situation such as the global financial crisis needs to be looked at, that we look at deferring projects. For the benefit of the parliament I will identify how misguided the government is in its preferences to what projects it defers. Notwithstanding the Premier standing in the parliament today openly gloating about the government's decision to proceed with redevelopment of the Glenside Hospital, one of the first casualties on the Treasurer's list is that there will be a two-year delay on that redevelopment. From memory, it is about $25 million that he is going to save by not building that, and so its completion date is two years later than what was originally proposed.

Yet in the same breath, there is confirmation that the government is going to continue to proceed with a $45 million film and sound hub at the Glenside Hospital site. Where are the priorities here? If things are tough and the belt has to be tightened why is it that a redevelopment for mental health, which we all agree is necessary, has to be put aside for two years, and yet a movie hub has to be proceeded with and $45 million spent by the Premier's department is somehow or other justified in progressing?

So, here we are in alleged economic meltdown and we have that sort of priority identified. It is completely unacceptable. If the government had any ounce of understanding of the urgent need out there for mental health, including housing for mental health, which is woefully inadequate in our current social housing situation, it would be allocating that $45 million immediately across to the provision of housing on that site and not selling it off for a bigger supermarket that nobody needs.

The situation for South Australia relative to the rest of the country is that we now carry the worst budget deficit in the nation, with only New South Wales being worse, and we all know what the predicament of New South Wales is, given the national and its own state media—it is an appalling situation. At the end of seven years in power, the Rann government, at this point, has built nothing, saved nothing and provided nothing for the future. It has spent all the money and it is now embarking on a fire sale, and we are facing a major debt.

The other aspect that concerns me is that, in the environment that is presented by the Treasurer, his government continues to press ahead with a $1.7 billion rail yard hospital proposal—which, incidentally, it has now been admitted, will be partially funded by the $400 million from the saving that the government proposes to make (this is the evidence of the CEO, Dr Sherbon) from the stripping of other hospitals, including the QEH and Modbury, and the restructuring of health services in this state. The government is going to cut and gut those services to do so.

Notwithstanding the financial holocaust that we are experiencing, the Treasurer appears to have missed the point that the government has approved $15 million in the health budget to transfer and install a kidney transplant service to the Royal Adelaide Hospital, which is currently underway and which has been through the Public Works Committee (and we will have a bit more to say about that tomorrow). That service is currently being installed in the Royal Adelaide Hospital, which the government wants to bulldoze in a couple of years. It is incredible to think that we have a perfectly good facility at the Queen Elizabeth Hospital, and it is going to put it into the east wing at the Royal Adelaide Hospital and then bulldoze it.

The other thing that seems to have slipped under the radar of the Treasurer is this: how reliable is the $1.7 billion? If he looks at his own budget papers he will see that, from the previous year's budget when this was announced until last year's budget it has moved from a $1.67 billion project to an 'NA'. 'NA', I assume, is either 'not available' or 'not accessible', and it is simply not disclosed. The reason for that is explained in the budget papers, that they are now moving to a different model of procurement and they do not know what it will be. So, notwithstanding the protests of the Treasurer even today, reinforcing statements made by the Premier that it is all in the budget, that situation has clearly changed.

Even more concerning is that the Premier has picked up this idea of the hospital from the Western Australian Fiona Stanley Hospital. He has never come up with a new idea himself in the time that I have been in the parliament. He usually steals someone else's idea, and this is no exception. This is taken off the drawing board from Western Australia pretty much word for word. Its hospital was originally identified and costed at $1.1 billion, with extra research services, pathology and the multitude of health services that this one will have, and all the Labor premiers say they are having state-of-the-art, world-class, best practice, blah, blah, blah. This quote was $1.1 billion.

It is very interesting that, two years later, that same model of a hospital has now been re-costed and it is now a $1.76 billion hospital. It has already blown out by nearly $600 million, and they have not even started seeing any patients there, for the purposes of finalising its construction and operation. It gives me no comfort to think about the projects they have maintained that they are going to follow through in the environment of financial impecuniousness that we are facing.

I will give another example of how blatantly irresponsible the government is being. The government was recently asked why there was no provision for the cost of transferring things out of the current Royal Adelaide Hospital to the new rail yard hospital, which it proposes will occur in 2016, and I think it will pay in its budget $180 million-plus for new furniture and equipment. We asked what it would cost to take the equipment—MRIs, linear accelerators, scalpels, and so on—down to the other side of the city. They said, 'We have not budgeted for that, and the reason is that we are not taking it. The only thing we are taking is the patient records.' I said, 'Well, what about the radioactive waste that is sitting in the basement?' They said, 'Yes, we will be moving that too. But we haven't actually budgeted anything, because we are not taking anything.'

I do not know what will happen to the millions of dollars worth of equipment that is still sitting there—whether it will be thrown out to other hospitals, whether they will have a great big clearing sale or what will happen. That is the sort of wastage that I think the people of South Australia need to know about.

I do not know how the government could even commit to a new hospital when, since 1999, and mostly in the lifetime of this government, a major portion of work has already been done on the hospital, with over $100 million spent on the Royal Adelaide Hospital site for new surgical equipment, emergency department, pain clinics, burns units, all these sorts of services, as magnificent as they are and claimed by the people who work in them to be of world standard, yet the government is just going to bulldoze them. The financial position the government is taking on this is completely unconscionable and irresponsible.

