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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-06-13 Daily Xml
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APPROPRIATION BILL 2012

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PEGLER (Mount Gambier) (15:42): I indicate my support for the Appropriation Bill. Firstly, about the budget presentation itself, I believe that there should be a foreword to the budget which spells out to the people of South Australia (after all, it is the people's budget) in layman's terms what the budget means to them. The level of debt including workers compensation and superannuation liabilities should be shown in real terms, and what the debt is for, and what the effect is on the budget bottom line, with what the interest and principal repayments as a percentage of income are now and into the future.

The foreword should also spell out how money is being spent in each theme of the budget; for example, in health, we should show how much is being spent on wages, on consultants, on services such as power and water, on administration, on new capital, on consumables, and on capital maintenance, etc. I am not talking about pretty graphs but rather real and true information so that our people can have a better understanding of how their taxes are spent.

The loss of the AAA credit rating does not overly fuss me. Our AAA credit rating is determined by the same agencies that rated collateralised debt obligations that financed subprime mortgages as AAA during the global financial crisis, and we all know what happened to them. I feel that they have little credibility and a AAA credit rating means little if you are selling your capital such as our forests and future income to retain it.

I will now turn to the effects of this budget and Appropriation Bill in the Mount Gambier electorate. The $26.7 million upgrade of the Mount Gambier Hospital will still go ahead on time and as planned. The upgrade includes accident and emergency as part of the redevelopment of the Mount Gambier and District Health Service, to be completed mid to late 2014. The upgrade will significantly modernise and double the physical capacity of the emergency department.

With mental health services in Mount Gambier, currently South-East Intermediate Care Service has seven non bed-based intermediate care packages. South-East Intermediate Care Service is an innovative step-up step-down mental health service designed to provide eligible people with the choice of being treated intensively in their homes. Intermediate care is a level of care targeted at people who are unwell but who no longer need acute hospital treatment (this is referred to as step-down care), and who are at risk of experiencing an acute mental health episode but who do not require acute hospital administration (referred to as step-up care).

Intermediate care encompasses short-term intensive clinical, mainly nursing, treatment and multidisciplinary psychosocial rehabilitation, mainly carried out by the NGO sector. The place of care is not as relevant as the type of care, and where a person's recovery would be further enhanced with the delivery of treatment and support provided outside of a facility setting, care will be provided in the person's home.

Once the Mount Gambier Hospital redevelopment is completed there will be three additional hospital-based intermediate care beds as well as three limited treatment centre beds. The three limited treatment centre beds will provide acute involuntary care for people experiencing severe episodes of mental illness, avoiding the need to transfer these people through to Adelaide. Often these patients have to be transferred to Adelaide within 24 hours; the only way they can be brought here is on a plane, and they basically have to be immobilised to bring them here. So, this will make a very large difference to those people.

There will be a major dental services upgrade and, as part of the wider redevelopment of the hospital, the number of chairs at the South Australian Dental Service clinic will increase by four to a total of 10, contributing to a reduction in waiting times. Oncology services have developed significantly in the past six years, with chemotherapy treatments now available locally to 50 patients per month—bear in mind we never used to have any at all. As part of the hospital redevelopment this service will now expand further, with an increase from two to six chairs and a full chemotherapy suite.

Telemedicine has been used in Mount Gambier for a number of years. The service has now been improved with a move from telephone lines to internet connections. The new connection is digital and provides a very high quality picture and sound in consultation areas, conference rooms and the emergency department. Telemedicine is currently being used in mental health in providing consultations with psychiatrists, oncology and cancer care for discussion of cases, the emergency department for stroke assessment, rehabilitation and geriatric evaluation, and surgery and anaesthetics for weekly clinical education and peer support.

A new $3 million ambulance station and the $20 million 112-bed cell block extension to the prison will still go ahead this financial year. People with disabilities and their carers in Mount Gambier will be able to access a portion of the extra $212.5 million provided for extra accommodation and community support, community access and respite services—and I certainly congratulate the government on making these funds available to people with disabilities.

Whilst our education services are receiving adequate funding, I would like to see more for professional counsellors in our schools. I feel that money spent now to guide our young people through their formative years would alleviate a lot of problems and costs into the future.

Extra moneys have been made available for our CFS and SES volunteers to replace breathing apparatus sets and access to nationally accredited training. A digital projection system will be installed in our theatre so that, when this format is adopted internationally in 2013, we will be able to view new release films. Whilst there are no specific allocations to our roads, sporting clubs and other bodies, there are overall allocations we can access, and they will be determined in the future.

The state government's total financial expenditure for the year will be $15,926 million: 31 per cent of this will go to health, 25 per cent to education, 10 per cent to public order and safety, and 15 per cent to social security, housing, etc. We rely on all of these services and, as can be seen, there is not a lot left for all the other government services we receive.

One of the worst initiatives of this budget is the removal of the payroll tax exemption for trainees and apprentices. This will have a large impact on many of our employers and take away the incentive for them to employ and train our young people. I think it is completely wrong that we tax employers for giving people jobs, let alone taxing those who employ apprentices and trainees. This tax cuts in when the wage bill totals $600,000, which is not much nowadays.

