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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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SUPPLY BILL

Second Reading

Adjourned debate on second reading.

(Continued from 22 June 2010.)

Mrs REDMOND (Heysen—Leader of the Opposition) (11:41): It is my pleasure to at last have an opportunity to speak on the Supply Bill, which is a stunning bill really when it seeks to get permission from this parliament to apply $5,220 million in order to pay the Public Service. Why? Because this government has not brought down its budget; it has not brought it down in time, and indeed we are not going to get our budget until the middle of September.

That is just extraordinary when you think about the fact that in the UK they have had an election very recently and they have just brought down their budget. It is a pretty tough budget. It has been brought down overnight actually. I saw the Chancellor of the Exchequer on the television last night bringing down the budget and bringing some very bad news to a whole lot of people in terms of the regime that they are going to have to bring in over there because of their financial situation, but they did it. They brought in their budget, because they recognised the need to react quickly to their financial circumstances, and they did it on something like a $1.3 trillion budget and they have done it within 50 days of the election.

Yet in this state we have a government that has been in office for eight years. We are now three months post-election, and they cannot bring down a budget until September—another three months away. It is just the most extraordinary thing. This government, having been here for eight years, last year brought down a budget that in itself was an extraordinary thing. They brought down a budget last year in which they said, 'Here is the budget, but by the way there is $750 million in this budget that we have not figured out where we are going to make savings. We have to make savings to get this budget to come in where we have printed it as being. We still need to identify $750 million worth of savings, but we are not going to tell any of the people in the state or the public servants who might be affected by our decisions in that regard, so how we are going to do that?'

It is just extraordinary. If you imagined a private enterprise CEO or financial controller coming in and saying to the board—and I know many of the people on this side have been in private enterprise, unlike those over there—'Here is the budget for next year, but by the way there is a whole swathe of it where we are going to make cuts, but we are not going to tell anybody where we are going to make cuts because that might upset people. We have got an election coming, so we will not tell anyone. Furthermore, although we have a department whose specific job is to manage the finances of the state, we are going to employ some people and call them the Sustainable Budget Commission and they can spend the time up until the election is past figuring out where to make the cuts within the budget that we have produced.'

Now we find that the Sustainable Budget Commission is not only out of time—it is overdue with its report—but it is $2.5 million dollars over its own budget. Why would you trust a group of people who cannot even do the job within their own budget to do the budgeting for the state? It beggars belief, but this government has got away with it for eight years, and I am sad to see that in the UK the obvious thing is that Labour governments all over the world behave the same. They get us into financial doo-doo, and then we have to get in and fix it up. I expect that we will have to get in and fix it up in due course in this state. They have got us into a fair degree of trouble already.

The Treasurer thinks that the way to manage the affairs of this state in terms of the budgetary situation is simply to say, every time he gets to his feet over eight years, 'We are good economic managers.' Even though there is no substance to that statement, he has been, I will grant you, very good at getting up and saying, 'We are good economic managers.'

I am beginning to think that what we should have been doing was getting up every day and saying, 'You are appalling economic managers.' There is certainly more substance to that statement because this government has got us into situations that you would not believe. Our living standards, our service levels, our infrastructure and our economic position relative to other states have all declined. Our share of the national economy has gone down.

This is a government that has had a good opportunity. Over the first seven years that it was in office, up until the global financial crisis, this government was receiving more money because of increased land and housing prices. They had a massive boom in the money that was coming in from the property market and, on top of that, they had a massive amount of money coming in as extra GST.

They calculate the GST differently from the commonwealth government, so—surprise, surprise—every year they get a bit of a bonus in the GST. That is probably (or possibly) what is going to get them out of their difficulties over the $750 million, because they have got a surprise bonus of $2.5 billion in GST coming in. So, they are probably going get themselves out of their problems. The point is that over the first seven of their eight years in office, this government had massive amounts of money coming in by way of property taxes and massive GST bonuses and surpluses.

What have they done with it? They have done nothing with it. This state is in a worse economic situation than it was when these guys got into office. Our share of the national economy has declined over their period in office from 6.8 per cent to 6.5 per cent. We have 25,000 fewer jobs in this state now than we would have had if we had but kept pace with the national growth. We have fallen behind the national growth.

When we talk about our exports from this state, they were always pretty good. In fact, under the previous Liberal government they were climbing quite significantly and there was a legitimate target. This government came into play in 2002 and—they are great at setting targets—they said they were going to treble our exports. Treble our exports! What has happened, however, over the eight years that the Labor Party has been in government so far, is that our exports have gone down.

When the Liberals were last in office, our exports—just in cold, hard dollars, not even taking into account inflation—were $9.1 billion for the year 2001-02. They have now dropped to $7.9 billion. In fact, our export growth is the lowest in the nation and our exports over the last 12 months alone have dropped by 23 per cent.

It is disgraceful that this government and particularly this Treasurer have the gall to come into this place and assert that they are good economic managers with a record like this. We have the lowest proportion of exporting businesses of all mainland states. What is more, we continue to lose residents to other states with four times more people migrating into other states than under the previous Liberal government.

Our share of the national population has declined under the Rann government. In fact, the week before last, I met with some people from the skilled migration group and they are most concerned at this government's lack of action in making sure that we bring into this state the people we need to fill our job vacancies.

The government boasted during the early part of the year about how they had the lowest unemployment. I do not think they addressed youth unemployment, specifically, which I think is about the highest in the country; they boasted about their low unemployment, but the question is: how many people have left this state looking for employment because they cannot get it in this state?

Mr Gardner: Too many.

Mrs REDMOND: Absolutely. This government has been just an appalling waster of money. They have wasted money and, by increasing our taxes by over 60 per cent in the eight years that they have been in here, they have now established this state as the highest taxed state in Australia, the highest taxed state in this country. What is that going to do to business in this state? It is going to have an appalling influence on business in this state. We have excellent business people in this state and, indeed, I have been out visiting businesses that are extremely successful overseas—we do not even know about it here. However, the government, by introducing this tax regime and becoming absolutely dependent on the tax regime that it now has, has put us in a position where our business people are unable to compete.

