Budget Reply from Sam

In Parliament - Tuesday, 30 June 2015

Mr DULUK (Davenport) (12:45:36): This budget is a failure. It is a failure on infrastructure, it is a failure for business and it is a failure for job seekers. The Labor government has no plan for job creation, debt reduction, there are no new infrastructure projects nor assistance for local exporters and no plan for South Australia's future in this year's budget. We need solutions. Right now South Australia's economy faces some serious challenges. The South Australian economy has been on the decline for the last 10 to 12 years and ongoing struggles are becoming terminal. Our challenges are not new. They have not crept up on us. They have been presenting themselves for some time now.

Successive Labor governments have failed the people of South Australia. They have failed to put the brake on our state's decline, they have failed to diversify our economy and they have certainly failed to create a positive jobs growth agenda: jobs that would attract people to our state; jobs that would keep our young people here. We continue to suffer from a mass exodus of our best and brightest, who are leaving South Australia in search of greater opportunities. They are moving interstate and overseas for opportunities that do not exist in their own backyard.South Australia is now in the unenviable position of having the highest unemployment rate in the nation at 7.6 per cent. In the period since the Premier was re-elected unemployment has dropped in Queensland, Victoria, New South Wales and it has even fallen in Tasmania, but in South Australia we have bucked that trend. In the last year alone our unemployment rate has jumped from 6.2 per cent to 7.6 per cent and there are grave fears that the worst is yet to come. Jobs at the Port Augusta power plant, Holden and BHP are still to be shed and the full impact of those announcements will not be realised in the jobs stats for another year or so. Add to this the demise of Leigh Creek and our ongoing manufacturing decline, and South Australia is in real trouble.

ABS figures released in June of this year revealed that more than 5,000 mining jobs have disappeared from South Australia; 5,000 jobs lost since the Premier promised to create 5,000 new mining jobs—5,000 jobs lost. This government is not very good at keeping its promises. The Treasurer promised that this state budget would offer some answers, that this budget would be a jobs budget, but his supposed jobs budget is nothing short of a failure.

This year's budget prediction of 1 per cent employment growth for 2015-16 is less than last year's predicted employment growth of 1.25 per cent for the same period. Labor has proven time and time again that it does not have any answers. This Labor government has proven that it cannot keep its promises, promises that included creating 100,000 new jobs by 2016. In reality, just 6,651 jobs have been created since Labor promised 100,000 extra jobs in February 2010.

This government has broken its commitment to create jobs and instead of working to deliver on its promises it has taken a saw to our vocational training centre by axing jobs training programs and announcing funding cuts for non-government training providers. These are cuts that will drive many private training organisations to cease offering courses and reduce the range of vocational training available to South Australians.

Data released by the National Centre for Vocational Education Research in May of this year shows the drastic decline in the number of South Australians in jobs training in 2014, falling from 165,000 to 129,000. The number of students in vocational training has fallen by more than 21 per cent. At a time of soaring unemployment and daily announcements of further job cuts across South Australia, cuts to vocational training could not have come at a worse time for job seekers, job seekers who need training to have a chance of success in this highly competitive jobs market.

This state is at a critical juncture. The decisions we make, the steps we take, will determine whether we look back at this moment as one of lost opportunity or the turning point that delivered enduring prosperity. South Australia can turn around its fortunes; we can reverse the trend of our soaring unemployment, but we need a budget and a government that lowers business costs and lowers them now, a budget that provides incentives for investment in our state. Health, biotech and medical research are industries that could help drive future economic growth. International education, tourism, food and wine are other areas of great potential for South Australia.

I believe in South Australia and its people. South Australia has the foundations to rebuild our economy. We have the ability to transition our state to a new, modern economy. But transitioning the economy is a complex and delicate task. It requires a careful mix of the right short-term and long-term solutions. We need to confront the issues we face today, and also put in place the economic framework that will stand the test of time. But, to achieve success, to turn around our fortunes, we need a bold vision, we need bold decisions and we need bold actions.

Labor has not been bold: Labor has played it safe; Labor has delivered a budget that has no plan for job creation, a budget that has no plan for turning around our failing economy. The state budget again proves that Labor is not up to the challenge. It proves that the Premier and Treasurer cannot, will not, make the tough decisions. Our economy has flatlined. South Australians are paying more and getting less. They are paying more taxes, more for water, more for electricity and further increases to the emergency services levy this year, after a massive hit last year.

This budget fails to deliver for South Australians, it fails to provide any real cost of living relief to households, and it fails to deliver a plan for our future. Small business is the heartbeat of this state's economy, but our small business sector is struggling. It is struggling because of bureaucratic red tape and government apathy.

The South Australian business sector needs a budget that drives competitiveness, lowers costs and incentivises investment, and they need that now. The changes to stamp duty announced in this budget will be welcome relief when they are eventually phased in, but they fail to deliver the urgent impact our small business sector is craving, and they fail to deliver the significant impact the small business sector desperately needs.