It is most disappointing that Regional Development Australia funding is to be reduced. A lot of work went into bringing about an agreement between the local, state and federal governments on the running and funding of RDAs, only to have the state government pull back funding before the ink had a chance to dry on the agreement.

I note that there is to be a reduction of 98 PIRSA employees. The government is only too happy to jump on the bandwagon when there are announcements of record exports, yet it does not seem to realise that a majority of these exports come from primary industries. The number of PIRSA employees is being reduced to such an extent that the organisation is almost defunct.

My major concern with the budget is the fact that net state debt is heading from a present $4.3 billion (or 27 per cent of present income) towards $8.8 billion (or 49.1 per cent of projected income) in 2016 when the Royal Adelaide Hospital is completed. This debt takes into consideration the sale of major assets, such as our forests, and will be much worse if these sales do not happen. We must also take into account the loss of future revenue from these assets. On top of this, there are also massive liabilities in WorkCover and public sector superannuation, and the loss of the AAA credit rating may mean interest payments will rise.

The Treasurer may be confident that the government can handle the debt, but, for many of us, such a huge debt means anything but feeling relaxed and comfortable, especially with council rates, taxes, living costs, water and electricity bills spiralling out of control. Any alternative government will have to spell out how they would do it differently, rather than just knock what we have before us. There are only two alternatives: either reduce expenditure or increase income, which can only be done through increased taxes, as we have sold all of our money returning assets.

I find it hard to understand how we can have so many public servants earning such large amounts of money, with several being paid more than double what our Premier receives. The tail has been wagging the dog for far too long. We must spend the money that we receive from taxes, levies and grants much more wisely than we have in the past so that our people receive the maximum level of services for the minimum amount of expenditure.

Mr WHETSTONE (Chaffey) (15:54): 'Resolve not to be poor: whatever you have, spend less.' Samuel Johnson made one of the greatest individual contributions to literature and the English language in history, but this particular quotation resonates most strongly in South Australia today. The Labor government seems incapable of taking this sound advice. What is the result? We have record debt; a record deficit; the downgrade of the state's credit rating; increases in fees and charges and the highest taxation regime in the nation; the highest electricity prices in the world; and the rapidly rising cost of living and doing business with the spectre of a carbon tax looming over all of us.

Regarding the statewide issues, of course, we have heard much about the debt accumulating to more than $13 billion, and it is up from $2.7 billion in 2002. That equation will cost 1.64 million South Australians $2.3 million a day—that is, $71.30 for every man, woman and child in South Australia a day, just in interest. How could this government let it come to this sorry state of affairs? They have wasted the enormous revenue streams that have come into this state over the past 10 years.

They have thrown $2.8 billion towards the new hospital that need only have cost half if it were left on the current site and revamped, while threatening the future of vital country hospitals by being mean with just a few hundred thousand dollars, which impacts the regions once again. They have blown it on a $2.2 billion desalination plant that has resulted in water prices skyrocketing and, despite the promise to reduce Adelaide's reliance on the River Murray, delivers no environmental benefit to the river and no water to the regions of South Australia—and they are being forced to pay for it.

Amazingly, they are spending $40 million on a bridge over the Torrens, just a few metres away from another bridge that crosses the Torrens. In the meantime, they have announced the closure of a $400,000 per year ferry service in the Riverland, a service upon which a whole community relies for its economic future. It relies on that ferry for tourism and for its emergency services to attend to people needing those services.

The priorities of this government are twisted beyond the recognition of a sane person. Imagine, in today's financial climate, what $1.7 billion would do. That is the extra it will cost this state for increasing the capacity of the desalination plant from 50 gigalitres to 100 gigalitres. If a 50 gigalitre plant had been commissioned, it would be up and running today and we would be returning water from our investment.

The net operating deficit of $867 million is a record, a $1.2 billion turnaround from the predicted $304 million surplus. The net cash deficit is almost $2 billion and the net lending deficit almost $2 billion. It is incomprehensible that a government could let things be so out of control in this day and age. This government is out of control and, despite creating the highest tax regime of any Australian state and despite having record revenue since coming into power, it cannot get the budget under control. Using reduced GST and reduced income taxes as an excuse, this government is creating a no-confidence zone all around the small business of this state.

Again, we have the loss of the AAA credit rating and, despite this government saying the maintenance of our AAA credit was of paramount concern, even to the extent of selling some of our last money-making assets (obviously, the forests and the Lotteries), the effort has been abandoned. What is this going to cost us? It will not be the Treasurer's $2 million to $3 million a year but ten times that amount. What did the former treasurer say about the loss of our AAA credit rating? That it would send South Australia into an abyss of debt. I suppose the current Treasurer looked at his fellow minister's reckless spending and concluded, 'We are already in that abyss of debt so what's the problem to just be a little further deeper?'

Samuel Johnson also once said, 'Every man naturally persuades himself that he can keep his resolutions, nor is he convinced of his imbecility but by length of time and frequency of experiment.' In the burgeoning public sector during 10 years of Labor, there are 20,000 more public servants and only 2,000 were budgeted for. We have 360 public servants being paid without a role to play. I would not have a problem with this if they were all front-line personnel, like teachers, nurses and police, but they are not. No wonder the spending is out of control. This government treats the Public Service like a jobs program. Where is the improvement in services that would be coming from all these warm bodies filling office chairs in Adelaide? All my office receives is complaints about poor service and reductions in services.