What is the consequence of that? The consequence is that when you look at those few things where we do have infrastructure being built, like the desalination plant, the tram extension and the Northern Expressway—which, by the way, is 80 per cent funded by the commonwealth not by this state—who is getting the contracts for them? Largely people from Victoria, not people from South Australia.

Is that because our businesses are not good enough? No, not at all; it is because they cannot compete with the tax regime in other states which favour those organisations to the point where they can tender at a lower price. This government says, 'Oh, not our problem, lowest price so that is where the tender is going.' Then the benefit of the tender does not come into the state either because, as everyone would appreciate, if the business which got the tender was based in South Australia and the people employed by it were in South Australia it would mean that the money was going around in our economy and, thus, helping the economy of the state. But, no, it does not matter to this government.

Indeed, we came out with a policy before the election about the way the Victorians address this because we know that you cannot simply make it an unlevel playing field. However, in Victoria they say—and I am just going to from memory on the figure—any government project over $3 million has to have, as part of the tender process, a consideration of not just the financial bottom line but the bottom line in terms of the training, the intellectual property and the employment that it will generate as part of the social sector and what it is going to do to help the state. That becomes part of the assessment for the tender process in Victoria. So, not only do the Victorians give their own guys a bit of favourable treatment in that way, because obviously Victorian companies tendering in Victoria and employing Victorian people will get bonus points in their tenders but then they come over here, because they have got a better system, and steal the projects from here.

This government has led us into a serious decline in the state's economy and, yet, the Treasurer persists in getting up and saying, 'We are good economic managers.' As I started to say at the very beginning—

Dr McFetridge: Self-praise is no recommendation.

Mrs REDMOND: No; as the member for Morphett says, 'Self-praise is no recommendation.' Since it is the only quarter in which it gets any praise it is the only option it has for praise. But when you think about the things that his government has promised—and I will take you through a few of its promises over the past eight years: it was going to expand the Mount Bold reservoir. Personally, since the Mount Bold reservoir is in my electorate, when I first heard that I thought, 'That sounds like a good idea because water is clearly our number one issue.' That was until I found out that its plan was to double the size of the Mount Bold reservoir so that it could pump more water out of the Murray. It beggars belief that this government would think that it was a good idea to pump more water out of the Murray, given the situation with the Murray both as to our irrigators and as to the environmental concerns.

The government also promised that it was going to bulldoze bikie fortresses. Well, bulldozing bikie fortresses—isn't that amazing? It was also going to lower electricity and water prices. I can't wait until we start hearing from the government about what is going to happen to our water prices because it is obvious that our water prices are going up. Not only are they going up—there it is, the member for Finniss has a copy of Mike Rann's original pledge card. Oh, if only! If only the pledges had been kept maybe I would not wake up every morning so motivated to get rid of this government.

Lower electricity and water prices: has anyone here got lower electricity prices over the last eight years?

Honourable members: No.

Mrs REDMOND: Or lower water prices over the last eight years?

Honourable members: No.

Mrs REDMOND: In fact, I suspect that what is going to happen is that we are going to find out that not only are we getting a very significant increase in our water bills but the cost of the desalination plant is going to add even more to the water bills, especially if it turns out that in order to get the commonwealth money the government decides that it has to put the desalination plant on earlier. Of course, we had a better proposal but the government did not want to know about it. We had a way of actually reducing our reliance on the River Murray right away but the government would not do it.

The government was going to stop political government advertising. Does anyone remember that promise? Remember that Mike Rann made a comment that if you saw a politician in an ad it was basically a cheap way of doing paid political advertising. The government said it stopped political government advertising. In the first six months of last year, it spent $23 million on government advertising.

Dr McFetridge: $23 million!

Mrs REDMOND: Yes, $23 million in the first six months. I grant you, some of that would have been legitimate. Some of it would have been to notify us about when we were not allowed to use our sprinklers or hoses, and all that sort of stuff. It would have been simple information. But what government needs to have paid advertising on television to advertise its budget? A budget advertisement last year! It is just extraordinary the money this government has wasted.

If only we could stop the waste, we would find that this is a very rich state. Indeed, when you look at last year's budget, my recollection is that it showed that the government was trying to get our debt—it is working hard towards it—back out to where it was at least in relation to the State Bank; so back to $6.8 billion in debt. I will come to WorkCover and all those other things in a minute. My recollection is that the interest payment on that $6.8 billion was going to be $711 million a year, and that was before all the interest rate rises we have had over the past 12 months. My bet is that it was pretty close to $2 million a day in interest. I was not in this place then but, when the then government got us into the State Bank situation, I seem to recall John Olsen, when the Liberals got in, having to fix up that mess and that it was $2 million a day in interest.

I have this image of how this state would look if every day as the premier I could go out and say to each town, 'Here, you have $2 million today; $2 million for you tomorrow; $2 million for you the next day.' Imagine after just one year what that would look like around this state—if every community got that money. But, no, we are paying that money in interest because of this government's fiscal mismanagement over the time it has been in government.

Speaking about that, it is not just the state debt. If you look at WorkCover, we worked and worked to get the unfunded liability down and, when we left office, I think it was around $59 million. Where has this government got it? Back out over $1 billion. You would think that, having done that, at that point you would have a situation where you had the best WorkCover in the world. But, no, our WorkCover has the highest levy rates in any state and the lowest return to work rate. It has the highest work levy rate by more than 50 per cent. The highest in any other state is 2 per cent, and the highest levy in this state is 3 per cent.

By the way, with the federal government and its proposals at the moment, that is going to double. It will not be WorkCover, but imagine the impact of the 3 per cent extra in superannuation on small businesses in this state, and that is the majority of business in this state—and they are going to have to pay an extra 3 per cent. They will not actually get the benefit of any reduction in company tax—they are not structured as companies—and they will have to pay that extra 3 per cent in superannuation. So, an extra 3 per cent in oncosts for all the employees in this state. Talk about building in disincentives to growing businesses in this state.

