The Hon. R.I. LUCAS (16:47): I rise to support the second reading of the Supply Bill debate and, perhaps unsurprisingly, will devote my brief time this afternoon to an important part of public expenditure within the state of South Australia at the moment, an increasingly important part—the amount of money being spent on the Adelaide Oval project redevelopment. Mr President, as you are well aware, at the very least $535 million of taxpayers’ money is in the process of being expended on the project and, as I intend to outline, I believe that certainly significantly more millions of dollars of taxpayers’ money will be expended on it.
I want to take members quickly back through the history of the project. It was announced by the government, by Mr Foley and Mr Rann, on 2 December last year. We all remember the men in suits walking across Adelaide Oval, patting each other on the back and talking about the historic agreement that had brought together the project for a cost of $450 million.
The PRESIDENT: I don’t think there were any public servants amongst them.
The Hon. R.I. LUCAS: There was a significant number of public servants there and a significant number of people being paid out of the Supply Bill and the Appropriation Bill debates, Mr President, which is of course the issue of concern to you, I am sure.
Just prior to that, we are now aware that in November last year Mr Whicker, who is currently being paid by the taxpayers—sorry, I should not say that; he is employed in an authority that is costing $5 million of taxpayers’ money, the Stadium Management Authority. The South Australian National Football League evidently wrote to the AFL (because the AFL was negotiating the deal with Mr Rann and Mr Foley) indicating that it did not believe that this project could be delivered for the $450 million the government was going to announce on 2 December. This was on 17 November last year, so it was some two to three weeks prior to that particular announcement.
We now know that the night before, 1 December, that Mr Whicker and others were brought together with the senior ministers of cabinet, Mr Rann and Mr Foley, and indicated the nature of the deal that would be negotiated with Mr Andrew Demetriou from the AFL and others and that the development would be for $450 million. What we were promised, with the taxpayers’ money, was the Adelaide Oval Project, which would be fully FIFA compliant for the prospect of World Cup games in 2018 or 2022.
We were promised a bridge over the River Torrens linking the Convention Centre precinct with the Adelaide Oval precinct. We were promised a roof on the Memorial Drive Tennis Centre so that that facility could be used not only for upgraded tennis facilities but obviously also as a replacement for ‘the shed’, which is the colloquial expression for the entertainment facility for Adelaide Crows fans currently down at the AAMI Stadium and also, although I am sure a much smaller venue would have been required, for the Port Power fans, should they wish to celebrate the occasional Power victory at Adelaide Oval.
The PRESIDENT: The honourable member should keep to the Supply Bill.
The Hon. R.I. LUCAS: Thank you, Mr President. The fourth aspect was of course car parking. The nature of the agreement that had been struck with football and cricket and the government was that a term sheet had been negotiated, in particular for football, because cricket was happy as a pig in mud because it had a significant debt that was going to be picked up by the taxpayers of South Australia. The term sheet laid down the minimum requirements from football from this $450 million taxpayer funded project. There has been a lot of publicity about all the aspects of that term sheet and I do not intend to take up the council’s time to go through all of those, but there were three or four key aspects that relate to the expenditure of taxpayers’ money and the project.
Firstly, there is a minimum requirement for 3,800 car parks to be provided within the precinct. This precinct is bounded by Montefiore Road, War Memorial Drive, King William Road and Pennington Terrace. We now know that there are 2,100 car parks supposedly currently available within that precinct and that the proposal advocates an underground car park for another 800 car parks, but that the term sheet requirement for 3,800 is still 900 short, even if someone can be found to fund the underground car park. That was a minimum requirement in terms of the project. We know that the roof on the tennis centre is now no longer to be part of the project, and I will refer to that later on in my contribution.
That is what was promised in December 2009: a fully FIFA compliant stadium, 3,800 car parks, the roof on the tennis centre and a bridge across the Torrens. We now know that prior to the election, on 19 February, treasurer Foley met with Mr Whicker and was briefed about a blowout in costs on the Adelaide Oval project. We now know that three days later, on 22 February, the Stadium Management Authority—Mr Whicker and Mr McLachlan—met with the government steering committee to look at the Adelaide Oval redevelopment.
