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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-09-15 Daily Xml
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Question Time

BUDGET CUTS

Mrs REDMOND (Heysen—Leader of the Opposition) (14:19): My question is for the Treasurer—and he would not have been expecting me to ask him a question first up. Given that the government has been in office for 8½ years and has received billions of dollars in unbudgeted extra revenue during this period, how could the Treasurer let our state get into a position where cuts such as those recommended by the Sustainable Budget Commission are even being considered?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Federal/State Relations, Minister for Defence Industries) (14:19): If the opposition wants to talk about eight years of government, let us remember the situation we inherited, with increasing debt and substantial budget deficits, and what did we do when we came to office?

Members interjecting:

The SPEAKER: Order!

Mr Marshall: Talk about the eight years before that, if you want to go back in history.

The SPEAKER: Order, member for Norwood!

The Hon. K.O. FOLEY: In coming to office, we instituted in excess of $1 billion of budget cuts in our first four years, from memory. We dragged the deficit into surplus. In doing so, within two years we were in receipt of an upgrade to a AAA credit rating, after two budgets. This government had done the hard work, had done the difficult work that members opposite ignored and refused to do because they were weak when it came to financial management. That AAA credit rating has remained with us into our third term of government.

What happened two years ago was the global financial crisis. Members opposite behave like it never existed, it never had an impact. Queensland, with its revenue base of mining royalties and royalties from its rail freight etc., was unable—the powerhouse economy of this nation, Queensland—to hold its AAA credit rating. We did. What this government was able to do, at the outset when the global financial crisis was to hit us, was put corrective measures into place immediately. We cancelled projects. We made further budget savings. We exited some 1,200 public servants to relieve pressure. We maintained our AAA credit rating.

What occurred was that the recession did not hit Australia, but we did suffer a significant downturn—sharp, but it was significant. What we saw was not the $3 billion loss in revenue over the forecast forward estimates we lost about $1.4 billion. So we still are out of pocket on GST and own-source state revenue $1.4 billion over the forward estimates.

Mr Williams interjecting:

The SPEAKER: Order, deputy leader!

The Hon. K.O. FOLEY: Madam Speaker, they are either deaf or ignorant. I ask the members to listen to what I have just said. We are negative $1.4 billion over the forward estimates.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: What is more, we have been incredibly open and up-front about this from day one in government. The battle—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: The incredible difficulty we have as state governments around this nation is managing the growth in health expenses, growing at least 9 per cent per annum compound—this year alone $200 million more in expenditure than we had budgeted, and we had budgeted for a healthy growth in people coming through our front doors. That $200 million is not a one-off year expense. That is what they used to do. When they overran their health budget they would say, 'That was just a one-year overrun.' They would not fund it into the forward estimates.

The Hon. P.F. Conlon: 'Oops! It happened again.'

The Hon. K.O. FOLEY: 'Oops! It happened again. Let's do it again.' We have been consistent in improving financial accountability and transparency in the way we budget. So that $200 million alone has to be fed across the forward estimates. That is a further $2.2 billion impact over the forward estimates. It is not rocket science; it is not difficult to calculate. What is more, we did go to the election with a suite of election promises—just like the Liberal Party did—and we are funding them in this budget.

But do you know where the lie is in their tale? The lie in their question today is this. We just had a state election. The opposition had the Mid-Year Budget Review. They had the accounts going into the calendar year 2010. They made promises. They made substantial multibillion dollar promises, including a billion plus for a football stadium. They made more spending promises than Labor—more spending promises than Labor. So where would you be today if you were in government framing a budget? You knew exactly the financial position of government. You knew exactly the reality of the loss of money from the GFC.

Every treasurer in Australia, including the commonwealth treasurer, who I do not think gets his budget back into surplus until 2012-13, is confronted with the same problem. The global financial crisis did have a substantial impact on revenue. The global financial downturn did have a significant impact on investment. The GFC did have an impact for a short period, but a very decisive reduction in royalty income for the nation. Those events occurred beyond our control.

I will finish with this. As Treasurer, I have never shirked a hard decision. This government has never shirked a hard decision. This Labor government has done more to rein in spending and keep spending under control than any government in this state's history.

Members interjecting:

The Hon. K.O. FOLEY: Any government in this state's history. We maintain a AAA credit rating. We have done the hard work, and we will continue. Notwithstanding the yapping dog, the member for Norwood, back there with his raised eyebrow trying to outdo his colleagues in the front, I will say this, that we are a government proud of our financial record, and as long as we are in government we will continue to bring the budget back to surplus even when we are hit with the effects of a global financial crisis.

Members interjecting:

The SPEAKER: Order!

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