This government just buries its head in the sand. This government has a Treasurer who thinks that land tax is important only for people who are rich so-and-sos who can afford extra houses. He does not recognise that, first of all, those houses provide rental accommodation and that the more the land tax the higher the rentals for all the young people and others out there who are trying to get into the housing market but are renting. It also affects every business that is renting accommodation—and that is the vast majority of businesses in this state. They work in rented premises, and that means there is a landlord and there is someone paying land tax, and ultimately it is passed on to every business owner and, therefore, to all the consumers in the state.

So, it is not just an issue for the high earning end of the town; it is an issue for every person in this state and, in particular, for businesses throughout this state. But it is a message that this government has chosen not to hear for the longest time.

I will go back to some of the other things this government has said it would do but did not: I refer to honesty and accountability in government. Well, that is a given; we do not have that with this government. The underpass along South Road beneath Port and Grange roads. The tramline extension to North Adelaide. I am not a person who is opposed to trams per se, but it does occur to me that, if you have a city where you have trams and you have removed the trams, before you decide to put them back maybe it would be a good idea to have a bit of a public discussion about the idea to see whether there is any legitimate basis for saying, 'Well, this is the way of the future, therefore we are going to go back there.'

They just decided, because they wanted an infrastructure project they could say was completed by the close of their previous term in office—their first term—to extend the tramline to North Terrace—and hasn't that made North Terrace a joy!

They also promised, interestingly, a solution to the Britannia roundabout problem. They promised a prison at Murray Bridge—the member for Hammond would recall that—and they also promised, famously, a redeveloped FIFA-compliant Adelaide Oval for $450 million.

Mr Pederick: Or somewhere close to that number.

Mrs REDMOND: Well, not even close any more. They are a few of their broken promises. I could go on about broken promises but, obviously, there is a need to break promises when you do not manage financially. As I said, every time he gets to his feet the Treasurer's habit has been to simply say, 'We are good economic managers.' Clearly, they are anything but.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Federal/State Relations, Minister for Defence Industries) (12:01): That was an interesting tirade from the Leader of the Opposition. Her experience as a lawyer never ceases to be on display when she is in this chamber. She is a very good orator, but when you look at what she is saying it is nothing but shrill. The Supply Bill, as we know, is a necessary piece of legislation, given that without it—

Dr McFetridge: Why can't we have the budget?

The SPEAKER: Order! The member for Morphett will allow the Treasurer to speak.

The Hon. K.O. FOLEY: I am happy to address the issue of the budget. When the state went through the global financial crisis, having lost $3 billion worth of state revenue over the forward estimates period—and we have recovered at least $2 billion, but my most recent advice is that we are still in the order of about $1 million net down—it necessitated something that required more than the normal budget process. It required a structural assessment of our spending; that is, the greatest threat to the budgetary position of this state—as it is in any state but I think it is more acute in this state—is that the service demand far outweighs our capacity to fund it. That has been a historical fact in this state and it will be a fact going into the future.

What governments have done in the past is that they have funded increased service delivery by running consistent net operating deficits. We changed that when we came into office—and we were the first government to do so for decades—in order to get our budget into a position where our recurrent expenditure was covered by our recurrent taxation and funding sources, and our capital, where necessary, would be funded from either that same source of revenue or borrowings.

When the global financial crisis hit us, it knocked the stuffing out of our state's finances. In the last budget we moved to a situation—certainly with the support of the rating agencies—where we did what every government will have to do. Normally we have a two term government in this state—or a three term government in this instance—and after every eight years or so there is no doubt that you need a thorough forensic look at everything you spend and then as a government make decisions as to what expenditure can be supported and, indeed, what expenditure may have to stop because there are more compelling priorities.

With the Sustainable Budget Commission, what I have done in this budget is exactly what Dean Brown with Stephen Baker did on coming to government in 1993. It is what John Howard did in 1996 when he came into government after the Labor government. I have chosen to do it heading into our third term. I have chosen to bring in outside expertise to assist my government officers to do that forensic analysis of our expenditure. I asked that Geoff Carmody, the founder of Access Economies, was the senior economist who undertook this work or headed up the secretariat that undertook the work for John Howard. Geoff Carmody is a very good man and very good economist, and he knows more about federal and states' budgets than most, if not all, in Australia and I felt that he was an outstanding choice.

The Sustainable Budget Commission provided me with an interim report before the end of last year, before we went to the election, on its suggested timing of a good time to bring down the budget, which would allow it to undertake the forensic work it needed to do. It recommended that we do a budget later in the year, and we selected a September date, which is exactly what we did following the last election because the reality is that a March election coincides with the normal budget cycle.

There is no doubt in my mind that an incoming Liberal Government would have, quite rightly, needed time, and my guess is that it would have allowed this work to have continued because it is very good work, it is not political, and it is a good analysis and a good assessment as to what it is we can sustain in terms of our budget going forward.

The Leader of the Opposition talked about history. I was not going to do that, but given that she felt the need to do so let us reflect on where we were when this government came to office in 2002. When we came to office, notwithstanding the sale of ETSA and notwithstanding any other work that was undertaken, particularly by Stephen Baker (who I think was a good treasurer, notwithstanding the fact that I in opposition would rarely have given him that credit—

Mr Venning: Notwithstanding the State Bank.

The Hon. K.O. FOLEY: And with the State Bank, absolutely, and I have said publicly that Stephen Baker inherited a nightmarish scenario that he had to deal with, but we do not want to go into the politics of that period.

Members interjecting:

The Hon. K.O. FOLEY: Okay, we will. I was actually referring to the first Liberal government when Stephen Baker and Dean Brown, who were trying to do the best for the state, were torn down by the Olsenites, Joan Hall and others, and were not allowed the privilege of contesting the next election. I do not want to lift the scab on old Liberal Party infighting, which has been replaced with a fresh Liberal Party round of infighting.