That steering committee is chaired by the government’s consultant of choice, Mr Bruce Carter, who has been involved in a number of Rann government projects, paid for out of the taxpayers’ purse. He chairs that committee which consists of other public servants such as Mr Rod Hook; Mr Kevin Cantley, the head of SAFA and one of Mr Foley’s senior officers within Treasury; Ms Jenny Hughes from the Office for Recreation and Sport; another officer from SAFA, Ms Alison Back; and Mr Manuel Delgado who is a senior officer within the Department for Transport, Energy and Infrastructure (DTEI).
That meeting took place on 22 February and those senior government representatives were again advised of the blowout in the costs of the Adelaide Oval project. The minutes of that meeting make it quite clear that Mr Foley had met with Mr Whicker prior to that particular meeting and that he had been advised of a blowout in the Adelaide Oval project costs.
Why is that important? It is important because during the election campaign, in that period leading up to 20 March 2010, the Treasurer and the government on a number of occasions denied that they had been provided with any advice, from the Stadium Management Authority or anyone else, that there had been a blowout of the $450 million cost of the Adelaide Oval redevelopment.
Treasurer Foley went so far as to authorise a statement which said that he swore on his grandmother’s soul that he had not received any advice in relation to a blowout on the project costs. I am indeed aware of that because, on 8 March, I issued a press release which claimed that information provided to me at that time from sources with an intimate knowledge of the workings of the Stadium Management Authority had told me that at that stage there had been a $100 million blowout in the costs of the Adelaide Oval.
I was then personally subjected to abuse and ridicule from the Treasurer of the state, which is not unusual. As I said, he then issued a statement saying that he swore on his grandmother’s soul that he had not received any advice along those lines. The strenuous nature of the criticism, the denial and, as I said, going so far as swearing on his grandmother’s soul that he had not received any advice, managed to convince significant sections of the media that this claim from the opposition was unable to be proven, came during the election period.
We also know that during that period, just five days prior to that, on 3 March, Mr Foley met with the Stadium Management Authority about the Adelaide Oval redevelopment. Mr Foley says that he said at the start of the meeting that there was to be no discussion in relation to the costs of the Adelaide Oval redevelopment. Mr Whicker has no recollection of that. He indicated that he could not recall that being mentioned, but he did confirm that there had been no discussion at that particular meeting about the costs of the Adelaide Oval redevelopment—so there we are.
On 8 March, only 17 days after a critical meeting when he was told about a blowout and only about 14 days after his senior advisers had been told about a blowout in the Adelaide Oval costs, the opposition, in the middle of a white hot election campaign and one of the key issues, claims there has been a blowout. One can only assume that the Treasurer’s defence is that he had forgotten about the meeting, only 17 days beforehand at that stage. If he had not forgotten, he was not telling the truth when he issued those denials and he swore on his grandmother’s soul that he had not received any advice. All through the election campaign we had denials from the government and the Treasurer in particular.
Then, on 30 March, after the election, we are told that the Treasurer received a verbal update on escalating costs of the Adelaide Oval redevelopment. We know that on 1 April—April Fools’ Day—the Treasurer gets written Treasury advice on escalating costs and we understand that that particular advice was noted on 7 April. I am not sure why it takes the Treasurer six days to note advice on a critical issue like this, but that is the advice that he has provided to the parliament.
We are told that on 13 April the Treasurer met with the Stadium Management Authority and the steering committee, and one can only assume that there was some discussion about cost blowouts at that particular meeting. We know that on 29 April the Stadium Management Authority provided a cost estimate to the government steering committee about the escalating costs. We now know that that particular estimate was not for $469 million, which was the basis of the 19 February discussion with the Treasurer, but for $701 million.
The $701 million includes estimates for not all but most of the things that were promised on 2 December: that is, it includes some parts of FIFA compliance but not all because it does not include estimates of costs for a temporary northern stand and a range of other components that are required for FIFA compliance.
We know that it includes some estimate for the cost of a roof on the tennis centre and it includes an estimate for some car parking—800 underground car parks—but still does not meet the 3,800 car park number that is required for the precinct, and it includes some estimate of costs for the bridge over the River Torrens.
That particular number is $701 million, and I will come back to that later on in my contribution, but that was provided to the steering committee on 29 April. On 12 May and days afterwards, there were questions to the Treasurer in the House of Assembly about the issue, and on 18 May the Treasurer gets written Treasury advice about the escalating costs of the Adelaide Oval redevelopment. We are told that there are attachments to that particular written advice.
