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Legislative Council - Fifty-First Parliament, Third Session (51-3)
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SUPPLY BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 2351.)

The Hon. S.G. WADE (15:22): Today I rise to speak on the Supply Bill and I take this opportunity to highlight Labor's record of failure. I have recently addressed the subject of the Rann government's failure in the areas of water security and climate change, and so today, instead, I will focus on another of my shadow cabinet portfolios, that is, disability. The Rann government's record in disability is a record of failure: failure to support people with a disability and those who support them.

The Supply Bill provides parliamentary authorisation of the funding of the state government. It gives us a chance to reflect on the performance of this government when, after seven years of the best economic conditions this state has experienced, we can reflect on how effective the government has been at delivering services. Those economic conditions were due, in no small part, to the sound management of the Howard government; yet, in recent months, after seven years, Treasurer Foley has shown that he has been unable to take advantage of those years because he is talking about a substantial budget deficit. Seven years of lost opportunities for South Australians, including South Australians with a disability.

In spite of massive federal grants funded by debt, Treasurer Foley is still telling us that we will have a deficit of half a billion dollars. Very concerning are the recent reports that the Treasurer is requiring departments to find cuts in their budgets. Reportedly, Disability SA is being required to make a 20 per cent budget cut. While we recognise the need for the state to manage its finances, it is just not credible to think that the government can cut 20 per cent from Disability SA services without savaging those services.

Disability is already drastically underfunded by the Rann government. In fact, South Australia already spends the least per person with a disability of any state or territory in Australia. Productivity Commission figures show that South Australia's disability services expenditure per person with a disability is the lowest in Australia, at only 62 per cent of the national average.

Let me clarify for the council that that is a Productivity Commission figure; it is not, shall we say, a private sector or an independent think tank. It is a commonwealth agency which works with states and territories to present, in a comparable way, performance across the country. The verdict of that commission is that, effectively, South Australia is underfunding state disability services to the tune of 38 per cent, as compared with the national average. Effectively, South Australians with a disability are getting less than two-thirds of that received by people in similar situations elsewhere in Australia.

Earlier this year the opposition revealed that unpublished government data estimates that to clear the disability waiting list in South Australia would cost approximately an additional $280 million; more than double what is currently being spent. However, these figures do not convey the urgency of the situation and the impact on people's lives. To get some sense of that we need to turn to the government's own figures.

After being publicly challenged about the failure to deliver on an election commitment to publish disability data, last November the government published disability waiting list data showing that, as of November 2008, 2,173 people with a disability in South Australia are languishing on waiting lists. That is over 2,000 people not receiving the support that they need to meet their basic daily needs. To make matters worse, this figure includes 525 people classified by Disability SA as being of immediate and high risk of harm to themselves or others, so there are over 500 people who are still waiting for support not merely to live a decent life but to avoid harm to themselves or others.

Not content with underfunding the basic support, the government has also cut funding for important projects. For example, the government has cut $750,000 from advocacy and information services such as DIRC. Only in the past year it failed to provide ongoing funding to Novita's highly successful statewide complex communication needs project which delivers communications equipment and training to both adults and children with a disability, at a cost of $900,000 a year.

Members of the council may remember the government's botched attempt last year to introduce higher fees for equipment for people with disabilities. What concerns so many people in the disability sector is that, if the government was thinking of introducing higher fees for basic equipment that people need for disability when they were at, shall we say, 100 per cent funding, now that apparently the Treasurer is requiring the department to find 20 per cent savings—in other words, they are expected to operate on 80 per cent funding—what more bizarre scenarios will be necessary under this Rann government?

During seven of the best years South Australia has seen, the Rann government has preferred to spend on bureaucracy rather than addressing unmet needs in disability services. People with disabilities do not need more bureaucrats telling them how to run their lives; they need basic support and they need services.

It is not just in funding issues where Labor has failed people with a disability in South Australia. The Rann government has failed to recognise that there is much more to providing quality of life for people with a disability than just dollars. People with a disability seek that South Australia would become an inclusive community, a community which gives them full opportunities to participate. The first responsibility of this government, I believe, in relation to disability, is to promote that sort of community. It should, with its own services and its own departments, be promoting disability awareness and totally accessible services that are expected by people with a disability.

I would like to highlight the government's failures in this broader support of disability by touching on three portfolio areas: health, education and transport. In relation to education, earlier this week it was my privilege to attend a rally on the front steps of Parliament House, attended by parents of children with a disability. It was billed as a silent rally, which I found particularly helpful, because it meant that I was able to spend time talking with parents and children with a disability about their own situation to get some understanding of what the lack of services means to people in their daily lives.

In particular, they spoke of the lack of appropriate options in schools and classes. Some children are better suited to special schools, others to special classes in mainstream schools, and others to attending mainstream classes in mainstream schools. In fact, I spoke to one father who had actually chosen a home schooling option. There is, of course, a diversity of need amongst people with a disability and a diversity of service options that should be available to help them to meet those needs.

At the rally I spoke to a parent who handed to me a letter highlighting the frustration and despair that she was experiencing in trying to give her child, a little boy named Brodie, an education within the South Australian education system. Brodie has the condition of autism. He currently goes to a special school where he receives little support or education, after being moved from school to school as the education department struggles to meet his needs.

He has been constantly moved and DECS appears unable to provide Brodie with a school with proper support or care, leaving Brodie at a special school where he is merely, shall we say, minded rather than educated. The feeling of despair in the letter is quite evident. Brodie's mother says:

The school doesn't want him there anymore, I don't want him at this school anymore and most importantly, he does not want to be there anymore. Yet there are no places in any other special school, and this is the only recommended place for him…Please can someone tell me, when will my son get an education?

This letter shows the difficulties faced by everyday people struggling with a lack of understanding, a lack of options and a lack of support within government education.

Assisting people with disabilities is so much more than just funding from Disability SA. The experiences recounted by parents of children with autism at the rally show that the rigidity of DECS does not meet the needs of many of these people. The lack of understanding, training and support for teachers and school staff leaves staff, parents and children feeling frustrated and unassisted.

It is not just the children with a disability and their parents but also the other children who are receiving education in that context who are affected. Properly supported, a person with a disability can enhance the social and education experience of other children, but, unsupported, the presence of a child with a disability can actually cause disruption and may prove to be an extremely negative experience for a child and their development. It is important for children without disability as well as children with a disability that educational support for children with a disability be provided.

The issue of this government's failure to provide appropriate support for the education of children with a disability was also highlighted recently by a story in the Sunday Mail, which related to the Mount Barker South junior school. The child in question has autism and the newspaper reported that he and others were being dressed in fluoro vests and were spending their breaks in a separate fenced playground dubbed 'the cage'.

That story begs the question: what support is available for staff and principals of schools to work through the options that might be available to them? It may well be that, in that case, some form of restraint in terms of an enclosed playground was appropriate, but I find it hard to conceive that the use of fluoro vests is an appropriate way to manage children in a playground. It tends to perpetuate an attitude of separation and stigmatisation.

I appreciate that school staff have a duty of care to their students and that the challenges they face are often difficult. This is why it is important that there be specialist staff within DECS who are available to support schools as they manage these issues. South Australian schools do have a policy of inclusion of disabilities, including people with autism, yet these practices seem to segregate children with disabilities and promote a mindset which undermines inclusion and community engagement.