The fiscal impact of the stamp duty changes will not be delivered for up to three years, and it is worth reminding members that these same changes were promised by the Labor government in the 2005-06 budget, changes promised by former Labor treasurer, Kevin Foley, until he changed his mind. The small business sector in South Australia needs a government that is pro small business. It needs a government that makes it easy to do business in this state by removing red tape, a government that gets out of the way of business so that business can thrive.

Payroll tax is a huge impediment on growth. It is a tax on jobs, jobs that this state desperately needs. It is a tax on jobs at a time when we have Australia's worst unemployment record, and a record that is sadly trending upwards. Removing payroll tax across the board would have an absolute and immediate positive impact on business. It would free up capital for investment to expand their workforce, capital to invest in their business.

But simplifying taxes is not enough. We must also work with the business sector to help it grow. We need to help South Australian businesses, exporters and producers to find new markets and new opportunities. We need to attract more business, offering incentives and making it easy for businesses to set up shop in our state. We need to increase the number of new businesses, new industries and people moving into South Australia, and we need to do more to help start-ups. There are some amazing entrepreneurial spirits in South Australia, and we must help them unlock their full potential.

Programs such as the South Australian Young Entrepreneur Scheme can play an important role in fostering entrepreneurship and helping enterprising business people, but suitable and sufficient support is crucial for this to occur. I am concerned because support for programs aimed at helping the business sector have fallen in recent times. Since the 2011-12 state budget, funding for the main state government program aimed at boosting exports has been cut by this government from $30 million to $19 million, at a time when unemployment is rising and at a time when export and investment are crucial to this state and its future.

The Labor government has slashed funding to the main state government program aimed at boosting exports. Support for this program has fallen, despite the fact that the current government is nowhere near its target of $18 billion in annual exports by 2017. In fact, during the last 12 months South Australian exports have dropped and merchandise exports have plummeted from 7.1 per cent to $14 billion per annum.

Small states do not become prosperous by selling their produce to themselves. Instead of entering or expanding further into international markets, Labor's lack of adequate assistance means that many businesses have had to turn their focus to survival—not export growth. Attracting inward investment is equally important to promoting exports. The government's $15 million budget commitment to fund and secure new investment in South Australia is a welcome step, but it does not go far enough to address our needs. The Treasurer is picking winners through the provision of targeted assistance rather than providing a vehicle to attract sustainable new business.

It is time to think outside the box. To be bold, we should look at new programs and new initiatives to help kickstart our lagging economy—programs such as the Immigrant Investor Program in the United States, also known as EB-5. The US Congress created that program to attract investors and entrepreneurs from around the globe to attract investment that will create jobs in America. EB-5 makes a limited number of visas available annually to immigrant investors who invest in commercial enterprises and there must be an enterprise that creates at least 10 US jobs in a high unemployment or rural area.

The concept of an EB-5-style program should be explored here in South Australia with potential benefits for many. It provides an alternative to the Treasurer's 'picking winners' strategy. The challenges confronting South Australia are not unique to our state. There are many cities that have also experienced the sharp decline of our key sectors of the economy, surging unemployment, increasing costs and population decline. We can look to these places for ideas—ideas of what has worked and warnings of what has not worked as they transition to a new, modern economy.

The revival of Pittsburgh, Pennsylvania, has lessons for all of us. The City of Bridges—as it is known—has built a bridge from its steel past to become a diverse 21st century economy. Pittsburgh long symbolised the industrial era in the US. When the US steel industry collapsed in the 1980s under foreign competition, Pittsburgh unemployment surged to 17 per cent and its population declined. Yet Pittsburgh found a way forward. The manufacturing sector diversified into advanced manufacturing, health care and education picked up the slack, and entrepreneurs turned the city into a centre for robotics.

It took a coordinated effort by the city's political, economic and non-profit leaders to link education and innovation, nurture new business and turn Pittsburgh into one of America's most liveable cities. In 2009, the city was selected to host the annual G20 Summit and was hailed by the group as 'a model for economic, environmental and quality-of-life transformation'. That transformation did not happen overnight, and it did not happen on the back of safe, unimaginative political leaders.

The city's transformation took vision, it required bold decisions and involved good, long-term planning. Most importantly, it was driven by government coinvestment. The waterfront, once lined with factories, was given over to parks; the city fostered its green technology sector; and the G20 Summit was hosted in the world's first and largest LEED-certified convention centre. Government involvement has been in the right places and to the right extent in Pennsylvania. Entrepreneurship has been fostered, innovational work and a state-aided seed fund has played a vital role in Pittsburgh's technology economy. It provides capital investment, business and technical expertise and access to a network of innovative expert resources. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 12:58 to 14:00.

Adjourned debate on second reading (resumed on motion).

Mr DULUK (Davenport) (15:57:27): Innovation works provide support to firms in their earliest stages of development. Support for new business, investment in business. Following the lead of Pittsburgh could have significant benefits for all South Australians but the government must take the lead—it must engage with the private sector and it must develop a long-term blueprint for job growth and job creation.