I also want to refer to the fact that, with respect to revenue, notwithstanding the bleatings of the Treasurer, from 2002-03 to 2007-08 the government has collected a massive $3.7 billion more than it had expected. So, not more than just what it had already allocated (which was significant); this was above the budgeted increase. The government has said, 'We are going to have a reduction of $48 million from the 2008-09 state budget,' and the Mid-Year Budget Review confirms that, 'and that is something to be taken into account.' But remember this: from 2001-02 to 2008-09 the overall percentage increase in state taxes, which includes payroll tax, taxes on property—stamp duty, land tax and so on—taxes on insurance and motor vehicle taxes, has been very substantial. This includes property taxes, which we have heard a lot about. There has been a 63 per cent increase in those tax revenues. So, it is a complete nonsense to come along and say that we are going to suffer a reduction in some taxes anticipated this year, and not take into account the extraordinary growth in taxes that the government has enjoyed way above what it had expected to have. I see that it still managed to spend it all.

Public housing, I suggest, will be at serious risk. If it were not for minister Plibersek at the federal level, who has announced an infrastructure contribution through public housing, we would be completely stripped of housing services to cover the accruing demand in this state. Stamp duty on a $300,000 house continues to be $11,330 in South Australia, $8,990 in New South Wales, in Victoria it is a similar amount to that in South Australia, $8,835 in Western Australia, and it plummets down to only $3,000 in Queensland. I think the picture is very clear. It is punitive and it is unacceptable compared to the other states.

Land tax is a real killer because, if we compare a property around the country valued at $1 million, the tax is $11,420 in South Australia, $10,356 in New South Wales, $2,975 in Victoria, $4,500 in Queensland and $700 in Western Australia. Again, there is a big disincentive to stay in South Australia and, not surprisingly, that means we are losing over 4,000 people net a year from our state to other states.

Our net migration is completely in the reverse direction of the State Strategic Plan targets. More importantly, it is the loss of a major resource for our workforce and the provision of finance in this state, and that affects those who can productively employ their income for the purposes of home ownership and/or private rental.

Time expired.


[Sitting extended beyond 18:00 on motion of Hon. J.W. Weatherill]


Mr PENGILLY (Finniss) (17:53): I indicate that I support the bill, and I will take the opportunity in the time allotted to raise some issues of concern to me and the people in my electorate, and also to make mention of some issues in other electorates near mine where people have concerns about where the government is going in regard to its financial accountability, expenditure, etc.

I find it amazing that a government that was so strongly opposed to the goods and services tax is now so totally reliant on the goods and services tax that it gets itself in such a mess. Incomes over the last few years have been quite outstanding, and the government could well have saved a considerable amount of money and put a lot of money away for a rainy day or a global financial crisis but it did not choose to do that. It tended to be fiscally irresponsible and spend money on all sorts of things that were not in the long-term benefit of the state, and it really had no idea where it was going.

If we take time to listen to South Australians at large about what is not happening (instead of listening to them about what is happening, because that does not take too long), we will find they are pretty disappointed and looking for far greater financial accountability and far better management of the state's finances than we are receiving at the moment.

The Mid-Year Budget Review revealed the lack of financial management of this Rann Labor government. Revenue figures actually illustrate a healthy sum. For example, the state's net financial liabilities to revenue ratio is now 87.3 per cent and is expected to reach 92.1 per cent next year, meaning that in seven years the government generated $3.7 billion while expenditure figures stayed otherwise. The public sector figures show lack of financial discipline and management by the Rann government.

We in South Australia, much to our dismay on this side of the house, are currently rating second for having the worst deficit budget in Australia. It is not something we can be very proud of. We have the Treasurer, who thinks he has his finger on everything, running around like a headless chook at the moment, and that is doing none of us any good and is most disappointing.

If we look at the issue of land tax and the failure to amend the land tax system and formula, it is creating enormous angst in South Australia. It is creating enormous angst for private investors—mum and dad who have built a couple of houses over many years for their retirement income are now getting absolutely slugged for land tax. In my electorate there are considerable numbers of retirees who had investments put away to help them through their retirement years, and their incomes are falling apart at the seams and then they get slugged with almighty land tax bills which cripple them even further. You have to ask: what does this government want from its citizens, particularly its more senior citizens? Does this government want to starve them into submission?

It is totally ridiculous that particularly these self-funded retirees are put in the position of being on the bones of their backsides. Indeed, many of them were self-supporting and did not require aged pensions or government assistance. They did everything themselves and generated enough income to keep themselves going, have holidays and participate fully in the community. They are now having to apply for pensions and part pensions just to live. It is an absolutely ludicrous situation.

I have a constant stream of constituents coming into my office raising concerns about the land tax issue, along with the River Murray and the effect of the lack of water in Goolwa and the Lower Lakes in my electorate. These are two of the biggest issues that cause great concern to the electors of Finniss.

I seriously wonder what this government intends to do for anyone who lives outside the metropolitan area. We have just the simple issue of public transport. To all intents and purposes, there is no public transport outside the metropolitan area—it just does not exist. There are council-supported services and, indeed, it is extremely difficult for councils to find money to run community buses and such.