DEC's lack of disability awareness was highlighted again just last week when it was revealed that the Ramco Primary School in the Riverland was holding a disability dress up day, which was meant to promote disability awareness in the context of overseas support but which characterised disability in terms of what were really medical conditions rather than disabilities. The lack of sensitivity and the potential for stigmatisation was not realised.

Again, I appreciate that schools face many different issues that must be balanced and I do not expect every teacher or principal to be sufficiently aware of disability issues to be able to easily spot them; that is why we have disability awareness programs, and it is why the government has committed to disability awareness programs within the Public Service. So, with two incidents in relatively quick succession one has to ask: what is happening in the Department of Education and Children's Services? What has led to these two events? Is it merely coincidence? I fear not.

Another story that has not been on the public record, as far as I know, is a situation in a country region where I understand that a child with a disability, who had previously been offered transport by a Department of Education and Children's Services' bus, was deprived of that opportunity because, even though there is space available on the bus and even though the bus passes the child's home, that person is no longer receiving an educational service from DECS. Therefore, they have been told that they cannot travel on the bus. In the context of country South Australia—where public transport is almost non-existent, and where specialist disability transport is even rarer—when a government department has capacity that it could make available to a person with a disability but chooses not to (in fact, even worse, it withdraws that service) it raises serious questions about the department and its sensitivity to disability issues.

The second portfolio area I would like to address in regard to disability is that of health. I have had a number of people, both professionals and individuals, who have raised with me their concerns about the lack of appropriate support for people suffering from motor neurone disease, or MND. For members' information, MND is a degenerative condition with no known cure at this stage. It is a very rapidly progressing disease, with the majority of people with MND surviving only 12 to 14 months from the time of diagnosis.

Due to this rapid degeneration, the needs of people with MND are quite different to the needs of many other people with disabilities. Unlike most of Disability SA's other clients, people with MND are unlikely to be long-term clients; because their condition often rapidly deteriorates, their needs also rapidly change, as should the response to those needs. Unfortunately the inflexibility of the government leads to many slow and belated responses.

I have been advised of a number of examples of people with MND needing a wheelchair at the early stages of the disease but, because of Disability SA taking so long to respond, the person does not receive the equipment until several months later, by which time the disease has progressed to the point where the person is bedbound and has no use for the wheelchair.

I have also been told of a person who applied for support from Disability SA who was granted a certain number of carer hours a week. Unfortunately, Disability SA did not get to the point of advising the person of their entitlement until 11 months later, and within two months that person had died, having received very little of the support offered.

However, I put it to the council that this is not just a matter for Disability SA. The health department has also failed to adequately support people with MND. Currently the Repatriation Hospital at Daw Park operates an MND clinic, providing multidisciplinary care for patients with MND. However, this clinic is funded by the Southern Adelaide Palliative Services budget, with no direct South Australian government funding, despite the fact that it provides a metropolitan-wide service.

Similarly, there is very little information or referral services provided by the health department, information which is critical for many of these people, as many patients do not see their MND as a disability; they do not think to contact Disability SA and do not know where to go for support. So, we are faced with an issue where the Department of Health and Disability SA need to be more aware of the needs but also of the needs in transition, where a person receiving the support they can from the health sector then moves, perhaps relatively quickly, to needing a high level of support from the disability sector. The lack of understanding and awareness within both agencies is an example of the need for an across government approach to supporting people with disabilities.

The third area I want to highlight in terms of the Rann government's failure to properly support people with a disability is the transport portfolio. In October last year, I drew attention to the fact that the South Australian government was ignoring its responsibilities to people with a disability in its purchase of second-hand buses. As I mentioned in question time today, the then government had made a commitment (obviously it was not a government of ALP persuasion, but it was the government of South Australia) to the relevant commonwealth Disability Discrimination Tribunal that, from 1996, it would purchase accessible buses. Last year, the government bought second-hand buses to get around this commitment. A fleet of buses was introduced to the Adelaide bus fleet in mid-2008 which were not accessible to wheelchairs, prams or people with a disability, and that 1996 commitment was breached.

I raised in question time today the issue of the new 160 articulated buses, which will be built in South Australia as a result of federal funding. The press release from the Premier mentioned jobs and sustainability and environmental issues, yet there was no mention at all of whether these buses will be accessible. I know that the disability sector has been concerned for a long time that the O-Bahn busway is not accessible. My understanding is that that is not just a conversion issue; it is a structural matter. Apparently, it is a $118 million deal, and I would certainly hope that, if we are investing $118 million in transport infrastructure, the disability sector will not be excluded.

As I have mentioned, it is not just people who have a disability but also perhaps people who are dealing with ageing or people who are looking after children and people who perhaps are dealing with a temporary sports condition. A lot of people in our community have mobility challenges, and it is important that we make sure that our transport infrastructure is accessible to them. I look forward to the minister's reply on the accessibility of the buses. I certainly hope that we are not breaching the commitment we made in 1996 to the people of South Australia with a disability.

I now refer to the way I believe the money being provided to people with a disability could be better delivered. As I have already mentioned, there is more to disability services than just the basic issue of pumping out support and services. There is a whole range of awareness issues and issues which affect a person's ability to engage in community as a full member of that community.

The way that funding is delivered for support services is one of those factors. People with disability would rather that they themselves have control of what services are purchased for them and how those services are delivered. Rather than just having bureaucrats telling them what they can and cannot have, people with disabilities want to engage with the community as equal members, making their own choices, enriching their own lives and charting their own future. Labor's bureaucratic, department-focused, one-size-fits-all approach is leaving many people with disability feeling disengaged, disempowered and disappointed.

The Liberal Party, on the other hand, believes that people with disabilities and those who support them should be given the autonomy to make their own choices to the greatest extent possible in relation to their support needs. Individuals know their own circumstances best, they know their values and the risks that they are willing to take, and in the end they have the right to make their own choices about their own lives.

To this end, in April this year the Liberal Party released a policy to introduce individualised funding in South Australia. International experience shows that such funding significantly enhances the lives of people living with disability as they develop services and support that are better tailored to their circumstances. Only at lunch today I was talking to a disability advocate, who was talking about the successes of the Canadian provinces where they have been experimenting with individualised funding or a variant of the same for 25 years. This is not a novel idea; it has been well tested overseas.

It is pleasing to see that the New South Wales Liberal opposition has also circulated a discussion paper on the same issue and is pursuing a similarly individualised approach to funding services for people with disability. The South Australian Labor government has previously talked about the concept of individualised funding. In fact, the Hon. Jay Weatherill, when minister for disability services, welcomed the visit of Simon Duffy, a world expert on individualised funding, by undertaking to refer the issue to the Disability Advisory Council. That was the beginning of last year, I understand, but nothing more has been heard.

There was perhaps a faint reference to individualised funding in the budget papers, although we did not dare use the phrase. The Minister for Disability Services, then the Hon. Jay Weatherill, made positive comments about individualised funding in the estimates last year, but here we are almost 18 months later and people with a disability, who have been seeking this funding model for years now, are still waiting for any indication from this government about how it will deliver on that commitment.

