Dr WOODRUFF - Treasurer, you're saying that Cabinet was given Treasury advice and you can't release that. Can I ask you, through you to the Treasurer, did the Treasurer provide you.
Mr FERGUSON - I am the Treasurer.
Dr WOODRUFF - I beg your pardon. Through you, minister. Mr Ferrall, did you provide the Treasurer with any advice on the stadium.
Mr FERGUSON - First of all, I will take the questions. If I need extra support of advice from the officials who are at the table, I will invite them to do so, but also respect their positions. I will be sensitive and respectful to that; but I refer you to my answers that I provided to Dr Broad earlier.
It is a well-established and important principle that, for Cabinet consideration of important matters to be effective and for it to be workable, Cabinet needs to be able to receive advice. The Cabinet provisions enable frank and fearless advice by the authors of advice to be provided. That is the key principle, and the reason that perhaps, at times, we can do a better job of explaining why we have Cabinet-in-confidence advice. That is why I never speak about Cabinet deliberations.
Dr WOODRUFF - You are misrepresenting my question. I did not ask what the advice was. I asked you, through you to Mr Ferrall, whether he provided you with advice as Treasurer.
Mr FERGUSON - I have to refer you to my same answer. You are able to ask the same question in different ways but I will always give the same consistent, honest answer.
Dr WOODRUFF - It is unfortunate that you have started off this section of Estimates by being so dishonest with Tasmanians about what is going on.
Mr FERGUSON - That is unfair and I reject that.
Dr WOODRUFF - Let me finish. This is the largest infrastructure project in our state's history; millions of dollars. The majority of Tasmanians are concerned that we have signed a dud deal and we want to find out what advice was given by Treasury to you as Treasurer; whether there was advice and what it was, about this deal. Through you, Treasurer, can I please get an answer from the head of Treasury.
Mr FERGUSON - I am going to respect -
Dr WOODRUFF - You are going to run cover on yourself.
Mr FERGUSON - my team in Treasury and I do not like them being talked about or talked over or misrepresented
Dr WOODRUFF - They are not being talked over, because they haven't opened their mouth yet.
CHAIR - Dr Woodruff, can you let the minister answer please.
Mr FERGUSON - I am happy to answer. You may be aware this process is for me to give account for the Budget, and I am happy to do so.
Dr WOODRUFF - Why are they sitting at the table?
Mr FERGUSON - When I need extra support, information or detail then I am able to use the services of our department. But this is my accountability to the House of Assembly process, and I will do my best to answer with as much detail as I am able to.
Dr WOODRUFF - You want to make sure they don't say something that puts you in a politically uncomfortable position.
Mr FERGUSON - Okay, thanks for that.
Dr WOODRUFF - Treasurer, given that the AFL has squeezed over a $1 billion stadium out of us in order to get a 12-year deal, one that they are allowed, at their own discretion, to pull the plug on after 12 years, what are they going to squeeze out of us in 12 years' time if you were Treasurer, to keep it going?
Mr FERGUSON - First of all, I think it's great that the Premier has been able to negotiate something that former premiers and sports ministers have been dreaming about. We've actually secured a licence for Tasmania -
Dr WOODRUFF - You're kidding, aren't you? A stadium that's going to cost $1.5 billion with everything else?
CHAIR - Dr Woodruff, please let the minister answer.
Mr FERGUSON - You should welcome good news. It's a good thing. The terms of the agreement have been negotiated by the Premier and his team and the Department of State Growth on no doubt quality advice and de-risking contracts is something that occurs within government routinely. I am not going to speak across another portfolio but I am doing my best to nonetheless answer your questions to the extent I can as Treasurer.
It is important to note that the AFL have made it clear that this is a licence for the long term, well beyond 12 years, and the contract in holding parties accountable for the success of the team is clearly what those clauses are aimed to do so that there is maximum energy and effort by all Tasmanians to ensure that the team is not only established but is successful and sustainable long term and 12 years is a long running start in order to achieve sustainability and greater corporate support. Then as you approach the concluding years of the existing deed you start to look to the next one.