When we came to office, despite the sale of ETSA, the budget position was that they had run four consecutive net operating deficits, so even with the sale of ETSA Rob Lucas and the then Liberal government were incapable of getting revenues to match expenditure. They ran four net consecutive operating deficits. We rebuilt the state's finances: that is an indisputable fact.

Members interjecting:

The DEPUTY SPEAKER: Excuse me, Treasurer. Order! Member for MacKillop, I know that yesterday was exciting, and I know that you enjoy interjecting, but I am not minded to listen to these perpetual interjections all day long. Please do not argue with me. Let us have a little quite time and let us listen to the Treasurer. Thank you.

The Hon. K.O. FOLEY: Thank you, Madam Deputy Speaker. We had eliminated the general government sector debt. Let us remember that this government regained the state's AAA credit rating, and this government has focused on setting up a framework for a strong economy by focusing on economic development, jobs, sustainable industries, skills and careers for future generations.

Our infrastructure expenditure today is five times that of the last Liberal budget. The 2009-10 health budget is more than $4 billion, which is a 100 per cent increase on funding provided to the health budget under the last Liberal budget. I can demonstrate—and we have had it said by both international rating agencies Moody's and Standard and Poor's—that this government's fiscal discipline was a major reason we regained the AAA credit rating and the major reason we have maintained the AAA credit rating.

When the global financial crisis (GFC) hit, we saw this destruction in revenue and, whilst we have not suffered anywhere near as badly as we thought, revenues have not bounced back and the consumers of Australia are not spending to the extent they were before the GFC; they are much more mindful of personal debt, much more mindful of their capacity to service their home loans. We have not seen the revenue come back to the strength that had been forecast before the GFC.

We had to do a couple of things: we had to cancel the prison; we had to make a number of other adjustments to our capital program; and I had to demonstrate to the rating agencies that we had a plan to ensure that we worked our way through the GFC. You only have to look at Queensland, which lost its AAA credit rating because, like us, it was hit with the realities of the global financial crisis. But they were not able to convince the rating agencies that they had a plan to deal with it; they lost their AAA credit rating.

I developed a plan; the government developed a plan. I went to New York and Melbourne where Standard and Poor's is based. I put the plan to them before I released it publicly to gather feedback and some confidence that this was a plan that they would be comfortable with, and they have agreed to it. What that means—and this will be the challenge for governments well beyond this government and well beyond a future Liberal government—is this state's capacity to meet the expectations and needs of the broader community in service delivery. How do we fund that?

If we can look beyond the short-term politics of a debate in this chamber, or the short-term politics of an election or even just the short-term politics of a four-year parliamentary term, in the years and decades forward these are the challenges that our community and our society face. Health expenditure is running, on the most generous assessment, at 8 per cent per year but, when one really looks at the wage inflation of the profession and the technical advancements that we are continually and thankfully making in health, health costs are running more in the order of 9 to 11 per cent compounding per year.

You only have to look at the fact that, since the last Liberal government (so, eight years ago), we were spending, say, $2 billion; today it is $4 billion. That is in eight years. That is so far in excess of inflation. If we can just for a moment put aside short-term petty politics on either side, this is the challenge our society faces. The national government has put a plan in place, and we support its involvement. I think it is very important that we have the commonwealth at least in the game now, but the reality is that issues such as child protection and social welfare for the young in our community are growing significantly all around the nation and around the western world.

At a time when society has never been more affluent, when society has never been better educated and when society has never had higher living standards and when you would think that the quality of parental care should be far higher and far better than it has ever been towards our young, the reality is that the abuse and neglect of our young in society is increasing. Part of that, of course, is that we are identifying it much better today than perhaps we have in the past, and that could be a large part of the problem. It may well be that the quality of care has now reached a new level and brought a whole new cohort of kids into protection and care, but the undeniable fact is that it is an exponential growth right around the nation and the western world in excess of inflation. They are just two very large components of the budget sector that are growing well in excess of inflation. Combined, they make up probably half the budget, if not more. It is probably half the budget: close to it.

The point of the matter is, and I am coming back to the Sustainable Budget Commission, that there is no doubt in my mind that governments today and in the future will have to stop doing things we currently do to fund the things we need to do which we consider to be of higher priority. That is not going to be easy. It will not just be this government's challenge: it will be every treasurer and every government for decades to come. We will have to make hard, stark choices about what it is we can afford to fund and supply as a service and what we can no longer afford to fund. Unless the community has a larger appetite for taxation increases (and I do not think the community has that and I do not see that as the solution, ultimately), it really will be about what we as a society want from government for the level of revenue that we are prepared to give government.

Mr Venning: Stop wasting.

The Hon. K.O. FOLEY: The member for Schubert says to stop wastage. In relation to wastage in government in an enterprise of 70,000-plus people and a budget in excess of $16 billion, of course there are issues of wastage, duplication and inefficiencies. Every time I have done a budget I have hit hard on those inefficiencies. We have taken 1,300 people—I think that was the last number I saw—out of the public sector in the last 18 months. We are doing Shared Services, for which I have got an enormous amount of criticism from members opposite.

Shared Services, as an example, is a way in which we can better deliver the core services of running an enterprise by eliminating duplication and, when it is bedded down, a more efficient way of doing it that will deliver $50 million, $60 million or $70 million a year in efficiency savings. But, bear in mind that initiative alone, as difficult as it is and as frustrating as it can be, when it is bedded down, will give us an efficiency. That efficiency is almost a drop in the bucket in terms of the long-term future funding needs of the state.

One of the prime motivations for the new hospital was, again, to see where we could get a more efficient hospital operating with a better design, a modern design, and a design that is considered in the total, as against the current Royal Adelaide Hospital, which has been a very old hospital that has had additions and work done, but it is not as efficient as it could or should be. We may get $50 million a year in efficiencies out of it or $100 million; we will not know until we see the bottom line of the tenders. But, again, as good as that is, it is but a small proportion of the cost pressures we face going forward.