My personal view is that councils should not have to run bus services. It is not their job. Councils' jobs are well stipulated and they have extremely limited revenue sources. Councils are limited to just their rates income and grants they can get from the state and federal governments. We know about the federal grants schemes for the states and councils. However, councils are having to move far outside their prime responsibility. I was a part of local government for many years and I am probably well aware of what they have tried to do, but they have gone outside what they should be concentrating on.

The old adage that they are responsible for roads, rates and rubbish has not really changed all that much. They are the three Rs of local government, yet they are bound down hideously with the requirements of the planning laws of this state and adjudicating on planning. They have to deal with a host of other things. They can put levies on rubbish collection—and let us not forget that the bureaucratic clots in the EPA, who have enforced all sorts of requirements on local government in relation to waste disposal without any responsibility, have a fair bit to answer for. We still let them roll along and do what they like and the poor old councils have to pick up the slack from that. I do not mind giving a council a bit of a belt around the ears if it needs it but, by and large, most of them do the right thing. Those without sin can cast the first stone, but that does not apply in many cases.

I am greatly concerned about the amount of money—or, more to the point, the lack of money—that is spent in rural and regional South Australia by the government and the failure of government to deliver on expenditure. For example, we have just witnessed the opening of the new Rapid Bay jetty, a project of some $3.9 million. That project fell under the radar of the Public Works Committee because it was under $4 million. I am yet to get the paperwork on it, but I am informed that the Rapid Bay jetty did not cost $3.9 million but, rather, $6 million. I have been informed of that figure by someone within the system. They have advised me that amount of money was required to finish the Rapid Bay jetty.

The Rapid Bay jetty, which was badly needed and which was announced, conveniently, for the 2006 election, was opened recently. Certainly, it will be a great asset to tourism on the Fleurieu Peninsula, and I commend members of the Rapid Bay, Second Valley and Delamere communities who pushed for the jetty to be built. However, if it is proven that the cost of this jetty was $6 million rather than $3.9 million, someone must be held accountable; so we will have to look at that situation.

So many things need doing outside the metropolitan area, and I appreciate fully that many things need doing within the metropolitan area. However, the cost of maintaining roads and upgrading roads is a huge issue outside Adelaide.

Another issue of critical importance in my electorate is the sea corridor between Kangaroo Island and the mainland. This has been festering away forever, without its being fixed. I know that the Kangaroo Island Council, Kangaroo Island Development Board, the farming community and others have pushed to have some sort of justice given to islanders and producers; and I put on the record I am a producer on the island, as well as working in this place.

How is it that this government can find the money to extend trams to the Entertainment Centre and in the city, yet it cannot find the money to fix up the sea corridor between Kangaroo Island and the mainland? How is it that every time a member of the public gets on a punt to go across the River Murray—where there is still water that the punt can travel across, I might add—they do not have to pay to go on the punt? How is it there is a subsidy to travel between the mainland and Tasmania? How is it that the issue of the sea transport corridor between the mainland and Kangaroo Island has never been resolved satisfactorily?

The government can spend tens of millions of dollars putting trams to the Entertainment Centre—and they are lovely, fantastic—but it does nothing for the economy of the rest of the state. I do not care what people say. We can fluff around and talk bubble and froth all day on that issue, but the reality is that while Nero fiddles over here Rome burns—and it is just not good enough.

A few issues in the electorates of Mawson and Kaurna have been brought to my attention. A resident from that way was today bewailing the fact that nothing is happening. They are immensely alarmed about the rise in crime throughout the southern suburbs in the electorates of Mawson and Kaurna. They live in the area and every night they witness criminal activities, which are allowed to continue. The much vaunted Aldinga Police Station shuts at 5 o'clock; it's done and dusted. Indeed, if you ring Yankalilla, Goolwa or Victor Harbor police stations in the evening you go straight through to Christies Beach. Well, that is a lot of good because you then go into a long process. The government says that it is tough on law and order. Well, it is about as tough as a feather duster as far as I am concerned. It is the next best thing to useless. What is going on is a joke. The police are hamstrung in what they can do.

Mr Goldsworthy: They are under-resourced.

Mr PENGILLY: The member for Kavel says that they are under-resourced. Of course, they are under-resourced. They go through this process where, if they do get caught and they are charged, they will get a smack on the wrist. They might get 2½ years in prison for some diabolical crime and then they are out and back into it. The people down south are sick of it. They are sick of graffiti, and they are sick of hoon driving. It was put to me this afternoon that the best thing for some of these hoon drivers is to do what they do in America—grab their car, dad's car, or whoever else's car they are using, and put it in a car press and get rid of it.

Mr Goldsworthy: Crush it.

Mr PENGILLY: Crush the car. Get serious with it instead of stuffing about and doing nothing. Crush the cars. If they have done something ridiculous in dad's car and it gets crushed, well, too bad.

Mr Goldsworthy interjecting:

Mr PENGILLY: Yes; a late model Mercedes Benz. Some members in here might not have one, but there are a few around. We have to get realistic about this stuff. The resources are just not there to do anything about it, despite the longwinded puffing and blowing of the Premier. If it is good news, good news Mike is there, otherwise he is nowhere to be seen. He ducks for cover like a snake on a hot day when you prod him under a bush—they are off, they are gone and there is nothing happening.