Looming over our biggest economic driver is the carbon tax and the Murray-Darling Basin Authority's basin plan. What of the mining boom—the Labor government's golden child? Where is our mining boom? Yes, we all want it to happen but, while we are waiting, this government needs to remember that we cannot eat zinc from Strathalbyn, we cannot eat iron ore from Iron Knob and we cannot eat copper from Roxby Downs.

We rely on agriculture for the things we eat, but this government needs to remember that the state's economy currently relies far more on agriculture than it does on mining. However, the funding for primary industries and regions has been cut by another $24 million this year and the government continues its relentless pursuit of recovering more costs from industry for biosecurity. It is another example of the twisted priorities of the government.

The whole state benefits from agriculture and quarantine, but this government cuts funding and seeks to place more costs on farmers already struggling with the high dollar and poor commodity prices. Farmers in the electorate of Chaffey are now incurring massive electricity costs, particularly in irrigation pumping, and over these loom the basin plan and the carbon tax. Then there is agriculture and that $24 million cut. How will we move with the times in food production? How are we perceived to be a world-class producer when we have a government that has almost abandoned an industry? Ag has always been essential for survival.

In Chaffey, there are the Berri Hospital funding cuts and that brings me to a puzzling little item in the 2012-13 budget papers. In Budget Paper 5, page 28, the Berri Hospital redevelopment's total estimated cost is $36 million. It is puzzling to me because in every budget and every media release before now, the total cost has been $41 million.

Miraculously, the Riverland is going to get a $41 million hospital for only $36 million and the health minister, whom you would think would have used that recent visit to Berri this year as a platform to announce the miracle that has opened up from the heavens, has apparently found some more savings. It is an unsatisfactory explanation at best and the Riverland community deserves to know exactly what it is missing out on.

Just touching on this government's stand on the basin plan that is to resurrect and bring the Murray River back into sustainability, I am saddened that it is now so political that it smells like rubber and it is all spin. We hear the Premier and the water minister telling South Australia that they will sell 20 gigalitres to the commonwealth. Is it raising capital? I believe so. South Australian irrigators' contribution has already met its 101 target. The Premier says, '101 gigalitres and no more,' so why are they selling 20 gigalitres to the commonwealth? I presume it is just more budgetary gain.

It is selling off another state asset and I believe it is another easy target for this government to now prey on one of the few assets that this government has not sold. Please keep an eye on the state's water licence—it is a very easy target. This sad indictment of the Premier gives no reason for confidence in the food sector. His stand is unrealistic in the real world. It is divisive, it is political and it is not a solution for a real outcome to help save the river. Does this budget support a prosperous future for this state? I think not.

Mr GRIFFITHS (Goyder) (16:04): I am a tail-end Charlie again on this, but it is an honour to have the opportunity to speak in regard to the Appropriation Bill. While I no longer have any level of responsibility from a shadow perspective in relation to budget implications, I take very much an overarching view of it. I still like to review the budget papers, understand the implications and consider the issues for the community of Goyder that I have the honour to represent and what it will do for the 1.65 million people who live in South Australia.

I am very concerned about the levels of debt. I am very much a fiscal conservative. I understand that debt in appropriate ways is often important if it provides the capacity to build infrastructure that is going to be used to grow the economy, and I will never argue against that point. However, sadly, in much that I have read and much that I have reviewed, I do not necessarily see a correlation between the current level of debt, the anticipated increases in the forward estimates, what that money is going to be spent on and how the economy will grow from that.

I am scared when I am told statistics, that is, that between the 2007-08 financial year and the 2015-16 financial year the level of debt in South Australia will have increased at some $3.9 million per day—that is per day, not a week, a month or a year. It is $3.9 million per day that is now a liability the taxpayers of the state are responsible for. No matter what government occupies the benches to the right-hand side of you, Mr Acting Speaker, there will now be enormous challenges to ensure not only that appropriate budget measures are put in place but also that fiscal responsibility is exercised within departments to ensure that the budget estimates are met and that revenue sources are created to have the capacity for us to fund the never-ending series of demands put in front of governments from a community that wants to be better serviced. It will be very hard, no matter who is on that side of the house.

I am a part of a group that wants to take up that challenge. I recognise that the Labor Party members have had that challenge for the last 10 years, in some good economic times—and much has been made of the fact that Kevin Foley as treasurer benefited enormously from some good economic times—but also in the difficult economic times the world, the nation and the state have experienced in the last three years in particular.

It requires a level of commitment and skill that really would tax any person to ensure that they were able to manage a state budget and, by association, the economy of this state, because the state government is such a large driver of the economy, in the way that it needs to move forward. That is why it is important that every minister who is charged with that level of responsibility ensures that within their department they meet their own budgetary restraints.

I have felt great frustration in previous years when looking at estimates, identifying how much is allocated within departments, looking at the end-of-year results and the midyear financial review figures and seeing a constant increase in expenditure items. I do not link it all back to an increase in public servants, but I think expenditure across all departments has demonstrated a real lack of fiscal control. With that, it is now all coming home to roost, and it will be an enormous challenge for a treasurer of any political persuasion to ensure that they are able to get that right.

