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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-07-28 Daily Xml
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APPROPRIATION BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. J.S.L. DAWKINS (15:20): In returning to the important appropriation debate can I turn to another issue that I have raised in this place before and that is the Branched Broomrape Eradication Program, one that I know is close to the heart of my colleague the Hon. Mr Lucas.

I previously raised in this chamber my concern that a federal review of this program was likely to find that branched broomrape is now ineradicable and that would significantly threaten the amount of money that would come into that scheme from the federal government. Unfortunately, that seems to be the case.

I will quote from some correspondence that was provided to the Murray Mallee Local Government Association, which takes in pretty well all of the area affected by branched broomrape. The letter is from Mr Philip Warren, Manager, Branched Broomrape Unit, Biosecurity SA. I quote:

The report from a national technical review of the Branched Broomrape Eradication Program that was conducted during March 2011 is released. The review panel's findings have important implications for agriculture in the Murray Mallee. As an organisation with an interest in agricultural development in the region, this note is to inform you of recent developments in the Branched Broomrape Eradication Program.

The technical review panel concluded that the beneficiaries of the program are widely distributed across industries, but could not identify significant public benefits that support the need for continued government investment in the absence of an industry partnership.

The report notes that the program is being conducted in a professional and diligent manner by all its participants. However, when the current technical situation is matched against international protocols for successful eradication it is concluded that the feasibility of eradication is very low. A move to another management structure is recommended with 'Containment plus the pursuit of product and property free status' as the first option to consider.

It is likely that the current eradication program will continue while a future management plan for branched broomrape is developed at the national level for implementation from July 2012. A key factor will be the support provided by the range of industries affected by this weed. After 11 years of an eradication program, it is important to re-establish the status of branched broomrape as a weed that will reduce production and can destabilise national and international marketing of a wide range of commodities.

A new management program must be crafted with industry and community input in order to optimise the benefits of the program and balance contributions from beneficiaries. Regional risks include additional costs of quality assurance for local producers, adjustments in capital values, changes in regional employment and flow on affects for the health of those affected.

I read that correspondence in because I believe it is important that the state government—while minister O'Brien has continued to commit funding to the program, along with local government and landholders—makes sure that the commonwealth meets its commitment to this program. This program should continue to have the status that it has had over the last 10 years. We should work to continue to eradicate this threat to our horticultural industries across this state.

It is a significant problem and one that I would hope members in this chamber would take seriously in that it could be a threat to a much broader area of the state. I have previously indicated the number of properties affected—some farming, but many that are situated in inaccessible areas of the Murray River flood plain. I urge minister O'Brien to continue to put pressure on the federal government to make sure that, from the middle of 2012, it continues to fund this program in a manner that is suitable to the risk involved.

I will move on to matters relating to local government. I note that this chamber has already spent some time this afternoon on matters in the local government area, however—

An honourable member interjecting:

The Hon. J.S.L. DAWKINS: Well, I am not going to pick any council. I think this government has demonstrated a total disdain for the local government sector. The fact that we have had four different ministers this year and a minister who this afternoon had a vote of no confidence moved against him just shows that this government holds local government in contempt, as people that they have to deal with but do not really want to.

The fact that the current minister yesterday in this council demonstrated that he does not even know the name of the President of the Local Government Association, having met with him the previous morning, I think, encapsulates that disdain. I take offence to it, as many members of local government do.

Earlier this year, one of the four former ministers this year, then minister Bernard Finnigan, and the Premier, the Hon. Mike Rann, signed an agreement with the then president of the Local Government Association, Felicity-Ann Lewis. They signed an agreement to communicate and to do all these good things together. What happened only a matter of weeks later, before the Hon. Mr Finnigan had to stand aside? He brought in through the Gazette—he did not announce it, he put it into the Gazette—all these increases in car parking fines (that local government had to bring in) without any consultation. Where did that fit in to the agreement that they signed?

I have highlighted in this place the disdain that the four government ministers have held in their dealings with local government associations, those regional subsidiaries that do not own any equipment or buildings or employ anybody directly. Generally they have a budget of about $100,000 a year, and they were expected to go through all the audit processes that the new Local Government Act had brought in for councils across the state, particularly large entities.

As an opposition, we did not object to those provisions. However, for a small regional subsidiary to be made to do that is silly. I raised that during the committee stage of the bill. The first out of the four ministers (minister Gago) eventually agreed with me and agreed to do something about it. Thirteen months ago in this chamber she told me she was doing something about it. Only this week has a letter gone out—even though the minister yesterday did not remember he had sent it—to these subsidiaries telling them what has happened.

Until very recently, we have also had a lack of representation from departmental officers responsible for local government relations at meetings of these regional local government bodies, and there has always been an opportunity made in the agenda for departmental officers, whether it be called the office of local government, the office of local government and regional development, or the Department of Planning and Local Government, as it is known now.

Whatever the title has been, departmental officers have always been given an opportunity in the agenda of those local government bodies to bring relevant matters to the attention of delegates at those meetings. For some considerable time, officers of those departments or agencies ignored them. I am pleased to say that that has changed and that they are now being sent along. I think that is a good thing, but I am not sure why the commitment was not there for those officers to be at those meetings on a regular basis.

Finally, I think many local government bodies in the regional areas have in good faith participated in the Regional Coordination Networks; along with senior officers from many of the government agencies and departments, they have participated in those bodies. There has very recently been no commitment from this government, particularly from the various local government ministers, for those bodies to work effectively or even work at all. I know that a number of them have had no meeting for months. It is a lack of respect, I think, for the time that local government officers and elected members put into these bodies which they feel can work towards advancing their own particular area of South Australia.

I appreciate the opportunity afforded to me in this debate to bring those matters to the attention of the council but particularly to the attention of the government. I would be grateful if, as a result of the debate in here, we get some idea that the ministers actually take these complaints with a measure of respect and seriousness. I do not appreciate it when I raise these matters and find ministers laughing and carrying on with no regard for the people who are impacted by those actions and decisions.

In conclusion, as I said, I appreciate the opportunity this debate has given me to note the funds appropriated in the budget to various agencies and raise particular issues relating to the services that arise from the appropriation, and I support the bill.

The Hon. J.S. LEE (15:33): I rise today to contribute to the second reading of the Appropriation Bill 2011. It is the 10th Labor budget and the people of South Australia are very upset. They have the right to be upset because this budget has delivered more bad news after bad news. It has delivered more debt and more deficits for the people of South Australia. Everywhere I go, whether it is visiting a community group, attending a meeting with businesspeople, or having a conversation with workers, parents, students or retirees, I have found that households and small businesses are struggling to pay their bills and make ends meet.

This state government is so out of touch with people and seems to be living on a different planet. Whether it is on radio, in The Australian or in other newspapers, there is a strong indication that the government is on the nose. Premier Rann and the government are unpopular not only because are they tired, arrogant and disinterested but also because of their poor economic management of this state, which is causing pain and problems, causing businesses to close down and causing people to leave the state.

In a recent report one of the state's largest business membership organisations, Business SA, predicted that South Australia's economy is facing a perfect storm of adverse conditions. 'It is the worst I have seen in my 12 years here,' the chief executive of Business SA has said. He continued:

I have never had so many members come and see me with tales of dismay, concern and fear. And frankly, there is no light at the end of the tunnel.

South Australian business confidence has suffered the largest fall of all mainland states, according to a National Australia Bank business survey in June 2011. Businesses in South Australia are feeling the pressure, according to these survey results. Costs of labour, materials and overheads are all rising, and profitability is falling. Employment levels are stagnant, and more businesses are reducing capital expenditure than are increasing it. While there has been an exploration boom in South Australia, there has yet to be a mining boom.