We know that, in that written advice, there are copies of the minutes of the critical meeting of 22 February which indicate quite clearly that the Treasurer had been briefed by Mr Whicker on 19 February and had been told about the escalating costs and the blowout in costs of the Adelaide Oval redevelopment.
On 25 May, I think it was, cabinet agreed to put in an extra $85 million of taxpayers’ money over and above the $450 million. Then, in the following days, there was a series of questions asked of Mr Foley in the House of Assembly where again he denied any knowledge of the blowout prior to the election which, of course, subsequently, Mr Foley has had to indicate was wrong and was the substance of a recent apology to the House of Assembly.
We now know that, on 25 or possibly 26 May, Mr Whicker was very concerned that he and the SANFL were being fingered by the media and being accused of having misled the government in relation to a blowout in costs. We know that a telephone call with a very strong message from Mr Whicker went to Mr Cantley (and possibly also to Mr Carter on that day) indicating very strongly that he had told Mr Foley on 19 February (and he had told the government steering committee on 22 February) that they—that is, Mr Whicker and the SANFL and football—were not going to cop an accusation that said that they had not told the government and that they had misled the government in relation to the blowout in costs issue.
Now, that is important because soon after that, early in the following week, Mr Foley went public and indicated that he had misled the house, and clearly also had misled the public, when he had indicated that he had not been told about a blowout in costs before the election. In late May, Mr Whicker tells Mr Kevin Cantley in Treasury and possibly also Mr Carter that he was not going to cop accusations of having misled the government, that he had told Foley and he had told the government steering committee before the election.
The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The honourable member should refer to the Treasurer as ‘the Treasurer’ or ‘the Hon. Mr Foley’.
The Hon. R.I. LUCAS: Treasurer Foley had also indicated, as I said, that he had told the government steering committee on 22 February—both prior to the election. That was late May, and soon after that, on 2 June, Mr Foley came out and admitted it. I am sure that the Hon. Mr Foley will indicate that it was coincidental that on the very same day the Liberal Party was being briefed by Mr Whicker and the SMA, and there was a clear prospect that he would indicate to the Liberal Party representatives that he had advised the government prior to the election. Of course, I think it was on that morning that Mr McLachlan, who is the chairman of the SMA, had also indicated that he had been telling the government steering committee and the government for some time that there had been a blowout in the costs of the project.
That is a potted summary of the project and in particular the saga of the blowout in costs and when the Treasurer in particular had been told about the blowout in costs. It has been the substance of debate on other issues, and I am sure it will be the substance of debate on other issues in this council in relation to the accusation that the Treasurer has not told the truth to the parliament and to the people of South Australia. I do not intend to spend much of my time in the Supply Bill debate on that. What I am interested in is the blowout in costs and how much the taxpayers of South Australia ultimately are going to have to meet to deliver this project.
The most recent advice, as we understand it, was that minute from the Stadium Management Authority on 29 April which says that the cost of the project is $701 million. As I said, the government is now going to take out of that the roof on the tennis centre which will reduce the costs somewhat. It is now saying that the $40 million for the bridge will still be paid for by taxpayers but it will not be part of the Adelaide Oval project redevelopment, even though originally it was promised that it was going to be part of the project. So the taxpayers will pay for that out of a project redevelopment of the convention centre and that precinct south of the Torrens. One can add that $40 million or so to the $535 million that the government has already announced, so we are talking about $575 million or so at the very least from taxpayers’ funds for those components.
Then there remains the issue of the car parking, and that is at a stalemate at the moment. If the underground car park is to proceed and if the government continues with its current position—and that can always change as we have seen—then the taxpayers will not fund all of that or indeed part of it, and that is about a $40 million cost for 800 car parks. At the moment there is no private sector funder for that and there is no city council agreement to fund it, but there are discussions to try to find somebody to fund that particular aspect.
We then have the third aspect of the remaining 900 car parks. Let’s assume that either the council or the private sector will fund the underground car park, there are still meant to be another 900 car parks. The term sheet that I referred to earlier requires that to be within the precinct. At this stage it appears that it will not be, and therefore the term sheet from football in particular will not be complied with. The Stadium Management Authority and the government are looking at providing maybe 900 car parks south of the Torrens as part of the convention centre development. Again, we do not know who is going to pay for that particular 900 space car park.