I commend the Leader of the Opposition as part of her response yesterday for confirming that the Liberal Party, upon winning government in 2014, will appoint a commission of audit to go through the budget line by line, seemingly, to ensure that hard decisions are made, to look for recommendations on alternative revenue opportunities and to really scrutinise all levels of expenditure and income to come up with the balance that is needed to ensure that you still grow the economy, provide the services that are needed and to get it right. It is appropriate that we do this.

I note, though, that it has occurred in previous nuances. Upon becoming premier, Dean Brown announced it in 1994. I know Kevin Foley had the Smith review undertaken. Kevin Foley's previous budgets certainly had efficiency dividends required and savings targets that had to be met and full-time equivalent staffing numbers capped, which were never seemingly met either. Now we all live with the legacy of that; of how do we get it right? At the end of the day, yes, we become anxious about it and, yes, we have a lot of yelling and screaming in this room on occasion, but the people we represent are the ones who will be responsible for it—and not just the current generation. With the level of debt we now hold, it will probably be a multidecade effort that will go into repaying that debt over the forward years.

I am the parent of a 20 year old and a 22 year old, both of whom have gone out with their partners and bought homes in the last 12 months and therefore contributed to the state coffers via stamp duty. They come to me and say, 'Dad, what's it going to be like in the future?' They are responsible young people. They do not waste their money. They enjoy a good life, there is no doubt about that. They know that they have to contribute but they themselves, just in what they do, worry about what it is going to cost in the future when the time comes for them to have kids, educate them and try to give them everything that they want to have. So, all the generations in our society are concerned.

We are very much driven by the challenges facing us when it comes to the number of taxpayers that we are going to have in this state, because we have an older demographic. It is going to be hard for us to get the care needs of our older citizens, the infrastructure needs of our working, economically-driven citizens and, indeed, the future needs of our young people and their kids, who are not even born yet, when it comes to giving them an education and providing them with a great career path. It will take a lot of work.

I am concerned about some decisions that have been made in past years that will come to fruition in future years, such as the sale of the forests. Probably every member on this side of the chamber has spoken about that in the past, as well as the level of frustration they have and their concern for the people of the South-East. The member for Mount Gambier is not alone in being worried about that. I know that the shadow minister for agriculture, food and fisheries and forests, the member for MacKillop, and everybody who has been to the South-East and met with those people are concerned about their worries and share their concerns.

The sale of the forests is not going to help us retain the AAA rating. We know we have lost that now. The sale of Lotteries SA is not going to help us retain the AAA rating. It was on the basis of that that the decision was made in previous budgets to sell those items. The sale has not occurred yet, but it will occur when the maximum opportunity for return is there. It has to be focused on that to get the maximum benefit once the decision is made; however, it is going to impact on communities, businesses, private enterprise and people across our state.

It was interesting to hear the Minister for Finance confirm today that Shared Services and Services SA are going to amalgamate. There has been concern on this side of the chamber for years about Shared Services. I think it was in about 2007, not long after an announcement that South Australia was going to copy the Western Australian example, that we expressed a lot of concern about the implications of that on the people who lived in the regions and in metropolitan areas whose jobs were going to be moved to a more central location and what it would do to those suburbs and communities.

Originally, some 2,300 people were targeted. My understanding is that about 624 people, or thereabouts, actually work within Shared Services. A lot of money has been put into it to try to create efficiencies, even though the $93 million—according to the Auditor-General's Report on the dividends that it is meant to return—has not been achieved. About $60 million-odd has gone into making it work, but it is still not working. There is constant criticism about delays in payments and members of parliament having their phones disconnected because their bills are not paid on time. We all live with that frustration.

I hope that the decision announced only this week is going to be a positive one. I think the Services SA network that exists across the regions and in the metro area does a pretty good job under a lot of pressure. I have a Services SA branch in my own area, in Kadina. They are always busy whenever I am close by. I am grateful that the manager of that site is prepared to speak to me when I have concerning issues brought to my attention and is prepared to take care of that for me. That shows that good dialogue can exist if it is focused on an outcome. However, it is a big challenge to try to actually create some savings.

I think the member for Morialta first raised the cost of living pressures yesterday, and he talked about Adelaide now being the 27th most expensive city in the world to live. I think he noted that New York had moved from 32 to 33—

Mr Gardner: Exactly right.

Mr GRIFFITHS: —yes—as a result of Adelaide's leap into the top 30. It is not just people who live in metropolitan areas: it is people who live in the whole of our state who suffer from this increased cost of living pressure. I have heard many members in the chamber say that everything we consume has gone up in some way. So, no matter what your circumstance, you are paying an additional cost. That is going to be hard for us. We have traditionally been more of a low cost-of-living community. Sir Thomas Playford—who gazes upon us every day—trumpeted the fact that South Australia was open for business in the forties, fifties and sixties based on the fact that we had a lower cost of living pressure, therefore there was a better opportunity for businesses to establish here and have a profit opportunity.

It is a very different situation now. How do we turn it around? How do we ensure a good quality of life for the older members of our community who are living on fixed incomes, or on pensions, or relying on superannuation benefits, who are struggling, as are those who have their money invested in a bank? Some people have semi-regular employment, as parliamentarians do, because we get only four-year contracts.

