(SA Government) Supply Bill 2015

In Parliament - Tuesday, 5 May 2015

Mr DULUK (Davenport) (12:10:30): Thank you, Deputy Speaker, I know I have not been that long in this house. I also rise to speak to the Supply Bill and, of course, the government has come to this house asking to appropriate $3.29 billion from the Consolidated Account for the Public Service of the state for the financial year ending 2016. I know the Liberal Party will of course support this bill but I wish to make a few brief comments about the government's fiscal performance overall.

The Commonwealth Bank's State of the Statesreport published in January this year ranked South Australia seventh on economic performance out of eight states and territories— that is right, seventh out of eight—and that includes the ACT and the Northern Territory in those eight jurisdictions. Dwelling starts, housing finance and construction work lagged almost behind every jurisdiction. The state economy grew at just 1.3 per cent in the year 2013-14, following a growth of only 0.9 per cent in 2012-13.Our state's unemployment rate is just too high. The participation rate or those looking for work has fallen to 61.8 per cent, indicating that there are many jobseekers out there who are giving up on the hope of finding work, and we are especially seeing this in many of our regional and rural centres, those in traditional manufacturing areas and amongst younger South Australians. The seasonally adjusted unemployment rate remains around 6.9 per cent trending to 7 per cent, which is just unacceptable.

Of course, utilities have become some of the most costly in the world with water prices rising 227 per cent since 2002, power prices some 137 per cent, and gas prices 126 per cent under the same period. We know that households, industry and agriculture are all suffering from these higher costs in utilities, especially water costs where we know that consumers are being price gouged and stymied by this government.

Former Essential Services Commission of South Australia chief executive, Dr Paul Kerin, has come out on the record and said that the government has been price gouging SA Water users for years. To quote Dr Kerin:

The Government and its senior bureaucrats have clearly demonstrated that they have no interest in genuine reform, nor in serving the long-term interests of consumers.

We wonder why our businesses are struggling in South Australia with such high inputs into their businesses.

We know that our state debt is approaching $11 billion. Net debt to revenue is expected to peak at 54 per cent of revenue in 2015. Over the last financial year, the government borrowed an additional $260 million to cover its debt—that is about $712,000 a day spent on interest servicing our state debt. That, of course, is $712,000 a day that this government is not able to invest in schools, hospitals, roads, police stations, which we are seeing closing all across metropolitan Adelaide, and family services. This is the real opportunity cost of our $11 billion of state debt—it is the cost of not being able to invest in those key services of government, those services that have been so stretched and cut back over many years.

It is not just the mounting state debt level that should be a wake-up call to all of us; it is the ongoing state deficit that is of real concern. Our state deficit for 2013-14 was over $1 billion. Our budget position in South Australia is in stark contrast to that of our Victorian neighbours. Today it is expected that the Victorian government will hand down a budget with an expected surplus of $1.2 billion—a Victorian budget surplus being handed down on the back of four years of strong Liberal governance. After 13 years of continuous Labor government surely we should be in a better financial position than we are today. Alas we are not.

Talking about some of the other indicators: consumer and business confidence remains low in South Australia; population growth trails behind that of the Eastern States; and according to the Commonwealth Bank's State of the States report for April this year, just recently released, South Australia once again ranks seventh out of eight in most indicators including economic growth, retail trade and housing investment.

Small business is the backbone of our state economy. It is small businesses that are suffering at the hands of excessive red tape and regulation. We all talk about removing red tape and the inefficiencies that go along with it, but rarely has the government acted on genuinely removing red tape to ease the cost of doing business in South Australia.

The high cost of energy and essential services is one of the many reasons that businesses are shutting up shop and moving their operations interstate. Our inefficient WorkCover scheme has been a major contributor to small business inefficiencies for many years. For the past 13 years this government has mismanaged WorkCover, hurting both employees and employers. I have to say that I do welcome the government's recent announcement to cut the WorkCover rate from 2.75 per cent to 1.95 per cent from 1 July this year. Of course this is a welcome announcement, but one that for many is too late.

State payroll tax is another inefficient state tax that penalises our business operators from employing South Australians in their businesses. If there is ever a tax that is a disincentive to job creation and economic growth, it is payroll tax. I will paraphrase the member for Bright, who was speaking the other day of his uncle's business back in Scotland, and the frustration that the member had in explaining to his uncle that this state and this country levy payroll tax. From what I understand, for some time there was a lack of understanding that a government would impose a tax on employment, yet we do here in South Australia and across the nation.

Business SA has called on the government to lift the payroll tax threshold from $600,000 to $1 million by 2017-18 through annual increases of $100,000, and I for one certainly support Business SA in this case. I urge the government to review our state's payroll tax and thresholds as a means of stimulating our economy. We are at the stage where a serious and mature debate on the GST and our funding arrangement within and from the commonwealth is required. A future state reform process needs to look at the abolition of many of our inefficient state taxes.

