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

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 2972.)

The Hon. R.I. LUCAS (15:27): I rise to speak to the second reading of the Appropriation Bill and make some opening comments in relation to the performance of this government and its ministers in terms of public accountability—accountability, essentially, in relation to financial issues.

First, I refer to the attitude of minister Holloway as the Leader of the Government in this chamber in relation to the issue of the Appropriation Bill debates, and I will summarise his approach as patronising, puerile and pathetic. Indeed, we can summarise it as minister Holloway's own version of the PPP, as demonstrated in the past few budgets. He is the only minister and Leader of the Government, in my experience—and, I understand, even prior to my participating in these debates—who has adopted the approach of refusing to answer questions from members in the Appropriation Bill debate.

Members will recall that, in the past couple of years, in a petulant (if I can add another P to the three Ps) fashion he has refused to answer most questions from members on the basis that, 'You lot have formed a Budget and Finance Committee, and you can go off and ask these questions in that committee.' I hasten to say that he is the only leader of this chamber who has ever adopted that approach, even excluding Labor leaders prior to him.

I go back to the period of former attorney-general Chris Sumner and others who took their responsibilities seriously. When a question was put to them in debate on the Appropriation Bill, they asked Treasury officers to use their best endeavours to provide an answer within the relatively limited time frame we had to debate these issues and, if they could not do so, they would take it on notice and undertake to provide an answer in writing to the member's inquiries.

In part, this developed because, during the 1980s, this chamber exercised its right at the committee stage of the Appropriation Bill to quiz ministers in this chamber on the detail of the budget documents. On occasions, senior departmental officers were available to ministers to provide answers in this chamber's version of a mini estimates committee in just one or two selected areas.

As a result of developments during the eighties and nineties and the genuine endeavours of former leaders of the chamber—undertakings given by attorney-general Sumner and me, as leader, during the period that we were in government—this chamber accepted not to continue down that path; instead, it accepted a process of genuine endeavours by the representative of the government to provide answers.

As I said, in the past two or three budgets, we have seen the patronising, petulant, puerile and pathetic response from minister Holloway. It is beneath contempt when one looks at the sorts of responses the minister has given. Yes, it is correct that this chamber has established the Budget and Finance Committee for accountability purposes. The general process of that committee means that, over a period of 12 months, agencies are asked to provide evidence to and answer questions from members of that committee.

It means that regarding the Appropriation Bill we have before us today, for example, some agencies have not appeared before the Budget and Finance Committee for approximately 12 months due to the question of processing their appearances before the committee. Any questions that were asked 12 months ago are obviously out of date so, when they next appear before the committee, the members who attend that committee can ask questions.

However, agencies like Premier and Cabinet, which appeared before the Budget and Finance Committee in February, March or April of this year, prior to the presentation of the budget, have only just been before the Budget and Finance Committee and answered questions on the basis that they could not say anything because the budget had not been brought down. They will not appear again before the committee in this four year cycle until after the next election, if the committee is to be re-established.

As I said, it is a petulant response from the Leader of the Government. I urge members to consider and look behind that sort of glib response because there is no need for him to adopt that approach to answering questions in this chamber. As you know, Mr President, the dogs are barking, and the young turks and some of the older turks within the Labor Party are trying to remove minister Holloway from his position and from the chamber.

One would hope that, if this government were re-elected and, heaven forbid, the Hon. Mr Finnigan or, even worse, the Hon. Ms Gago were to lead the government in this chamber—spare a thought for the person who could actually lead the government in this chamber in the future, whoever it is—they might at least be prepared to look back at the sort of approach adopted by former leaders of the government of both persuasions in this chamber and not follow the approach that, sadly, has been adopted by the current leader. As I said, he is the only leader in this chamber's history ever to have adopted this approach in relation to the Appropriation Bill debate.

In the event that there is a Liberal government after March 2010, I would certainly hope that a leader of the government in this chamber from my own party would adopt the traditional, conventional, sensible and rational approach expected of leaders of the government in terms of public accountability and, through genuine endeavours, try to provide answers to questions from members in the Appropriation Bill debate.

This comes within the whole gamut of the lack of accountability of this government and its ministers. We see it in questions on notice, in questions without notice, and in freedom of information requests. The government laughs when I describe it as the most secretive government in the state's history, but I think testimony to that comes not just from opposition members but from many crossbench members as well.

I recently had an FOI document refused on the grounds of either public interest or a working document, or some similar excuse. That particular document was amongst a number of others and was actually a copy of Hansard, which referred to a particular issue I had sought information about under FOI. So, here is a publicly available document being refused under FOI, because it is one of a large number of documents, on the basis that it was not in the public interest that it be released.

As a guesstimate, we currently have at least 2,000 questions on notice that remain unanswered. My staff tell me that, as of this morning, I alone have 983 unanswered questions on notice, and I know there are also other members who have significant numbers of questions that remain unanswered. Again, this comes back to leadership; obviously it comes back to the Premier and, sadly, to the Leader of the Government in this chamber as well. Together they are not prepared to follow the conventions that all previous governments have followed in this chamber of, through reasonable endeavours, providing responses.

I accept that in the past some members may not have been happy with the quality of the responses, and whether or not they truly answered all the questions the way the member may have sought, but at least the convention and tradition of being prepared to be accountable was followed by former premiers and leaders of the government in this chamber. Sadly, that is not occurring at the moment.

So, whilst we have all of that, questions without notice is a whole new minefield, because there is no central record of those; however, my office quickly checked some of the questions I have raised (and I know that other members would be able to give similar examples). Back in December last year I asked a question of the minister representing the Attorney-General that related to the appointment of Mr Kourakis and Mr Bourne to various positions under this government (of course, we know that Mr Kourakis and Mr Bourne generously provided free legal advice to the Attorney-General in a private legal action some years ago that related to Mr Clarke). At that time I asked the following questions:

1. To ensure that there could be no perception of conflict of interest, did Attorney-General Atkinson exclude himself from, first, any cabinet discussions or decisions on appointing Mr Kourakis to the position of Solicitor-General and then recently the cabinet decision to appoint Mr Kourakis as a Supreme Court judge and, if not, why not?