Those people who are just approaching retirement age or have been retired for a little while have suffered big downturns in the last three or four years and have had to decrease their quality of living because of the reduction in their revenue stream. However, now they find this continuing pressure upon electricity, water, car registration, driver's licences, stamp duty costs on insurance policies—every possible thing is increasing. The increase in registration on trucks does not sound like much until you consider that trucks transport every item that we buy from our supermarkets and stores, so the cost of every item will increase.

I know people in my community who have attended rallies on the steps of Parliament House in the past (for example, about country health mark I in about 2007). They have told me that they are sick of paying the level of tax and that they would much rather write out a cheque direct to their hospital and ask me if they can do that. These are people who have significant landholdings and are big farmers and they pay a lot of tax, but they are sick of it.

I think it is symptomatic of a lot of people in our community who want to be responsible. They understand they have a responsibility to contribute to the overwhelming state costs for those who cannot contribute as much as they might be able to, but they come to the end of their tether eventually, and it is nearly reached. My hope is that being at the end of their tether will make them vote a different way in 20 months' time, or thereabouts; but, gosh, there is going to be a lot of pain between now and then before they reach that decision; it will come.

Treasurer Snelling has some enormous challenges before him as a relatively new Treasurer. I am worried about the continued reliance upon borrowings. The deficits that we are running in the next two years are scary. It is a very different scenario to what it was three years ago when GST incomes were projected to produce healthy growth. The downward trend in GST revenues is frightening. It means that we are living in a society that does not want to spend now. Any person who is in business or knows people in business or is a trader of any form will tell you that they are not selling as much because people are putting their money in the bank. They are not sure what is going to happen and they are taking a conservative approach; but by doing so, they are going to make it very hard for our state.

It is things like that which contribute to the 32 per cent youth unemployment rate, and that is for kids between 15 and 19, those who are choosing not to take higher education opportunities. They come out full of youthful exuberance and are excited by the opportunity to get a job, but, gee, when one in three kids do not get a job and face many challenges to get one, they quickly become disillusioned.

It is these young people we have to encourage, and that is why I think the decision that was made in regard to the rebate on traineeships and apprenticeships for payroll tax was negative. It is a cost implication of about $1,400 per person, as I understand it. For a lot of employers who have had a traditional focus on giving kids a go that might make the difference to them at a difficult time, to think, 'I can't afford to do it this year. I'd love to do it again but, even though I've got this great young person—boy or girl—who would be really good in my business, I can't make it happen because I need that money in my own pocket to pay my own bills at home, and I have to retain that from the business.' I hope the youth unemployment rate does not increase, but it will be a big challenge for us.

An example is small business. We have had a lot of debate in this chamber about the 135,000 small businesses that exist in South Australia. Everybody stands up and talks about how fantastic they are and the work ethic that exists. It is all true, but when you look at the budget papers you note that there is only about $1.98 million for the 2012-13 financial year. Last year the budget allocation provided on average for 135,000 businesses only $14 each. Given that the budget allocation has decreased this year, it is frightening to think of the level of respect that the budget process has paid to those businesses in a direct program to try to provide a resource to benefit them. I know there are other programs that exist in state government that operate to support small businesses too, but it is probably in the $10 or $12 range.

A lot of people here are talking about the frustration of Regional Development Australia. I am a regional man, so I will always talk about the RDAs. The member for Stuart in his shadow portfolio now has highlighted the fact that instead of having $7.1 million available as it was last year, of which $4.1 million was for the RDAs as core funding to ensure that they were there to support small business in the regions, now it is a contestable $3 million amount. $1.6 million or thereabouts, I think, is devoted to RDAs that they can apply for, but the other money is available for any regional based organisation to apply for. I am really fearful of that. I have been involved in RDAs for the last 15 years. I have seen the good work they do.

It is a bit like the business enterprise centres that exist in metropolitan areas. They had their money cut out last year. The pressure has been on them. They had 70,000 contacts per year, and it really makes that hard. Where does small business get the support that it needs? In difficult economic times, when you want to have somebody you can talk to, you want to run through an issue that you think you have an opportunity to grow, or you have a challenge in front of you that is preventing growth or actually even forcing you to the wall a bit, who do you go and talk to? Yes, you might have some confidence in your bank doing that, but no relationships exist with bank managers any more. Business enterprise centres and Regional Development Australia boards perform that role, and all credit to them, but with the funding cuts that have happened, it does not look like they are going to be there.

I have to tell you that I have had a lot of contact from farmers in the last month or so about water prices. It is not just a domestic situation. Anybody who has intensive animal keeping—and I certainly recognise that the member for Chaffey's electorate consumes more water than just about anywhere else in the world—for those of us in agricultural areas where there are sheep, cattle or pigs—

Mr Gardner: We have poodles in our house.

Mr GRIFFITHS: I won't repeat that. There is a lot of pressure upon them. A farmer who operates three pigsties in separate locations tells me his water bill has gone from $3,000 a quarter to $15,000 a quarter in the last four years. Pig markets are really marginal a lot of the time, too, so he must be wondering how he is going to pay his bills. Similarly, people who have cattle feedlots in the electorate of Goyder want to stay in agriculture, they have been in it for generations, and this, they think, represents their best opportunity for a financial return, but such a significant increase in such a short number of years is really making it hard for them to actually operate a business.