This Labor government is putting pressure on households by increasing everything from water bills, motor registration, drivers licences, bus tickets and utility costs, etc. Our shadow treasurer in the other place, the Hon. Iain Evans, has articulated how South Australian families will feel the pain of the Labor budget. Since Labor was elected to office in South Australia, cost of living pressures have exploded: water bills have almost trebled, and other utilities, including electricity and gas have almost doubled, while overall state taxes under Labor have increased by 88 per cent.

We are now the highest taxing state in Australia. High taxes mean that people cannot afford to run businesses in South Australia, and hence the 22 per cent of businesses nationally moving to another state are coming out of this state. Businesses and families are suffering under a Labor budget because of the bad decisions that this government has made year after year in its term of office. The debt to this state was at about $4.5 billion, and the government intended it to go out to about $7.5 billion. Believe it or not, is going to take it out even further to $8.2 billion.

The Hon. R.P. Wortley: Don't look at me; I've been accused enough today. Look at Carmel.

The Hon. J.S. LEE: You are the only minister in this place right at this moment.

The Hon. T.J. Stephens: Give it to him, Jing. Turn up the heat!

The PRESIDENT: Order!

The Hon. J.S. LEE: With the new hospital to be built on the rail yards site there is an additional $2.7 billion-plus to the $8.2 million debt, so we are looking at $11 billion in debt. But that is not all. What about unfunded superannuation, WorkCover, public sector workers compensation liabilities, public sector long service leave and all those major projects that Labor has promised? The total debt and liabilities for this state will become $24 billion.

With that amount of debt, can anyone in the right frame of mind say that this government has been a good economic manager? I do not think so. I recall that the new Treasurer said, on his first sitting day, 'I will not allow this state to run up a credit card debt that will be left for our children to pay.' Wow; what a noble thing to say! But that is exactly what he is doing. Treasurer Snelling is the one who has signed us up for enormous debt and we, our children and their children, will have to pay for it.

The Labor government has got the state into this cash-strapped situation. Premier Mike Rann promised that there would be no more privatisations under Labor. However, I have seen a copy of the pledge card that Premier Rann circulated, and I noticed it has authorisation from the Hon. Ian Hunter on the bottom of that pledge card. Yet treasurer Snelling has broken Labor's promise not to privatise government assets. He is going to forward sell the state's forests—and we heard from the Hon. David Ridgway, in his Appropriation Bill speech this week, that the forward sell would destroy the economy of the South-East.

Furthermore, in this budget, the Labor government announced that it is going to sell the Lotteries Commission. The state forests produced an income for the state last year of about $40 million, and the Lotteries Commission produced an income for us last year of about $86 million. The reasonable question to ask is: why is this government selling assets that are producing an income for the state? The only reason the government would sell an asset that is producing an income is that it is cash strapped.

Not only has the government privatised things such as the hospital, the schools, the state forests and now the Lotteries Commission but it is doing this with little consultation with the community and going against the wishes of the community being affected and putting the people of South Australia at risk. For instance, Labor's privatisation of South Australian Lotteries will put at risk the $90 million per year contribution to South Australian hospitals, the $25 million per year commission that newspaper agencies and other outlets earn from selling lotteries, the $200,000 per year that South Australian Lotteries contributes to sporting clubs across the state, and the $8 million per year that South Australian Lotteries spends on purchasing local goods and services.

The new Treasurer makes out that he is a family man—as if he understands life on struggle street—and that this is a family-friendly budget. Unfortunately, there is nothing family-friendly about this budget. If you catch a bus, drive a car, consume water or electricity, pay insurance and you are looking to help your kids to get into their first home, you are worse off under this budget.

Average water bills have tripled under this government and, on top of that, sewerage charges are going to go up by 12 per cent this year, when you include the property prices. Add to that property taxes, which have more than doubled, primarily due to increased stamp duty and land tax. South Australia is one of the most expensive places for stamp duty. This explains why Adelaide's commercial and residential property markets are struggling severely.

In a report in a local newspaper, Todd Brown, the CEO of Urban Construct, one of the state's leading property developers, said, 'Everyone is in survival mode at the moment.' He said that the state government received 44 per cent of its revenue from property-related activities, yet seemed blind to the problems pressing down on the sector. He said:

They've taxed the buggery out of the industry and they need to realise that if you start choking the golden goose, it stops laying eggs.

Mr Brown also mentioned that, while the state government is focusing on the redevelopment of Adelaide Oval and the Riverbank, those projects are not going to help the sectors that are struggling. The government forgets that it is the small to medium operations that build houses and small buildings in this state, and home builders have revealed that they are 30 to 40 per cent down. The property sector is really hurting.

Land tax has increased hugely, by 346 per cent. It has more than quadrupled since the Labor government has come to office. We have by far the worst land tax regime of all the states and it is not just the tax paid by the wealthy. So many business associations and community groups have come to see me, raising concerns that high land tax and property taxes are impediments for investors who buy properties in South Australia. Does the government understand that this affects the availability of rental properties?

In this budget, of course, the $8,000 first homebuyers' subsidy on newly-constructed home purchases has been slashed. It affects the people who are the most vulnerable and who have not managed to get into the property market themselves. Many of the people looking for places to rent are disadvantaged individuals and families. They are ones who are renting, and they are the ones who will pay the price for this government.

Taxes overall are up by more than double the rate of inflation. In each year of the forward estimates there is more than double the rate of inflation. It will amount to $1.1 billion in extra tax revenue, and the government wonders why people, especially young people, are going interstate. They are getting out of South Australia. It is very sad to see that our share of the national population is declining, and when businesses and good people leave our state it causes our share of the national economy to decline.

Under this government our share of the national economy has gone from 6.8 per cent to 6.3 per cent. We have gone backwards under this government. Our national population has declined from 7.75 per cent to 7.35 per cent. If we kept pace with national growth we would actually have in this state at this time 38,000 more jobs than we have now. What is more, given the direction we are taking, Access Economics have forecast that jobs, economics, exports and population will all grow at less than the national growth rate for the next five years.

In conclusion, there is no doubt that South Australians are hurting and feeling the impact of a high taxing, high spending Labor government. After nearly 10 years of Labor government in South Australia Treasurer Snelling must explain to the people of South Australia why South Australia is underperforming the rest of Australia. I reassure all honourable members that the people of South Australia will be waiting for the Treasurer's answers and explanations in anticipation.

The Hon. R.I. LUCAS (15:47): I rise to support the second reading of the Appropriation Bill. In doing so I went back and looked at the contributions of all members to last year's Appropriation Bill debate to see what, if anything, had changed in the last less than 12 months. Sadly I think the conclusion that many commentators have made—and I certainly agree with it—that this government is the most incompetent, most secretive and most scandal-prone government in this state's history has again been proved correct over the last 12 months or so.

We only have to look (and I will not detail them all) at the problems, scandals and issues surrounding Premier Rann; former treasurer Foley; former attorney-general Atkinson (who seems to be involved in an almost countless number of defamation cases these days); minister Conlon; the former leader of the government, Bernard Finnigan, in this place, who resigned, after a very short period of time, from his position in mysterious circumstances; and the well-known problems now of the newest minister, the Hon. Mr Wortley, who now has the ignominious record of being only the second minister in the 168-year history of the Legislative Council to have had a successful no-confidence motion moved against him.

He joins the controversial Dr John Cornwall from the period of the mid-1980s and the then Bannon government in that dubious distinction. Further, we have the well-known problems of the welsher from the west, as you would know him, Mr President, minister 'Turbo Tom' Koutsantonis. The problems of minister Rankine and minister Conlon are well known.

I guess we saw the set of circumstances just over a couple of months ago where, when one set of unfortunate-for-the-government opinion poll results came out and minister Kenyon said, 'Oh well, at least it can't get any worse,' and 'At least we don't have the scandals of the former New South Wales Labor government.' Of course, soon after that the problems of the unnamed Labor member of parliament facing criminal charges hit the media airwaves, and we have had more recently the problems with minister Wortley. That is the problem we have with the government as we look at the Appropriation Bill debate.