It is time for the government to state its position and let the community know clearly whether it supports giving individuals the choice and the freedom to shape their own futures, or whether it is going to stick to its one-size-fits-all approach to disability support in South Australia. I urge the government to do that in the context of the upcoming budget. It is important, as we go into the last financial year within which the next state election will be held, that people have a clear understanding of what alternative governments in South Australia offer people with a disability. We, for our part, have made clear our values and our direction. We call on the government to similarly make clear its values, its direction.

The Hon. R.D. LAWSON (15:49): I rise to speak in support of the Supply Bill, which will appropriate some $2.75 billion from the Consolidated Account for the Public Service of this state for the financial year ended 30 June 2010.

The Supply Bill provides an opportunity to look at the financial circumstances of the state at this particular point in time. I propose making a longer contribution when the Appropriation Bill comes in because we will then see, after the state budget, the true state of our finances and we will be able to comment upon the measures which the government proposes taking in the coming year.

It has been oft repeated in this debate that over the past seven years in which the Rann government has been in office the revenue streams coming into this state—taxation and other revenue, not only from GST but also from land taxes and the like—have been at absolutely record levels by whatever measure one takes. Whilst it is true that the public sector has grown in South Australia quite markedly during that time, it is not true that our relative position in the Australian scheme of things has improved at all. Indeed, by most measures, it has retreated.

The parliamentary library in Canberra produces a very interesting research paper annually entitled State Statistical Bulletin, and it compiles the statistics for all Australian states and provides not only a picture at the end of the particular financial year but also a picture developing over time. The most recent of these bulletins that I have received is the one for the 2007-08 year, and it is very instructive. Some will say, of course, these figures are out of date and, indeed, other events have supervened and the latest figures will be interesting (they will show a slightly different picture), but these figures, released in February of this year, show where we were and where we had come from, and it is not a pretty picture, you would have to say.

I do not want to talk down the state and I do not want to suggest in any way that we are a basket case, but what I think is important is that we have a realistic assessment and the community has a realistic knowledge of where we sit in the Australian scheme of things. Listening to the braggadocio of the Treasurer here of his AAA rating and his great hard work and achievements in relation to financial matters, you would think that we have improved our position by most measures and we are doing extremely well. We are not. That creates a false picture. It creates false expectations and it prevents the community from realistically addressing these issues—and it happens to be in the political interests of the government not to provide a realistic picture but to spin the figures so that the government's political stocks are improved.

When one looks at employment, once again we are not only at the lowest level of any of the Australian states (including lower, unusually, than Tasmania in this particular field) but also our rate of improvement on the employment figures over the year 2007-08 was the lowest rate of improvement. So that we are simply not improving. In relation to unemployment, unfortunately, once again, we are at this particular time where we usually are, which is the highest of the mainland states and well above national averages. The participation rate of the labour force shows that our participation rate, expressed as a per cent, is the second lowest of all Australian states but the lowest of the mainland states.

Our figures for long-term unemployment are near the highest—not as high as Tasmania, admittedly, but certainly well above the national average. If one looks at youth unemployment, one sees that the youth unemployment rate in South Australia is 22.3 per cent at the time, compared to the national average of 17.4 per cent. In that particular category, we were second only to Tasmania by the narrowest of margins.

In job vacancies, one finds that South Australia has the second lowest vacancy rate—not a healthy position. In relation to industrial disputes, we are well situated in that we are led by New South Wales and Victoria, but the rate of disputation and days lost per 1,000 employees in the year was above that of Queensland, Western Australia and Tasmania, but below that of the two major states. I do not believe that our relative position has much to do with state government policy.

Average weekly ordinary time earnings shows South Australia marginally above Tasmania, but it is no great boast to say that we are near the bottom in average weekly ordinary time earnings. We are in a similar position in relation to the real average weekly ordinary time earnings when expressed as an annual change. Our improvement is not as good as that of others.

Most of the wage statistics show us in a similarly poor position but, more importantly, we have not improved our position against the adjoining states. Even in something like the consumer price index, when one looks at the annual change in that, Adelaide used to be regarded as a low cost city, but our annual rate of change was up near the top of the list.

I will not go on with the generally depressing statistical information about the state of this state's finances. There are some, in fairness, where we are doing reasonably well, but they are precious few, and I doubt that this government can claim much credit for those. I call upon the government to address our financial situation with a little less bombast and a little less boasting, but with more realism. The South Australian community are not mugs and they do not deserve to be treated like mugs, as they are by the Treasurer.

Observers of the statements of the Treasurer would be intrigued to notice how for years he has been claiming credit for achieving a AAA credit rating for this state, whereas anyone with any knowledge would know that the AAA credit rating was awarded early in the term of the new government, and the measures that were put in place to achieve that were put in place by the previous administration, through the hard work of the then treasurer (Hon. Rob Lucas) and others over many years.

Having proclaimed the AAA rating loud and long as a personal achievement, suddenly, in the past couple of months, the Treasurer realises that the AAA rating is unlikely to be maintained. Of course, that is nothing to do with him. On this occasion, this is all to do with external circumstances, and the Treasurer has started warming up journalists and others who will listen to the prospect of this state being re-rated. Once again, you will see spin after spin trying to put a good face on what was not his achievement in the first place and now, of course, he will be running away from it.

There are some other measures of which the government seems to think we have reason to be proud. One, for example, is the fact that the number of prisoners in our gaols is at record high levels—not many more, but there are a few additional prisoners—but it is no great achievement to have more people in prison for longer periods. American experience shows that ever increasing the proportion of the population who are imprisoned is no guarantee of ever increasing community safety. Indeed, it is not. I do not believe that is a significant achievement and, of course, as is so often the case, the Treasurer seeks to walk both sides of the street on this particular issue. On the one hand, he is seeking to appeal to a certain section of the community by saying 'Rack 'em, pack 'em and stack 'em'—an irresponsible but politically populist position—and, on the other, he is claiming credit for establishing a new prison facility.

I do not deny the need for a new prison facility, especially one to replace the inefficient and inadequate Yatala Labour Prison, first established in the 1850s. However, what is disappointing is the fact that the government has completely bungled this project. It chose Mobilong for the basest political reason—it happens not to be located in a Labor electorate. The original proposal examined by the government was to have the prison situated on the Strathmont campus near Yatala, or, indeed, on the Yatala campus, but that brought opposition from the Labor members representing that area and other Labor areas that were mentioned.

However, when it chose Mobilong, it failed to consult. It did not consult with the prison officers or the Public Service Association. Those prison officers have to work in the prison and, when Yatala is closed, those who want to continue working in the correctional system will suffer great inconvenience, but they were not consulted; nor were the psychologists and the other professional services which are necessary to run a correctional facility, especially one which will have combined with it a mental health unit.

The government did not consult the local council until after the decision to locate the prison was made. Then, on top of it all, the government has been unable to deliver the project. Having promised this project to be started some time ago (I think the latest indication was that it would be completed in 2005), the government has been unable to secure a private-public partnership to facilitate it. That failure cannot be blamed on the global financial crisis, because the delay of the project was announced well before the effect of that crisis.

It is a matter for regret, not that a new correctional facility is to be built but that this government has been unable to deliver it. Of course, because it was not prepared, was not ready and did not have the plans and arrangements organised, it was not possible then for it to have this project fast tracked under the stimulus packages that have been offered by the commonwealth government and it is, yet again, a missed opportunity.