What is going on down south is criminal. Mitsubishi closed down a couple of years ago. The gentleman mentioned today used to work for Mitsubishi. He finally found a job, but he has torn himself in half trying to find work. He is concerned about his future in doing what he is doing now. He raised the issue of Mitsubishi: he worked there for 21 years, and he thought he was there for life. He has many friends from his Mitsubishi days who still have not found work.

So, what is the government doing for the south? About sweet FA, in my view. Port Stanvac is sitting there like some mausoleum. What do we have there? The Treasurer announced that nothing is happening until 2019. We have a rusting hulk of a refinery down there, and the jobs have gone. Kimberly-Clark has gone from the south. What is the government actually doing for the south? What is it doing for the people of Mawson, Kaurna and that area? It is doing very little, I suggest. There is a large host of issues that the government is not addressing.

Going back to my electorate and the issue of health, the people there are vitally concerned about the future of rural health. Although the South Coast hospital was not earmarked for extinction, like some others, the fact of the matter is that it will be slowly sucked into the Flinders hospital and the health system in that area. It will have services withdrawn.

After three years of pushing, prodding and proposing that the government gets on with it—and I know my predecessor also pushed for this—we finally had the announcement of two dialysis chairs for the South Coast hospital. However, that is with a generous donation of $80,000 from the Port Elliot CWA. That is a huge benefit.

People with major concerns regularly come into my office. They are elderly people who have no public transport, and they have to get to Adelaide for treatment and appointments. We do have Medi Ride, which cannot take everybody. They worry constantly about going to Adelaide for these appointments, and they do not want to drive.

The Adelaide-Victor Harbor Road has been mentioned many times in this place. If you are 80-odd years old and have to see your heart specialist, you certainly do not want to drive your 20 year old Commodore up the Adelaide-Victor road on a 38° day—trust me. It is not fair that these people should have to put themselves under such pressure and duress by going back and forth to Adelaide on a regular basis; it is simply not fair.

Education is also a major issue that is being underfunded and not addressed properly. There was an announcement of super schools, but the reports that I am getting from the schools in my electorate are that they are still underfunded and just do not have the resources.

Mr Goldsworthy interjecting:

Mr PENGILLY: Once again, as the member for Kavel says, they are under-resourced. They do not have the ability to do what they should be doing to their full intent. Earlier, the member for Unley had a fair bit to say about the education system generally. We have had a long delay in the Victor Harbor High School redevelopment, which was first announced and budgeted for in 2001 by the former Liberal government. Only now in 2009 are we seeing the commencement of work on the site. The South Coast TAFE still has not yet come to Public Works. It was announced in last year's budget; we are nearly at the next one, and it still has not ramped up.

The Labor Party does not have a lot of peccadillos down our way, I can tell you. If it wonders why it does not get too many votes down south in my electorate, perhaps it should have a bit of a rethink about things.

Our people are good people. They are terrific, and they are the salt of the earth, yet they are being treated with disdain and contempt by the Rann Labor government. Good things come to those who wait, and I cannot wait for 20 March 2010. It is symbolic of a catastrophic government in terminal decay. Heaven knows what it will come up with in the next state budget. One cannot continue just to plunder the state's finances, spend money on useless things that do not produce anything and expect to be re-elected.

Time expired.

Mr VENNING (Schubert) (18:14): I would like to say at the outset that I support the bill, as we all do. It is necessary for the first few months of the 2009-10 financial year, as it ensures that government departments and agencies will receive funding to cover their costs until this year's budget has passed through the parliament later in the year.

The state Rann Labor government has had a large amount of state and other tax-generated revenue at its disposal since the 2002 election, and it has managed the state's finances very poorly indeed. We repeatedly hear from the Treasurer that the biggest problem is the decline in revenues caused by the global financial crisis. However, there are many examples demonstrating that poor financial discipline and management have placed South Australia's finances in an uncertain position.

We heard again yesterday that WorkCover is a prime example of this government's poor financial management. The WorkCover debt is increasing, and it has now increased to $1.3 billion—already half of the debt that led to the State Bank collapse. We on this side of the house repeatedly warned over the past few years that the unfunded liability was growing out of control. What decisive action did the government take? None! The fact that unfunded liability has grown to such a level was blamed this year on the global financial crisis. Last year, it was because of a poor return-to-work rate. I wonder what the excuse will be next year.

As a result of the state's unstable financial position, the government has embarked on a set of strategies that make little economic sense, including selling the buildings it occupies and renting them back. That is crazy; it is like selling the farm and then buying it back.

Mr Pengilly: Not such a bad idea sometimes.

Mr VENNING: Well, the way things are, it's happening, I'm afraid. The government is selling 600 government employee houses at a low point in the housing market especially in country regions as a result of the dreaded shared services strategy, which is a death strategy for country residents in our regions and totally contradictory to the principles of decentralisation and regional development. Another strategy is reducing incentives for teachers, police, doctors and nurses to work in regional South Australia—a stupid decision.

The government is deferring infrastructure that has a community value such as the new prisons and continuing with infrastructure that has little or no economic benefit such as the $162 million tram extension to the Entertainment Centre. How many South Australians will benefit from that? What percentage of the population will actually use it?

It is continuing with plans to build a new rail yard hospital, which the government claims will cost $1.7 billion but more specific costings are unknown, as it disappeared from last year's budget papers altogether. With remediation of the site and other blow-outs, this figure will certainly rise. We all know one thing for sure: it will be a huge cost—another State Bank.