Each minister, and some former ministers, are too worried about their own personal problems, issues or scandals, and are not concentrating on what they have been elected to do; that is, to govern the state in the public interest and to manage the state's finances in a conservative and businesslike fashion. As debate on appropriation in this place and the other place has well demonstrated that certainly cannot be demonstrated by this government, the former treasurer or the current Treasurer who has continued the task after former treasurer Foley.

I seek leave to have incorporated into Hansard, without my reading it, a purely statistical table numbered 1.5, from Budget Paper 3.

Leave granted.

Table 1.5: Summary of key general government sector budget indicators

2008-09Actual 2009-10Actual 2010-11Estimated Result 2011-12Budget 2012-13Estimate 2013-14Estimate 2014-15Estimate
Budget balances
Net operating balance ($m) -233 187 -427 -263 114 80 655
Net lending ($m) -872 -1 092 -1 821 -1 252 -489 -56 542
Cash surplus ($m) -721 -1154 -1 840 -1182 -421 -3 608
Revenue and expenses
Revenue real growth (%) 1.8 12.4 -5.7 1.2 -0.1 -1.3 3.4
Expenses real growth (%) 7.4 9.1 -1.9 0.1 -2.4 -1.1 0.0
Interest ratios
Net interest to revenue (%)(a)(b) 0.2 0.4 0.8 1.2 1.4 1.5 1.4
Net interest plus nominal superannuation interest to revenue (%)(b) 3.1 3.4 3.7 3.9 4.0 4.0 3.8
Balance sheet indicators
Net debt ($m) 475 1,402 3,217 3,825 4,098 4,213 3,615
Net debt to revenue (%) 3.5 9.0 21.3 24.3 25.3 25.7 20.8
Unfunded superannuation ($m) 8,939 9,478 8,734 8,742 8,732 8,703 8,652
Net financial liabilities ($m) 11,562 13,182 14,237 15,029 15,492 15,784 15,379
Net financial liabilities to revenue (%) 85.5 84.9 94.4 95.6 95.8 96.3 88.5
Net worth ($m) 24,146 36,231 37,456 37,713 38,791 39,512 40,743


Note: Real-terms calculations use the Adelaide Consumer Price Index.

(a) Net interest does not include nominal superannuation interest cost.

(b) Revenue does not include interest income.

The Hon. R.I. LUCAS: This is an adaptation of table 1.5 in Budget Paper 3. The only change is that I have added in the previous year's results—the year 2008-09 actual results from last year's equivalent budget paper—so that we now have a spreadsheet record of the financial performance of the treasurers and the government from 2008-09 estimated through to 2014-15.

What the table shows is that, after almost a decade of the rivers of gold flowing into state coffers from the GST deal negotiated by the former Liberal government—a GST deal which was attacked by Premier Rann and former treasurer Foley at the time as a lemon of a deal for South Australia—what this government and, in particular, the failed former treasurer Foley, has left the state is a budget in deficit over a period of four years. On the best measure of deficit, the net operating balance in three of the four years—2008-09, 2010-11 and in this current year's budget, 2011-12—are all in significant deficit, and there is a modest surplus in 2009-10 if you use that particular measure of the surplus or deficit in the budget.

We see a $233 million deficit in 2008-09; a $427 million deficit last year; and we estimate a $263 million deficit for this current year. We are looking at almost $1 billion in deficits over a four-year period—if you want to net off the $187 million, perhaps $700 million or $800 million in net deficit over that four-year period—at the end of a period when we had the rivers of gold flowing into the state from the GST financial deal negotiated by the former government.

We have often heard from members in this and the other chamber about how this government has delivered perennial surplus budgets, that this government is a magnificent financial manager and that this government was not delivering deficit budgets. Wrong, wrong, wrong on all counts. What treasurer Foley has done after the rivers of gold is left a budget in such a weakened condition that, even on the best measure of deficit, three out of the four years record deficit budgets.

I turn to the measure that former treasurer Foley, when he was first elected, said was the one true measure of whether a budget was in surplus or deficit—that was not the net operating balance which he now uses.

What he said in 2002 is that the only true measure of the health of a budget is an accrual measure called net lending. This Budget Paper 1.5 shows that, for all four of these years from 2008 through to 2012, the budget is in deficit. In fact, for all seven years from 2008 through to 2015, it has been or will be in deficit. That is not a bad record from the former failed treasurer Mr Foley and now failed Treasurer Snelling: seven years of deficits under the net lending measure which Mr Foley said was the one true measure of whether or not a budget was in surplus or in deficit.

Under this net lending measure, in 2008-09 there was an $872 million deficit in that year alone. In 2009-10, there was a $1,092 million deficit in that particular year; in 2010-11, the year just gone, a $1,821 million deficit; and, in 2011-12, a $1,252 million deficit. So, on this one true measure that measures the health of a budget, we see over a period of four years some almost $5 billion—that is $5,000 million—worth of deficits imposed on the state in the state's budget by Mr Foley and Mr Snelling. That is a tragic set of circumstances.

If it were a government coming out of the calamities of the State Bank disasters of 1992-93, there would at least have been an explanation. Certainly, the opposition will concede that, in 2008-09 with the global financial crisis, there were particular problems in that year rolling over into the following year, but we do not see the situation improving since then. We see it actually getting worse. As I said, there was an $800 million deficit in the global financial crisis year of 2008-09 and a $1,821 million deficit in this last year 2010-11, so a couple of years after the global financial crisis, the situation has markedly deteriorated in terms of the state's finances.

Sorry, I stand corrected: this particular table shows that six of the seven years under the net lending measure will be in deficit. In the final year, 2014-15, the Treasurer is predicting that it will finally turn into surplus if one believes those figures so, rather than seven years of deficit, it is six years in a row and then, in 2014-15, they finally predict a surplus.

Similarly, when one looks at the cash measure, which is the third measure of whether a budget is in surplus or deficit, which is the way the federal budget is reported—the headline either surplus or deficit figure as a cash measure under the federal budget arrangements—if we look at it on a cash basis, we had a $721 million deficit in 2008-09, a $1,154 million deficit in 2009-10, in this last year a $1,840 million deficit and, in the coming year for 2011-12, a $1,182 million deficit and, again, deficits right out to 2013-14 with finally a surplus in 2014-15.

That is a stunning indication of the state of the state's finances. Using the measures that the former treasurer and the current Treasurer said are the most accurate measures of whether or not we have been managing our budget well, clearly those figures demonstrate in an independent way that the treasurers past and present are not managing the state and the state's budgets well. I seek leave to have incorporated into Hansard table B.7 from Budget Paper 3 without my reading it.

Leave granted.

Table B.7: Non-financial public sector key balance sheet aggregates ($million)

As at 30 June Net debt (a) Unfundedsuperannuation(b) Net financialliabilities Net financial worth Net worth
1988 4,397
1989 4,197
1990 4,457
1991 5,418
1992 8,142
1993 11,610
1994 10,550
1995 8,844
1996 8,432
1997 8,170
1998 7,927
1999 7,657 3,909 13,099 -12,256 10,624
2000 4,355 3,543 9,914 -8,986 12,445
2001 3,223 3,249 8,151 -7,109 14,816
2002 3,317 3,998 8,973 -7,902 14,721
2003 2,696 4,445 9,096 -8,811 15,288
2004 2,285 5,668 10,031 -9,550 15,760
2005 2,126 7,227 11,511 -11,004 16,359
2006 1,786 6,146 10,451 -9,889 19,703
2007(c) 1,989 5,075 9,518 -8,795 22,128
2008(d)(e) 1,611 6,468 10,208 -10,487 23,741
2009 2,872 8,939 14,302 -14,921 24,146
2010 4,487 9,478 16,626 -16,997 36,231
2011 6,872 8,734 18,274 -18,284 37,456
2012 7,922 8,742 19,465 -19,381 37,713
2013 8,175 8,732 19,857 -19,583 38,791
2014 8,170 8,703 20,021 -19,581 39,512
2015 7,553 8,652 19,582 -18,996 40,743


(a) Net debt data for the years before 1999 is sourced from Australian Bureau of Statistics, Government Financial Estimates 2003-04 (Catalogue no. 5501).