The hardest job you have as treasurer—it is the hardest job Rob Lucas and Stephen Baker had and that I am having—is the unavoidable cost pressures of government. They are a steamroller coming at you and it would not matter how hard, tough or vicious you want to be in stopping them, you cannot. They are the people rolling up to our hospitals. They are the kids we have to take out of neglect and harm's way. They are the realities of government. All we can do when we are in government is try to find ways to continue to improve and deliver better services. It is a difficult and, at times, onerous task.

However, the economy in South Australia has never been stronger—certainly not in the last 30 years. We have some of the lowest unemployment rates this state has ever seen. We are bringing people into this state at a level that we have not done since the surge in immigration in the postwar period. We are seeing a diversification and a broadening of our economy that we have never had before. These are good things. It is not without enormous challenges and not without areas of problem and fault, but we are establishing a much broader economy in South Australia where we are no longer as reliant as we have been in the past on the manufacturing sector or the agriculture sector to hold us up, or the services sector or the wine industry as a subset of the agriculture sector. We are seeing the development of a mining industry. It will not be the most dominant sector but it will be a very, very, very important balance in our economy as various other sectors go through their economic and seasonal cycles.

Our primary industry sector, which has been—as it has always been—the area where we have had the most competitive advantage in terms of an economic base, has great hardships. At any given time, at any given moment, there will be one or more issues compounding in that sector. When they all collide—like the nightmare that has been the lack of water in the Riverland coinciding with poor and little rains for our cropping industries, or the attack of foreign product coming into Australia in our dairy sector or in our citrus sector or wherever—there are always pressures on that sector, but the broadening of the overall economy gives us the ability to look after some other sectors.

I know that the hardship that has been seen in the Riverland has been tragic and I know that we as a government have been the subject of criticism but because we have had balance in other sectors of our economy, we have been able to channel significant resources into the Riverland, into the issue of buying water and into the needs of a community under severe stress. That is because the overall budget position is strong relative to what it has been in the past.

On the issue of infrastructure, I said that we are now spending five times more than when we came to office. A lot of our infrastructure in this state has been allowed to deteriorate. When we came to office the amount of capital that the last Liberal government was expending was actually, from memory, below the depreciation of our capital assets so that meant that we were, through underinvestment, watching our capital stock depreciate.

We have reversed that quite significantly, and these projects are never easy but they are necessary. We are doing that in a way that we believe will best deliver a more efficient and more liveable city in Adelaide as well as doing what we can to improve the quality of life and infrastructure in our regional and rural areas.

I am very proud of this government's financial record. I am very proud of this government's economic credentials. It has not been without error or without mistake, but in eight years (or heading to 8½ years) it has seen our state become one of the strongest performing states in all of Australia, and many commentators say this whether it is Access Economics who once would have looked at South Australia as the rust bucket forgotten state—even Access Economics who are the harshest and sharpest critics now say that, or whether it is the chief economist from Westpac or the National Australia Bank or the Commonwealth Bank or ANZ. When these opinion leaders are commenting on South Australia, it is not always as positive as I would like but it is largely a very positive story.

That has occurred because, despite what errors or faults members opposite may wish to level at this government (and perhaps in some cases they are legitimate criticisms), taken in the overall context, I believe that this government has managed this economy very well. We have a stable administration that has not been beset with the internal tensions and the impossibility that was the last Liberal government where it did not matter who was leading, the powerful forces sitting behind those leaders just tore that government to pieces over eight years.

We have been a very stable government. We have delivered a better state and are delivering a better state economically, I would argue socially, and financially than when we came to office. That should always be the measure of whether you have been successful or not. Going forward, we have to do a lot more. We have a very large agenda to deliver on and we have a very significant budget challenge. This budget that I will bring down in September will be a very, very difficult budget. It will be a hard budget. It will be a budget of challenges that our government will have to meet. It will be a budget that will cause discomfort in some sections.

Mr Venning: Why so late, Kevin?

The Hon. K.O. FOLEY: I've explained that, Ivan; you weren't listening. It will cause discomfort in some sectors, in both the public sector and in the broader community. It will be a budget that will demonstrate that, after eight years and with our ninth budget, we have the experience and the mettle to ensure that we do not look for short-term political outcomes from the budget but that we look at a number of decisions that will structurally adjust the budget to provide longer term benefits for the state. That will be one mighty challenge. It will be the hardest budget I have ever delivered, and very few treasurers have had to deliver a harder budget.

I will conclude on this point. My guess is that, probably after every seven or eight years in the future, a treasurer will be confronted with the same reality. To continue to provide the essential needed services of government, you have to—

Mr Venning: You'll still be here.

The Hon. K.O. FOLEY: I don’t think I will be here in eight years, Ivan.

Mr Venning: That's good news. Nor will I be, but I'm not 70, Kev.

The Hon. K.O. FOLEY: But, unlike you, I would like a life beyond politics at some point. Probably every seven, eight or nine years, you must do a major forensic analysis of your expenditure and decide what it is you can afford to fund and what it is you cannot fund, and that will be the challenge of every government. When the Sustainable Budget Commission report comes down, I hope it will show a process that is successful. It will be one that I would be surprised if future governments do not follow.

I thank all members for their contribution. As critical as I am sure they were, and as personally vilifying of me as I am sure many of them were, I take it in good stride. I am a tough nut and I can handle it.

The DEPUTY SPEAKER: I would like it noted for the record that the member for Schubert is not 70.

Bill read a second time.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Federal/State Relations, Minister for Defence Industries) (12:28): I move:

That the house note grievances.