2. In relation to the most recent defamation case involving the Attorney-General and Mr Cannon, is the Attorney-General receiving free legal advice from any solicitor or barrister in relation to those proceedings?

These are genuine questions of public interest, given the Attorney-General's form in this area but, seven months later, the arrogance of the government and Attorney-General is such that no reply has been provided.

Of course, we now know that the most recent legal costs of the Attorney-General are being picked up by the government, and that is an issue about which I will address some comments when the parliament reconvenes, given the Attorney's and the Premier's statements in the past about such matters These are genuine issues of public interest that are just ignored by the arrogance of the government and, in this case, the Attorney-General.

I will go back to June 2007 when I asked questions, and I will not repeat them all. For example: 'Was the Attorney-General, or any other Rann government minister, or any of their advisers, recently advised of concerns relating to the behaviour of the then ombudsman? If so, what action was taken in relation to any such concerns and, in particular, were any inquiries initiated? Were the communications staff within the Department of the Premier and Cabinet briefed on any such issues and involved in providing advice on handling any possible media issues resulting from those concerns?' That was June 2007 and, two years later, the Premier and the Attorney-General steadfastly refused to answer.

I referred to an issue on a number of occasions in early 2008—and I will not repeat it—relating to a public servant who had been suspended from their workplace for saying 'bullshit' to a senior officer in the workplace. That officer was sent home on full pay and suspended for almost 2½ years, waiting for a disciplinary inquiry for that heinous crime, in the view of senior officers in the Premier's own department. I asked a series of questions as to what action was taken, why and how it was going to be resolved. Again, it was just another example of the very many questions—that I, and many other members, could put on record—asked in this place that ministers just arrogantly ignore.

I give credit to former attorney-general Sumner, a Labor leader in this chamber. He was someone prepared to respect the conventions and traditions of this chamber. Sadly, the current leader is not prepared to follow that sort of leadership. As I have said, I am prepared to say that it was not just former Liberal leaders in this chamber who followed that convention and tradition: Labor leaders (such as former attorney-general Sumner) were prepared to follow the conventions and traditions of the chamber and provide some form of accountability.

I think it is a sad way for minister Holloway to leave this chamber, as clearly appears likely if the Hon. Mr Finnigan has his way. It is sad that we have a situation where minister Holloway is just demonstrating right across the board an unwillingness to be financially accountable in a whole range of areas, whether it be questions on notice or questions without notice in this chamber.

It is only a personal view that I am expressing at this stage, and I have expressed it before. I think it is important to talk about the reform of parliament, rather than the sort of nonsense we have heard from minister Holloway and the Premier in the past 48 hours. Talk about reform—give me a break. All they are doing is trying to get out of the difficult circumstances they got themselves into in terms of having a referendum to abolish the Legislative Council.

In terms of genuine reforms of this chamber, the sooner we establish a budget and finance committee—whether it is exactly the same as it is at the moment, or some variation thereof, is open to debate—as a standing committee, with permanent and ongoing staffing, as I have outlined before, the better; so that, irrespective of the backgrounds of the members of that committee, they can be provided with expert financial analysis and advice to enable appropriate questioning of chief executives on budget and finance issues.

If a Liberal government comes into office after March 2010, I hope that it would introduce legislation and changes to make the Budget and Finance Committee an ongoing standing committee. The successor to the Hon. Mr Holloway—should the Hon. Mr. Finnigan be successful—in opposition, could then see whether they could use the forums of the parliament, through a budget and finance committee, to highlight important issues of accountability in terms of budget and finance issues. It is important that that occurs. If there is a Labor government after the next election, it will not be interested in financial accountability at all and will obviously not want to see the Budget and Finance Committee continue in its current form.

As I said, whilst I am expressing personal views, I think this chamber should look at ways of ensuring, even though at that stage it would not be a standing committee, that it be more permanently established through changes to sessional orders and through a motion to ensure that appropriate funding is provided through the Legislative Council budget to provide permanent, ongoing expertise to the committee to allow it to undertake the task that is required of it.

The second area—and, again, I have expressed this before as a personal view and not as a party view—concerns an issue that I have and will raise more formally with my colleagues; that is, as a result of the breaking of convention by this government we cannot go on with this process of just having thousands of unanswered questions on notice. I have highlighted before that most other jurisdictions now place a time restriction on ministers within which they must provide some response to a question on notice. It is, sadly, now time that we go down that path if a majority of members in this chamber agrees to change the sessional or standing orders to ensure that that occurs.

To be fair, if there was agreement, it ought to be something that is flagged prior to this election, so that whoever is elected after March 2010 can either benefit or not benefit from it in the new parliament, depending on your own perspective of this issue. Both a Liberal government and a Labor government will be required to follow it. That is an eminently reasonable, sensible and fair proposition. It is an issue that I think we ought to debate.

If the Hon. Mr Finnigan and others can move some of the old thinking on from the Hon. Mr Holloway's way of thinking, perhaps some of the newer members of the Labor Party will be prepared to look at some of these sorts of reforms rather than the nonsense that the leader and the Premier are putting out, such as reducing the number of members in this chamber from 22 to 16, and the other sort of nonsense that they put out as a facade for parliamentary reform.

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Well, the Hon. Mr Holloway would have to be pretty thick if he did not know what my views are; but, I suspect he might be, so perhaps he does not realise—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: My views have been on the record for a long time, unlike yours. You have been all over the place. You are a man for all seasons; you do not know where you are. The latest view from the Premier happens to be your view on issues. I will not go on in relation to accountability issues, but they represent a taste of some of them. In terms of genuine reform and accountability, there are many others that we could look at.

The Hon. Mr Parnell—and I pay him credit—has highlighted some of the issues that one can look at in the House of Assembly in terms of its reform processes. I do not agree with all of the reforms the Hon. Mr Parnell raised this morning, and I understand he may well raise them in his speech this afternoon. Nevertheless, a willingness of the lower house to look at some of its own processes would be welcomed, as well.