(b) There is a structural break in the methodology used to calculate superannuation liabilities between June 2003 and June 2004. This accounting change, which involved the adoption of Commonwealth Government bond rate for valuation purposes In line with AASB119, Employee Benefits, resulted in a significant increase In superannuation liabilities.

(c) There is a structural break in 2007 reflecting the amalgamation of the South Australian Government Financing Authority (SAFA) and SAICORP on 1 July 2006. The transfer of SAICORP assets and liabilities from the general government sector to the public financial corporations sector resulted in an Increase in non financial public sector net debt of $99 million at 1 July 2006 and an increase in net financial liabilities of $90 million at 1 July 2006.

(d) There is a structural break in 2008 reflecting the amalgamation of the South Australian Community Housing Authority (public financial corporation) with the South Australian Housing Trust (public non-financial corporation). This results in an increase in net debt and net financial liabilities and a decrease in net financial worth of $98 million in 2007-08, with no impact on net worth.

(e) There is a structural break in 2008 reflecting the first time recognition on the general government balance sheet of South Australia's share of the net assets of the Murray-Darling Basin Commission. This has no impact on net debt, however results in a reduction in net financial liabilities of $615 million in 2007-08, and increases in net financial worth and net worth of $615 million.


The Hon. R.I. LUCAS: This touches on some of the issues that my colleague the Hon. Jing Lee has just referred to, but it provides a list of the net debt figures in fact going back to 1988. What it shows this year is that it peaked (the net debt figure) at $11.6 billion in 1993 at the height of the State Bank problems. Under the stewardship of the former Liberal government it reduced to $3.2 billion; from $11.6 billion down to $3.2 billion, an $8.4 billion reduction by the period of 2001, just before the change of government.

That is the measure that the Hon. Jing Lee has referred to. That figure is now estimated to jump to $8.175 billion in 2013. So, in simple terms: from $11.6 billion down to $3.2 billion, and now jumping back up to a peak estimated of $8.2 billion in 2013. That table also shows the unfunded superannuation figures, the total net financial liability figures of the state, where one just adds the net debt and the unfunded superannuation figures together.

It is a pretty damning indictment of the former treasurer, the failed former treasurer who had to be dumped from his portfolio by his Premier and colleagues, but also a stunning indictment of the current Treasurer, supposedly part of the future direction of this Labor government. One can see that the budget that he has brought down just continues the misery; continues the poor performance; continues the financial incompetence of the former failed treasurer and the failed Labor government.

During the last few years, one of the claims by the government, in particular the former treasurer and now the current Treasurer, is the impact of the global financial crisis: the reason why we are having problems is the global financial crisis. For a period of a year or so, Mr Foley claimed that as a result of the global financial crisis the state budget was going to lose well over $3.4 billion, but during last year that claim came back to: we are going to lose $1.4 billion to $1.5 billion as a result of the global financial crisis.

Through the work of the Budget and Finance Committee, we sought advice from Treasury, and it took some time because the government would not provide the answers. We actually said to Treasury, 'We want a detailed breakdown of this claim about a $1.4 billion to $1.5 billion loss.' What we found was, and I seek leave to have incorporated into Hansard without my reading it a purely statistical table listing the Treasury estimate of the impact of the global financial crisis on the state budget.

Leave granted.

Treasury estimate of impact of GFC ($m)
08/09 $439.2
09/10 $510.3
10/11 $148.9
11/12 $160.8
12/13 $96.1
TOTAL $1,355.4


The Hon. R.I. LUCAS: This information was provided to the Budget and Finance Committee and what it shows is that this $1.4 billion figure that has been claimed, most of that was actually in past years. In 2008-09, there was a $439 million impact, in 2009-10, there was a $510 million impact, but in the current circumstances, 2010-11, it was $148 million, in 2011-12, $160 million and in 2012-13, $96 million. That adds up to the $1.35 billion that the government had been talking about.

As you can see from that, almost $1 billion of that occurred a number of years ago. It is in the past tense. It has nothing to do with the current budget situation in terms of the impact on the current budget. So, if we actually look at the impact in the financial years 2010-11, 2011-12 and 2012-13, the average impact on the budget is about $135 million a year, or less than 1 per cent of a $16 billion to $17 billion budget.

So, in real terms, we are talking about a modest hit or a modest impact on the health of the state budget. It is not insignificant—we accept that—but it is a modest estimated impact as opposed to the headline figure which has been trumpeted to the media for some time of a $1.4 billion impact. It is a deceptive figure because it refers to five years. It is a deceptive figure because the bulk of that—almost $1 billion—has occurred in the past and does not impact on the current budget circumstances.

There is no doubt that this claim from the government and the former failed Treasurer, Mr Foley, is a fraud designed to conceal from South Australian voters the main reasons for the state budget crisis and savage budget cuts. Those main reasons are the financial incompetence of the government and the financial incompetence of the ministers in the government.

The Budget and Finance Committee has commenced doing some work—and will continue this work in the coming week when Treasury revisits the committee—on trying to get behind the detail of the Royal Adelaide Hospital public-private partnership deal. What we have established in our first discussions with Treasury is that, when one looks at the fine print of the PPP for the Royal Adelaide Hospital, the state of South Australia, in particular the taxpayers, will be exposed in a number of significant ways which have not been highlighted or publicised. We will explore this in further detail with the Under Treasurer and senior Treasury officers next week.

The Under Treasurer Brett Rowse has confirmed to the Budget and Finance Committee that taxpayers would be exposed to additional costs for interest rate movements and to some contamination costs. Taxpayers will be responsible for 80 per cent of the cost of remediation of unknown pre-existing contamination—whatever that is—and 100 per cent of contamination caused by the state. In relation to the latter case—contamination caused by the state—Mr Rowse's view was that it would only relate to the period of the hospital project, but he has taken that question on notice and will come back to the committee.

The reason that is highlighted is that it is contrary to the earlier evidence that had been given to the Budget and Finance Committee that the private sector bidders would be responsible for all the contamination cleanup costs at that particular site. Treasury has also taken on notice to ascertain who will be responsible for the costs of cleanup of any possible contamination of the underground aquifer.

The Under Treasurer also confirmed that taxpayers will be exposed to interest rate risk in certain circumstances. The fine print of the deal shows that taxpayers will take base interest rate risk from the refinancing of the deal, which is likely to be as early as about 2018. So, in simple terms, this means that, if there are significant interest rate increases when the first refinancing of the whole deal occurs, the cost to taxpayers will be significantly increased.

We already know that average annual repayment costs are estimated to be about $391 million per year, or about $1.1 million a day. That is an average figure. The Under Treasurer has taken on notice what the peaks and troughs in that particular repayment schedule might be, but he did concede that in some years it might be higher than $500 million a year.

If we take additional interest rate risk and if interest rates move in an unfavourable way during the refinancing period, those particular estimated repayment costs of $391 million a year on average, peaking at over $500 million a year, will obviously increase significantly as a result of the state taking on that additional risk. Treasury has also confirmed that taxpayers will be exposed to the costs for any legal challenges to the development planning consent and also native title or heritage claims.

We have called on the Treasurer and Minister for Health to be transparent and accountable in relation to this PPP deal, although I have no great expectation that they will be. I would hope that as we move into the period when the Auditor-General is preparing his annual report he will cast a close eye over the project documentation for the PPP deal and look at not just the risk exposures (some of which I have highlighted) but also at whether or not in his judgement it is a good deal for the people of South Australia.