I remind members that we are already halfway to the State Bank debt. In another year, we will be three-quarters of the way there. Despite the Rann Labor government having more revenue at its disposal than any other South Australian government in history, seven years after it was elected to power, it has built nothing, saved nothing and provided nothing for the future.

In the previous Labor government, I was on the Public Works Committee and, time and time again, I said, 'Where are the projects? You are earning the money; you are getting the GST, but where are the projects? What are you doing with your money?' And what happened? Nothing! Now there is a mad scramble to do these things with projects that cost twice as much, and we do not have the contractors or enough building expertise to build them on time.

The government is announcing the start of the desal plant today after five years of drought. It should be opening it, not just starting to build it. I sailed, and then also drove over, the River Murray last week, and it is pretty horrific. It is in a terrible state. When you see it from up top, the pumping station at Mannum looks like it is in a puddle at the moment. It is a big concern.

The Mid-Year Budget Review revealed that the 2008-09 state revenues actually improved by $180 million since the 2008-09 budget handed down on 5 June, but expenses blew out by a massive $453 million. Expenses, expenses; it is like life. We all know people who earn big salaries, but they never have any money. The only way to have money is not to spend it or waste it. I have a banker alongside me, and he would know the way people handle their money. People can do very well with very little; it is just the way you manage it.

I believe the Rudd stimulus package that we have before us is the wrong strategy. I look at my own private life, and it is the wrong strategy. It is as if you have a crook bowel. What do you do if you have diarrhoea? You do not feed it; you starve it. It is very similar. I believe the economy has a bug which is this corporate lending situation, and I believe there are a lot of crook deals out there, a lot of very poor banking decisions made, and the only way you are going to sort them out is to put people through pain.

I hope the people who made those decisions, the bankers who lent the money, have to put up with that pain as well. I believe that throwing money at the situation is only going to prolong the agony, because when there are bad financial deals out there, they are still going to be out there at the finish of the stimulus package.

I believe that it is very different to the Depression that we had back in the 1930s. Although we are going that way, it is quite different. You can spend when you are on the way out; spend like mad when you are getting out of it to get people back on their feet, but you do not when you have the tummy ache. You wait. You have to put the thing through the processes. It is companies like GM in America that will affect everything that we do here. It is a very interesting and fascinating time, but it is extremely difficult and hurtful, and very concerning to the rank and file of South Australia, particularly the younger people and those who have lost their jobs or those who are worried that they might.

It is clear that this government does not have so much a revenue problem, but a spending problem. South Australia now carries the second worst budget deficit in the nation, with only New South Wales being worse. It definitely seems strange that, given the current state of South Australian finances, cabinet decided to delay a pledge made by the Rann government to cut government advertising over the next three years—but 1,600 public sector jobs will be axed. How gross is that? I have said all along that this government spends millions on itself. It is the waste within itself that is the big problem, particularly its spin team—it just soaks up millions of dollars. The government does not cut that, and the government, taxpayer funded advertising rolls on and on and on.

State levies and taxes have increased astronomically since the Rann Labor government was elected to power. Payroll tax has increased 52 per cent. Taxes on properties have increased 104 per cent, land tax being a staggering 250 per cent, the highest in Australia. I know what I pay in land tax. It is just through the roof. Nobody else in Australia would pay at this level. The member for Napier would have rental properties, and he would be paying it, too. As a businessman, he would know, too. I feel for people who have to have rental housing. Really, it is a serious issue. One can understand people going interstate to buy properties, because it is a lot cheaper to run and operate a rental property in New South Wales than it is in South Australia.

Motor vehicle, gambling and insurance taxes have all increased. Overall, taxes have increased 63 per cent since 2002. It would all be well if we had something to show for it, but we do not. South Australia has been the most severely taxing state each year under the Rann Labor government. The 2001-02 financial year was the last year South Australia was not the most severely taxing state. Of course, that was the last year of the previous state Liberal government. When we consider what we did from 1993 to 2002, it was fantastic, considering the debt that we took on. We were able to deliver at the end of that period, and this government is doing exactly the opposite. It is an absolute disgrace. I think history will show that these years will be called the wasted years.

Given the vast amount of revenue at this government's disposal, it makes one think about what we have to show for it. We have no desalination plant, no extra health services, no extras for transport in regional areas, no electrification of the rail network, no new stormwater harvesting infrastructure and no new Barossa Hospital. Where has all the money gone?

We are in the midst of the worst drought in history, yet this government continues to waste time dragging its heels in getting infrastructure constructed and operating to reduce Adelaide's reliance on the River Murray. There is no argument there. If you go out into the street and ask South Australians what the biggest issue facing our state is, it is guaranteed that most will respond: water, water, water.

Given the vast amount of taxpayer generated revenue this government has at its disposal, it seems that South Australians deserve solutions to the biggest problems facing the state, but this government is yet to deliver any large projects to ensure our water supply for the future. Even the big $10 billion package deal that our Premier trumpeted he had won for the state when John Howard was prime minister—he trumpeted that he had the better deal. He got his way, but what do we have? We have achieved absolutely nothing. John Howard was right and the Victorians still have far too much say. They have the power of veto, which makes it worse. We are thinking about weaning Adelaide off the Murray and they are putting Melbourne on. What a disgrace.