Another aspect of the criminal justice system that I will mention briefly is the government's failure to adequately fund the Courts Administration Authority. One of the real reasons why we have a high prison population, and a very high population of prisoners who have not been sentenced and are on remand, is the fact that we have significant delays in our criminal justice courts. There are insufficient judges and insufficient courtrooms in the Adelaide metropolitan area to increase the throughput. That has meant that we are holding, at great expense, more prisoners and remandees in our Adelaide facilities.

One way to overcome that is to increase the number of courts that are sitting. The old motto 'justice delayed is justice denied' was usually thought of in terms of the trial of the person who was being charged with a criminal offence. However, the motto 'justice delayed is justice denied' is especially true for victims. When the victims of a crime have to wait months, if not years before finally testifying in court against the perpetrator of the crime, they simply do not reach closure. Countless studies have shown that they relive, time and again, the trauma they have experienced and they are re-victimised.

We need more courts and we need more judges to clear the lists. The response of this government, a couple of years ago, was to reopen two old, inadequate and inappropriate courtrooms that were established for war crimes tribunals in Sturt Street. We have recently been told that that project has been, yet again, delayed and will not come onstream until October this year. Judges have not been appointed to man it yet. There is a judge who has retired and, once again, the government is not replacing that judge.

The condition of the Supreme Court remains a disgrace, and proposals by the judges for an improvement have been met with an abusive response by the government that it is not interested in funding a Taj Mahal. The judges are not interested in a Taj Mahal. They have not asked for a Taj Mahal. They simply asked for facilities, and not only the work facilities for people who work in the courts but also for victims, witnesses and the like, and the public in general who are suffering because this government has failed to appropriately manage its budget and its programs.

Previously, I had the honour of serving in the disability services portfolio and I was delighted to be preceded this afternoon by the Hon. Stephen Wade who gave a very good account of the failures of this government in relation to supporting people with disabilities. This government is always very keen to suggest that, under the previous government, disability services were not adequately funded. However, each year and in the years in which I served in that office, additional real money was put into the system to assist people on the ground.

We were not in the business of appointing more middle managers and creating more bureaucracy. We were in the business of providing accommodation, support and assistance to people with disabilities. I think it is a matter of considerable regret that this government has not maintained what was a strong tradition.

The Hon. R.I. LUCAS (16:10): I rise to support the second reading of the Supply Bill. As I see it, the background to this debate features some of the comments made by the Hon. Mr Lawson in relation to South Australia's credit rating, what I will refer to as the AAA credit rating debate. As the honourable member indicated, it has been the one supposed claim to fame of this government—and, in particular, of Premier Rann and Treasurer Foley.

In recent weeks it has been clear that Treasurer Foley has been rather glumly predicting, to journalists and anyone else who would listen, that South Australia—and he, as Treasurer—is about to lose the state's AAA credit rating. If that is indeed the case, then Treasurer Foley will become only the second treasurer in South Australia's history to have lost the state's AAA credit rating. Treasurer Foley's name will go down in the halls of infamy along with former treasurer John Bannon, the only two treasurers (Labor treasurers, I might add) who have lost the state's AAA credit rating during their term as treasurer.

If that happens, Premier Rann's name will also go down in the halls of infamy as being only the second premier in the state's history to have lost South Australia's AAA credit rating, and he also will join former premier John Bannon as the only two premiers—again, Labor premiers—to have done so. Mr President, as you and anyone who knows Treasurer Foley would know, that would be a huge political blow to him, as well as a massive blow to his ego in terms of what he sees as his personal accomplishments.

I would like to trace the history of the credit ratings, having spoken in recent days to Standard & Poor's and gathered some information from Moody's agency as well, the two pre-eminent agencies that rate the states and countries around the world. I will not go through all the detail, but the simple history is that in the period 1991-1992, at about the time of the State Bank crisis, Moody's dropped the state's AAA credit rating first to AA1 and soon after that to AA2. As I said, that was when John Bannon was treasurer.

It is interesting to go back through Standard & Poor's ratings. It rates the state of South Australia on two categories: a foreign currency rating and a local currency rating. It has advised me that the local currency rating is the better measure; however, that rating started only from 1991. When one looks at the foreign currency rating for this state, we see that we lost Standard & Poor's AAA credit rating to AA+ in 1986, at the time when John Bannon was premier and treasurer. In 1991 and 1992, at the time of the State Bank crisis, when the local currency ratings had been issued by Standard & Poor's, the AA+ was reduced first to AA and then to AA with a negative outlook. So, in and around that period we saw downgrades of the state's credit rating with Standard & Poor's. We lost the AAA rating on the foreign currency measure back in 1986—again, under the premiership and treasurership of John Bannon at that time.

I note the personal claims of the current Treasurer of the accomplishment of the AAA credit rating in 2004. I remind the Treasurer and members that Standard & Poor's issued a major report on South Australia in September 2003 which talked about the credit rating upgrade. Standard & Poor's, in that report, stated that there were two key factors contained in the state's debt burden. The report states:

In order of importance, privatisation of the state's electricity assets in 2000 and 2001, which reaped almost $A5 billion, most of which was used to pay down debt.

Standard & Poor's listed two major factors, the pre-eminent one, in order of importance, was privatisation, and the other was the restructuring the state's finances. The key issue there in relation to the massive improvement in the state's finances was the massive increase in GST revenue collections over the original estimates through the period from 2001-02 onwards. Again, there has been much talk about the rivers of gold of GST up until the last 12-month period, which has left all state and territory governments in a much healthier position.

I remind the Treasurer and government members in this chamber that they were the two key factors that led to the AAA upgrade, and both of those were trenchantly opposed by Treasurer Foley and Premier Rann when they were in opposition. Premier Rann said that the GST deal the state had done was, in essence, a lemon of a deal from the state's viewpoint. They were very critical of the GST and, of course, at the time they maintained—and they still maintain the pretence even to this day—that they opposed the privatisation and the debt reduction achieved through the privatisation of the state's electricity assets.

Standard & Poor's, in its document from September 2003 and subsequent documents, made it quite clear that the decisions taken by the former government—certainly nothing in relation to those taken by the current government—were the major factors leading to the AAA credit rating upgrade.

In more recent times, Standard & Poor's, in an interview on ABC Radio on 2 July last year, started raising some warning signs when it looked at some of what it said were the major problems facing the state of South Australia, and Standard & Poor's looked at one of the measures, which was the net financial liabilities to revenue ratios of the state government. On 2 July 2008, the Standard & Poor's commentator said:

If the net financial liabilities to revenue ratios did get up around that 80 per cent mark then we would be having a look at the rating and seriously looking at what else was going on with South Australia's finance. It's that 80 per cent mark that is, I guess, a hot button for us.

It is important to know that, just prior to this budget, the most recent budget figures indicate that the state's net financial liabilities to revenue ratios is already above the 80 per cent hot button point: it is 87.3 per cent, and forecast to reach 92.1 per cent next year. So, in broad terms, it is already in the high 80s or the low 90s, which is significantly above the 80 per cent hot button mark identified by the Standard & Poor's commentator in the middle of last year.

Given the significant financial problems, some created by the global crisis but others created by the policies and the financial mismanagement of the current Treasurer himself, we are likely to see that particular measure (that is, the net financial liabilities to revenue ratios) potentially going over 100 per cent, which is significantly higher than the hot button mark that Standard & Poor's has identified. I think that is why we have seen Treasurer Foley glumly predicting to commentators the fate of our AAA rating. As I have said, he may well suffer the ignominy of being only the second treasurer in the state's history to lose the AAA credit rating whilst they were treasurer.