In relation to some of the claims raised during the debate by the Hon. Mr Wortley and, I note, from the debate in the House of Assembly—and we have seen it before in debates on the Appropriation Bill and the Supply Bill—they have a wonderful Goebbels-type consistency to them. That is, you continue to repeat a lie or an untruth, and you work on the basis that if you keep saying it you might be able to eventually get a number of people in the community to believe it. We have seen a number of such examples, as I said, in the current debate on the Appropriation Bill. The first one is, of course, that the former Liberal government never produced a surplus budget. That is just factually incorrect; it is a Labor lie. I challenge the current Treasurer or the Hon. Mr Wortley to look at the budget documents that were produced by Treasury during the eight years of the last government.

In its last year, in the final outcome, the Liberal government recorded a surplus of $22 million. I refer members to my Supply Bill speech in May this year and the table of the deficits and surpluses of the eight Liberal budgets between 1993 and 2002. The last four budgets were virtually lineball. There were small surpluses in two years of $20 million to $30 million and small deficits in two years of, I think, $30 million and maybe $50 million, or something, but in an $8 billion-plus budget they were essentially balanced budgets, and in two cases (the last two years) surpluses, even on that particular measure. So, the budget documents are there.

What this government has done, of course, is it has gone back and recreated a different budget sector, a different measure of what is a surplus or deficit, and then it runs around saying that the last government could not balance a budget. As I said, it has a delicious Goebbels-type consistency to it. It does not surprise me with this government and its ministers, but they are not going to get away with it, and they will not be allowed to get away with it.

There has been this wonderful consistency, again, from the current Deputy Premier in claiming that, under the former government, money was given to agencies like health and Treasury, for example, and that it had no oversight of the agency until the end of the year when they were overspent. Let me read what the Deputy Premier claimed in the estimates committee:

Such was the animosity between Rob Lucas and Dean Brown that Dean would be given his budget at the beginning—

I might just interpose there. That too is a Labor lie. There was never any animosity between Dean Brown and myself, but that is not the main point—

of a year and Treasury would have, effectively, no communication and control until the end of the year when health told it how much it had overspent. That is what happens when you have a divided government.

As I said, that is just another Labor lie. Treasury maintained an ongoing watching brief, not only of the health department but all departments and agencies, during the period of the former government—and, in fact, during the period of the former Labor government that preceded the election of the Liberal government in 1993.

Later in my contribution I will refer to the health department. The Deputy Premier makes criticisms of the health department under the former Liberal government. We will have another look—after his so-called bold reforms and financial accountability—at how well he has done in terms of managing the health budget and budget overspends, but I will return to that later.

As I indicated earlier, I spoke on a range of budget related issues in the Supply Bill debate in May of this year, such as credit ratings, the work of the Budget and Finance Committee, the Auditor-General and things like that. I will not repeat the views I expressed in May; they remain the same.

I acknowledge that we are in difficult economic circumstances. We are in difficult financial circumstances as a result of being in difficult economic circumstances. There has been a lot of publicity in the past week of an announced decision by the Adelaide Bendigo Bank to encourage, in the first instance, its staff to take up to two weeks unpaid leave over the current financial year. That has been in the headlines in most of the newspapers and the electronic media as well.

It is unfair to single out the Adelaide Bendigo Bank in this respect. I hasten to say that I have a family member who is an employee of the Adelaide Bendigo Bank, albeit at a lower level, not at management level. There are a number of other companies in South Australia and, I suspect, in other states as well, which have adopted or are adopting similar practices to the announcement from the Adelaide Bendigo Bank.

Let me refer to one of the biggest accounting firms in South Australia, Ernst & Young. It required all staff to take a minimum of three weeks of unpaid leave over the next 12 months. Adelaide Bendigo Bank encouraged people to take up to two weeks or 10 days of unpaid leave, whereas Ernst & Young required them to take a minimum of three weeks, with an option of up to 12 weeks in total; this, too, was an alternative to redundancy.

Internationally, KPMG in the UK recently offered staff a four day week as well as three to six month career breaks. I am not sure whether, in South Australia, KPMG has adopted a similar proposal but, certainly, its international cousins have done so, and people have advised me that a number of other companies of a smaller nature are also encouraging staff to take unpaid leave.

The bottom line in relation to that is two things: first, clearly, we are in difficult financial circumstances; and, secondly, the published unemployment rates in South Australia (and nationally, I suspect) to that extent will be misleading; that is, whilst the unemployment figures may well indicate the percentage as being in the order of just under 6 per cent in South Australia, what we are seeing, probably for the first time in any major way, is an alternative mechanism being explored for redundancies. According to the finance sector union, within those agencies people are feeling that it is more than just encouragement and that it is, indeed, an expectation that they will share the pain by agreeing to take unpaid leave over the next 12 months.

The Deputy Premier, whilst he did not refer to this particular option during the estimates committees in relation to the wage debate, did point out that the public sector unions had the option of bigger wage increases or further redundancies. I do not think he used the word 'redundancies' but, obviously, further job losses within the public sector. We are already going to see a number of those anyway, under the announced terms of the Mid-Year Budget Review.

As we look at the 2010 budget, it is informative to look at some of the essential underpinnings of that budget. I intend to look at some of the aggregate budget figures and at one agency in particular—the health agency—to see how robust some of these figures are. As I have highlighted before, I think it is important for members to recall that this government's word and the leader's word (and the Premier and Deputy Premier) on budget and finance issues are not to be believed. We know that, in 2002, the then Labor opposition made specific commitments in relation to no tax increases.

The infamous words of the Deputy Premier in 2002 were that he had the moral fibre to break his election promises and that the opposition leader, Rob Kerin, did not have that moral fibre to break his election promises. That is the guiding moral compass of the Deputy Premier and this government and the Leader of the Government in this chamber as well.

We saw it repeated in 2006, when there were specific commitments not to have job cuts. One may remember the campaign against the then Liberal opposition's proposition that, through targeted separation packages and attrition, 4,000 jobs would be removed from the public sector to help pay for tax reduction, service delivery improvements and the like. The commitment given by this government is not to go down the path of targeted separation packages, not to have job cuts and certainly not to have 4,000 job cuts.

As I highlighted in the May speech, we saw that promise also broken: in the first budget in 2006-07, 1,571 job cuts; in the 2008-09 budget, up to 1,000 job reductions in the public sector; and then in the Mid-Year Budget Review, a promise of another 1,600. Already you can see over 4,000 job cuts in three separate budget decisions by this government, after promising and campaigning against the position of using targeted separation packages and attrition to reduce job numbers in the public sector.