Mr MARSHALL (Norwood) (12:28): I rise to speak on this bill proposed by the government. The Treasurer has asked the parliament to authorise the supply of $5.5 billion prior to the release of the budget in September this year. Today in the house he has told us how proud he is of the government's economic performance over his eight years, and now ninth year, as Treasurer. He told us about the accomplishments of the government. Of course, what he failed to tell the house was the economic backdrop under which he has been operating.

The past eight or nine years have been some of the most economically successful years in the history of the country and certainly in the history of this state but, rather than acknowledge this, the Treasurer takes all the credit for this performance based upon his running of the budget. Indeed, he talks about this government's fiscal discipline.

In my earlier speech on this bill, I very comprehensively—which I do not plan to do today—outlined the $3.8 billion of revenue that this government has received over the period of time since it took office. I also outlined to the house that very little of this $3.8 billion was actually within its control; the majority of it, of course, came from GST revenue over and above what was guaranteed by the federal government and, of course, what was budgeted by this state government. In that speech I also outlined the government's expenditure, and this cuts to the heart of it. This government, over the seven years to date for which we have the numbers, has spent $2.742 billion in excess of its very own budget, which it set for itself. That hardly shows a government with strong fiscal discipline.

It is a curious thing that the parliament is now being asked to authorise expenditure without knowing what the funds will be spent on. Of course, in the commercial world this would never occur. You could not imagine a situation in the commercial world in which a chief financial officer would go to the managing director or the board and say, 'I would like to spend $5.22 billion, but I don't actually have a budget.' It would never ever occur. However, this is what the Treasurer is asking us to do here today. Make no mistake; we are being asked to make a decision without a complete or, indeed, even a sketchy, picture of what the money will be spent on.

Today I would like to reflect on this theme, the theme of being asked to make decisions without complete information. This was developed into an art form by the current government leading up to the last state election. There is a growing trend within governments in South Australia, and indeed nationally, to promise before an election and to apologise after the election. This is a very disturbing development, and one we need to be very wary of.

I would like to give three specific and significant examples of this, which, of course, are of a financial and supply nature. The first example is that of the Adelaide Oval. This government was dragged kicking and screaming to the issue of a city stadium. The opposition presented a very clear vision for a city stadium and a cultural and sporting precinct to surround it. The people actually loved it. At first the government tried to rubbish the idea; however, unlike the opposition, its plan was not really very well thought through. It tried to rubbish the idea, but when the state government knew that it was very popular with the public, it switched over, and in December last year announced its own plan which it put to the people, telling us that it had been working on it for some time.

The guts of the issue, which I would like to reflect upon, is the lack of information that was provided to the people of South Australia prior to the election, because that is the theme I am developing here today. The voters were asked to make a decision without full and complete information. Yesterday in this house the Treasurer made it very clear that he had information relating to the costing of the Adelaide Oval redevelopment which was not provided to the people of South Australia, yet they were asked to make a decision at the state election without this full and complete information.

The second example I would like to give is that of the Royal Adelaide Hospital. This project was originally announced as the Marjorie Jackson-Nelson Hospital in the June 2007 budget. By June 2008, one year later, the project had already been delayed by a year—within a year this government had made no progress, so it put it back by a year. By June 2009, we were promised, unequivocally, that tenders would be let before the March 2010 election. So, why were the tenders not declared until after the election? This is a very good question, and one we need to ask. Maybe the government did not want us to know the precise details of its mismanagement before the election. It is easier to promise before an election and allude to the tenders being received, but they will not be looked at until after the election. The government did not want us to have the full information before making a decision at the March 2010 election.

The third example I would like to give is that of the Sustainable Budget Commission. This was first announced in the May/June 2009 budget. This commission was designed to reduce public-sector spending over the forward estimates by $750 million, but again, conveniently, this report was not required by the government until after the March 2010 election, after the people of South Australia were asked to make a decision on who should lead the state over the next four years.

It is not that the Liberal Party in any way, shape or form opposes the concept of fiscal discipline. In fact, I do not think that we as a party opposed the establishment of the Sustainable Budget Commission, but what we do oppose vigorously is the concept of the report coming down after the election, after the people are asked to make a decision.

The Treasurer in this house this morning spoke specifically on the issue of the Sustainable Budget Commission in his Supply Bill reply, and he said that this was a very important commission set up by the government to decide what it could fund going forward and what it was not able to fund going forward.

They are very lofty ideals, and it is a fantastic scope for this commission; but, again, why is that information not provided to the people before the election? Why were the people of South Australia not told what the government thought should be funded going forward and what should not be funded going forward before they were being asked to make a decision?

Each of these examples demonstrates the government's total and utter disregard and disrespect for the voting public. The voters in South Australia get a chance to elect their government only every four years in South Australia. It is therefore crucial for the public to have full and accurate information in front of them before they make their choice, just as it is important for us to have full and accurate information in front of us before we make a decision to give the government $5.22 billion to run the state up to the time of the September budget. By delaying deadlines until after an election, the voters are denied crucial information so necessary to make their decisions.

At the moment, the government has asked the parliament to approve $5.22 billion in its Supply Bill. It is asking us in advance and providing us with a budget for the next financial year. In fact, it will not be handing down the budget until 16 September. It is then going to take some time during estimates to evaluate what it offers us. Surely, this system is in urgent need of reform. In the commercial world, as I have said previously, we would certainly not ask for money in advance of developing a budget.

The Premier and the Treasurer went into the election asking us to elect them for a third term. A major plank of their election campaign was their economic credibility. Within weeks of the election we have already seen just how fragile these promises really are. Much of the last budget was framed around the $750 million Sustainable Budget Commission. Will the Treasurer soon be issuing a statement on this matter? Will he be executing a backflip trifecta on the hospital, oval and Sustainable Budget Commission?

It is all too easy to make promises that cannot be kept. It is all too easy to make claims without substance. It is all too easy to make a promise before an election with an apology or update later. What we need is full, accurate and timely information, something sorely missing from this Supply Bill discussion.

The DEPUTY SPEAKER: The member for Kavel.