An issue we are exploring in the Budget and Finance Committee is that the former government and this current government for a number of years had a set of guidelines, called Partnership SA guidelines, which are up on the Treasury website and which were obligatory for all departments and agencies of government to follow if they were to look for any PPP project or any private financing of an infrastructure project. One of the many requirements in the Partnership SA guidelines document is that any proposed PPP had to pass the value for money test (VFM test). In doing that, it had to construct what is called a 'public sector comparator', which was the cost of doing the project in the traditional way, through debt financing, through government departments and agencies.

One of the guidelines was always that it could only go ahead as a PPP if it was value for money and if it was demonstrated to be cheaper to the people of South Australia by going down the private financing route; that was always the guideline. When the first PPP under this government was done, which was a small PPP in relation to country courthouses and police stations, the government proudly proclaimed that it passed the value for money test and that it was cheaper than doing it in the traditional way, and it went ahead as a PPP.

However, when it came up against the super schools, what happened was that, when you applied the test, it actually failed. It was about $9 million to $10 million more expensive than if it was done in the traditional way. It was at that stage that the government threw the rule book out of the window—that was the start of the process—and said, 'We're going to go ahead and do it anyway, even though it's more expensive than if we did it in the traditional way.'

The rule book was torn up—and it is something which has been little reported on by the Auditor-General—and the government proceeded with the project. At that time, we asked the then under treasurer, 'What's going to happen with the Royal Adelaide Hospital PPP, because here we are talking about a $1.7 billion project,' which was the claim at the time, 'and are you going to insist on a value for money calculation?'

What we have established—and we are interested in some answers from Treasury on this—is that mysteriously in the last few months the Partnership SA guidelines, which have been up there until recently, all of a sudden disappeared and some new guidelines, called the national infrastructure guidelines, have now been listed. When the Under Treasurer was asked about this, he said, 'Well, that must have been an oversight because the government for some time now has got rid of the Partnership SA guidelines, and we moved to these new national infrastructure guidelines some time ago. If the Partnership SA guidelines were still up on the Treasury website until recent times, that was an oversight or a mistake.' I find that hard to believe, but we will nevertheless explore that with the Under Treasurer when he returns to the Budget and Finance Committee.

The important point with this is that the reason the government has jettisoned the public private partnership South Australian guidelines—the ones they previously said they would adhere to, and the ones the former Liberal government had adhered to—is that it was getting too hard for the government to pass the test, like the super schools. It was continuing to fail the test when you did draft calculations.

The Under Treasure has been steadfastly trying to deny that Treasury officers have done any calculations. I know that is not correct; I know that Treasury officers had done calculations under the old public sector comparator guidelines, and it is an issue that we will pursue. What they were finding on their rough calculations was that, as with the super schools, it was almost impossible for the arrangements to pass this test. They would therefore be stuck with having to go back to the traditional way of financing or, each time a deal was done, having to publicly justify why it did not pass the value for money test.

So what do you do? What you do—and there is now this agreement at the national level, and every government is obviously interested in this—is you change the guidelines. You make the test easier; you incorporate an additional or more generous component for a calculation of risk, which makes it an easier calculation for the private sector financing option to pass the test. Of course, as a state you also accept back increased risks or exposures, such as the risks I referred to earlier in terms of reducing the risk for the private sector investor and leaving additional components of risk with the public sector payers of the particular project.

This is an important issue, because it is being used by the government to justify this particular deal. The Budget and Finance Committee does have important work to do; no-one else is going to do this sort of work. It will require hard work, forensic questioning and persistence in terms of asking the questions of the Under Treasurer and Treasury officers, and of the Treasurer and government ultimately, and getting on the record the history of how this particular test has been changed, the impact of the changed test and how it has made it easier for the government to ensure that these PPPs are passing the test.

Why is it critical for the budget? It is critical for the budget because, if the government has to do it the traditional way (this is the hospital), then this year and over the next five years—and depending on whose figures you want to believe, whether it is the $1.8 billion figure that the government is talking about, which no-one really believes, or a figure somewhere in the low $2.1 or $2.2 billion, or as high as $2.7 billion—the government would have to find that amount of money to build the project and take it out of the next five or six years' budgets.

As I said earlier, the budget is already in a power of trouble in terms of deficits, and debt in particular. If you have to add to it, over a period of five years, over $2 billion worth of borrowings and expenditure on budget, then those figures of the net operating balance and the net debt would increase, and they would increase significantly. The attraction for the government with the PPP for the hospital is that virtually nothing goes on the budget until 2016, long after the government probably expects to be booted out of office in 2014.

The first impact will probably be the first PPP payment in 2016-17 of about $400 million a year. Each year after that, for 30 years, an average payment of nearly $400 million will be made out of the budget to the private sector operators.

So it is a critical issue for the health of the budget, it is a critical issue for transparency and accountability, and it is a critical issue in terms of judging the financial competence of the government as to whether or not it has been able manage this RAH PPP project efficiently and effectively on behalf of the taxpayers. It is critical that the Auditor-General applies the forensic capacity that is available to him in the audit office to this particular deal so that the details are exposed for all of us who are interested to see—members of parliament, economic commentators and members of the public.

I now turn to a number of specific issues in terms of budget cuts and measures and also examples of waste within the budget. The first one I want to refer to is a recommendation in the Sustainable Budget Commission draft report, on page 121, under the heading 'Unroadworthy vehicle fines'. The measure states:

This measure proposes additional revenue of $7.9 million across the forward estimates due to the introduction of a fine for the detection of unroadworthy vehicles. DTEI proposes that this fine will accompany the issue of a standard defect notice which does not have a direct penalty.

This indicates that the budget impact in a financial year is estimated to be around about $2.5 million a year. So, this is an additional potential impost of $2.5 million.

I have been informed that there is a raging dispute going on within the government at the moment with government departments and agencies in relation to this issue. That dispute, essentially, involves DTEI bureaucrats but also South Australia Police and, obviously, bound up in this are Treasury officers as well.

I am told that the current arrangements in relation to defect notices are that, if you are pulled up in the street by a police officer with, for example, your tail lights out or bald tyres, or whatever it might happen to be—but let's take the easiest one: your tail lights are out—the police officer places a yellow sticker on your screen which is, in essence, a defect notice.

The police officer has a couple of options. He or she, firstly, can issue you with an expiation notice at that time or can issue you with a caution. I am told that, if the police officer issues you with a caution, he or she must fill out a form which indicates that you have been cautioned. That way, I am told, police can monitor whether a person's car has been cautioned three or four times in a six-month period, or whatever it might happen to be.

The police officer has that option or discretion at that stage to issue an expiation notice and a fine or just a caution without a fine. The yellow sticker goes on the window, and the person is told, 'You have to fix this and then go to a police station and have the defect notice removed.' If you do that for a tail light, for example, you just jam in a globe and you fix it. You go down to your local police station, they remove the defect notice and you make a small payment, I am told (I think it is about $20) as an admin fee, at that time.

I am told that what is occurring at the moment (and I refer to that Sustainable Budget Commission recommendation) is that the government is looking at a significant increase, in essence, for the management of this process of defect notices; that is, DTEI is seeking to take away from police their discretion in that there would be an expiation notice issued in virtually all circumstances rather than, in many cases, the caution. Clearly, that increases the revenue flow to government because, currently, the police officer has the discretion to issue a caution, and many of them do.

Then when the car owner goes to have the defect notice removed, there is to be a significant increase in the level of the payment the car owner has to pay. As I said, at the moment, it might be $20 or so. The original suggestion was that, for a small defect, it goes up over $100, I think, to about $125. So, you go to your local police station, you might have already been pinged for your expiation notice for having your tail-light out and then you might be pinged for the removal of the defect sticker at the local station, maybe with another payment of up to $125. I am told that with the original proposal for the more serious defects—a suspension problem or something where you have to go down to Regency Park—the removal of the defect might be as high as up to $250, which was deemed to be a major defect as opposed to a minor defect.