So, the message for members of parliament, for the community and the media is: whatever the Premier, the Deputy Premier and the Leader of the Government in this chamber say in relation to the budget position, this budget and what they take to the election, you cannot believe it because they work on the moral compass that they have the moral fibre to break their election promises. They see it as a virtue that they are so strengthened by that particular moral compass that, if they make a promise, they at least have the moral fibre to break those election promises. So, the commitments that have been given now and in the lead-up to 2010 cannot be believed on the basis of the record of this government and its leaders.

As we look at this budget, the 2009-10 figures and the forward estimate figures in particular, the kindest description one can give them is that they are rubbery. They are certainly designed to mislead both members in this chamber and members of the media, but also more particularly, to mislead the analysts in the rating agencies—Standard & Poor's, Moody's, Fitch and others—as they look at the forward estimates.

Those rating agency analysts do not have the capacity to go into, to dig down or 'drill down' (to use the appalling jargon of recent years) into the budget figures to see whether or not the claimed aggregate figures in terms of savings will ever be achieved in aggregate or by the individual agencies. It is clear—and I will look in particular at the health department—that these figures being rubbery and designed to mislead will not be achieved by this government if it is re-elected.

It is clear that this government will again have to break the inevitable promise it will give. The promise will be that there will be no tax increases or 'We see no reason to have tax increases,' or some such phrase, but soon after the election, when the Sustainable Budget Commission brings down its report, I am sure that either it will recommend further tax and revenue increases or the government itself will recommend further tax and revenue increases.

Let me put my flag in the sand here now based on some information provided to me. I believe that, when we look back on this budget after the next election, if this government is re-elected, it will increase royalties on mining companies in South Australia. I know they are telling everyone that they will not. I accept that no final decisions have been taken yet, obviously, but based on the skerrick of information provided to me from inside Treasury, I reckon as we look back (and if the Hon. Mr Finnigan has his way minister Holloway will not be here to see the results of it), we will see royalty increases being actioned by a Labor government if it is re-elected.

As we look at these rubbery numbers, one of the key areas in relation to the figures that have been provided is that assumptions have been made about wages growth. I want to refer members to a story in the AustralianFinancial Review of only Wednesday of this week, 15 July. I refer members to the front-page story headlined 'States battle to contain wages', which is continued then on page 8. I know members will be delighted when I say that I will not read all of the article but let me just quote six figures that the Financial Review'sanalysis shows. In summary, the article is basically saying that the states will really be battling to keep wages growth to the level they have proposed or assumed in their budgets. I think it is fair to say that there is a degree of scepticism that state governments will achieve it.

The Financial Review analysis has looked at the 12 month growth for the state government wages bill in 2009-10, and it has calculated that as a percentage. The highest percentage increase for the 12 month growth figure is Victoria, 6.3 per cent; the second is South Australia's wage growth bill of 6.2 per cent; the third highest is a significant drop from that with Western Australia at 5.8 per cent; Queensland, 5.3 per cent; New South Wales, 4.9 per cent; and Tasmania, 4.3 per cent. The total Australian figure is 5.5 per cent for 12 months growth in wage bill costs. That shows that, in terms of the total wages bill, South Australia is the second highest.

I hasten to say that the Financial Review analysis obviously looks at total wages costs, which include the number of employees. It may well be that South Australia has had a bigger increase in public servants than the other states (I do not know that), or it may well be that we have had bigger wage increase cost settlements than the other states, or it could be a combination of both, which I suspect is possibly the case. However, what it shows is the enormity of the task of keeping one element of that calculation, which is the wage cost increases, to 2.5 per cent, as the government has assumed in producing numbers for deficits and surpluses in the budget papers we are looking at.

The Deputy Premier has said that, if we can keep wages growth figures to 2.5 per cent, $290 million of the $350 million in annual savings required by the end of the forward estimates would be achieved. What is not clear is whether that calculation includes the current situation in relation to teacher salaries. As we know, the AEU is before the Industrial Relations Commission at the moment, and it is quite clear from that there is not going to be a wages settlement at 2.5 per cent, given the government's offer is already above the 2.5 per cent annual figure.

Again, in normal circumstances, that would be one of the questions I would put to the Leader of the Government and seek a response to whether or not that is included. However, for the reasons I have already outlined, he has adopted and continues to adopt an approach that he is above answering those sorts of questions or, indeed, even asking Treasury to provide answers in relation to these issues to mere members of the Legislative Council.

I turn now to the second big issue in relation to the rubbery nature of these figures and that is the agencies. In May, I looked at a number of agencies, but I will only look at the health department because this has been a subject of some interest to the Deputy Premier over the years; in particular, in the estimates committees this year.

Let us look at the major reforms the Deputy Premier and Treasurer says he has instituted in relation to managing the finances of departments, having been critical of the management of departments, such as the health department, by former treasurers. In the 2006-07 financial year, the health department, in the first instance, massively overspent its budget by some $62 million, and, at the end of the 2006-07 financial year, it had to be bailed out by Treasury with an extra grant of $62 million. Even with that, the department reported a $32 million overspend.

When departmental representatives appeared before the Budget and Finance Committee some months later, they said, 'Well, we don't know whether or not we are meant to repay this. We overspent the budget, and they gave us an extra $62 million because we had overspent. We overspent it again by another $32 million, and we don't know whether or not we have to repay it.' Eventually, they were told that they did not have to repay it. There was a $94 million overspend in that year, all of which was bailed out by Treasury on the basis of, 'Don't worry about it; you have overspent your budget; here is $94 million.'

Having blown its budget by $94 million, what happens in the following year? In 2007-08 the agency overspent its budget by $70 million. Again, Treasury and the Treasurer bailed out the health department by giving it an extra $70 million to help balance the books. In two consecutive years there has been a blow-out of $90 million and $70 million—$160 million—in the budget of the health department. This is under the so-called major reforms instituted by the Deputy Premier, where he said that he would be insisting on fiscal discipline by departments and agencies.

