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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-05-04 Daily Xml
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ROYAL ADELAIDE HOSPITAL

Mrs REDMOND (Heysen—Leader of the Opposition) (14:20): My question is again to the Minister for Health. Will the minister confirm that the new Royal Adelaide Hospital has a total cost to the taxpayer of around $11 billion?

The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (14:20): As I have said repeatedly, we will be giving all of the information about the costs—both the construction costs and all of the other costs associated with the Royal Adelaide Hospital over a 35-year period contract—once we have signed the contract and once we have settlement as to what the costs are. We are not yet in the position where we can do that.

However, I can confirm that it is a 35-year contract and we will be paying a sum of money to the company that we have the contract with, because it will cost a sum of money each year to provide a whole range of infrastructure services—as we do at the current Royal Adelaide Hospital and every hospital. However, this money will be up-front, we will know in advance how much it is, and it will be fixed over the course of the contract. That is a good deal for South Australia. We will be clear. All of the taxpayers will know.

I know that the member for Davenport put out a press release that did not get much coverage (I think InDaily might have run it, the in-house newspaper) about a month or so ago saying it was going to cost $11 billion. Earlier today the opposition said it is going to cost $2.7 billion. I think the opposition needs to get its lines right. If they are going to claim that there is a cost overrun, they had better be clear what that figure is. The reality is that the design and construction and all the elements associated with the construction will be a particular cost; there will be other costs associated with finance; there are other costs associated with maintenance; other costs associated with the delivery of non-clinical services; and costs associated with the risk.

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: All of those figures will be given to the public. You bring all of those figures together and that is the cost of the project over 35 years. That is not a blowout. That is the real cost of looking after a hospital over 35 years.

To put this in perspective for members, the current health budget is about $4.5 billion. It will be going up in the next budget. I am not sure precisely by how much but, no doubt, the Treasurer will tell me: if there is any change out of $5 billion, I will be surprised. Just to give us an easy figure, let us say the annual health budget in South Australia is $5 billion. Over the course of the next 35 years, if there was no inflation of that health budget, we would be spending $150 billion-plus on health services in South Australia. So, when we start talking about how much the cost of running the Royal Adelaide Hospital is as a proportion of that, it is going to be a relatively small proportion.

An honourable member: So, is it $11 million?

The Hon. J.D. HILL: All I can say, Madam Speaker, is the cost will be made apparent once we have the figures before us. We currently do not have that. The opposition is relying on some estimates, as I understand it, that came from the Macquarie Bank. The member for Davenport came up with a similar figure. I do not know what information he had and which doctors he had been talking to, but, obviously, if you take into account the financial cost and the running cost for 35 years, it is going to be a lot more than the construction cost. You do not have to be a genius to work that out. That is not a blowout: that is the real cost associated with delivering that hospital over a period of 35 years.

What if we brought to account the real cost of running the existing Royal Adelaide Hospital over 35 years? How much would it cost to clean it, repair it, maintain the buildings, run the car park and run the caretaking? If you add all of those costs together, then you have a real point of comparison. You cannot just say, 'We are going to compare the construction costs of one with all the operating costs of another.' It just does not make sense. Even the opposition, despite their lack of economic know-how, should understand that.

Members interjecting:

The SPEAKER: Order! The member for Bright.

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