In my discussions with people who are actively engaged in this at the moment—a couple of whistleblowers—I am told in the latest discussions that those particular numbers, other options, have been reduced to about $50 in the first instance in relation to removing the sticker at the police station, and maybe $100 or a bit above that in removing it from your windscreen down at Regency Park. I am told that a submission has been considered by cabinet in the last fortnight, and the furious debate continues between police in particular and transport bureaucrats in relation to this proposal.

Police are furious that the discretion of the police officer is being either removed or significantly reduced under these particular proposals. They believe they will be the ones at the forefront attracting the ire and anger of car owners, when in the past they might have issued a caution, whereas under these proposed arrangements that discretion would either be removed or significantly reduced. This is and will be a significant issue.

There has been a lot of discussion already on talk-back radio about this particular issue. As I said, the debate is raging within the bureaucracy at the moment. It is taking on a life of its own in the community in terms of this particular debate. One can trace it back now to this recommendation in the Sustainable Budget Commission, and the government needs to come clean and be accountable in relation to what would appear again to be another revenue-raising grab initiative by the government on, in this case, car owners.

No-one of course supports somebody clearly driving an unroadworthy vehicle on a continuous basis, but there are any number of occasions when your tail-light might be out when you do not realise it, and in those circumstances a caution with not significant costs for fixing the problem is the sensible way of policing it. Massive increases in fines, penalties and admin payments for those sort of circumstances will not only cause grief for the police officers and the image of the police force but also cause further grief for a government and its ministers who sadly are blissfully unaware of the impact of many of the decisions they take.

We discussed earlier ministers in this government being blissfully unaware of the impact and ramifications of decisions they take. Sadly, in the budget issues we see exactly the same, and this issue of defect notices is just one further example where, in this case, minister Conlon, and a distracted minister for police, Mr Foley, are blissfully unaware of what is going on at the pointy end of decisions that their bureaucrats and others are recommending to be taken.

We have seen, through the work of the Budget and Finance Committee, and in other forums as well, many examples of waste and financial incompetence by the government. There are too many to list, but I want to raise just a handful to highlight, because we often get the question from the Hon. Mr Holloway and others: what would you do and what would you do differently? We can highlight in many cases the problems of this government where it could be done and done better.

Shared Services is an unmitigated disaster. All who have been exposed to Shared Services now realise that it is an unmitigated disaster. We have seen that the new governments in Queensland and Western Australia, at considerable expense to taxpayers, are unwinding their shared services initiatives or putting them on ice and not further expanding them. We have seen, in recent evidence to the Budget and Finance Committee, that a $60 million cost of implementation of this project has now blown out by more than 100 per cent—by $68 million.

Brett Rowse and Damian Bourke told the Budget and Finance Committee at its last meeting that the $60 million cost was now $128 million—a mere $68 million blowout on a $60 million budget—not a bad effort when one looks at the implementation cost of any project. The Auditor-General has already reported that the actual savings from this shared services project are nowhere near the claimed level of $60 million.

What is blissfully unreported, because I guess it is a difficult issue, is that even the claimed savings of about $30 million a year that they have achieved have nothing to do with the shared services project. Shared services was essentially about payment of accounts across government departments, managing payrolls in bulk in one centre and reducing costs. The major part of this $30 million claimed saving was the Future ICT project, which was a centralised arrangement in relation to information and communication technology purchases across the board.

That was something which was going on separately to Shared Services but is now being lumped in with the claimed shared services savings to try and give them at least some degree of credibility. Sadly, the Auditor-General has not drawn the public's attention to this particular deceit by the government. We took evidence from the health department a couple of years ago and they said, 'Look, Treasury told us that we are saving $5 million from Future ICT and they just reduced our budget by $5 million and said, "There's your saving."

'When we reported to them, and then to the Budget and Finance Committee, that it was actually costing $50 million more over a period of four years—not a saving, but Future ICT was going to cost the health department more money rather than saving it—Treasury said, "Too bad. We've made the saving. We are reporting that to the Auditor-General. The fact that it is actually going to be an increased cost is something you have to manage within your budget anyway."' So far, this fraud on taxpayers has been perpetuated and continues to be reported as a claimed saving under shared services, when clearly it is not.

The latest fraud masquerading as a shared services saving is procurement reform. Every agency, even going back to the former Liberal government, has been making changes—modest for some and significant for others—in terms of procurement reform. This is rationalising the number of suppliers, rationalising the number of warehouses; all these sorts of things are being tackled by various departments and agencies.

This was going on long before shared services, and Shared Services now does have some role in relation to this, but the savings from procurement reform, warehouse reform and so on, are separate to the original notion of shared services. Nevertheless, those savings are now being incorporated into the claimed shared services savings—as I said, another fraud being perpetrated on the people of South Australia through that particular claim.

We can pick out one or two of the agencies—starting at the top, the Department for Premier and Cabinet—to see rotting from the very top in terms of wasting public money. We found, with the Premier's own department, that his own CEOs had wasted $246,000 on remodelling the chief executive officer's office. One chief executive wanted to have an open plan office and spent a bucketload of money; the next chief executive came in and said, 'No, I don't like that. I'm now going to go back to the old way,' and spent a bucketload of money.

Altogether, they spent a quarter of a million dollars returning it to virtually the same state it was in three years ago. It just went full cycle, and a quarter of a million dollars of taxpayer's money was spent under the nose of the Premier. The Boston Consulting Group was paid half a million dollars for a consultancy on megatrends without advertising and without going to competitive tender. When we asked the former chief executive officer of the department how on earth you can go to a $500,000 consultancy without advertising and competitive tendering, he said he knew them to be a specialist group in this area and they had given a special cut-price deal.

We said, 'Well, how do you know that a lot of other reputable companies wouldn't have given you a cut-price deal as well if you didn't go to competitive tender?' There was no answer to that at the Budget and Finance Committee. It was just a lazy $500,000 going to the Boston Consulting Group for this consultancy without any pretext of advertising or competitive tendering.

We have smaller examples just to show that it is not just in the millions and the hundreds of thousands that this department and government departments are wasting money. The Department of Premier and Cabinet spent $40,000 on the cost of a master's degree program at a Melbourne university for a public servant in the CEO's office—the total cost of the course.

In some cases, employers will contribute to the cost of professional development or further course development. The person who undertakes it makes some contribution to it, not just the taxpayers, but, in this case, we the taxpayers spent $40,000 to send a person to a Melbourne university for a master's degree program with no contribution from that individual, and of course, no commitment—no bond, as you would call it—to lock that person into the public sector for any period of time to see some sort of return on the investment that the taxpayers were making.

In essence, we could spend the $40,000 and soon afterwards that officer—heaven forbid, he or she took a package and was helped to leave—could leave and go off to the private sector or somewhere else and seek other employment with a master's degree paid for by the taxpayers of South Australia. We are still trying to find the cost of a new ministerial office for minister Portolesi to try to find out what the costs are.

We are still paying $23,000 a year for Mr Rann's friend Bob Ellis supposedly for speech-writing purposes, yet those payments were not revealed in the department's annual report. Why weren't they revealed in the annual report? We still don't know. It is not as if the Premier does not have a speechwriter. He already has a full-time speechwriter earning almost $100,000 a year on his staff, yet we are still paying his mate Bob Ellis up to $23,000 a year supposedly for speech-writing purposes.

There are innumerable examples of waste right across the board in small projects and in big projects within all government departments and agencies. I refer to the South Australian police department. Evidence given to the committee by the business services director, Denis Patriarca, revealed that hundreds of officers have been underpaid workers compensation payments over a number of years. He confirmed that SAPOL had budgeted up to $1 million to meet the total cost of the underpayments.