Mr GOLDSWORTHY (Kavel) (12:38): Thank you very much, Madam Deputy Speaker. I appreciate the correct pronunciation that you have given the name of the electorate I have the honour of representing in this place. I wish to continue some remarks that I finished with yesterday evening concerning the Supply Bill, and now we have an opportunity with a few more minutes to make some further comments in relation to matters that we believe are important to the safety, security and wellbeing of the good citizens of South Australia.

I was making some comments in relation to road safety issues in terms of making a comparison between the policy the state Liberal Party took to the election and the policy that the ALP took to the election. To be fair to the government, and to put some clarity around the issue, I mentioned that the government raised three or so issues in relation to that policy. To be fair to the government, it highlighted about half a dozen issues in its election policy. However, I stand by what I said, that our policy was significantly more comprehensive than what the ALP took to the election.

I note that the Minister for Road Safety a number of weeks ago, obviously during the sitting of the house—and I can check this—made a ministerial statement highlighting three issues that he was looking to progress from their policy document in the short to medium term. As I said, I want to put some clarity around that and to be fair to the government, because I think I am a reasonably fair person and I take a reasonably fair approach to my duties as a member of parliament and as a shadow minister.

Continuing my remarks in relation to road safety issues, as I said yesterday evening, I do not believe that the government's road safety strategy is working, because the road toll is at the same level, if not marginally higher (I think it may be one more than at the same time last year), which is 20 per cent higher than the previous year of 2008. So we are continuing on a graph where our road toll tragically is 20 per cent higher than it was in 2008. As I said, there are obviously a number of reasons for that. I also stated we have had four ministers for road safety in about 12 months.

Ms Chapman: They get rid of them quickly now.

Mr GOLDSWORTHY: They certainly got rid of the—well, the member for West Torrens was actually forced to get rid of himself when his driving record came to light. He himself had to resign from the position of Minister for Road Safety. I can tell the house that that was an issue that was raised while I was campaigning up to and including the election. Several people spoke to me about that particular issue and how it was going to change their vote, that they had voted previously for the ALP but they were so disgusted with that level of offending that it changed their vote.

I would like to state that in the house: we had a Minister for Road Safety who, in the opinion of some members of the community, was not fit to hold that office. We have said on this side of the house that he is actually lucky to hold any front bench duties.

The DEPUTY SPEAKER: Member for Kavel, while this is all very interesting, I am not quite sure how this relates to the Supply Bill. I know it is a grievance but I think we are wandering a little.

Mr GOLDSWORTHY: It is a grievance.

The DEPUTY SPEAKER: Yes, I am aware of the grievance but you cannot just—

An honourable member interjecting:

Mr GOLDSWORTHY: Better than you are, mate! Better than you.

The DEPUTY SPEAKER: Member for Kavel, don't respond to the interjection. Carry on.

Mr GOLDSWORTHY: Thank you. In terms of supply and the direction of funding—I can certainly talk about that, Madam Deputy Speaker, in relation to the commitment by the state Liberals at the election of $52 million in an effort to address the $200 million backlog in road maintenance—we know that road maintenance and infrastructure has a direct correlation with road safety issues. We made a commitment, and obviously that commitment stands, that $52 million in funding was to go to that specific issue of addressing the backlog of $200 million in road maintenance.

I want to comment now on the most recent visit by a thinker in residence, being that of Professor Fred Wegman, who was a thinker in residence for road safety. Our policy is to abolish the Thinker in Residence program because, in my opinion, they are expensive consultants. In one of the latest developments within the government Professor Laura Lee has brought down a report saying that a commissioner position should be created—and, guess what? The Premier and the government appointed this person to that role of commissioner without advertising the position or going out into the public and seeing if perhaps anybody else out there in the community, or even further abroad, has similar, or even higher, qualifications and credentials. I think this highlights a deficiency in that particular process.

We also recall that, leading up to previous election campaigns—I think it was running up to the 2002 election campaign—the then leader of the opposition and other opposition members were screaming from the rooftops about the amount of money that the then Liberal government was paying out on consultants. Well, thinkers in residence are no different; they are consultants.

I do not dispute Professor Wegman's credentials or qualifications. He heads an institute in the Netherlands that is specifically focusing on road safety issues. He is highly credentialled and highly qualified, but why bring him out here for a three or four week initial visit a month or so ago? I met with Professor Wegman and had a good discussion with him. He is a very nice person and he said he is coming back to South Australia towards the end of the year—all at a cost to taxpayers.

I put this proposal forward: why can't the director of the Road Safety Secretariat—a section within DTEI, which has 150 staff with a $50 million budget—get on a plane and go to the Netherlands, spend two or three days talking to the professor, get some information from him, then come back and incorporate it into the government's road safety strategy? You can get a lot of information about Professor Wegman's discussions from the website. I have that information. We have downloaded it and printed it off the system. In my opinion, this is excessive spending on consultants. The government, when in opposition, used to rail against the cost of consultants that the then Liberal government used to contract in.

There are other issues in relation to emergency services. Again, I think we had a quite comprehensive policy going into the election. Checking the ALP website, I cannot see an emergency services policy.

Time expired.

The DEPUTY SPEAKER: Thank you, member for Kavel. I believe that I owe you an apology. As you know, I am slightly new to this job, but if we wish to vote on supply, then apparently you can grieve about anything you like. I apologise for that. No taxation without representation.

Mr GOLDSWORTHY: Thank you, Madam Deputy Speaker. I accept your apology.

Mr PISONI (Unley) (12:48): Thank you, Madam Deputy Speaker. I will be grieving about anything I like. Some of you may have heard our Premier doing the rounds last week on morning radio, explaining away his reasons for his solo trip to the US and Europe. He gave us a lengthy discourse on those whom he met and the institutions he visited—through Twitter of course, there was no official itinerary. It was a well rehearsed message each time. I do not know whether anybody else went through this exercise, but I actually grabbed the transcripts of the 891 and FIVEaa interviews and compared them with each of the answers. It was amazing how, word for word, the answer was the same, regardless of the question. I will cover that a little bit later.