Over the past 18 months or so, the Legislative Council's Budget and Finance Committee has been going over with a fine tooth comb Treasurer Foley's fiscal management of government departments and agencies. This afternoon I hope to outline some of the findings that the Budget and Finance Committee has established and to indicate that the current forward estimates Treasurer Foley has produced—and, we believe, the forward estimates he is about to produce—are based on rubbery figures. In other words, the forward estimates Treasurer Foley has produced and will produce should not be accepted by credit rating agencies or commentators, or any other independent analysts, as being capable of being achieved.

In doing that, I hope to demonstrate the facts and the evidence that the previous estimates Treasurer Foley has produced are not capable of being delivered by this Treasurer, if he were to be re-elected, and to use evidence given by chief executives of government departments and agencies about the current problems they are having with implementing the existing forward estimates in their particular department or agency.

As I have said, I think it is imperative that rating agencies and also the Auditor-General have a close look at some of the claims being made by the government and, more particularly, comparing it to performance and my allegation that they are based on rubbery figures. I am pleased to say that the new Auditor-General, for the first time in recent times, actually did start looking at these claims, and he had a look at the shared services claims, and I will refer to those in a moment. I think the Auditor-General's office should do that and much more in terms of implementing its mandate.

We see audit offices in other states, in particular, Victoria and, to a degree, New South Wales, vigorously testing the performance against the claims in relation to savings tasks and other policies announced by governments and treasurers in their jurisdiction. That is a function that audit officers ought to adopt as a part of their ongoing process, and it should not just be a Legislative Council Budget and Finance Committee producing the evidence to dispute the rubbery figures of any government or Treasurer. The point I hope to demonstrate is that we will see the work of the Budget and Finance Committee show a significant lack of financial discipline from this Treasurer, this government and these ministers in the period since 2002.

In doing that, I refer to one of the early decisions and announcements Treasurer Foley made back in May 2002, which in my contention he made for political reasons at that time. The former government had experience with the Education Department of a $30 million overspend by that department, and it required of that department a repayment over a four-year period of that $30 million overspend—a modest repayment of some $8 million per year over four years out of a very significant budget, which at that stage would have totalled over $5 billion.

Without retracing all the detail of that time, in endeavouring to claim a black hole and unsustainable spending, Treasurer Foley indicated that he would forgive that particular $30 million overspend by the Education Department and that it would not be required to repay it. At the time, I warned the Treasurer that the message he was sending to departments was not to worry about overspending, that if the budget is there and they happen to overspend it, do not worry about it: the government will be there to bail them out and there will be no requirement in relation to financial discipline. Sadly, the Budget and Finance Committee has established that that is what has occurred.

I turn, first, to the health department. The evidence before the Budget and Finance Committee showed that in June, the last month of the 2006-07 financial year, Treasury had to bail out the health department by making an allocation of some $62 million extra, and even with that the health department had to report a $32 million overspend. It waited around for some six to eight months to see whether it would have to repay the $32 million. Because of the rivers of gold from the GST, they were forgiven the $32 million. For that financial year that department overspent its budget by $94 million.

The following year, the 2007-08 financial year, again in June (2008) that agency had overspent its budget by $70 million, and Treasury and the Treasurer bailed out the health department by allocating an additional $70 million to that department to help it balance its books by the end of the year. My advice from people working within health is that, in February or March this year, the health department was looking at a budget blowout or overspend of between $50 million and $100 million for this financial year. Given the performance of the past two years, as outlined, that does not seem to be out of the ball park for the health minister and the health department.

Given what has occurred in the past, the health minister and health department are not worrying about having to manage their budget within allocations from Treasury and the Treasurer because they work on the basis that at the end of each financial year they will be bailed out. In the past, with the benefit of the rivers of gold, the Treasurer has been in a position, through unanticipated additional revenue, of being able to bail out departments and ministers who cannot manage their budgets within the allocation. This year that has changed, so if the health department is facing a $50 million to $100 million overspend already, it will be difficult for the South Australian Treasurer to find that additional money to bail out the health department.

In September last year the Budget and Finance Committee took evidence from the health department (pages 578 and 580 of the committee's transcripts). Under the current savings regimes the health department is required to make savings or cuts of up to an annual saving of $163 million a year by next year, 2009-10. That does not include the additional savings task allocated as a result of the mid-year budget review, which was in December this financial year. Given that the health department is such a significant part of the total spending, if it is to make savings of between 300 and 500 additional positions from within that portfolio, then its annual savings task will be significantly above the $163 million a year—potentially over $200 million a year.

Without going through all the detail of the evidence given, it is quite clear that the health department is not in a position at this stage to deliver the savings it was required to achieve as a result of the budget decisions of 2006-07 and 2008-09, let alone the additional ones of the mid-year budget review. It is stumbling along, as are many other departments year to year, in meeting each year's budget savings to the best of their ability. In the case of the health department, it has not been meeting it because it has blown out every year and Treasury has bailed it out.

One of the most significant savings tasks it has been given is what is called the 'health reform service delivery changes', which started off saving $13.6 million a year, supposedly, but by the time of the 2009-10 budget it was meant to be saving $47.6 million a year.

When we quizzed Dr Sherbon and the health department about how they would achieve this $47.6 million through what is called, euphemistically, health reform service delivery changes, he said they were going to achieve that by reducing the level of increase of inpatient admissions into hospitals down to a 2 per cent increase from a level which in various times in the past had been increases of 7 to 8 per cent, and in more recent years somewhere between 3 and 4 per cent. So Dr Sherbon was saying they were going to achieve these savings of $47 million a year by reducing the increase in in-patient admissions and, supposedly, they were going to do that through preventative measures in the community and a whole variety of other mechanisms which, if you were to believe and accept them, were certainly going to be long-term changes of many years in the making and certainly not achievable by the next financial year. The question that I put to Dr Sherbon in September was:

Last year on 5 November you reported to the committee the growth was 3 per cent per annum for admissions. It is not a remarkable achievement to stay at 3 per cent. This is your evidence last year: the goal you had to achieve was around 2 per cent.

He answered: yes. I asked:

You had to reduce the growth in admissions to 2 per cent ultimately to achieve the $46 million in savings.

As I said, Dr Sherbon then went on to say that it had been 7 to 8 per cent and it was now just over 3 per cent, and they were hoping to get it down to that particular level of 2 per cent.

As I said, there is much more detail there and I am not going to go into it, but suffice to say that there is no way that health is going to meet that particular savings task. When that department meets with the Budget and Finance Committee some time mid this year or in the third quarter, I am sure the committee will be advised that that particular savings task has not been achieved and none of the other savings tasks have been achieved, either.

Likewise, the Families SA agency gave similar evidence to the Budget and Finance Committee. In 2006-07, there was a $32 million overspend and it had to be bailed out by Treasury because it had overspent. In 2007-08, again there was another significant overspend, there was a negotiation with Treasury (as it was described), and it was given permanent ongoing additional spending (a bail-out) in that year of $18.6 million—an additional budget of $18.6 million for each subsequent year.