However, even though it was not revealed in the SAPOL annual report, SAPOL revealed to the committee that the consultants Deloittes were paid $227,000 in the period leading up to 30 June 2010 to help sort out the mess. Eight months later in February 2011, Deloittes was still working with SAPOL to fix the bungle. When one looks at that, given that they earned $227,000 in the period up to 30 June and they were still working eight months later, it is possible that the total payments to Deloittes to help fix up this bungle would be about $400,000 or more, and we have obviously asked the question.

The question we put to the Minister for Police and to SAPOL is: why couldn't SAPOL fix up this bungle themselves rather than spending $400,000 on expensive consultants such as Deloittes to calculate and organise the payment of underpaid workers compensation?

Surely, that is not beyond the capacity of the South Australian police force. Surely, if they have made a mistake of about $1 million in terms of underpaying workers compensation, we do not then have to spend another $400,000 on consultants to try to work out the extent of the problem and how we are going to go about fixing it.

The final broad area I touch on in terms of waste and, I guess, examples of financial incompetence, is brought to mind by a headline today of Adelaidenow which refers to the potential for compensation payments to Marathon Resources for the government's Arkaroola decision. It was not that long ago that the government had to pay, I think it was—I do not have the figures with me—up to $10 million or so, and I stand to be corrected on that figure, as compensation for the prisons.

The Hon. T.J. Stephens interjecting:

The Hon. R.I. LUCAS: The Hon. Mr Stephens says it was about that number, about $10 million. Because of an incompetent management process, because of incompetent decision-making by ministers, the Treasurer and the government, we ended up with an exposure—the government said it did not have any legal exposure but in the end it needed to make these payments ex gratia to the bidders as compensation for the mess that had been devised by the government, or imposed on them by the government.

So, the taxpayers of South Australia not only did not get the new prison that they had been promised, they ended up paying almost $10 million in compensation because the government had stuffed up. Now the headline in Adelaidenow is, 'Taxpayers could pay $15m to Marathon Resources for mining ban at Arkaroola'.

I hasten to say that I am not aware whether that particular sum is correct, but clearly we are talking about many millions of dollars. Clearly, Adelaidenow would not be making the number of $15 million up, someone from within government has suggested a particular number to them.

This particular story quotes 'Turbo Tom' Koutsantonis, the mineral resources minister, as agreeing that he had had a meeting with the Marathon Resources people—I think it was today—and he concedes:

...we're working towards a settlement...In the interests of fairness, we will look at their costs incurred in exploration and look at that.

I notice he is very generous with taxpayers' money in paying compensation. He still has not paid me my $50 for welshing on a bet 10 years ago.

The Hon. J.S.L. Dawkins: He's got a fair bit of form in that area.

The Hon. R.I. LUCAS: He has a bit of form in that area, but he is generous with the taxpayers' money. So, we are clearly looking at another example of a significant compensation payment because this government had a flawed process where, for whatever reason, over a period of time it allowed Marathon Resources to continue to believe that it could go ahead and mine and so it continued to explore that area. We know that the government—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Well, you have actually been in government for almost 10 years now, so I do not think the former failed mines minister, the Hon. Mr Holloway, ought to squeak too loudly on this particular issue. The soon to be retired former minister should not continually interject out of order. We have a situation where the government, for 10 years, has continued to encourage Marathon Resources to explore and led it to believe that at the end of that—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Well, you do not explore unless you are going to do something with it. I do not know anybody who spends money on exploring if they do not think they are going to get something at the end of it. Just the knowledge is not of much value in the marketplace. My experience, limited as it is, is that if you cannot actually mine it, then it is not worth too much in the marketplace. If you know it is underground then not too many people would give you money if you cannot get it out. That is my limited experience of the market. I am not sure whether the Hon. Mr Holloway—

The Hon. T.J. Stephens: A mining legend.

The Hon. R.I. LUCAS: —a mining legend, I am reminded—knows much more about this particular industry than I do, but that is my limited experience. My experience is that it really only has a bit of value if you can actually get it out. If you know about it, if you can look at it or if you know it is there somewhere, I am not sure there is much value in that.

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Have a look at that now. We also know that the government paid money to it under the PACE scheme. The government will not tell us how much—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Don't shake your head, Paul, because—

The Hon. P. Holloway: That was somewhere else, I think.

The Hon. R.I. LUCAS: Well, we know Marathon Resources—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: The Budget and Finance Committee—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: Why don't you kick him out, Mr President. Ask him to leave, thank you. He is interjecting out of order. I would have been finished hours ago if it had not been for the Hon. Mr Holloway's persistent and virulent interjections.

The Budget and Finance Committee was told that Marathon Resources received a PACE grant. As the Hon. Mr Holloway infers, we do not know what Marathon used that for—whether it was for that particular lease in that area, or elsewhere. We also do not know, because the government will not tell us, exactly how much Marathon Resources was given under the PACE grant. We do know that Marathon was given money but we do not know how much.

So, we have a situation here where this company has been encouraged to continue to explore—it has been given money by the government to continue to explore potentially in this area, or perhaps in other areas as well, I am not sure—and the government makes a decision in the end which we are now told could cost us up to $50 million in compensation. It could cost us up to $50 million because of the flawed decision-making process that this government has gone through.

It is but one further example of the financial incompetence—on which I am sure you would agree with me—that has been seen from virtually every minister in this government and the government as a whole. I indicate my support for the second reading of the Appropriation Bill and highlight the fact that, hopefully, the Auditor-General will pursue some of these issues with some vigour in the future. Hopefully, the Budget and Finance Committee will continue its task of highlighting some of the waste and inefficiency of this government and its ministers.

The Hon. T.J. STEPHENS (16:47): I rise to make a brief contribution on the Appropriation Bill. I commend the Hon. Rob Lucas on (a) his speech and (b) the fine work that his Budget and Finance Committee does in keeping this government, at best, remotely honest.

I just want to highlight a couple of disturbing things before I touch on a couple of areas in my various portfolios. Access Economics has reported statistical information that I think most South Australians would find extremely disturbing. Whilst I do not want to be the bearer of doom and gloom, I think that, over the next few years under this government, we are going to face an incredibly rocky road.

The government has thrown out some numbers at us and also some statements, which include: South Australia's economic growth will be below national growth in each of the next five years; South Australia's share of the national economy will continue to decline from 6.8 per cent in 2001-02 (it is 6.1 per cent now) to only 5.8 per cent in 2014-15—it is a marvellous legacy that the Rann government leaves us—South Australia's export growth will be below the national growth in each of the next five years; South Australia's population growth will be about half the national growth in each of the next five years; South Australia's employment growth will be below the national growth in each of the next five years; and South Australia's unemployment rate will also remain above the national rate in each of the next five years.

It is a record that you could hardly be proud of, and it is certainly nothing to look forward to. I will just touch on the budget and sport. The Rann government's budget made savage cuts to sporting programs at the South Australian Sports Institute. Some of the sports that have been cut include the men and women's soccer programs, basketball, baseball, aerial gymnastics, sailing and tennis. By cutting these seven programs, the Rann government has cut short the future of South Australian sport in each and every one of those sports.

Labor has neglected grassroots sport. We have seen the passing of the bill today (and I, sir, I believe you have the message in front of you) in which the government agreed to the 40 or so amendments passed in this place about the Adelaide Oval. There is nothing in the Adelaide Oval for grassroots sport, other than in the amendment we moved to make sure that there was up to $1 million for grassroots sport—and of that one feature, I am incredibly proud.