The Labor government unfortunately does not have a plan. There is no plan for job creation and no plan for major new infrastructure projects. The Treasurer has put a freeze on government infrastructure spending, a freeze that will hurt the construction sector and do little to encourage investment in South Australia. This budget does not include a major new infrastructure project despite the massive cash injection from the Motor Accident Commission sale.

None of the major infrastructure projects that were listed as short-term priorities in the 2013 Transport Plan have been funded in this year's state budget. In fact, capital investment has declined, with the Treasurer announcing a capital investment budget of $1.3 billion per annum for 2015-16 when the past five-year average has been $1.9 billion per year.

Road infrastructure, public transport and a dedicated transport masterplan for the Mitcham Hills have long been on the agenda for local residents. Even the Department of Planning, Transport and Infrastructure has designed a road management plan, but the Treasurer has ignored the Mitcham Hills residents in this budget and he has ignored his department by not providing any funding. This budget has failed to fund the upgrade of the Blackwood roundabout, the worst roundabout in Adelaide as rated by the RAA.

The Melbourne-Adelaide rail freight corridor carries approximately five million tonnes of freight annually. In a high-use/rail-use modelling scenario traffic on the line will increase 4.6 times by 2039. This is an increase from about five million tonnes of freight annually to approximately 22 million tonnes. Rail freight at that volume cannot pass through the Hills. A long-term plan must be formulated. The Premier himself stated in the Integrated Transport and Land Use Plan, released in October 2013, that:

…as we cast an eye toward our State's 200 th anniversary in 2036, it is now our time to lead the way and set our plan for continued prosperity.

I ask the Premier: where is that plan? The consequence is that the people of South Australia suffer and the residents in my electorate of Davenport suffer when there is no plan.

The Melbourne-Adelaide rail freight corridor runs through the Mitcham Hills area, cutting Main Road at Glenalta and Belair. Taken together with Cross Road in Hawthorn, 63,000 vehicles cross the tracks daily. Lengthy traffic delays are experienced at all crossings. These delays frustrate commuters trapped in peak hour bottlenecks. The cost of traffic congestion is staggering both in terms of lost productivity and the impact it has on quality of life. It means people spend less time at home with their family, getting up earlier to beat peak hour and arriving home later from work because they are caught in traffic.

Investing in improved transportation infrastructure would reduce the costs of congestion by boosting productivity through the time people save. Rather than being stuck in traffic, they can spend more time with their families, more time having fun and more time generating additional income—money they could spend in retail, invest or use to improve standards of living, more money that will contribute to the GSP and our tax base.

The solution is simple. Invest in infrastructure and invest in the state's transportation needs. The Labor government has ignored the Mitcham Hills public transport needs and it has ignored the needs of Hills residents. The government has failed to deliver adequate park-and-ride facilities for the commuters of Blackwood, Eden Hills, Bellevue Heights and Flagstaff Hill. Park-and-ride is vital to attracting more people to use our train and bus services. People will not take the train if they cannot find a car park at the station. Public transport is a vital part of reducing congestion, but it must be accessible and an attractive alternative for commuters.

It is not just infrastructure and transport that have missed out in the state budget. Our hospitals have also been forgotten. South Australian hospitals are under immense stress with Adelaide's major hospital departments regularly operating above capacity and classified as 'code white'. Patients in emergency departments are subjected to huge waiting times as the system struggles to cope with the level of demand. Ambulance ramping outside the Flinders Medical Centre last month is another symptom of an ailing hospital system.

South Australia's major hospitals are already amongst the worst performing in the nation when it comes to treating patients in their emergency departments within the required period of time, and the government's closure of the Repatriation General Hospital is only going to make the situation worse, taking hundreds of hospital beds out of our public system.

The sale of the Repat is another attempt by this government to plug holes in its budget, another example of the inability of this government to manage the state's economy. It has sold ForestrySA, the Lotteries Commission and Gillman. Hampstead Hospital and the Repat have been added to the list, and now the Treasurer has announced the government is planning on selling the MAC over the next 12 months. Even with the sale of these assets, the government is still only estimating a $43 million surplus for 2015-16 and even a paltry $43 million surplus could be as elusive to achieve as job creation has been for this government given its recent record.

Looking at previous state budgets, all handed down by Labor governments, by now this state should be running a substantial surplus in the coming financial year. Alas, we have a trivial one, once again announced by this Treasurer. This state budget is more of the same from Labor, it is more broken promises, more debt, higher taxes and a higher emergency services levy. South Australians will be stuck with prolific red tape, unacceptable unemployment and outrageous utility charges.

Labor has remained gridlocked, unable to develop a plan for our future, unable to implement a plan for job creation, unable to address South Australia's urgent need for growth. We need a state budget that invests in our infrastructure, our business, our people, our future. If we continue to make the same decisions, we will continue to get the same results. It is time for political courage, for risk-taking. South Australia needs vision, we need answers. Unfortunately, this Labor government simply has none.