As I said in May this year, my information from within the health department is that in February or March this year it was looking at a budget blow-out or overspend of between $50 million and $100 million for the financial year 2008-09. Of course, the financial year has just concluded, so, again, one of the obvious questions to which I would seek an answer from the Leader of the Government is: did the health department in 2008-09 again overspend its budget? If it did, by how much? Finally, did Treasury have to make another allocation to help to balance the books of the health department in 2008-09?

Given that the Leader of the Government will not even deign to consider those sorts of questions, the opposition is left in the position of either pursuing the matter through the Budget and Finance Committee—and, luckily, we have Health coming before us in the next month or so—or freedom of information requests to try to see whether we can get an answer to that question.

In relation to the rubbery nature, that is the history of the past two or three years. If we look at the nature of what this government has built up in the agencies in terms of trying to balance its books, it has said to the agencies, 'Okay, here are the savings tasks you have to achieve over the forward estimates period.'

If we look at the health department—and I am looking at only the one department on this occasion—and what the cumulative effect will be by the end of the forward estimates period of the budget cuts which have been announced in the past four year period, in 2006-07 the department's budget was cut by the end of the forward estimates period (which at that stage was 2009-10) by an annual figure of $35.5 million per year.

When health department representatives appeared before the Budget and Finance Committee last year, they indicated that at that stage they had not implemented or made decisions to achieve all that $35.5 million cut. They had implemented savings measures to achieve a minority share of the $35.5 million. They said that they had a rough idea as to how they might achieve it but that all those decisions would be announced closer to the 2009-10 budget.

In the 2007-08 budget, the Premier announced further savings initiatives of up to $80 million by the end of the forward estimates period. In this case that is 2010-11—so another $80.2 million cut in that year.

In the following budget, there is a further cut of $48.6 million by the end of the forward estimates, which in this case is 2011-12. In the most recent budget, there is a further cut in Health at the end of the forward estimates period of $24.3 million by the end of the forward estimates period. We then have to add to that the announcement in the Mid-Year Budget Review of a reduction of 428 full-time equivalent staff and, if one works on a rough equivalent of $70,000 to $80,000 a head, that is a further job dollar value of around $30 million a year.

When you add those altogether, by the end of the forward estimates period in terms of ongoing savings, the health department has to achieve savings of approximately $220 million a year—not over a four-year period, but annual savings of $220 million a year. A small percentage of that—possibly $20 million, a maximum of $30 million—might have been achieved in terms of decisions taken, that is, the final value of the 2006-07 budget cuts was about $35 million by 2009-10.

We may well have had decisions taken—maybe not announced completely—to achieve $35 million worth of savings. If that is the case, what we have to see is another lump of savings of around $190 million a year by the end of the forward estimates period to achieve the sorts of figures that are being placed in the bottom line in this budget. The only way the deficit and surplus figures have been achieved in this budget is by using the sorts of assumptions that I have just given, that is, the government keeps wages growth at 2.5 per cent (it has been open about that), but that agencies will have to achieve (as in the case of health) a massive cut of somewhere between $190 million to $220 million a year by the end of the estimates period.

This is the same for all other departments and agencies. I do not have the time today to go through the education department or Families and Communities, but, through the work of the Budget and Finance Committee, we have all these analyses that are either finished or in the process of being concluded. As I said, the only way this Treasurer and this government have been able to produce the figures, which has meant that these rating agencies have said, 'Okay, if you achieve these figures, we'll keep the AAA credit rating', is by making the assumption that all these savings will be delivered.

On the one hand, you have an agency such as health, which instead of saving money has been overspending and blowing out by $94 million and then $70 million again last year. And this budget is predicated on the basis of it not just standing still and not blowing out but actually cutting its expenditure base by up to $220 million a year by the end of the forward estimates period. Under this government that will not be achieved, under this Treasurer that will not be achieved, and that is why I say that the figures are rubbery and designed to deceive ratings agencies, media commentators and members of parliament.

Should it be re-elected, this government will go back to its moral compass of, 'We have the moral fibre to break our election promises', and we will see significant tax and revenue increases right across the board to help it balance the budget. Okay then, what are the options in terms of where you can start to achieve some savings? I can only offer personal views, they are not party views, but let us have a look at some areas that are ripe for reductions rather than some of the areas in health which, I am sure, the government will have to end up having a look at.

Let us look at the decision taken by this government and the Deputy Premier to add another 50 to 60 policy officers into the Department of the Premier and Cabinet to provide a second-guessing capacity for that department. They are highly paid officers within the Department of the Premier and Cabinet. Clearly you would be talking about probably up to $4 million to $6 million a year or $20 million to $30 million over the forward estimates period of extra policy grunt—as they put it—in the Department of the Premier and Cabinet so that they can second guess the submissions coming in from other departments and agencies.

Let us have a look at the Public Sector Performance Commission. It costs, we understand, up to $3 million a year and, if that is right, up to $12 million a year. We have seen the lack of output from the government reform commission (its predecessor) and clearly there is no need, in my personal view, to continue with that agency or role. Again, I hasten to say it is a personal view.

A very strong argument from me in relation to the Social Inclusion Board and some of its fellow travellers is that we have agencies and departments charged with the responsibility of tackling problems of homelessness and drug abuse across the board, and we have ministers who are paid good money to undertake these tasks, so why on earth do we need commissars or commissioners to usurp the role of duly elected members of parliament and ministers? It ought to be their responsibility, not that of a non-elected official, however well intentioned he or she might be.

The number of ministers could be reduced—and my party is on the record in terms of reducing the number, whether it be to 12 or 13—and the number of ministerial staffers could easily be reduced by anywhere from 60 up to about 80 just to take it back to the numbers that existed in 2002 to achieve significant savings.

Then there are the wrong priorities—again, I express my personal views, but some of my colleagues have expressed these views, as well—of the big ticket items like trams through the centre of the city and through the western suburbs right down to the smaller issues, which have been the subject of much mirth from government members this week. The former leader, the member for Waite, indicated his view about the wrong priorities, and we are talking about hundreds of millions of dollars. One of the messages my mother gave me in terms of finances was that, if you look after the little bills well, it will be the approach you adopt in relation to the big bills.