Other members have spoken about primary industries and the need to support that. My understanding is that primary industries represents about 39 per cent, or thereabouts, of the export revenue that South Australia receives. The member for Hammond certainly talked a lot last year about the significant reduction in primary industry support. It is happening again this year, with another 98 staff going and $24 million from the budget, according to the member for Chaffey. Primary industries needs all the level of support it can get, from R&D perspectives to the plant genomics functional centre, to ensure that we are there for that next generation of producers.

Farms in my area are only getting bigger. It means that communities are shrinking as the farms do not need as many people to work on them. One guy in my area crops 13,000 acres. I could never believe that the Yorke Peninsula would have a farmer who had 13,000 acres. A lot of it is under lease, but they are determined to get bigger. It takes away that small operator. It means there is an enormous amount of money spent on major plants but you do not need as many operators.

Agriculture is changing, so that is why I am pleased to be on the Select Committee on Sustainable Farming Practices. I know that with the bipartisan support from both sides we will actually makes some good recommendations from that group. Agriculture needs to be recognised for the important role that it plays, historically, currently, and into the future. And we also need to support our growing industries. Budget pressures will forever be there, no matter what political party you are a member of.

Whoever reads all the contributions that are made in this strange place from time to time will hear the stories of people who have concerns. What we actually need in this place are people who have the answers to the problems, though. The Attorney nods his head in agreement. I commend him on what he has done since becoming Attorney and the Deputy Premier. He has tried to be on the front foot there, and I hope that the relationship between him and the Hon. Stephen Wade improves a bit. Mr Wade is a focused man who wants to make sure that the legislation that gets through these two chambers is the best it can be, and South Australia needs a system where the Attorney and the shadow attorney are working collaboratively.

That is an example of the sort of debate that occurs within the chamber. Let's get it right, let's ensure that the future discussions that are held here are focused on a positive outcome for the state, because when we get that to happen the debate in here is a lot better. It is vigorous, yes, but it is informed and it results in the absolute best decision being made. Sadly, I do not see that enough.

Bill read a second time.

Estimates Committees

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (16:25): I compliment the member for Goyder on his contribution. It was a very good contribution and I only wish that his calm, common sense could be imparted to the other gentleman he referred to because that would make everyone's lives a lot easier. I move:

That this bill be referred to estimates committees.

Motion carried.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (16:25): By leave, I move:

That a message be sent to the Legislative Council requesting that the Minister for Agriculture, Food and Fisheries, the Hon. Gail Gago; the Minister for Industrial Relations, the Hon. Russell Wortley; and the Minister for Communities and Social Inclusion, the Hon. Ian Hunter, members of the Legislative Council, be permitted to attend and give evidence before the estimates committees of the House of Assembly on the Appropriation Bill.

Motion carried.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (16:26): I move:

That the house note grievances.

Mr PENGILLY: Mr Acting Speaker, I draw your attention to the state of the house.

A quorum having been formed:

The Hon. I.F. EVANS (Davenport) (16:29): As part of this particular budget the government is winding up the South Australian Asset Management Corporation (SAAMC) which was established back in the early 1990s in response to the collapse of the old State Bank, and the flow on of debt and liability issues that the state inherited as a result of the investments and performance of the State Bank under the previous Bannon Labor government. It is interesting to see that it has essentially taken 20 years of effort on behalf of governments of both colours to have that entity complete the work of unwinding the mess and trying to retrieve as much dollar as possible out of the old State Bank debacle.

It is also interesting to note that when I first thought about standing as a candidate for Davenport in 1991 the deficit then was $359 million. In 1992, when I was preselected for the seat of Davenport, the deficit was $470 million, and in 1993, the year I won the seat of Davenport, the budget deficit was $317 million. It is now the 2012-13 financial year and that is the budget we are debating, and during that 20-year period the state has undergone a massive sales program on a whole range of what were state-owned entities that are now no longer state owned.

They include things like the old State Bank itself, SGIC, the leasing of electricity assets, the leasing of the ports, and the South Australian Pipeline Authority. The bus management was, of course, outsourced, and this government recommitted to that. Some of the water management was outsourced, and this government recommitted to that. Of course, this government itself is now going down the process of selling Lotteries, selling the forests, selling the hospital car parks, and outsourcing the management of Fleet SA—indeed, Fleet SA has had an interesting history of going in and out of government management over the 20-year period. So over the last 20 years, in a response to the State Bank collapse, consistent budget deficits and a massive debt, there has been a significant assets sales program.

The former Liberal government went through the process of reducing the Public Service, a lot in line with the sale or leasing out of those particular entities. Having sold or leased those particular public entities, obviously significantly less functions are undertaken by government now than there were 20 years ago.

Even the industrial relations function for the private sector has gone to the commonwealth. But the Public Service, under this government has still managed to grow from 66,000 to 86,000, even though a lot of those functions that were once performed by the public sector are now performed by the private sector in one form or another.

It is now 20 years since I was first elected to this place, and I find myself in a rather unique position. Having entered parliament, I guess, over the frustration at the costs to households and businesses due to Labor's mismanagement in the late '80s and early '90s, I know find myself, as the shadow treasurer, wanting to enter the Treasury benches over the frustration and anger at the cost to households and businesses again caused by Labor's mismanagement. This budget sets it out for all to see.