Road infrastructure and the investment that goes with it is a key role of any state government. Within my electorate of Davenport, Main Road, Old Belair Road and the Blackwood roundabout have been pieces of road infrastructure long overdue for state government investment.

On 5 March this year, the Department of Planning, Transport and Infrastructure (DPTI) released its Edition 2 of the Road Management Plan (RMP) for Main Road, Belair Road and Shepherds Hill Road at Blackwood. No doubt the residents of Davenport would appreciate the one-page media release that accompanied this fantastic announcement. I highlight that the initial Road Management Plan was released some nine years ago in 2006. In that time no substantial funds have been allocated to this project and, since the release of the 2006 Road Management Plan, DPTI has only delivered the following in their plan: reducing speed limits to 50 km/h; new bicycle lanes and an upgrading of bicycle infrastructure; a new pedestrian crossing at Russell Street; an upgrade to mid-block treatments; and upgrades to the intersections along the corridors, which mainly was the repainting of the lines on the road.

Whilst the above is probably welcomed by some in Davenport, it does not constitute decent road investment in a key corridor (namely, the Blackwood roundabout) which has been identified by the RAA as one of the worst roundabouts in South Australia. Last month AAMI said that Main Road at Blackwood is one of the five most common roads to have an accident on within metropolitan Adelaide. Given these statistics and a nine-year Road Management Plan, I am not sure why the government is failing to invest infrastructure in the Mitcham Hills. I call on the state government to genuinely invest in road infrastructure and join the Liberals' $20 million investment promise.

Today the state Liberal Party will table a petition signed by over 13,000 South Australians concerned about this government's proposed cut to pensioner concessions. Many of the petition's signatures have come from my electorate of Davenport, though not quite the same as those from my colleague the member for Hartley. Seemingly, this government has money to burn when it comes to government advertising, waste and mismanagement, but it cannot find within its means a guarantee to 160,000 South Australian pensioners, who are some of the most vulnerable in our community, that their $190 pensioner council rate concession will not be abolished. South Australia is the highest-taxed jurisdiction in the nation and removing the pensioner concession on council rates would exacerbate the cost of living pressures on a group in our society that can least afford it.

The emergency services levy, along with the pensioner concessions, is another levy and a cost this side of the house has acknowledged and has looked to have removed. This side of the house is really quite appalled by the government's record on the emergency services levy. But, of course, the government is removing the pensioner concession and increasing the ESL rates because it needs to because of its mismanagement, and it needs to find its way to service that debt I was referring to earlier.

The state Liberals have committed to reversing the government's $90 million increase in the emergency services levy. The ESL is no more than a tax on the family home, and the state Liberals have a commitment to restore the remission on the ESL, which would deliver an annual cut of about $168 to a homeowner with a property value of approximately $450,000. This amounts to a $672 tax cut over the life of the government.

Further, I call on the government to reverse its emergency services levy hike, made possible by the recent unexpected increase of $146 million in GST allocation that South Australia will receive as a result of the recent COAG agreement. Immediate relief in ESL charges and pensioner concessions is within the reach of this government, due merely to the recent changes in our GST allocation. Given this, why is the government continuing to inflict financial pain on those families and the most vulnerable in our community?

As I said, job growth in this state continues to fall, and we are seeing high levels of unemployment in the traditional manufacturing sector and rural communities, as well as high youth unemployment. Recent news that JBS Australia, the largest meat processing company in Australia, has stood down hundreds of workers from its facilities in Victoria and South Australia is a huge blow to our regional communities. The high cost of undertaking business in South Australia is hurting our long-term jobs growth and economic viability.

Poor fiscal management of the state has real consequences. Young graduates continue to leave the state in search of work, taking with them energy and ideas that would otherwise be available to this state. In 2013-14, net interstate migration from South Australia was 2,968 persons. Real youth unemployment in my electorate is approximately 14 per cent, and youth unemployment is much higher in the northern and southern areas of metropolitan Adelaide. This government is failing our school leavers. Graduates are completing VET and TAFE qualifications and university degrees with the knowledge that their first post-graduate job may well not be in South Australia.

Payroll tax compliance on apprentice wages has proven to be a disincentive for the employment of apprentices, putting further strain on our vocational education training system. In addition to removal of payroll tax on apprentice wages, the government should also heed the call of Business SA and abolish the requirement for employers to register before they can employ an apprentice or trainee in South Australia.

Mums and dads, families, small business operators and young people all suffer when governments perform badly, especially when the government loses its focus on economic growth. It is easy for us to sit here, comfortable as we are, and pretend that we are doing all we can while a whole generation has to pin its hopes on the meagre opportunities that currently exist in South Australia.

The first purpose of government must always be to support business and its efforts to create jobs and wealth. The dignity of a job cannot be overstated. This government has manifestly failed to support jobs growth in South Australia. In view of the government's record, I must express my reservations before extending the government more funds as part of this bill. I urge the government to continue its focus on job creation in South Australia.