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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-11-11 Daily Xml
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STATE BUDGET

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:35): In light of the Treasurer's response, on what date will the promised financial statement, providing full details of our fiscal position, be made to parliament?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:35): I have already said that it is unlikely that we can do it now for parliament. We would normally bring the mid-year review down in either late December or into January. It is my intention to bring that forward to early December and to incorporate both the Mid-Year Budget Review and an update on the financial position of the state and what we are doing to address the concerns and the expectations of rating agencies, and what we should be doing for the prudent management of our balance sheet.

The problem we have, and the reason it is being delayed, is that we are in a period of incredible volatility. You cannot make a judgment call—and it may well be that we cannot when we make a decision in December to go ahead with the mid-year review—on exactly what our unfunded liability is or exactly what money we will have to put into our unfunded liability to meet our expectations.

There is a new accounting standard, the mark-to-market assessment of liabilities, which is a very difficult accounting standard for governments and business to deal with. There has been a lot of debate and discussion occurring on whether it is unfair on governments or businesses to have to report their liabilities on a mark-to-market basis on any given day on any given week, given the volatility of the share market.

Yesterday the Australian stock market, I think, performed okay: today in early trading, I heard it was down 3 per cent. In New York you have a situation where the stock market is going up 500 to 800 basis points a day and coming back down the next day. The volatility in the market is such that it is nigh on impossible to get a proper understanding of where our liabilities are at.

The information I have received from my discussions with people in both the United Kingdom and the United States, and just to show what we are dealing with: I had a meeting with one fund manager who was confident that we were starting to see some stability in the equities market and that we should start to see some rational behaviour, and the next day I got on a plane and by the time I got into the next airport the thing had dropped 800 points or something. Nobody knows what is happening in America.

I am hoping that by early December we will have a better feel for it. If we do not, we will go with what we have at the time. Reporting these numbers to the parliament or the public is not the issue here, it is what action we are taking to address the position, and we will be as open and forthright as we can.

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