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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-06-16 Daily Xml
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Question Time

SUSTAINABLE BUDGET COMMISSION

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:32): My question is to the Treasurer. When will the Sustainable Budget Commission be formed? When will it commence its work? When will it make its first recommendations to government on tax increases or budget cuts?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:32): This gives me an opportunity to reprise what we announced last week. We have taken the quite extraordinary decision for a government in office, but a government that knows that it has to put in place mechanisms that receive a tick of approval and demonstrate an ability and a willingness to make hard decisions.

As much as members opposite may try to play political games with this, the reality is that the Moody's rating agency, in New York, together with Standard and Poor's have demonstrated that they have confidence in this government. As they say themselves, we have a proven track record of achievement, and they are confident going forward that we will achieve the savings.

Members interjecting:

The Hon. K.O. FOLEY: Are you going to accuse me of corruption again over there? I would have thought that, after the Leader of the Opposition's behaviour in his address in reply speech on the budget, the last thing they would be doing is slinging mud.

Ms CHAPMAN: On a point of order, the address in reply speech has nothing to do with the fact that the Treasurer is avoiding giving an answer.

Members interjecting:

The SPEAKER: Order! I thank the Deputy Leader of the Opposition for giving me the opportunity to remind members about interjecting and not being disruptive while the Deputy Premier is answering a question they have asked.

The Hon. K.O. FOLEY: On that, I am happy not to refer to the embarrassment of the Leader of the Opposition during his address in reply if they do not keep interjecting.

Ms CHAPMAN: On a point of order, Mr Speaker, you have just dealt with this matter, and he is repeating it again.

The SPEAKER: And again I ask members of the opposition not to interject.

The Hon. K.O. FOLEY: But, of course, the deputy leader would not know what the Leader of the Opposition did because she was the only member not in here, although there were a couple of others. I wonder why she was not here. She did not want to be filmed next to the Leader of the Opposition.

Ms CHAPMAN: That has nothing to with the issue.

The SPEAKER: Order! The deputy leader will take her seat. The Deputy Premier will return to the substance of the question.

The Hon. K.O. FOLEY: We have appointed the budget sustainability commission, and we have asked Mr Geoff Carmody, a former partner of Access Economics. He is highly regarded and undertook a similar exercise for the former Liberal prime minister, John Howard, in 1996. He is a person who will accept no pressure from government and will not be afraid to tell government what it needs to hear.

We have made a commitment to Mr Carmody that all his report to government will be made public at the point of its conclusion. We may, of course, not agree with everything, and I would be surprised if we did not disagree. I have already said, and I will say ad nauseam, that the government does not believe tax increases are the answer to the budget woes; not at all. Had we felt that tax increases were an option we would have considered them in this budget. They are not. Budget cuts are the way forward, public sector savings are the way to balance the budget, and public sector efficiency is the way to bring the budget back into structural reform.

I have already said publicly that the committee will begin its work in the near future. I have asked Mr Carmody to come to Adelaide to meet the other members of the commission. I would expect that over the next few months they will have a look at the internal government budgeting procedure. I have asked them, or will ask them formally, to consider the way in which we frame budgets internally within government, whether there are best practices we can adopt that we are not currently adopting, whether there are better ways to forecast and whether there are ways in which we can make improvements.

I am not afraid as Treasurer to say, 'Do a full review of the way I have been conducting my position as Treasurer in forming the budget, and is there a better way to do it?' That work will be undertaken over the next few months. They will also be asked to consider how much time they will need to undertake this exercise and, in doing so, be in a position to inform the government of a suitable time frame to bring down the post-election budget which, given the election at the end of March, will have to be delayed from its normal period of late May or early June.

The ultimate exercise is about good budget management and good outcomes for government. I would invite the Leader of the Opposition to sign up to the budget sustainability commission and utilise that vehicle, should he or whoever might be leading the Liberal Party at the time be successful in winning office. It is a good vehicle. It is not a Labor Party appointed machine: it is a committee of independent, robust—

Mr Williams: It is! By definition, it is.

The Hon. K.O. FOLEY: By definition?

Mr Williams: It is a Labor Party appointment: you're appointing it.

The Hon. K.O. FOLEY: The point I am making is very clear. This is not a commission that has Labor Party mates or people who will just tell the government what it wants to hear. These are people who will be more than prepared to be robust and direct in their advice. You can hardly say that Geoff Carmody would not tell the government what he thinks.

An honourable member: They might tell you next year's budget should have been this year's.

The Hon. K.O. FOLEY: They could do that, but ultimately I am confident that the suite of savings that can be achieved from the public sector will put the budget structurally back into surplus.

As I said, one of the easiest things to do is, as some people are saying, 'You're leaving all these savings options off until post-election.' That is not correct. We can achieve a large part of the savings options. I would argue that at least half of the savings can be locked down before the election if we can get a very good wage outcome with the Public Service union in its round of enterprise bargaining.

If we can get wage outcomes at 2.5 per cent or lower, we can save at least $150 million or thereabouts in the ongoing wages bill for government. In the current environment, that is still a very real increase in wages. Job security is still intact, and the government can achieve the vast bulk—or certainly 50 per cent—of the savings we need. That will be done in the lead-up to December. So, I say to those opposite or other commentators who say we are leaving the hard decisions to post election that we are not. We are saying to the Public Service union that 2.5 per cent is all we can afford.

Ms Chapman interjecting:

The SPEAKER: Order, deputy leader!

The Hon. K.O. FOLEY: Do members opposite support 2.5 per cent?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: The deputy leader supports 2.5 per cent. We now have the Liberal Party accepting 2.5 per cent. Thank you for that interjection. So, with bipartisan support now—

Ms Chapman interjecting:

The Hon. K.O. FOLEY: So you don't support it?

Ms Chapman: I didn't say that at all.

The Hon. K.O. FOLEY: Do you support it or not?

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: That's the problem with the Liberal Party opposite. They say they'd do things differently but they never say how. They say that everything we do is wrong or bad, but they never say how. You are nothing—

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: I listened to the budget reply, and you did it again. You accused me of corruption; you had to withdraw, you had to apologise.

Members interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order! The house will come to order! The Treasurer is now debating.

The Hon. K.O. FOLEY: It is quite clear to all observers that Martin Hamilton-Smith is unfit to be a leader of a political party and premier of this state.

The SPEAKER: Order! The Deputy Premier is now debating.

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