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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-02-15 Daily Xml
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Address in Reply

ADDRESS IN REPLY

Debate on motion for adoption resumed.

The Hon. I.F. EVANS (Davenport) (12:44): I rise to speak in response to the opening of parliament and the speech given by His Excellency yesterday in opening the Second Session of the Fifty-SecondParliament. I congratulate the Governor and Mrs Scarce on the wonderful job they do in performing the role of Governor. The way they carry the position and make themselves available to the people of this state is a credit to the Governor and Mrs Scarce. I place my congratulations to them on the record. I think it is a very good decision that they have been reappointed for a further term, and that is broadly supported in the South Australian community.

The Governor, of course, reads the speech prepared by the cabinet of the day, which is in the grand traditions of the Westminster system, so the comments we make here are really about the context of the speech.

I just want to pick up on a few themes put forward by the member for MacKillop, my deputy leader. I think that the content of the speech is a good example of how this Premier is no different to the previous premier in regard to spin. For a Premier to suggest that the decisions taken in the next decade are more important than any other decision taken in the state's history needs to be questioned.

What he is saying is that, over the next decade, the decisions that South Australia is going to take are more important than we took during the First and Second World Wars, more important than during the term of the Great Depression, more important than when the state was first established, more important than when we gave women the vote or Aborigines the vote and more important than when we developed the secret ballot system. This grand statement of this Premier needs to be questioned, because my experience of this Premier is that his rhetoric is as broad as the previous premier and he is full of spin.

The issues outlined in the speech relate to seven broad themes, and I just want to touch on a couple of the themes because I think that they deserve special attention. The opposition deputy leader (the member for MacKillop) raises the issue that is raised in the speech about a future fund, and he talks about the fact that this government during this term will not be setting up a future fund.

I just want to make some comments about this because the background to it is an interesting issue. The federal government, of course, is doing a review of federal/state financial relations, and part of that review is a possible cut to grants to states through the GST redistribution mechanism. In South Australia we get about $800 million a year in subsidy, in effect, from other states.

During the process, I moved in the Economic and Finance Committee on 20 October (which was the former premier's last day) that the committee look at investigating a sovereign wealth fund for the state. That matter before the Economic and Finance Committee was adjourned so that the members could take it back to their caucus. Now, of course, this current Premier took over that evening, on 20 October—the next day he was the Premier. So, it was this Premier's caucus that considered the issue of whether they would support the opposition's motion to at least investigate the issue of a sovereign wealth fund or future fund, call it what you wish.

At the next meeting of the Economic and Finance Committee on 10 November the Weatherill caucus, having considered it and rejected it, voted my motion down. They were not prepared to have a bipartisan committee look at establishing a sovereign wealth fund, because we know that the Economic and Finance Committee is a bipartisan committee. Roll forward three months, and in their speech, when the Premier is trying to paint himself as a man of ideas, the first idea he trots out is the idea of looking at setting up a future fund—an idea that his caucus, under his leadership, flat out rejected three months before.

The point I make is that the state government has no clear economic direction. How can you flip-flop as a leader from going to not supporting a sovereign wealth fund—at least looking at it—to supporting investigating a sovereign wealth fund all within three months? The Premier has no clear economic direction for the state.

Now, let's walk through some of the issues. When we were debating the BHP indenture bill we were told that, when the BHP expanded mine at Roxby was expanding at full capacity, we would get somewhere between $325 million and $350 million a year in royalty. The former treasurer, Kevin Foley, then went out publicly and attacked the Family First MP the Hon. Robert Brokenshire (because Robert Brokenshire was suggesting that you could spend most of that in certain areas of the state) and said, 'No, no, no. You don't understand. There's a thing called horizontal fiscal equalisation where the commonwealth adjusts your grants, and the net benefit to us out of that $350 million is $20 million.' That is when the mine is operating at full capacity, and my shadow minister for mining tells me that could be up to 20 years away. So, in 20 years' time we might get an extra benefit of $20 million.

This state government—and you will not find this in the speech—has a budgeted debt of over $11 billion. It is currently $8 billion—$8,000 million worth of debt. It is increasing over the next three years to over $11,000 million worth of debt. That is after we sell the forests and after we sell the Lotteries Commission—after Labor sells the Lotteries Commission and after Labor sells the forests. Our debt goes to over $11 billion. So, if your net benefit out of Roxby is $20 million, you can do your own calculations as to how many years it will take you to pay off the $11,000 million in debt.