We saw this nonsense over the past couple of weeks, when the government fought to prevent the release of information and did not answer questions in the house: because the Premier and the Deputy Premier were feeling hot in their cars, they decided to spend $30,000 of taxpayers' money to put a shade over their cars.

Those people who look at us—particularly those who have made grant applications or who are parents of children with disabilities who have sought additional funding and have been told that an additional $5,000 or $10,000 is not available for their child or their child's disability—are being told that one of the priorities of this Premier and Deputy Premier is that, because they feel a little hot in summer or get a little wet in winter when they get into their car, they would prefer to spend $30,000 of taxpayers' money on shade for their car.

As I highlighted earlier, it never worried the Tom Playfords, the John Bannons, the John Olsens or the Dean Browns of this world; they managed to get to meetings with businesspeople. Minister Holloway said, 'Do we want the Premier to turn up, sweating, to a meeting with important people?' That is the real world. Many hardworking South Australians have to hop into a hot car in summer, and maybe in that small way, if the Premier and the Deputy Premier did have to hop into a hot car in the middle of summer or dash 10 metres to a car when the rain is falling in winter, they would become more in touch with the real world, rather than this insular—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: The Premier of the state has a covered car park in Gawler Place, and he also has a covered car park here. The Premier has covered car parks everywhere: he has one here and one in Gawler Place; it is not as though this is his only car park. He and his driver have any number of covered car parks they have used and previous premiers and deputy premiers have also used.

As I said, whether it be issues of $30,000 or hundreds of millions of dollars in terms of the tram issues that the member for Waite highlighted in recent years and some of the other areas that I have highlighted today, there are many examples of wrong priorities and waste within this government's spending patterns. These are the areas that should be targeted for cutbacks rather than some of the other areas that they are targeting—and, I suspect, they will target—over the forward estimates period.

The Hon. R.D. LAWSON (16:25): I wish to speak briefly on this bill because it does provide an opportunity to comment upon the Rann government's record in managing the finances of this state.

The first point I want to make is that, despite the Treasurer's self-promotion and self-aggrandisement, the record of this government in financial management is unimpressive. The Treasurer placed great store upon the state's AAA rating—a rating, I interpose, that was earned by the previous Liberal administration through prudent husbanding of the state's finances and resources. It was earned by an earlier government but actually awarded after Labor formed an alliance with Peter Lewis. So, this particular Treasurer should take no credit in obtaining the AAA rating. However, listening to him, one would think that the AAA rating is the be-all and end-all and is in some way the true measure of the Treasurer's competence. I do not share that faith in AAA ratings—or any ratings, for that matter, bearing in mind the history of Enron, Bear Stearns, Merrill Lynch, Allco Finance, etc., all of which enjoyed high credit ratings virtually within hours of collapsing.

As my colleague the Hon. Rob Lucas mentioned a moment ago, the credit ratings are based upon information provided by governments, and claims made by governments, and the agencies do not have the capacity to go beyond those claims. Where we see in this budget factors such as the government's proposal to limit wages growth to 2.5 per cent per annum, it may be a noble objective (and it would be wonderful if it was achieved) but, in the statements I have seen, even the Treasurer himself acknowledges that it is unlikely. The savings targets that are built into this budget upon which the credit rating is based are not merely optimistic: they are grossly exaggerated as, once again, my colleague pointed out in his contribution a moment ago.

A lot of the hyperbole of the Treasurer is virtually in cloud cuckoo land. It is all spin and bluster. It relies upon the catchy term 'AAA'; it is headline grabbing; and it simplifies (indeed, it over-simplifies) the situation to such an extent that it disguises the underlying issues. It is a great pity that members of the public do not have the capacity or the inclination to go beyond the headline. I think it is a regrettable fact that the media in this state appears not to have the capacity to do so.

In my view, a Treasurer's competence should be judged by his capacity to husband the available resources, plan prudently, control costs, and adhere to budgets; but, instead, in South Australia, this Treasurer prefers to spruik the AAA line.

I want to mention a number of factors briefly which show the weakness of the budget and the incapacity of this government. One important element, of course, in any Treasury, is to control costs, and this government has singularly failed in that direction. For example, the budget shows that, over the past eight years, over 16,000 additional public servants have been hired and, as everyone knows, the most significant element in the total of the state budget is wages paid to public servants. Undoubtedly, some of those additional public servants were appropriately hired, but only about a quarter of the 16,400 were nurses, teachers, doctors or police officers. Whenever the Treasurer or the Premier are challenged about public sector numbers, they say they make no apologies for hiring more teachers, doctors, nurses and police officers, but that accounts for only one quarter of the rise. So, the government has been unable to control costs.

It has also been unable to control spiralling debt. The way in which the Treasurer described the situation at the time of the budget was that the government's debt was increasing to $3.1 billion. He conveniently failed to mention the fact that the debts for which the South Australian taxpayer is collectively responsible include the debts of public non-financial corporations such as SA Water, TransAdelaide, the Housing Trust, ForestrySA, etc. If you take those debts into account—and they amount to some $3.6 billion—the total rises from $3.1 billion to $6.7 billion.

Other debts ought be included. For example, $1.7 billion of debt is linked to the proposal to relocate the Royal Adelaide Hospital to the rail yards. The Treasurer has indicated that will be debt if, as is likely, the government is unable to find a private partner for the exercise. Of course, there are unfunded superannuation liabilities. In 2002, when this government came to office, they amounted to some $4 billion; they are now some $9.8 billion. The figure of $3.1 billion as government debt overlooks the unfunded liabilities of WorkCover, which are once again likely to be well over $1 billion, notwithstanding the amendments which the parliament made to the scheme last year. So, the total unfunded liability of this government is, in global terms, nearer to $20 billion. Once again, these are unfortunate facts which are papered over by the Treasurer.

Another sign of good budgetary management is adhering to budgets and programs that are laid down. This government has made much of its law and order policy. They are good, cheap political capital but they require investment and, quite correctly, in previous years, the government announced that Mobilong Prison would be extended to accommodate additional prisoners. That is absolutely necessary expenditure, but that project was abandoned in this current budget. The government has abandoned not only projects but also programs. In its first budget it abandoned crime prevention programs. It reduced psychological services in prisons. It reduced other programs in the correctional institutions in the name of budget stringency but, once again, it is an unfortunate fact that this government has been unable to plan, to budget or to ensure that budgeted moneys are expended.