Dr WOODRUFF - That's not true and you are being dishonest with Tasmanians
Mr FERGUSON - It is true and I reject that.
Dr WOODRUFF - Well, you can reject it when I finish my question but you're being dishonest with Tasmanians when you say that the AFL won't be able to walk away after 12 years. The fact is that you've signed a terrible deal and they've got us over a barrel. In 12 years' time when we're up to our neck in debt and we will need every opportunity we can to keep the AFL here, what else are they going to blackmail us for to stay on for another 12 years?
Mr FERGUSON - I reject the assertion. We can spend all afternoon and I could be calling you dishonest. I won't do that, I don't need to do that but I just reject the characterisation. It's unfair and untrue.
I have answered the question in relation to the way in which the establishment of a major AFL team for Tasmania will be working. The accountability has been provided and members have been able to even get an insight into the contracting arrangements which would allow you to ask these questions. Many times the Government engages in contracts with counterparties which contain provisions that deal with what would happen as we approach the end of the first or the current agreement and that is a reasonable position for the state to take.
The alternative, it would seem to me, would be an evergreen contract where the state is always on the hook for $12 million, which I would have hoped that the shadow treasurer and the official Opposition and the crossbench, would have taken the view that we would want to see over time a greater input to the team to commercial sponsorship so that it is sustainable from a range of income sources, but that will be for others to explain.
Dr WOODRUFF - For the record, if we spent $12 million a year for the next 100 years, it would still be less than the debt you are putting us into. It will be over $1.5 billion and by 2026-27 you have forecast a more than $5 billion debt, not including the stadium. You are the Treasurer who is putting Tasmania into enormous debt and the AFL gets to walk away if they want after 12 years, leaving us with no games to make any money. Do you really think that's a good deal?
Mr FERGUSON - The contracting I have described in detail to the extent that I have the expertise to speak about individual clauses and I have done that. I'm surprised at your comments, Dr Woodruff, because it sounds like you're proposing that we would be on the hook not just for the debt and borrowing servicing but also for an evergreen, perpetual $12 million a year team support payment. That surprises me. I'm more than comfortable and look forward to discussing our borrowings because I know that members will want to undermine and rubbish our infrastructure program, our COVID 19 support and the way in which we're supporting our business community. I look forward to addressing those questions and our ability as a state to service our borrowings.
Dr WOODRUFF - Treasurer, the stadium and the associated costs and the team are likely to be in the order of $1.5 billion that we know of at the moment. That is equivalent to something like 18 per cent of the current state Budget. It is about half of the Health budget. Based on the 2026-27 debt projections, it will add more than 20 per cent to our state debt at that point. Do you think this is the high bar of fiscal responsibility?
Mr FERGUSON - I will certainly look forward to having a further look at the numbers that you have placed on the record. You have clearly co-mingled operational expenditure with capital expenditure. I suspect that you have co-mingled date ranges as well.
What we are doing is carefully managing, not only our operating expenditure and revenues but also our capital program. Having a strong capital program is important for a range of reasons. It is not only about jobs during construction, it is about the capital assets, the infrastructure that will be enjoyed by generations. That is what capital allows you to do.
We have been dealing in many areas across government with under-investment in past decades. We have been very open about the fact that we intend to borrow to build. We have been clear about that since 2019. Appropriate decisions around investing in infrastructure is classically described as good debt. Good debt is when you have borrowed for something that you get to keep as opposed to borrowing for recurrent expenditure on the credit card.
I am happy to be challenged on this and will continue to respond as best I can if you have any particular examples or concerns. With regard to the stadium, together with the team, we want Tasmanians to enjoy and be proud of being Tasmanians and to enjoy their football, including being able to see nation-class teams playing here in Tasmania and for our team to be able to represent Tasmania in the national competition so that the competition can genuinely be Australian for the first time, including all of its states.
Dr WOODRUFF - Treasurer, I don't know if you know this but yesterday the Premier said that managing the state Budget was like managing his potato farm budget.
Mr FERGUSON - Okay. I am sure you are faithfully representing his comments.