I take the point: the member for MacKillop is quite right. It is ironic that the government has backflipped about looking at a sovereign wealth fund while at the same time it is selling an asset that already brings $43 million a year into the budget. They are selling the forests. It comes back to this point: this Premier and this Treasurer do not have a clear economic strategy. Are they looking to build up state assets that produce income, à la a future fund, or are they looking to sell state assets that bring in an income, à la the forests and the Lotteries Commission? What is your strategy? Do you want assets that produce income for the state or do you want to sell the assets that produce income for the state? You are selling assets and increasing the debt. The state government has no clear economic strategy.

Another point for the government to consider is this: they talk about the benefit out of Roxby; they talk about the benefit out of the mining industry. Let's say that Roxby does get fully developed and the royalty, as predicted, is $325 million. The expense—

The Hon. A. Koutsantonis: It's not the only mine in the Gawler Craton.

The Hon. I.F. EVANS: No. I accept the point: the minister for mining interjects and says, 'It's not the only mine in the Gawler Craton.' The opposition knows that, and the reason we know that is when we were last in government, Dale Baker, the then mining minister, ran a program called the targeted exploration initiative. Even though the state was broke because of State Bank matters, we put $23 million into that because we wanted to expand the mining industry. So, all of those mines that the minister talks about out of the Gawler Craton we support. Give that a tick, because that was a Liberal initiative that helped develop the mining industry. We understand—

The Hon. A. Koutsantonis: TEiSA wasn't in Woomera. You know that.

The Hon. I.F. EVANS: You said the Gawler Craton. Is Woomera in the Gawler Craton? Don't you know where the Gawler Craton is? Woomera is up in the other corner, mate.

The Hon. A. Koutsantonis interjecting:

The Hon. I.F. EVANS: No, you interjected the Gawler Craton.

The Hon. A. Koutsantonis interjecting:

The DEPUTY SPEAKER: The member for West Torrens!

The Hon. I.F. EVANS: Go and read the Hansard. You interjected the Gawler Craton, and I said in relation to Gawler Craton we ran a $23 million program and we support it. We understand that. But the reality is that this government has then committed us for the next 35 years—that is, a five-year build and a 30-year contract—to the new Royal Adelaide Hospital where the cost every year is $397 million. So, even if you will get in $350 million out of Roxby and if the net benefit of that is only $20 million, it is already spent. It is spent on the new Royal Adelaide Hospital. So all these issues need to be considered.

There are other ways to develop a future fund. They are called budget surpluses. This government is not predicting a budget surplus this year. It is spending more than it earns to the tune of $367 million; and next year they are talking about a budget deficit of $453 million; and the year after that they are talking about a budget deficit of $348 million. Add those together: that is $1 billion worth, just there, of budget deficit. So these issues need to be considered. What is your economic strategy, becomes the question. The issues raised there need to be considered. The weakness in yesterday's speech was trying to find something to do with the budget and something to do with a sustainable budget strategy. It was something clearly missing in the speech yesterday.

The other issue not raised in the speech yesterday was the selling of the forests and the lotteries. Here is $1 billion of asset sales, which underpins their budget, and as we look forward to their being sold this year, not a mention. If it underpins your budget, why would you not mention them in your speech? The reason is that the government realises that those two policies are not popular within the broader electorate.

In a past life I also was a minister for industry and trade and dealt with manufacturing, as does the current minister. I had to smile yesterday when the government started to talk about advanced manufacturing, as if it was something new. The first thing this government did for manufacturing was close down the centre for manufacturing. You closed it! You went down and you closed it! The reason you closed it is that you did not want to support the little bloke. The centre for manufacturing was a centre of excellence where the small manufacturers could get some assistance to grow into big manufacturers. The first thing you did as a government was close down the centre for manufacturing.

Here you are, a decade later, and you suddenly come out and say that you think that innovative manufacturing is somehow something new. Every manufacturing economy in the world has that challenge. It is nothing new, absolutely nothing new in relation to advanced manufacturing in this state.

The other issue I want to touch on very quickly from the Governor's speech yesterday was this concept of a vibrant city. One of the aspects of its being a vibrant city is the government trotting out that it is reforming shop trading hours. If ever a government has been dragged kicking and screaming to a policy it does not like it is the reform of shop trading hours. Throughout its history this government has opposed the reform of shop trading hours. On every occasion it has been dragged kicking and screaming in relation to shop trading hours. We have a position where I believe we will go to a break, so I seek leave to continue my remarks.

Leave granted; debate adjourned.


[Sitting suspended from 12:58 to 14:00]


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