One institution of course that the Premier did not meet with was Carnegie Mellon University, although he did meet with its resident lecturer in architecture, Laura Lee, in both London and New York. That was not tweeted of course; that came out with the interrogation by both the radio stations FIVEaa and 891. He did not tweet that he was meeting with them. In fact, he said that he did not meet with any representatives of Carnegie Mellon. However, we did find out that he did meet with Laura Lee. Whether she is a representative of Carnegie Mellon or whether she is an employee, we can leave that to be established at some later stage. However, the Premier should have met with representatives of Carnegie Mellon, because of the drain it has become on the state's coffers.

Recently, the Rann government was forced to prop up enrolments to the tune of an extra $3.8 million, resulting now in a total investment of $43 million, or somewhere around the figure of $236,000 of South Australian taxpayers' money for every student who attends the university.

It is interesting that the Department of the Premier and Cabinet has consistently referred to the assistance given to Carnegie Mellon as being fixed at a figure of $19.5 billion and that assistance ceasing in 2010. Yet, later on, after the election, of course, we were told that another $3.8 million has been given in assistance to Carnegie Mellon.

Madam Deputy Speaker, you will recall that the Carnegie Mellon campus opened with great fanfare in May 2006. According to the Premier's press release, 71 local and international students were enrolled, with a promise of huge increases in enrolments in later years in courses in information technology, public policy and entertainment technology. Most of these students were from overseas and were funded under the federal government's AusAID scholarship program, and the local students were public servants paid for by the South Australian government.

Also, we have since discovered that not only South Australian public servants but also federal public servants are subsidised by South Australian taxpayers. So, those on the federal government's payroll are also subsidised to the extent of 75 per cent of their $65,000 fee by the state government, with the federal government chipping in the 25 per cent. So, not only are we seeing South Australian public servants being subsidised at taxpayers' expense to attend Carnegie Mellon but we are seeing federal government public servants also being subsidised by the state government to attend Carnegie Mellon University.

Of course, there was always going to be two campuses. The Premier made a big song and dance about the fact there was not one but two Carnegie Mellon campuses. We found out recently that the second campus—the Entertainment Technology Centre—was closed two years ago—two years into a four year lease, with an option to renew on that lease. We believe that the break clause of that lease was exercised in September 2009—so there was no obligation for the government to take on the option of an additional lease—and that was being paid for the Department of the Premier and Cabinet. The Premier's own office has confirmed that it is $142,000 a year in rent for around about 500 square metres. It has been empty for two years, and it is being paid for by taxpayers' money.

When the college opened, we were told that the Entertainment Technology Centre was going to be a very, very exciting project for South Australia. The Premier was very excited about the fact that the Entertainment Technology Centre would be providing students with Disney and Pixar training right here in Adelaide. What have we found out since then? We have found that not a single student graduated from Carnegie Mellon's Currie Street premises, the Entertainment Technology Centre. Two years after the launch, with great fanfare by the Premier, not a single student has graduated, and those students who were there were transferred to California to complete their courses.

So, here we have a university that was promoted by the Premier as being our gateway to more international students in South Australia, sending our students off to California because the model that the Premier had worked so hard on simply did not work. The interesting thing about the past five years is that the Department of the Premier and Cabinet was quite extensive about its commitment to Carnegie Mellon. Its executive summary states:

The department has an existing agreement with Carnegie Mellon University to establish two schools, the H. John Heinz III School of Public Policy and Management and the Entertainment Technology Centre. The contract will not exceed $19.5 million and the State Government's funding support will cease in 2009-10.

That is reported as late as the 2008-09 report, 12 months after the Entertainment Technology Centre had closed. We should not be too disappointed that the commitment the Premier made before the election has been broken—where funding would cease in 2009-10—because we were being told that the Entertainment Technology Centre was still operating, was still open, and was still running in the Currie Street location 12 months after it had, in fact, closed.

The Premier was asked questions about the Carnegie Mellon campus by Mike Smithson, filling in for Leon Byner on FIVEaa. He was asked, 'Did you meet anyone from Carnegie Mellon?' The Premier said, 'No...they're based in Pittsburgh and I was in New York.' Mike Smithson then said, ‘The reason I asked that is that David Pisoni has been on this morning,' and the Premier said, 'Yeah, and he's wrong again, once again.' Smithson went on to say, 'He raised a question in parliament which didn't seem to draw a positive answer or any answer, any substantial answer last time it was asked. Are we pouring money into Carnegie Mellon for one campus that appears to have closed?' 'No, no,' said the Premier.

Smithson then asked, 'Or would you say it's combined with the University of SA, but are we throwing money away?' The Premier then said, 'The Carnegie Mellon campus at the Torrens building—we've got University of London College.' Then he started talking about the University of London. It was a perfect opportunity to explain what is happening at Carnegie Mellon, but this is the sleight of hand that we have become used to over the past eight years of Mike Rann, regardless of the question that is asked. We see it here in question time and we see it in the media. The Premier will give the answer that he wants to give to a question, even if it is not related to the question.

He was specifically asked a question about Carnegie Mellon, and he started telling us about University of London College. He went on at some length to talk about where it has come from and that Cambridge in England is the No. 2 university. Yale, in the United States, for some reason gets a mention but, while we are talking about American universities, we are still not talking about Carnegie Mellon.

The question was about Carnegie Mellon and the Premier avoided the issue. It was the same when he was asked questions in this chamber about Carnegie Mellon, and his further education minister said, 'I have no idea.' In the end, with the persistence of Mr Smithson, the Premier went on to say, 'It's a slow start for Carnegie Mellon but it is now growing at 35 per cent per year in terms of student numbers.' That is what he said.

Debate adjourned on motion of Hon. A. Koutsantonis.


[Sitting suspended from 12:59 to 14:00]


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