Total dividends and payments to South Australia from SA Water are budgeted to be $273 million in 2008-09 and, since 2002-03, the total stripped from SA Water is $2 billion. Yet, despite the dividends that SA Water is paying to the government, it seems to have trouble paying its contractors on time. I am aware of one contractor who is owed $30,000 and the account is one month overdue.

I acknowledge the government's recent announcement of free travel to pensioners on Adelaide's Metroticket network, but what about their country counterparts? Where is the equity? They contributed just as equally, and in some cases more, through taxes and levies to the revenue this government has available to it. The government should have pledged more funding to the 11 community passenger networks that service regional and rural areas, to give pensioners who live outside metropolitan Adelaide the chance to receive some discount benefit when utilising the transport service in their area—as their city counterparts do.

We are all aware that global financial uncertainty has affected the motor industry enormously, with Holden suffering as much as any. This resulted in the recent decision made by Holden management to consolidate the current two day and afternoon shifts into a single shift. Each shift will work alternate weeks, with those in the gap week receiving 50 per cent of their normal pay. This will impact on 3,150 South Australian General Motors Holden workers, along with employees of component manufacturers.

The downturn of Holden has the ability to impact quite heavily on this state. I am proud to drive a Holden, and I always have. My wife also drives a Holden; so do my children. However, because of the principle of free trade I am not allowed to make comments like that, I cannot say that; but I am. If we went out and looked in the parliamentary car park we would see that yes, there are a lot of Fleet SA cars there and most of them are Holdens, but look at the others. Until we had the Fleet SA deal there were all sorts of cars there. I always drive my own Holden, as I do now a Fleet SA car.

A few weeks ago I was imprudent enough to publicly state that we should all drink more South Australian wine—especially sauvignon blanc—in lieu of the trendy New Zealand product. It is well marketed, but we have wines as good or even better. Well, the sky fell in. Emails went mad, and I had all these comments from people saying, 'Hang on; what happened to free trade? We are a net exporter.' Blah, blah, blah. I bet that when all these young people (and I can see one in the gallery) go out on a Saturday night and order a wine, it will be a white wine and it will be a New Zealand wine—probably Geisen sauvignon blanc.

An honourable member: Not in my house, Ivan.

Mr VENNING: Absolutely. It is a trendy thing, but I got into big trouble for saying that. However, I got the message out there because we have some very good sauvignon blanc wines in South Australia—probably not so much the Barossa but certainly the Adelaide Hills and the colder regions south of Adelaide. We have some beautiful sauvignon blanc wines and it should be trendy to drink them. However, as I said I got into trouble again.

The Treasurer has categorically ruled out government assistance to sustain Holden similar to what occurred with Mitsubishi, saying that he would not subsidise any car company to the tune of $45 million a year—but has the government offered any other ideas that may help to ease the problem? No. It seems that revenue from Fleet SA purchasing times may help. Until 2005, vehicles were retained for two years or 40,000 kilometres but the government then made a decision to change it to three years or 60,000 kilometres. The Rann state Labor government should support the South Australian car manufacturing industry by changing Fleet SA purchasing policy to two years or 30,000 kilometres, or at least do a feasibility study on that.

According to the budget papers from between 2001-02 and 2007-08, public sector full-time equivalent numbers have increased to 14,842. The Auditor-General revealed that the increase in providers of core public services for the same period was only 4,414—meaning that 10,428 extra public servants have been employed in general administration and spin doctoring. So, when we ask where the money has gone, that is where it has gone. I bet the government is not paying them $30,000 or $40,000 a year; most would be over $100,000. It is certainly very revealing and I thank the Auditor-General for providing that information. What would the employees of Holden and the component manufacturing companies think about that increase in employees, when the government has refused to do anything at all to show its support for the car industry?

The Rann state Labor government was judged by the Commonwealth Grants Commission to have levied land tax more severely than the national average of 126.35 per cent, and overall taxes more severely than the national average by 11.78 per cent. It is staggering. Every day South Australians deserve more from their government. They are contributing more than ever to the state Rann Labor government's budgets through the highest taxes and levy regime in Australia, and they need to see more action.

I would finally like to float the idea of South Australia mirroring the new Western Australian government where it has implemented a royalties for regions policy, where 25 per cent of mining and petroleum royalties collected by the state will be allocated to new projects and services in regional Western Australia. Already planned expansion for regional projects and services will not be accounted for as royalties for regions funding but any additional funding over and above the planned expansion will come out of the RR funding. RR will be delivered through three new funds: first, a regional infrastructure and headworks fund; secondly, the country local government fund; and thirdly, the regional community service fund.

Funds will be appointed at the start of each financial year and drawn up through the normal cabinet processes. RR funds will be legislated and work on drafting that legislation has already commenced. Cabinet submissions for a major injection into local government are being prepared along the scheme to deliver a fuel card for country aged pensioners. I would certainly support this. I wonder whether the National Party member for Chaffey will support us in this matter, because I think it has a lot going for it. In the past 30 years country people have been sorely missing out.

I could never make a speech like this without mentioning my favourite subject—the Barossa Hospital. It is a disgrace. There is money being thrown around everywhere by the Rudd government and, indeed, by the Rann government, belatedly, but nothing seems to come the way of the beleaguered Barossa Hospital. It is appalling.