I turn now to another couple of agencies—the Department for Environment and Heritage and the Department of the Premier and Cabinet—to highlight a further point, and I refer to the transcripts of evidence on pages 728 and 729 in relation to the Department for Environment and Heritage. That department, a much smaller department, indicated that its total savings task by the end of the forward estimates year, 2012-13, was going to be $12.5 million per annum, plus whatever its share of the Mid-Year Budget Review was, and at the time of giving evidence it was not able to advise the committee what that particular savings task was going to be.

For that agency, it was a very significant savings task, and it was actually just achieving its savings on a year-by-year basis. It had not been able to lock in decisions to achieve its savings over the four years. We put the following question:

So it would be fair to say that, if you as an agency are just doing it one year by one year, in January 2010 you would be making decisions and recommendations in relation to the 2011-12 budget year. Is that correct?

Mr Holmes, on behalf of the department, said, 'That's right'. So, in regard to these particular savings measures which have been locked into the forward estimates, CEOs, finance directors and agencies have no idea as to how they are going to achieve them at the moment. They are just going from year to year. They are trying to get the 2008-09 savings, and currently they are talking with ministers about how they will achieve the 2009-10 savings. Then, after the budget, they will try to work out how they will achieve the 2010-11 and 2011-12 savings tasks.

If this government is re-elected, it will face chief executives saying, 'Okay, we still have a major decision. We are going to have to start cutting services or increasing taxes.' If there is a new government, it will be receiving similar advice. The decisions will not have been taken to lock in the savings tasks required to meet the current savings requirements of the government.

Similarly, I turn to the evidence of the Department of the Premier and Cabinet on page 779 of the Budget and Finance Committee transcript. That department is required to make savings increasing up to $30.4 million a year—so, annual savings of $30.4 million by the year 2012-13 at the end of the current forward estimates period (about $100 million in savings over the forward estimates but factoring up to increases of $30.4 million). Next year's savings are at a much smaller level of $14.7 million, but increasing through to the $30 million figure. Again, we put the question to the acting chief executive:

Have you locked in a process and made decisions on those yet or are you still working on those savings?

The acting chief executive, Mr Mackie, said:

We have locked in for 2009-10.

So Mr Mackie is saying, 'Okay, we have made the decisions for savings for next year but, when you start talking about the big savings in 2010-11, 2011-12 and 2012-13, we do not know how we are going to achieve those. We have not made decisions in relation to how those savings will be achieved.' They will be tasks for either a re-elected government or a newly elected government post the 2010 state election.'

Again, from the evidence of the Budget and Finance Committee, some of the savings tasks given to agencies have been demonstrated never to have been achieved by the current government and its administration. We remember the first example of that, going back a little bit in time to the first budget (the 2002-03 budget), that is, the announcement then that they were making $967 million in savings over the forward estimates period from 2002-03. I put on the public record again that, even fighting for this under FOI, asking questions on notice and without notice in the parliament, the Treasurer of South Australia has never revealed—this is seven years later—the detail of the supposed $967 million in savings announced in that budget.

The answer as to why is because they were never achieved. The Budget and Finance Committee has established that in a number of cases the savings were either forgiven by the Treasurer or not achieved. What we also established is that some agencies, rather than savings, had increases in revenue incorporated in that $967 million. Having sold to the rating agencies that they were cutting spending, what the Treasurer included in the $967 million calculation was some agencies that increased fees, charges and revenue items as a budget savings task.

It is quite clear that they are two separate items. Having sold themselves to rating agencies as being tough financial managers—'We are cutting $967 million in programs across government departments and agencies'—we now know that a component of that $967 million was revenue increases and not cuts in programs and services.

One asks the question after seven years—surely the confidentiality excuse has long gone—why the Treasurer still refuses to answer the question: what were the decisions that comprised the $967 million in total savings?

Secondly, one of the bigger recent claims for savings is what is known as the shared services initiative, which has been an embarrassment to the government, even though it was warned by the Public Service Association, its own workers and certainly the opposition that the claims it made were illusory. They claimed $130 million in savings over a four year period, factoring up to annual savings of $60 million a year by 2009-10.

The work of the Budget and Finance Committee over 18 months has demonstrated that those claims are not only illusory but also rubbish. There have been significant cost blow-outs. The implementation cost of the program was meant to have been $60 million. The Budget and Finance Committee established that there had been a $37 million blow-out in the $60 million program, so the total costs of implementation were $97 million.

We put questions to the Under Treasurer, Jim Wright, about the issue of dead rent for office space. We asked him about Westpac House at 91 King William Street, which has been leased by the government. He was asked whether it was true that most of those floors are vacant, and Mr Wright, in an outbreak of honesty on 30 June 2008, said, 'I think that would be true.' Mr Wright also confirmed that the government at that stage was going to be spending $9 million fitting out new office space at 77 Grenfell Street. He said:

This is one of the logistical difficulties that probably was not recognised as clearly as it could have been. The best choice we could make was to take 77 Grenfell Street even though that would involve some dead rent for a while.

There are many other examples of foolish, ill-considered decisions taken by Treasury, the Treasurer and the government in relation to shared services arrangements, and the wastage of money on the empty office buildings is just one part of that.

I will not go through the detail of this, but there was considerable evidence from agencies in relation to the double counting of shared services savings. A number of agencies came to the Budget and Finance Committee saying that they had already included, in their own required savings task, savings which the government was now wanting to claim as part of whole of government shared services savings; that is, they had already implemented some changes in relation to accounts payable, accounts receivable and corporate service savings, which the government was now trying to claim for an overall shared savings initiative.

Some departments, including Families SA, won the battle with Treasury and were given approval to keep those savings as their own, which therefore reduced the overall shared savings achievements. Others, such as DFEEST, thought they would win the battle with Treasury and had been given indications by the Under Treasurer, but in their most recent evidence to the Budget and Finance Committee indicated that they had lost the battle. Treasury claimed those savings, even though it was prior to the shared services arrangement and they were now having to look for other savings to achieve the savings for that particular department and agency.

At least in relation to shared services, eventually in October last year, some six to nine months after the Budget and Finance Committee had exposed many of these things, the Auditor-General and his department produced a report which flushed out some details of the wastage of money and the illusory nature of the claimed savings for shared services. As I said at the outset, the Auditor-General and his officers need to do much more in relation to comparing performance to claims in relation to some of these savings tasks.

It is so easy for governments of all persuasions to make claims as to what they will do, and the Auditor-General is the only one in a position to demand cabinet documents and information from ministers in relation to actual performance. The Budget and Finance Committee can certainly get to chief executives and finance officers and others, but it is only the Auditor-General who can eyeball a minister or the Treasurer and say, 'You have claimed this: provide the evidence to me that you have achieved it.' If they are able to do that, the Auditor-General can happily report that it has been done. If it has not been done, it should be the Auditor-General's responsibility to report on it.

The second one in this particular area of illusory savings is what is called the Future ICT project. The best way of demonstrating this is to refer to some evidence given by the health department to the Budget and Finance Committee. In particular, I refer to a file note dated 23 August 2007 from the Chief Information Officer for the health department, Mr David Johnston, to his chief executive (and himself) in relation to the impact of the Future ICT program on the health department.

