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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-02-18 Daily Xml
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ROYAL ADELAIDE HOSPITAL

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:38): My question is to the Treasurer. Will the total cost of the Marjorie Jackson-Nelson Hospital or the new central hospital—

The Hon. M.D. Rann: Didn't you hear the announcement?

The SPEAKER: Order!

Mr HAMILTON-SMITH: —the Royal Adelaide Hospital, renewed or rebuilt—

The SPEAKER: Order!

Mr HAMILTON-SMITH: —whatever it is going to be—

The SPEAKER: Get on with the question.

Mr HAMILTON-SMITH: —be treated as debt in his budget? Today the Treasurer told ABC Radio that projects built under a public-private partnership are listed as government debt in the same manner, he said, as a government-funded project. He said 'there is no difference to the debt level under a PPP', but the Auditor-General's Report 2008 states:

Depending on the terms of the contracts, PPPs may, under current accounting standards, be excluded from state balance sheets.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:40): I have said to the shadow treasurer often that he should get properly briefed on these matters before he makes a fool of himself. The quote from the Auditor-General is that projects may be considered off balance sheet. The accounting standard, and the amount of risk transfer one has to undertake to get these projects off balance sheet, is quite extraordinary.

A public-private partnership is nothing more mysterious than the private sector providing the funding and maintaining an asset whilst the government takes an effective long-term lease. As I said from the very beginning of this process, regardless of whether or not this is a PPP, it will be considered on balance sheet.

Ms Chapman interjecting:

The SPEAKER: The Deputy Leader of the Opposition is warned.

The Hon. K.O. FOLEY: Sorry?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Not applicable, actually; N/A is not applicable, because we have not allocated any money towards it. Whether we borrow $1.7 billion ourselves to build the hospital through a design and construct project, that is $1.7 billion of debt in real numbers as it appears on our balance sheet. Off she goes to be really proud of her dragging down of the former government.

The SPEAKER: Order!

An honourable member: Pick on a woman; that's what you do.

The Hon. K.O. FOLEY: Sorry; pick on a woman? What have you guys been doing to Marjorie Jackson-Nelson for the past twelve months? Give me a break!

The SPEAKER: Order!

The Hon. K.O. FOLEY: You have disgracefully politicised a great South Australian woman—

The SPEAKER: Order!

The Hon. K.O. FOLEY: —yet you have the audacity to accuse me of picking on a woman.

The SPEAKER: Order!

The Hon. K.O. FOLEY: Back to lesson 101 in public finances for the man who would be treasurer, the Leader of the Opposition, or as he prefers to be called 'the alternate premier', so I guess 'alternate treasurer'.

Mr HAMILTON-SMITH: Point of order, Mr Speaker. Without any interjection or encouragement, we have personal attacks across the chamber with no opportunity to respond. It is clearly debate. I ask that you call the minister into line.

The SPEAKER: I have called the Treasurer to order, and he is in order.

The Hon. K.O. FOLEY: I apologise, sir; I was out of order and I did not realise the leader was so sensitive. The hospital is on balance sheet. When rating agencies—

Mr Hamilton-Smith interjecting:

The SPEAKER: Order! The Leader of the Opposition will come to order.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Is he picking a fight with me? Trust me, you win. I know what you were trained in—you win! I'm not fighting him. I might be from Port Adelaide but we learnt one thing early in our lives in Port Adelaide—

An honourable member: We don't fight the big boys.

The Hon. K.O. FOLEY: We don't fight the big boys; yes, you are dead right. You win, Marty; but I think it is a bit undignified that you are trying to pick a physical stoush with me in the house.

The Royal Adelaide Hospital, whether it is publicly or privately financed, will be an on balance sheet transaction. The PPP schools will be an on balance sheet transaction. These projects are considered by rating agencies to be on balance sheet. When these processes of PPPs first started, there was a real drive, and a motivation quite often, to do a PPP deal because you could get it off balance sheet and, in an odd way, you could think that you were hiding your debt levels. That is not good motivation. You should never introduce or entertain an idea of a PPP if you think you can get it off balance sheet and hide your debt. That was old thinking. I have said right from the outset that whilst we are in government our PPPs will be on balance sheet, and there is no difference whether that is privately or publicly funded.

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