Here we have a growth area, one of the best growth areas in the state—the wonderful Barossa where tourists come from far and wide. I certainly hope they do not get sick because the Barossa Hospital is far below par. I am amazed that people get the standard of service they do in that hospital. The staff working there are fantastic and give wonderful service, but the facilities we ask them to work in are an absolute disgrace.

The other thing is that with all these visitors coming to the Barossa, how are they going to get there? I cannot believe that every day in the paper (and the member for Light would know this) there is more and more public comment about the fact that there is a railway line there that could be used to get people to the Barossa. Yet the government will not even trial either a passenger train or a wine train. A private person, Mr John Geber, bought the wine train and we cannot even allow him to operate it. Really, how dinkum is the government?

Ms Breuer: Who's going to pay for it?

Mr VENNING: The Barossa pays more than its fair share of taxes—absolutely. I have to say to you that right now the Barossa is really hurting. I was talking to some winemakers last night, in the middle of the night, midnight, out on their grape harvesters, picking grapes.

An honourable member interjecting:

Mr VENNING: No, I was here in this building and they were on their mobile phones, picking grapes. Do you know what they were doing with them? They were putting them on the ground. And those they sold they got $230 or $240 for them, but last year they got $800 or $900 for the same grapes. Many have sold approximately a quarter of their crop at that price and the rest is going on the ground. You don't need to be Houdini to know what will result, do you? These poor people are bleeding.

How stupid is it that they are out there planting vines today? They are out there planting more vines when the biggest problem of all is overproduction. What the hell is going on here? Where are your market forces working here? What is happening? I am going to work with the new minister, Mr Caica. I look forward to working with him because I have a lot of faith in him. I think we should go up there and have a good look at this problem.

Mr GOLDSWORTHY (Kavel) (18:34): I, too, am pleased to make a contribution to the debate this afternoon on the Supply Bill. It is a very important piece of legislation, to continue the flow of public moneys to various agencies to ensure the state operates on a satisfactory level until the budget process is finalised later on in the year.

It is important to lay some facts on the table here this afternoon; the facts of the matter concerning the financial situation that this state finds itself in. I initially want to comment on matters concerning the 2008-09 Mid-Year Budget Review. The fact of the matter is that the government does not particularly have a revenue problem; it actually has an expenses problem. Despite claims by the Treasurer and his government that his biggest problem is declining revenues caused by the global financial crisis, the numbers tell a different story. The fact is that revenues have improved in the seven months since the June budget, but expenses continue to spiral.

Poor financial discipline and poor management of the public sector have landed South Australia in a financial mess, and we have known this for many years. We have seen the burgeoning of the Public Service in this state pretty well since the Labor government came into power in 2002. We have seen a continual blow-out in public sector numbers, and that, as highlighted in previous speeches made to the parliament in relation to other budgets, is where a fair amount of the government's money has been directed.

As a result of the current situation we find ourselves in, the government has embarked on a set of strategies that really make little economic sense. As highlighted by other members in the chamber, we are looking at this state being faced with having to sell 600 government employee houses at a really low point in the housing market, reducing incentives for teachers, police, doctors and nurses to work in regional South Australia.

Another issue is the deferral of infrastructure projects that have community value, such as the new prisons. Also, we see the government continuing with infrastructure that has little or no real economic benefit, such as the $162 million tram extension to the Entertainment Centre, and shortly I will speak a little more about the government's plan in relation to its transport infrastructure, particularly the construction of a new tramline, which will continue from the Entertainment Centre down through the western suburbs to Semaphore and Outer Harbor.

I want to make some remarks in relation to incentives for police, doctors, nurses and teachers to work in regional South Australia, particularly relating to health services in my electorate of Kavel, as well as police resourcing in the Hills district. We hear the government bung on continuously about how it has increased the number of police out on the beat. The government says that its recruitment of new police is going to plan. Well, if more police are being recruited and the net number of police in the police force is increasing, it would make sense to suppose that there would be more police out on the beat.

But what do we see? Just last week, we saw a striking example of the under-resourcing of the police. We heard via the media that the police were called to a shopping centre, I think it was, where some security guards were holding a person who had been allegedly acting in an unlawful manner. The security guards tried to constrain that person. They called the police, but that person was able to escape from the security guards, thereby avoiding arrest and being taken into custody. If the reports are correct, it took an hour for the police to respond to that call. From what I understand it was a high priority call. What does that say? It is not the police's fault, because they are stretched to the limit; it is the government's fault.

The government has banged on continually about increasing police resources. If it is increasing police resources, why is it taking an hour for police to attend a high priority incident? I will tell you why: it is because the government's spin doctors have been at work and the net increase in police numbers has not been achieved, according to the government's plan. If it had, and more police were on the beat, they would be able to respond to these incidents.

That is one example, but I am sure there are myriad examples of issues relating to that. It is not the fault of the police. I think every member in this place holds the police in the highest regard. They do a very good job in difficult circumstances resulting from this government's policy.

In relation to transport infrastructure, the government is proposing to run a tramline down Port Road to Outer Harbor and Semaphore. I have asked this question, and nobody can give me an answer, because I do not think there is a sensible answer: why would you build a new tramline 150 metres from an existing train corridor which the government is proposing to electrify and which basically takes passengers to those destinations at Semaphore and Outer Harbor? Why is the government proposing to spend all that money—unnecessary expenditure on unnecessary infrastructure? I have asked that question, and nobody can give me a decent answer. There is no decent answer. It is an absolute waste of money.