For example, I note that the Techport development and the Defence SA developments are important in the government's priorities, but costs have not been controlled. The original Techport proposal involved expenditure of some $120 million; it has been re-scoped to $260 million. I am all in favour of having a strong defence industry, but I believe that this government has placed practically all its industrial eggs into one basket and made huge investments in that defence infrastructure at the expense of other forms of economic activity which would be equally as productive and which would provide us with a more rounded industrial economy.

Yet another aspect of this government's failures in relation to this budget is manifest in its approach to taxation and revenue raising. We complain—and I believe correctly—that the government's reliance upon property taxes is unhealthy and counterproductive and has led to an inefficient taxation system. In particular, there is the fact that land tax has so vastly increased; property taxes themselves are up by some 95 per cent. When this government decided land tax was a good source of revenue, some 69,000 taxpayers were paying it; now almost 190,000 people are paying that tax. The tax grab has increased by almost 300 per cent since this government came to office. It is a counterproductive measure, and it is sending investors interstate and penalising many good citizens who have used property investment as a form of superannuation.

The government has also failed in some of its expenditure priorities. For example, stormwater infrastructure is vital for this state's water security but it has been abandoned in favour of some pet projects such as solar panels on top of Parliament House, windmills on city buildings, and the like. Solar panels on Parliament House may be a good photo opportunity for television, but the simple fact is that we have to make investments in real infrastructure which will benefit the state—and stormwater is one of the many that has not had appropriate investment.

In the past I have complained—and I do so again—in relation to the failure of the government to invest in court facilities. The law and order policies of this government have been high in terms of political capital but low in terms of investment, and if we are to have an effective criminal justice system it needs buildings, personnel and resources to ensure that justice is provided quickly, in the interests of victims and the community generally.

Over the years the Appropriation Bill has increased quite markedly. When I came in here the appropriation for 1994, the first under the Brown Liberal government, was some $4.6 billion; it is now some $11.5 billion. When this government came to office in 2002, the appropriation was just a little over $6 billion; it went up by $195 million the next year; the following year it went up by $600 million; it went up by $500 million the next year; and then by $400 million in 2006. By 2007, it rose by some $600 million in one year, and then in 2008 by $1 billion. This year the appropriation has risen by some $2.2 billion. Obviously inflation is a factor, but the appropriation here has been going up well above the CPI, and I do not believe that it is under appropriate control.

I note that it is now proposed that there will be a referendum held at next year's election. There is no doubt that that will add to the expense of conducting the election. The government's announcement on Wednesday this week concerning its proposal to emasculate the Legislative Council was prefaced with the words, 'The government has listened to the people'—the clear inference being that the proposals now being put are supported by the people.

In 2002-03, the government spent some $710,000 of taxpayers' money on a constitutional convention, which was based upon a system called deliberative polling. The government must have been confident about the accuracy of this form of polling, otherwise it would not have spent such a vast sum on it. The essence of deliberative polling is to take a poll of a random selection of people at a particular point in time, then provide them with objective information and education in relation to the question, then poll them once again. This is said to provide a more accurate poll, polling more educated opinion.

If this government has—to use its own words—been listening to the people, it will be interesting to see what the results of that particular poll are. On the question of the perceived effectiveness of the current system, before the convention was held, 54 per cent of delegates thought that the system was good. After they had received information, 67 per cent thought the system was good, so it went up considerably.

Regarding the perceived effectiveness of the role of committees, 70 per cent of people polled before the convention thought they were effective, and 96 per cent thought that after the poll. On the question of the belief in the power of both houses to block legislation, at the earlier poll, 76 per cent thought it was appropriate, and that increased to 84 per cent after the convention.

On the question of whether the current size of the Legislative Council was about right, 58 per cent initially thought it was and, after the convention, some 65 per cent considered it was about right. So, if this government is—to use its own words—listening to the people, what possible justification can there be for abandoning a promise to hold a referendum to abolish the Legislative Council, and what possible justification can there be for adopting, instead, proposals which were positively rejected by the people in the most expensive political opinion poll held in the history of Australian politics?

The fact is that the government seeks to go ahead with this referendum and seeks to further squander public moneys on an exercise which has already been rejected. I think it is yet another sign of this government's propensity to squander public funds in the interests of some perceived political expediency. Once again, the final budget in this particular parliament is one of missed opportunities. It is a situation that I regard with some regret.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (16:45): I thank honourable members for their contributions to the budget speech. Given that it is nearly 5pm on the last day of sitting before we adjourn for the winter break, I will not spend too much time on the bill. Clearly, the Appropriation Bill gives an opportunity for members of parliament to raise issues on a whole range of subjects, and indeed they have done so.

Given that this is the last budget debate before the next election (some eight months away), given the global financial crisis and the general economic circumstances we face and given the fact that the Treasurer outlined in his budget the difficult financial position facing South Australia—with the decline in revenues and the loss of investments on the stock market, which affect a number of government entities—clearly, the state is in for harder financial times. This is a period in which it will be necessary to ensure that we have sufficient capital expenditure to keep the economy moving. We have done that, and the federal government has, fortunately, supported it through its programs.

At the same time, we need to have very tight control of our current ongoing expenditure. Therefore, I find it quite extraordinary that members opposite, particularly the shadow ministers, who, if they were successful at the next election, would become ministers, spent all their budget speeches, effectively, calling for more spending in their particular areas and/or tax cuts.

If ever there was a time that the state needed good tight fiscal management, it is now. We are facing the most difficult financial circumstances the world has faced since the Great Depression in the late 1920s and early 1930s. One would therefore expect that members opposite, if they are seriously going to put themselves up as a legitimate alternative government in this state, would in this last budget debate temper their promises with the reality of the financial circumstances that face the state. It is not a time when you can just find money to spend on a whole lot of other things or make offers of tax cuts, even though they might be vague.