One of the things that worries me about the cutting of the funding to SASI and to our elite athletes is that it is becoming more and more expensive for young people to participate in sport. It has been explained to me by coaches and parents who have young people involved in these elite sporting programs that now, if you do not come from the right side of the tracks, if you are not from a family that is reasonably well heeled, your ability to participate and perhaps grow to become a star for South Australia, or indeed a national champion, is extremely limited. That is not the South Australia I grew up in, and am extremely proud of. The fact that we are getting to a point where unless—

The PRESIDENT: Order! I am having difficulty hearing this very important contribution by the Hon. Mr Stephens.

The Hon. T.J. STEPHENS: Thank you for your protection, Mr President. He has been doing it for years, and I think you should throw him out. I was saying that I am really disturbed—

The Hon. J.M. Gazzola: That's true.

The Hon. T.J. STEPHENS: —yes, I am very disturbed—that a basic thing like sport, something that should not depend on the size of your parents' wallet or where you live, a basic necessity is fast disappearing from the reach of many South Australian families. It is not just the sporting component we are losing; there will be a cost to society if those young people, out of frustration, turn to other things—and they could well be things that involve crime and certainly rob those young people of discipline and opportunity. The cost to us in law and order I think will grow exponentially.

The government has left its commitment swinging in regard to the Campbelltown sports hub, which is one of those promises I think it will never deliver because its federal colleagues have shown no interest in the project. Whilst that part of Adelaide and South Australia is desperate for this type of sporting hub, it is obviously going nowhere fast. We are still waiting to see the Port Augusta project, which we still hold great hope for. The member for Stuart (Dan van Holst Pellekaan) has done an outstanding job trying to make sure that project stays on the table.

I have touched on Adelaide Oval and what it will do for grassroots sport, and I must say that over the last few weeks I have had a number of quite productive meetings with SACA officials and those who provide services to them. They have been very good in regard to how much information they have been prepared to share, and I am very grateful to them.

I will move onto tourism, and I am extremely concerned about this real income earner for this state. What we have seen is the flow-on effect from last year's horror budget, when $12.5 million was taken out of the tourism budget. Typically, what we have seen is the regional areas suffering. The first thing this government did, because it had to save money, was cut jobs out of the regions. Sir, being from the country, you know that in a small community any job is prized by that community because it could well mean that a family is attached to that job and it could mean people playing sport in that community. Every job is cherished.

The first thing this government has done is cut 23 positions out of regional South Australia. So, 23 positions that it funded to the tune of about $40,000 per position, and the best it has come back with is, 'Well, we're actually going to provide 11 positions', and they are going to fund those positions to the tune of $10,000 each. I ask: how serious is the government about regional tourism in this state? I have argued long and hard about the fact that regional people will sell their own area better than anyone else; they will cross-sell, they will make sure that tourists have the best possible experience in a region—and, to be fair, spend the money they are prepared to spend in that particular region.

You do not usually find out about the little restaurant, tucked away around the corner, which gives a great experience, from a website when you are looking at something else. Those are the sorts of on-sales that only a person in a regional area will do, and they really do maximise the experience. Of course, then you get into word-of-mouth; a tourist will go back to where they come from and talk about the great experience they have had. So I think that particular act deprives tourists of the full experience.

The minister knows that I was very unhappy about the way this government has privatised the visitor information centre. It has broken another core Labor promise of no privatisation, so we now have the trifecta of the forests, the lotteries and now the visitor information centre. The fact that the minister did not even bother to look at the premises that the new privatised visitor information centre was going to just smacks of absolute neglect. The fact is that South Australia's visitor information centre will be housed in a basement, with no disabled facilities. How could you sign off on something like that?

Much has been said about that, and I know that the chairman has fallen on his sword. I am not suggesting impropriety but I will say that the communications on that whole thing, and the minister's oversight of it, were really quite appalling. That should put a warning across the minister's bow with regard to how much hands-on attention he needs to pay to this incredibly valuable industry.

We have heard the Premier over the last couple of days—and hello, hello; it is fantastic. He has actually worked out that Kangaroo Island is a very important tourist destination. He has been the Premier for 9½ years and he has worked out that Kangaroo Island is a very important tourist destination. My goodness! It beggars belief to think that the community of South Australia will actually applaud him for waking up to what the rest of us have known for many years. We have had a promise of a spend on Kangaroo Island; I welcome that promise and look forward to it being delivered because, as you know Mr President, it is certainly way overdue.

The Hon. J.S.L. Dawkins: A couple of members put a significant investment into the Ozone, I believe.

The Hon. T.J. STEPHENS: The honourable member interjects, but I cannot comment because I would not know; I never comment on what members do in their own private time. Moving on from tourism, I will briefly touch on correctional services. As you would be aware, sir, we have a select committee looking into correctional services, and we are incredibly concerned about many areas: luxury TVs, escapes, shipping containers, drugs in prisons and bullying of officers. That will continue to unfold, and I look forward hopefully to being part of the solution and bringing that department back into some sort of reasonable shape.

Aboriginal affairs can be challenging, and I know that the work will be ongoing. One of the things that worries me with Aboriginal affairs is that we seem to have so many different silos of government supposedly taking responsibility for their own private area. I think that trying to coordinate that is almost unworkable, and I would like to see the minister have control of everything to do with Aboriginal affairs in that particular area. Certainly on the lands, when we have problems with power or with food pricing, it never ever seems to be the minister's fault; it is always a different scenario. It is very hard to pin them down on it.

Until we put up our hand and take some responsibility in that particular portfolio, I do not see the life of Aboriginal people improving. Hopefully, the Substance Misuse Centre in Amata is finally going to be put to good use. We have millions of dollars worth of infrastructure, which seems to have been wasted for a number of years. We are suggesting a haemodialysis facility; the Amata centre is totally underused, and this is something that would be fantastic for Aboriginal people on the lands. If you can have dialysis facilities on small communities in the Northern Territory, I do not see any reason whatsoever why we cannot provide those sorts of facilities on the APY lands.

I will now touch on gambling. We are still in a state of limbo with regard to the federal government and what it may or may not do. I have taken some comfort from the gambling minister's statements, which have been reasonably consistent with regard to believing in voluntary pre-commitment, and I applaud the minister for those comments. I know that, in relation to industry in this state, in particular, the hotel industry and, to a degree, the club industry, many important investment decisions are being put on hold at the moment because of the uncertainty in gaming.

I do not want to see anybody hurt with gaming. I will keep hammering the point that I believe the money from the Gamblers Rehabilitation Fund that goes to minister Rankine's Families and Communities would be better spent being farmed out to the NGOs to have people on the ground providing education, counselling and support. Until we do that and show that we are genuine about the fact that we as a parliament and we as a state believe in choice but we believe that those who are harming themselves should have the opportunity to be looked after—I will not rest until that is a reality.

I know that, in these economic times, the state is drifting. I know that people would be prepared to invest money in facilities and equipment, thereby employing people and providing a safe and attractive environment for South Australians to enjoy themselves. I know that that investment is on hold at the moment, and it is hurting many people. So, if you, sir, as President, or any of the ministers, can use any influence on your federal counterparts to try to get some certainty into that industry, it would be appreciated. The sooner they do it the better and the sooner they do it the right way, the better off we will all be.

The PRESIDENT: I influenced you yesterday to invest.

The Hon. T.J. STEPHENS: I would like to thank you that for hot tip, sir, for the nag yesterday. It is still running, I believe. But that will not be the last time we share a wager and a bit of fun, I hope, because I do believe in choice. I believe in responsible gambling, and I believe that those who cannot look after themselves in that scenario should be provided with support.

This Premier has run his race. For a number of years, he has skated through, making statements without follow-up and got away with it. His time is well and truly passed. The economic indicators show that this state is going nowhere fast. The sooner the Premier puts on his pyjamas, heads out to the steps of Parliament House, feigns illness like a previous premier and gets out of the way, the sooner, hopefully, we can get on with running this state and resurrect it. With those few words, I support the bill.

Debate adjourned on motion of Hon. S.G. Wade.

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