In 1991, the deficit was $359 million, and the debt was around $7.135 billion. Twenty years later, in 2011, the deficit was around $53 million, and the debt was around $66.541 billion. In 1992, the deficit was $470 million, and the debt was $8.055 billion. Twenty years later, in 2012, the deficit was $284 million, and the debt was $8.41 billion. In 1993, the deficit was $317 million and, 20 years later, the deficit is $867 million. The debt in 1993 was $8.249 billion, and the debt in 2013 is estimated to be $9.684 billion. In 1994, the deficit was $266 million, and the debt was $8.548 billion. Twenty years later, in 2014, the deficit is expected to be $778 million and a debt of $10.781 billion.

The debt, of course, under this budget continues to grow to over $13 billion. So, in the 20 years I have been in this place—I came in on the basis that I was frustrated with Labor's mismanagement. They were running budget deficits of $350 million a year, and had a massive debt that was increasing. Here we are, 20 years later, and we have exactly the same set of circumstances, in that they are running consistent budget deficits and the debt is increasing rapidly.

The debt in South Australia is now increasing at a rate of $4 million a day, every single day, for eight years. That is the mess the Labor Party are leaving taxpayers as a result of this budget. Importantly, the over $13 billion worth of debt is after they sell the income-producing forests and after they sell the income-producing Lotteries Commission. The debt still rises to $13.011 billion, or $13,000 million.

In the 20 years I have been in this place, I have observed governments, of both colours, trying to deal with the issue of debt. I make the point that there has been a significant sale and lease program of assets over the years and, after that program, the debt is still at $13 billion. This is the concerning thing for the taxpayers of South Australia. Think about this: this state has leased out its electricity assets, it has sold its TAB, it has leased out its port assets, it sold the state government insurance commission, it sold the old state bank, it sold its pipeline authority, it has outsourced its bus management, and outsourced some of the water management. They also sold things like the Island Seaway and the state chemistry laboratories. They sold some of the state printing equipment, they sold property, they sold SAMCOR and they sold the famous 333 Collins Street. They had Scrimber assets that they sold. They sold Santos House.

There has been a significant number of state assets that used to be state-owned, used to income to the budget, and they have all been sold. Following on from that, this government is selling our forests to produce income and our Lotteries to produce income. Then they are putting their hands up and saying, 'The debt's going to be over $13 billion.' Having gone through that whole process over that 20 years, our debt is still $13 billion.

So let us not underestimate the task that this government is leaving future South Australian taxpayers. You can only sell a good once, and all that is gone. For the government to suggest that the debt is not going to cause South Australia significant issues in the future I think is grossly underestimating the task and grossly misleading the public about the difficulty of the task.

It would an interesting position to be in for someone who came in on the back of the State Bank collapse and saw the hard work of the Brown-Baker and Olsen-Lucas regimes; and it is in this budget, 20 years later, that the mess created last time by a Labor administration, the final asset, as I understand it, in this budget, is being wound up.

The reason the opposition has raised the issue of the record level of budget deficits and the record level of budget debt is that this government has no plan to deal with the debt issue. It has put its hands up and let the debt increase significantly in this budget. They are having a debt level of $13 billion after selling the forests and after selling the Lotteries.

Here is an interesting observation. They are running six deficits in seven years. If you take that accumulated deficit, even taking off the $180-odd million surplus they managed to construct for the election year, you are still left with an accumulated deficit over that period of over $2 billion. That is in the departmental spending: that is not capital works. The point the government will need to explain is: when they sell the forests and when they sell the Lotteries, will it even cover that departmental overexpenditure? Will that even cover the departmental deficit?

We will see the forests and Lotteries will be sold this year, assuming the market conditions are right—and that will be an interesting question for the government, because the Minister for Finance is on the record two years ago saying that it was a bad time to sell. If it was a bad time two years ago, there might be some who argue: what are the conditions like now? We will leave that to the market. This government, I think, is going to sell the Lotteries and forests, regardless.

When they sell the Lotteries and the forests, will it actually cover just the departmental deficit? In other words, we are selling an income-producing asset (the forests have been around for generations) simply to cover departmental overspending that has built up the debt. That is the position this government faces.

Remember of course that this government has had three or four independent reports saying that it is the highest taxing government in Australia. The Commonwealth Grants Commission confirmed it. The tax effort of the government on its citizens is already the highest in Australia, so the issue of tax reductions is live as to how you can make cost of living lower for the public. That is a real challenge for the government and there is not a lot in this budget regarding the cost of living. You get a one-off water rebate. Having put up the price of water 249 per cent over the life of this government, they give a rebate. Of course the rebate is for one year but the water price goes up every year.

The opposition does not underestimate the task of going through the process of having to correct the mess that this particular government is going to leave the South Australian taxpayer as a result of its budget mismanagement. The opposition, in all of its contributions to the Appropriation Bill—each of the members for their local electorate and each of the shadows for their portfolio areas—has outlined some of the issues in the budget and outlined them well as to what the problems are with this budget.

It is for that reason that, as part of our budget response, the opposition has taken the responsible move to say that we would set up an audit commission as there was in 1993 under the then Brown administration. The audit commission came in and looked at the state's finances and the state's systems of government and made various recommendations about how to make service delivery more cost effective and restore the state's finances.