The government is planning to electrify the railway line that is 150 metres from this proposed corridor, so you are getting a double lot of expenditure: you are electrifying the rail corridor and you are building a tramline. It does not make sense, which is one of the hallmarks of this government—a lot of its actions do not make a lot of sense.

Returning to specific issues relating to financial matters, by the end of this government's eight years in power we will see the results of its lack of insight and lack of planning, and the state will be faced with the fact that very little infrastructure has been built. We will see no money having been saved, providing nothing for the future. We hear the shadow ministers and members of the state Liberals saying that the government is relying on borrowed funds to prop up its budget.

That takes me to matters concerning our fiscal position and outlook. At the time of the Mid-Year Budget Review, there were budget deficits on all three accounting measures: the net lending deficit was $819 million in 2008-09, the cash deficit was $801 million in 2008-9, and the net operating deficit was $112 million in 2008-09. All of these have worsened since the Mid-Year Budget Review.

In 2002, Labor stated that net lending/borrowing was the measure it would use for budget results; however, because this meant measures have subsequently slumped in the deficit, the government has discarded it and now uses the net operating balance measure—an easier measure through which to run a surplus. But now this, too, has plunged into deficit. What accounting measure will they use now?

The Mid-Year Budget Review revealed that the 2008-09 state revenues actually improved by $180 million since the 2008-09 budget was handed down on 5 June last year. Expenses have blown out by a massive $453 million. The Rudd Labor government is covering the Rann Labor government's expense blow-out. The state will receive $420 million in additional funds from the Rudd Labor government in 2008-09 in health, education, housing and community service payments than was anticipated in the 2008-09 budget.

Since the budget, state taxes are down by $48 million and GST grants have slumped. We know that. The unfunded superannuation liability has blown out from $5.1 billion in 2006-07 to $9.3 billion in 2008-09. That is an almost 90 per cent increase in the unfunded liability. These blow-outs are driving the state's financial liabilities to levels which may well jeopardise our AAA credit rating.

I will speak now about the impact of the financial market crisis. Returns on the government's invested assets under management, that is, Funds SA, WorkCover and the Motor Accident Commission, were all negative in 2007-08 as a result of exposure to declining international and domestic equity markets. In 2007-08, Funds SA incorporated the Motor Accident Commission's funds under management, as well as a couple of other funds, which masked its total losses.

Since 30 June 2008, notwithstanding revenue into and out of the fund, Funds SA's investments of $14.1 billion have fallen by $3.7 billion, and WorkCover's investments of $1.3 billion have fallen by $314 million. These losses total $4 billion and present a major risk to the state's finances going forward.

A few moments ago, I touched on the issue of the AAA credit rating of the state. It concerns me that that credit rating is now in jeopardy. It is hanging by a thread. The state's net financial liability to revenue ratio is now 87.3 per cent, and forecast to reach 92.1 per cent next year. The leader outlined those issues accurately and effectively in his contribution earlier today.

We then go on to talk about taxation. It is a Labor government hallmark, and we saw it with the Whitlam years in the seventies, throughout the nation (federal and state governments) that they are high taxing, high spending governments. From earlier comments, examples and figures that I have given, we know that it is with spending that the government is in crisis. It cannot control its expenditure.

I will not outline or give a comparison of state tax revenues from 2001-02 to 2008-09, but I want to talk about land tax. Land tax is a major issue to business in this state. A number of business people in my constituency have approached me and they are extremely concerned about the effect that land tax is having on their business. It is crippling their business to the point where they have had to sell some of their commercial property and look to invest interstate.

What sort of a signal is this government sending to the business community when good, viable, productive businesses, which employ high numbers of people, have to sell part of their asset base and move it interstate purely because of the crippling taxation regime in this state? It is a restrictive, choking, strangling taxation regime that we are currently experiencing under 'hard Labor', and I think that is a real indictment against this government.

We have heard the Treasurer on the radio trying to defend the indefensible. Some of my constituents have rung the radio stations and challenged the Treasurer about his position on land tax and, basically, he has said, 'You should be happy; you are getting richer because your asset is growing.' We all know that that argument holds no water whatsoever. The reality of the situation is that businesses are having to shed their assets and move their money interstate, and that is a policy that is negatively affecting economic activity here in South Australia.

We have also heard members on this side of the house speak in relation to the continuing blow-out in WorkCover liability. The Minister for Industrial Relations has again defended the indefensible with respect to the burgeoning WorkCover liability. The shadow minister for industrial relations, the member for Morphett, put it extremely accurately today when he exposed the real fact of the matter, that other states that are experiencing the same effects of the global financial crisis, for some incredible reason, are not experiencing the same effects as our WorkCover scheme.

We were prepared to support the government's proposals in the legislation that was before the parliament last year; we were prepared to give it a go. We supported that legislation in good faith. However, we have seen continual chaos and crisis. The legacy of this Labor government is that the state will be faced with financial ruin. The legacy of this government will be that of failure, and that is a consequence of this government's failing the South Australian community.

Debate adjourned on motion of Mrs Geraghty.

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