That is potentially some tens of millions of dollars. It depends, of course, on whether it is underground, underground and above-ground, or completely above-ground, or indeed whether it is open air on a slab of dirt. If it is on a slab of dirt, then someone has to purchase that slab of dirt, even if it is from another government department and there is an additional cost from taxpayers to be charged to this particular project. So there is potentially an additional taxpayer cost for the 900 car parks that are being currently contemplated on the south of the Torrens.
I referred to the issue of FIFA compliance earlier and I mentioned that the current proposal, even at $701 million, is not FIFA compliant. We are told it includes costs for laser levelling the oval, which is a requirement for soccer and FIFA, but it does not include any costs for permanent or temporary grandstand seating at the northern end of the Adelaide Oval. The only way that that would be able to be achieved would be for temporary grandstands to be erected at the northern end of Adelaide Oval and would have to be on the oval itself because those of us who are familiar with the Adelaide Oval will know that, if you are going to construct a temporary stand at the northern end—given the scoreboard, the trees, the mound and the terracing—the temporary grandstand will have to be on the oval itself at the northern end. The costs of that are not included.
We also know from Mr Whicker’s position and advice that they are still not aware of all the FIFA requirements and, therefore, have not been able to cost those. We are not aware who is taking responsibility for that, and that is an issue that the taxpayers will have to fund, whether that be a combination of federal government funding and state government funding, if we are successful with the bid for the World Cup in either 2018 or 2022.
The remaining aspect that is possibly not included in the costs—and this issue will need to be clarified—is whether the estimate of $701 million for the delivery of the project as promised in December includes the $85 million for paying off SACA’s debt and the $5 million for the cost of the Stadium Management Authority or whether that $90 million will have to be added to that $701 million estimate. If it is, that takes the number to $791 million in terms of delivering the project promised in December of last year which was promised to be delivered for $450 million. As I said, even then that figure of $790 million does not meet all of the promises from December 2009.
The other point I would make in relation to this is that there has been some reference in sections of the media that these are the extras that are being added to the Adelaide Oval project or, if you wanted bells and whistles to be added to the project, then you could do certain things. What I want to make clear is that these are not extras being added to the Adelaide Oval project: these were the aspects of the project promised by the government in December 2009.
They have to be costed into the project, so it is not an issue of bells and whistles nor is it an issue of extras: it is an issue of what was promised by the government in December 2009 and what the costs of that will be. It may well be that the taxpayers and the government now say, ‘Okay, we promised this but now we can’t afford it and we are going to cut it back.’ That is obviously a decision that the government can take as it looks at its appropriation and supply bills and budget priorities. It can make a judgment as to how it is going to fund the projects it wants. If they want to throw out of a supply bill or an appropriation bill an extra $85 million into this project, and if they want to spend an extra $40 million on the bridge in the Entertainment Centre precinct and spend extra money on SACA debt and extra money on car parking south of the Torrens, then they are decisions that governments can take.
But, in taking those decisions, they have to be held publicly accountable and, if they are breaking promises, breaking commitments or are found to have told untruths or lies to the people of South Australia or to the parliament, then they have to be held to account. That particular issue is not an issue for debate in the Supply Bill, but it will be and has been an issue in another place and possibly will be an issue for debate in this chamber as well.
In concluding my contribution on this debate, we are left with questions still unanswered in relation to the total costs of this project. It is incumbent on the Premier and, more particularly, the Treasurer of South Australia to answer those questions. We know the Treasurer in particular is under considerable pressure at the moment, but that does not excuse the fact that he has to be held responsible.
We know he will be sacked from the project and the project given to another minister in the coming weeks, but nevertheless he is still the minister responsible for the mess we are in at the moment and he has to be held personally responsible for the costs being incurred on this project. In particular, we need to know whether the final cost for this project will rest at the $535 million, plus the $40 million or so for the bridge (which is $575 million), and then we need to know whether additional taxpayers’ money will go into the car parking option south of the Torrens and whether any additional taxpayers’ money will be going into any other aspects of the project.
I conclude by saying that this saga has turned into a financial scandal. It is one that could and should bring down not only the Treasurer but also the Premier. We know the Treasurer is under pressure, and I would hope that you, Mr President, and other members of caucus, having listened to the details of this saga, will take on board some of these issues and mount pressure on your own Treasurer and Premier and hold them to account in caucus, as indeed you should.