We all remember that the Future ICT was this wonderful thing the government did in breaking up the former single EDS contract and dividing it up amongst a number of providers, and it was going to make savings of $30 million a year. How do we know that? Treasurer Foley said in his election promises that he was going to do this and it was going to save $30 million a year. After the election, when it was not delivering that, Treasury was told, 'Well, you will just have to demonstrate that we have saved $30 million a year.'

How did Treasury do that? Treasury went back and got some figures from the 2003-04 financial year. How do we know that? Angela Allison, Director of Corporate Services from the Department of Trade and Economic Development, told the Budget and Finance Committee that Mr Foley and Treasury had used ICT spending figures for 2003-04 to help justify his claim of $30 million in annual savings. Ms Allison said:

That is the way the Future ICT savings were calculated. They used 2003-04 baseline figures.

My question to Ms Allison was:

That makes no sense. I do not ask you to comment but let me say, as a former treasurer, that it makes no sense. Did you not have figures more recently available that you could provide?

Ms Allison:

We do, but Treasury are working from 2003-04 for whole of government.

Ms Allison went on to explain that, by using the old figures, Treasury had significantly overestimated the real level of savings for DTED being achieved by the Future ICT process. Ms Allison told the committee that claimed savings of $800,000 per annum for them was approximately double their expected level of claimed savings and that, as a result, DTED would have to slow down the replacement program for computers within the department and a range of other policy changes to try to meet these particular savings.

Treasury got a $30 million bottom line and divided it up between the departments and said, 'Your savings are $5 million here, $800,000 there. It does not matter what the reality was, they are your savings in the Future ICT project.' I return to this file note from the chief information officer from the health department, because he said that they were told that the savings to them, as part of this $37 million, was $4.7 million in 2007-08, increasing to $5.1 million in 2010-11.

What Treasury told health was, 'You are going to be saving $5 million in this Future ICT contract. We are going to reduce your budget appropriation by that level.' In this memo of 23 August, Mr Johnston, who is the head of IT for the health department, said:

The net Health position as a result of Future ICT is now estimated at—

I seek leave to have inserted in Hansard a table composed by Mr Johnston.

Leave granted.

Item 2006-07 2007-08 2008-09 2009-10 2010-11
Cost increase $8.6m $7.7m $5.2m $5.1m $5.2
Savings allocated $ — $4.7m $4.8m $5.0m $5.1m
TOTAL $8.6m $12.4m $10.0m $10.1m $10.3m


The Hon. R.I. LUCAS: Without going through all the detail of that table, Mr Johnston shows that the total cost to that department—not savings—starts at $8.6 million in 2006-07, increasing to $10.3 million in 2010-11. He summarises by saying, 'The total cost to health of Future ICT was $51.4 million over five years'. Instead of actually saving $5 million a year, David Johnston was telling Treasury and his own department that the additional cost to the health department was about $10 million a year—$51.4 million over the five years.

That again is something that I think the Auditor-General should look at. I mean, here is a claim from the government and ministers that this contract saved departments and agencies $30 million a year. There is evidence before Budget and Finance to show that that is nonsense, that that is rubbish. The Auditor-General should report in this coming audit report (or a future report) on the truth or otherwise of the ministers' and government's claims of supposedly $30 million a year having been saved as a result of that particular program.

There are many others, but they are the key ones which highlight that some of these claimed savings from the government are illusory and are the savings which are backing up the supposed budget performance and bottom line in the forward estimates that the credit rating agencies and others are being asked to look at. It is clear that, whatever bottom line the coming budget might indicate in relation to the forward estimates, that bottom line will not be achieved due to the fact that the Treasurer and Treasury are using rubbery figures. The evidence from the Budget and Finance Committee has certainly demonstrated that over the years.

I now turn to the reference to the state's deficit position and, in doing so, I seek leave to insert a statistical table in relation to budget performance 1993-94 through to 2001-02.

Leave granted.

Underlying non-commercial sector cash result surplus (deficit)
1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02
(200) (239) (101) (57) 48 (55) (25) 21 22


The Hon. R.I. LUCAS: This particular table demonstrates that, contrary to the oft repeated claims from the Treasurer and others, the government inherited a budget in surplus position. For the last two financial years—2000-01 and 2001-02—there were small surpluses in the underlying non-commercial sector cash result position of the budget papers prior to the 2002 election. For the two previous years, there were two small deficits, and, the year before that, there was a small surplus.

The government inherited a budget in surplus. As I said, this table demonstrates the claims made by members of this chamber and others that the former government never produced a surplus budget to be factually untrue, incorrect, wrong—whatever words you want to use—and the budget documents of those days and that particular table which comes from the budget documents demonstrate the position.

From 2002-03 onwards, of course, three different measures of the deficit position are produced. One is on the cash basis, one is on the net lending basis and one is on the net operating balance. The last two are accrual measures of the surplus or deficit position of budget. The cash position, as I have indicated before, is still the one used by the federal government—reported only this week. That was the position used by most state governments and the former Liberal government in South Australia through to 2001-02. When the government was elected in 2002, it said that it would use one of the accrual measures—net lending—and that was the really true measure of the health of the budget.

After a number of years that net lending measure of the deficit and surplus lurched into deficit and the government then changed its position and said it would no longer use that measure, so it was not going to use cash, it would not use net lending and it moved to the last remaining one (which was actually still in surplus) which was the net operating balance. It continues to use the net operating balance measure.

As of the most recent figures, every measure—cash, net lending, net operating balance of the state budget—is in deficit, and in significant deficit. Given the events of recent months, as well as both the impact of the global financial crisis and this Treasurer's and government's own financial incompetence, we are likely to see all three measures in this coming budget being in significant deficit also. So, the reality is that the position is certainly going to worsen.

Where to from here? If this government were to be re-elected in March 2010 what would be the impact on the budget position? Treasurer Foley has already promised, and will promise prior to the election, that he will not increase taxes after the 2010 election if he is re-elected. I am happy to have this prediction marked as from this day: there is no doubt that, if this government is re-elected—even though it makes that promise about no increase in taxes, it cannot be believed—it will increase taxes and charges significantly after the 2010 election. That will be the only way it will be able to bring the budget in somewhere along the deficit line that it is predicting.

As I have outlined already, the agencies are not achieving, under this current government, their current savings tasks and requirement. They are not achieving those tasks at the moment. They are not going to achieve them over the coming years if the government is re-elected and so the only way Treasurer Foley will be able to bring the budget into some semblance of normality, albeit still a deficit position, will be through a massive or at least significant increase in taxes.

I want to look at the record of this Treasurer and this government in relation to keeping promises. I remind members of the infamous line we heard from Treasurer Foley when, if you remember in the 2002 election, he had made significant commitments about not increasing taxes and charges prior to the 2002 election. Treasurer Foley went to the 2002 election promising no increases in taxes and charges. He wrote letters to industry associations, committing to the Australian Hotels Association a letter signed almost in blood by him, saying, 'We will not increase gaming taxes on your industry if we are elected in 2002.' Of course, in his first budget he broke that promise. What did he say? He said, in defending that promise, in Hansard on 15 July 2002:

You—

that is, the then leader of the opposition (Rob Kerin)—

do not have the moral fibre to go back on your promise. I have because I have done the right thing in taxing the industry.

He attacked the then leader of the opposition on the basis of not having the moral fibre to break his own word and to break his own promises. Again, he stated:

You do not have the moral fibre to go back on your promise. I have because I have done the right thing in taxing the industry.