In short, to see the reason that the audit commission would be re-established immediately on forming government, you only have to look at the broad numbers. State debt is budgeted to exceed $13 billion in the year 2015-16. Interest payments are increasing to over $800 million per year in 2015-16 and I must say that that is after selling the forests and the Lotteries Commission. Assuming they get the prices they think they are going to get for the Lotteries Commission and the forests, those figures are after selling those particular income-producing entities.

The state has run six deficits in seven years, including nearly a $900 million deficit next year and nearly an $800 million deficit the year after that. If you go back to the Treasurer's own comments, the surplus in the 2009-10 year of around $180 million was only constructed on the back of commonwealth assistance. Even in that year, you could argue that the state was certainly struggling financially if it were not for commonwealth assistance. Over a seven-year window, this government has really been accumulating budget deficits of around $2 billion.

The Liberal government having worked extraordinarily hard, the Labor government got the AAA back in 2004 largely as a result of the hard decisions taken by the former Liberal government and the success of the Howard federal government in growing the economy. The ironic thing is that the Labor Party took the position that we should never sell our electricity assets and never lease them out and that they did not want a GST.

Now they are complaining that the GST is not giving them enough money. Now they are out there complaining that the tax they never wanted is not successful enough, it is not big enough, it is not giving them enough money in the state budget, but the Labor Party has never actually explained to South Australia how, post-1993, that State Bank debt would have been reduced without the lease of the electricity assets.

As a result of the Labor budget mismanagement this time, of course, we are losing our AAA credit rating. If you want to see the importance of a AAA credit rating, watch the Queensland Commission of Audit report this Friday. The new Premier up there, Campbell Newman, inherited a basket case from the Bligh government, who also gave up the AAA credit rating. There are media reports that they will be announcing an extra $5 billion in debt that they have found through having an audit commission, and they are fearful that that will drive their credit rating down even lower.

I think this is the point former treasurer Foley was making: once you let it slip, it is a very easy, slippery slope to keep going, because the discipline on cabinet not to spend and the discipline on the Public Service to find those savings tends to decline once you lose the AAA credit rating.

So, we will see what happens in Queensland. My understanding is that it is this Friday that the Queensland Commission of Audit reports, and it will be interesting to see exactly what they find in the Queensland Commission of Audit. I did note that Standard & Poor's are telling this government that there is a one-in-three chance they could be further downgraded in the next six to 12 months.

Of course, on top of the standard budget position there is the liability position. The liability position of the state will be about $28 billion. So, about $28 billion in liability. The biggest of those liabilities are the unfunded superannuation liability, which is a touch under $12 billion in the budget, and, of course, the unfunded WorkCover liability, which is simply the private sector unfunded liability of $1.2 billion. That is just the private sector. There is another $377 million of unfunded liability in the public sector. So, our workers comp liability is a touch under $1.6 billion.

On all the key measures—on the debt measure, it is increasing to $13 billion; on the deficit measure, record level deficits of $700 million; on the liabilities issue, a record $28 billion, with unfunded liability for super being $12 billion and workers comp being $1.2 billion for the private sector and $1.6 billion for the total—the opposition believed the appropriate and responsible mechanism was to announce the audit commission, if we are fortunate enough to be elected to government in 2014.

It is interesting to realise that this government cannot really be trusted any more to manage the state budget or the state departments, because what they do announce either blows out or is cancelled. The list of projects that have been announced by this government through a media release and then cancelled some time down the track is staggering. There is the Darlington interchange that was scrapped. The doubling of the Mount Bold reservoir—big front page—was scrapped. The desal plant up in the Spencer Gulf was announced then scrapped. The underpass along South Road, between Port Road and Grange Road, was announced then scrapped. There was a front page announcement for a Sturt Road/South Road underpass which was scrapped. The solution to the Britannia roundabout was announced then scrapped. Trams to the western suburbs were announced then scrapped. Electrification out to Gawler was announced, half finished, suspended indefinitely, basically scrapped for the time being. The Outer Harbor line was announced then scrapped.

A cynic would suggest that this government has cancelled more capital works projects than it has completed. Why would you believe this government going to the next election? It went to the last election promising bells and whistles and, in this budget, it is cancelling things left, right and centre. I understand from the shadow minister for health that something like $770 million worth of health projects have been delayed or deferred. All of those promises have been broken by this government; how can you trust it?

We all remember the Adelaide Oval announcement—$450 million and not a cent more. We now know that the expenditure surrounding that particular project is heading north of $600 million. Of course, not even the government's own backbench trusted the cabinet on that one. The member for Croydon had to move a motion to try to cap the expenditure. This is a government that is big on announcements and small on delivery. There is no reason for the South Australian public to trust this government at the next election.

This government is leaving a massive debt and a massive deficit for a future government to clean up, and what do we have for it, the taxpayer may well ask? The government went out saying that its priorities were not going to be sports stadiums. I remember the famous quotes: 'Our priority is not going to be sports stadiums,' but then they want to spend $600 million at Adelaide Oval.

The reality is that this budget plunges the state into a record level of debt because it has a record level of deficit and massive liabilities. It took us 20 years to tidy up the last mess. It will be a huge task for whichever government is elected to do the work required to sort out the mess left by this incompetent government.

Debate adjourned on motion of Hon. J.M. Rankine.

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