Dr WOODRUFF - I thought that was something cooked up by the Government media office and was meant to be a ha ha moment, but here you are telling us that when we're generating something like a $1.5 billion debt for a stadium you said we get to keep it. Actually, we don't get to keep it because the AFL can walk away after 12 years. That means it's not a football stadium, it's a white elephant sitting in the middle of the most beautiful part of Hobart, costing us a fortune to pay off in debt for years. We don't get to keep the stadium if the AFL don't want us to after 12 years.
Mr FERGUSON - I think you've just answered my own interjection. It sounds like you've misrepresented me and I suspect you've misrepresented the Premier's intentions as well. Clearly I am happy to stand by my comments. When you build an asset that's owned by the state it's intended that it be with us for generations, decades and years into the future to support the activities that will occur there. Like so many things in life, you could argue that health reform funding that might provide extra support to the health system which is on a limited number of years in advance, you might have argued that we don't end up with a white elephant in a hospital and I haven't heard you make that case.
Dr WOODRUFF - I wouldn't make that case, and if only we -
CHAIR - Order, Dr Woodruff.
Mr FERGUSON - You are playing politics. I suspect you may be being a bit unfair to the Premier in your snide remarks about stud farming. I'd just invite perhaps a more reasonable point of view being put forward.
Dr WOODRUFF - Treasurer, you don't get to keep it if the AFL don't want it. Would that we were here today talking about a hospital at that place. The idea that a hospital in 12 years' time could be a white elephant is a nonsense. It might need to be refurbished but we have a realistic prospect of having a prime place in the middle of Hobart dominated entirely by a stadium that may have nobody playing football because the AFL have walked away because it doesn't generate enough money for their income stream. I can't believe that Treasury didn't provide some deliberative advice to you about this. Can we please hear from Mr Ferrall whether there was deliberative information, not advice, provided to you? You would understand the difference. It's not telling you what they think, it's just providing you with detailed information about the amount of money for a stadium.
Mr FERGUSON - I think you already know the answers to some of those questions. I'm not going to add to my earlier answers or the answers I've given in parliament. I think you're aware that a range of advice is in the time frame or has been in the time line. A range of documents have been provided to parliament and where documents haven't been provided that has been explained.
I'm not going to entertain it further because I don't feel it would be appropriate for me to do that, but I'm happy to continue to debunk and bust your claim that an asset like a stadium, which is not just for AFL but a range of sporting pursuits and activities including the arts, major concerts and entertainment and conferencing, to describe something like that, which is currently an asset the state doesn't have to be able to attract major headline acts, misses the point. We're reaching for an aspiration that Tasmanians will be able to enjoy an asset that will be with us for a lot longer than 20 years. It is also an enabler for achieving the dream of a Tasmanian AFL team. As I think you've probably been told 100 times by the Premier, if you kill the stadium you kill the dream and kill the team.
Dr WOODRUFF - Well, I'm sorry to hear you being slippery with that information because we haven't asked for deliberative information from Treasury, we've asked for advice. I'm asking you if Treasury has provided you with deliberative information about the stadium.
Mr FERGUSON - Again I reject your assertion; you're being political and unhelpful. I just refer you to my answers.
Dr BROAD - What would Treasury's role be on this project coordination group, or PCG? Is it to control costs, de-risk and manage the contract?
Mr FERRALL - It's actually in the contract. It's called the stadium steering committee and it's chaired by the secretary of the Department of State Growth and the membership includes Department of State Growth, various nominees; Department of Treasury and Finance, one nominee; Department of Premier and Cabinet, one nominee; Macquarie Point Development Corporation, one nominee; Stadiums Tasmania, one nominee; AFL, one nominee; Commonwealth representative, to be confirmed; independent stadium development expert, one nominee. So, the role of it is detailed as well. Do you want me to read it out?
Dr BROAD - What do you see Treasury's role as?
Mr FERRALL - Our role will be to support the role and function of that committee. Where we have a comparative advantage in terms of our specific skill set, we will support the committee.