One of the big challenges facing this government is the issue of public sector wages and how that is handled. It is absolutely crucial to this state, facing its financial challenges, to do it, but none of the shadow ministers opposite even mentioned that subject during their debate. One would think that, since that is the key ingredient of whether we can manage the budget over future years, they would either support the government's target of 2.5 per cent, or, if they did not agree, put up some alternative, but, all we had was a list of pork-barrelling promises from members opposite. It certainly will be disappointing if, in the lead-up to the next election, all we hear from members opposite is just pork-barrelling because that is the last thing the state needs, given the current financial situation.

I will not spend too much time in closing the debate, given the time, as we have other legislation to deal with. I want quickly to address the comments made by the Hon. Rob Lucas, who accused the government, and me in particular, of breaching convention. Well, one convention that was breached in this parliament in my time here was the convention that the government used to choose the chairs of committees within this parliament. That convention was breached by the Hon. Rob Lucas and members opposite. So, that is one convention that has been breached.

In relation to the concept that questions asked during debate on the Appropriation Bill would be answered by the minister, it was certainly a convention in relation to the Leader of the Opposition that, when questions were asked, they would be answered. But, of course, what has happened since then, as I pointed out in the budget several years ago, is that we now have the Budget and Finance Committee, which this council required. As a result of the establishment of that committee, senior public servants have to spend many hours away from the duties that they would have been doing in the past to attend that committee.

I do not have a problem with that in relation to accountability, but I think it is a bit rich to expect that you have that and then in addition you expect that answers will be given, and not only given to the Leader of the Opposition but other members as well. The reality is that the Hon. Rob Lucas is no longer the Leader of the Opposition in this place.

The Hon. R.I. Lucas: Independent members. Your claim is untrue.

The Hon. P. HOLLOWAY: What, do you mean you are the Leader of the Opposition?

The Hon. R.I. Lucas: No; your claim is untrue. When I was a backbencher in the eighties Sumner used to answer the questions on appropriation.

The PRESIDENT: Order!

The Hon. P. HOLLOWAY: There is a question—

The Hon. R.I. Lucas: Your claim is untrue.

The PRESIDENT: The Hon. Mr Lucas has had his go.

The Hon. P. HOLLOWAY: Yes, that is correct. I made the offer, in a similar response to a budget speech, either last year or the year before, that it is appropriate that this council should reconsider the way we conduct estimates committees. At the moment they are House of Assembly committees. It is, to my mind, rather absurd that shadow ministers in this council cannot participate in those; it just means a duplication.

If the ministers in this council are to spend a full day in estimates committees, why not have some arrangement where the members of this council can use that time in a similar exercise? I made the offer, in that speech, that if anyone wanted to discuss or raise with me ways in which we might improve procedures, then I would be happy to listen. No-one has approached me to do that.

To this extent I do agree with the Hon. Rob Lucas that the procedures that have been adopted through the estimates committees in the house have long outlived their usefulness. It is time to get some reforms.

The Hon. R.I. Lucas: No; I never said that. Don't misquote me.

The Hon. P. HOLLOWAY: Well, in that case I do disagree with the Hon. Rob Lucas on everything.

The Hon. R.I. Lucas: You do disagree with me; good. I feel much more comfortable when you are disagreeing.

The Hon. P. HOLLOWAY: It is a much more comfortable place to be when you disagree with him on everything.

The Hon. R.I. Lucas: Exactly. For both of us.

The Hon. P. HOLLOWAY: For both of us; yes, exactly. It is time that we should be considering ways of more effectively utilising the time of this council in relation to the consideration of these matters. The Budget and Finance Committee has now been tried for a couple of years and I guess we can make judgment on that in the future as to whether that should become a permanent feature. I would certainly suggest—

The Hon. R.I. Lucas: Would you support that?

The Hon. P. HOLLOWAY: I have no problem with it. It has effectively been established by this council, anyway, but I think that, whereas one might agree in principle, we need to, at least, think about how it—or some similar committee—might work more effectively in relation to the budget itself. That is something that perhaps should be addressed, but I did want to answer that particular criticism.

The Hon. R.I. Lucas: The Appropriation Bill could be referred to the Budget and Finance Committee.

The Hon. P. HOLLOWAY: Notwithstanding the Hon. Rob Lucas's comments, the Hon. John Dawkins did at least give notice of some questions that he was asking, and, in relation to those questions which he placed, concerning regional development boards, and some other areas, I will undertake to get answers in writing to him.

The Hon. R.I. Lucas: Hear, hear! He has shamed you into it, and he is not the Leader of the Opposition, either.

The Hon. P. HOLLOWAY: No, he is not, but at least he had the courtesy to come and do it. If the Leader of the Opposition had asked questions—

The Hon. R.I. Lucas: You're a bit embarrassed.

The Hon. P. HOLLOWAY: The Leader of the Opposition did not ask any questions. I was quite prepared to answer questions asked by the Leader of the Opposition, but there were no specific questions. The only one who did ask questions and specifically asked for answers is the Hon. John Dawkins, and I will undertake to get those.

The Hon. R.I. Lucas: No, I did. I put two questions.

The Hon. P. HOLLOWAY: You have asked them at 5 o'clock on the very last day of sitting. At least the other members were better organised than the Hon. Rob Lucas and were able to get their information about those questions on notice.

The Hon. R.I. Lucas interjecting:

The Hon. P. HOLLOWAY: I said I will undertake that. He said in his speech that he was quite happy for a response in writing, and it will be done. With those words, I commend the 2009-10 budget to the council.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I would like to take up the kind offer from the Leader of the Government in acknowledging that he has been given notice of some questions of the Hon. Mr Dawkins. He asked for answers to those questions and he was happy to accept them in writing, so I indicate that I am very happy to accept an undertaking from the Leader of the Government to correspond in writing about the two specific questions that I put in my second reading contribution.

One was in relation to the AEU's wage claim and whether that was part of the Treasurer's 2.5 per cent or $290 million calculation, and the subsequent question that I put concerned health finances. They are clearly outlined in the second reading contribution so I will not repeat the questions. I am very happy to accept an undertaking from the Leader of the Government that he will correspond in writing on behalf of the government.

The Hon. P. HOLLOWAY: I can, and I will refer them to the Treasurer for his consideration.

Clause passed.

Remaining clauses (2 to 8), schedule and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.

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