Even though he personally had signed a letter to the industry (from which, of course, they had received significant financial donations to their party prior to the 2002 election) and had written a letter containing that promise to the industry, he broke the promise in the budget immediately afterwards and then had the arrogance and the temerity to say that he had the moral position right because he had the moral fibre to break promises and the then leader of the opposition (Rob Kerin at the time) did not have. Their promises were unequivocal. In January 2002 Premier Rann and Mr Foley said:

None of our promises will require new or higher taxes and charges and our fully costed policies do not contain provisions for new or higher taxes and charges.

That was a promise they took to the election. As I said, in some cases they wrote letters and, in that first budget in July 2002, there was more than $200 million in increased taxes over four years—not only the gaming machine tax increases, but there were increases in stamp duty, conveyances and rental agreements, and increases in the emergency services levy and compulsory third-party insurance. There were big increases in fees and charges right across the board, contrary to the promises they had made prior to the 2002 election.

So, in 2002, they promised no new tax increases. In 2006 the climate was different. I might say that, contrary to urban folklore, the Liberal Party joint party room made a decision, as a party room, to support a radical package of significantly increased spending funded through a reduction of 4,000 by way of voluntary separation packages in the size of the public sector: no sackings, contrary to the claims made by Mr Rann and Mr Foley, but a significant package of spending financed by that option.

The joint party room, as I said, contrary to urban folklore, had two options: there was a much more modest spending package financed by a much more modest efficiency savings regime, or the more significant one. The joint party room chose the latter option. Of course, the Labor government, supported by the PSA and others, then attacked the 4,000 reduction in the size of the public sector. The government made a whole series of promises prior to the election, and I want to read one in particular made on 16 March 2006 in an interview involving Treasurer Foley and Matt Abraham, as follows:

Abraham: Okay, but...will you offer any separation packages at all?

Foley: We at this point are looking at about 800 additional vital public servants in our promises to date. That is 400 police, 100 teachers, 44 new medical specialists.

Abraham: And you won't fund those by getting rid of other jobs?

Foley: No.

I repeat that:

Abraham: And you won't fund those by getting rid of other jobs?

Foley: No. We will demonstrate today all of these spendings can be provided through appropriate efficiencies and savings within a budget. Matthew, I've brought down four budgets where I've had savings in every budget.

Abraham: You said that.

Foley: And we haven't had a separation for the public sector for two years.

They made a number of other commitments during that campaign, debates that I attended with the Treasurer and others, where they made commitments. They pooh-poohed the idea that there was any significant additional staff in the Public Service that could be reduced and indicated that there would be no reductions under the government.

What has been the result of that particular promise from Treasurer Foley? Soon after that election, on 25 May 2006 on FIVEaa minister Weatherill stated:

There are 400 people here that don't have proper jobs that have been basically rattling around the Public Service, in many cases for a number of years. Are we to let that just roll along?

That was in the context of justifying the offering of targeted separation packages three months after the election—when they promised that they would not be offering such packages—to up to 400 surplus people whom the minister described as 'rattling around the Public Service' essentially doing nothing within the public sector.

Soon after the 2006-07 budget, Treasurer Foley announced a range of savings measures leading to reductions in full-time public servant numbers of 1,571. So, there were 390 in May, and in the budget later that year there were another 1,571. In 2008-09, when the budget was released, the Treasurer announced further cuts and further cutbacks in Public Service numbers. In an article in the The Advertiser of 5 June 2008, Michael Owen, the political reporter, said:

More than 1,000 Public Service jobs are likely to be axed as the government tries to achieve major savings to help fund its increased budget spending.

That was based on discussions Mr Owen had with Treasury officers in the budget lock-up on that particular day. On the following day, 6 June, The Advertiser stated:

The state government has refused to rule out hundreds of Public Service jobs being axed in its drive for major savings...Mr Foley said he was 'taking an axe' to bureaucracy and administration within government, which would 'probably' mean job cuts in future years...Mr Foley...refused to put a figure on how many jobs could go.

The article continues:

Treasury said 'watch this space' when asked if the figure could be as high as 1,000 jobs.

This is a direct quote:

...'watch this space' when asked if the figure could be as high as 1,000 jobs.

Finally, in the Mid-Year Budget Review in the past six months the Treasurer has announced a further reduction of 1,600 full-time equivalent jobs over the next three years: 1,200 in the next year and then factoring up to 1,600.

Since the 2006 election, which was fought in part around reductions in the Public Service, the government took four separate decisions to reduce numbers by 390; in the 2006-07 budget, by 1,571; in the 2008-09 budget, by up to 1,000; and in the Mid-Year Budget Review, to reduce numbers by 1,600. When you add that up, the total number is approximately 4,600 full-time equivalent job positions that the Treasurer has announced since the 2006 election, when he attacked the Liberal Party's position in relation to reducing 4,000 jobs within the public sector.

In 2002 we saw a specific promise not to increase taxes, and then that particular commitment was broken. In 2006, we saw a commitment to not cut back public sector jobs, and we have seen four separate decisions adding up to 4,600 full-time equivalents, if they are achieved; they have been announced. I think the work of the Budget and Finance Committee has demonstrated that, in some cases, they have not been achieved and they might not be achieved in the future. I am saying: look at the evidence in relation to Treasurer Foley and Premier Rann.

In the coming election in 2010 they will promise—in fact, they will go back to the 2002 promise—no increases in taxes and charges as their big commitment. They promised the world in 2002, and they broke that promise. They promised the world in 2006, and they have broken that promise. They will now promise in 2010 no increases in taxes. However, the only way these numbers can come together is if the government again breaks its promise (if it is re-elected) and if there is a significant increase in taxes and charges.

Their record is evident. They are not to be trusted. As the Treasurer says, he has the moral fibre to break promises. That is the ideology of Premier Rann, the Leader of the Government in the council (Hon. Paul Holloway) and Treasurer Foley. They are quite proud of the fact that they believe that they have the moral fibre to promise the world and to break those promises after an election. That is their morality, that is what they believe in, and that is what they live by.

What will we see from the three of them and others leading into the 2010 will again be this commitment to not increase taxes and charges. Do not believe any of them. Certainly, if the Public Service Association or people out there in the community have not already been bitten twice in 2002 and 2006, let me warn them again in 2010: whatever comes out of their mouths this time, remember the ideology and the morality of this lot. They live by the adage that they have the moral fibre to break their promises, and they are quite happy to do that after every election.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (17:07): I thank all the contributors to the Supply Bill debate. Traditionally, the Supply Bill in the Legislative Council has been a much more narrow debate than it is in the House of Assembly, because money bills arise from the House of Assembly. In recent years it has become the new convention in this place that Supply Bill is a de facto Appropriation Bill, and the debate ranges far and wide, as we have just heard. In effect, all the Supply Bill does is allocate $2,750 million for the purpose of paying the Public Service until the Appropriation Bill has passed.

There is much one could say to address many of the points that have been raised but, as I have said, they probably have very little relevance to the Supply Bill itself. However, during the Appropriation Bill and estimates committee debates we will, of course, have a more appropriate and traditional opportunity to address many of the issues raised. Again, I thank honourable members for their contributions to this debate.

Bill read a second time and taken through its remaining stages.

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