State budget 2020/21 speech

12 November 2020

Mr DULUK (Waite) (17:20): Like other members, I also rise to make a contribution in relation to the 2020-21 budget. In most extraordinary times is the handing down of this state budget, several months later than usual, obviously on the back of a global pandemic. I would like to talk about a few things that are key to my electorate. The elements in the budget around support for the Country Fire Service, local businesses, schools and community groups, road infrastructure and the environment are really big key issues to the people I represent.

It was great to see some $30.5 million in funds for bushfire response and recovery on the back of the Mick Keelty review, which was obviously on the back of a devastating bushfire season last year. I think the additional funding that we are seeing going to the CFS, the SES and, to a certain extent, the MFS is symptomatic of the lack of funding that these services have received for many, many years. There is a lot of catch-up being played and there is a recognition that our volunteers need the best equipment that they can get. In terms of government going out there and investing in CFS infrastructure, new trucks, new fleet and new equipment, there really should be an insistence on the government using South Australian-based suppliers almost primarily, and where it is not possible, to look at interstate suppliers and then finally overseas suppliers for these investments. I think it is so important that we not only support our CFS in terms of the equipment that they need but go to Australian made and South Australian made policies around that to support the local jobs and the people who provide services to the CFS.

As I said, there will be new money for new fire trucks, safety protection, regional staffing enhancements and replacement of fleet and rollover. Really, the automatic vehicle location systems is something that many have been calling for. I remember earlier in the year when I was out at the Eden Hills brigade something that was certainly mentioned to me about their experience in the Cudlee Creek fires was the lack of those systems in their patrols. Mental health support is so important, and, as I said, capability and resourcing, which needs to be done.

On top of this, $16.7 million in federal and state government funding will be invested over five years into the South Australian Disaster Risk Reduction Grants Program, while a further $11.5 million will go to the MFS for new urban appliances. I look forward to further reviewing the budget in terms of these details in the budget estimates program and ensuring that in my electorate the Sturt brigade and the Sturt CFS and SES brigades receive their fair share of funding.

We know that over the last 12 months small businesses have been heavily impacted by this pandemic as a result of decisions made by the government that have limited their ability to trade and to go about their normal business, so it is good to see the state government supporting the small business sector. There is another round of sole trader stimulus grants of up to $10,000 and $3,000 grants for eligible businesses that do not employ staff, including sole traders and partnerships operating from a commercial premise and suffering financial hardship as a result of this pandemic.

It is about striking the right balance. We have no doubt seen a lot of traders and industries doing quite well or relatively well. Certainly, those in the home industry—garden centres, nurseries and large chains, such as Bunnings—have done extraordinarily well, as people have been spending money on their homes because they have not been able to travel or go out. They have been investing in lifestyle and the like. I think that places like Bunnings have also been assisted in a way by a perverse outcome of their being able to trade all through the pandemic, whilst other businesses had restrictions put on them.

It was really good to see a further extension of payroll tax relief. Businesses with revenue greater than $4 million and on the extended JobKeeper will also not have to pay any payroll tax until January 2021, and of course there are payroll exemptions on JobKeeper payments. Larger businesses will also be able to defer payroll if they continue to be impacted by COVID restrictions, and there is no new payroll for any new trainee or apprentice brought on for 12 months.

Of course, this is something that should be a long-lasting policy. It is a perverse notion that a business that seeks to bring on trainees—and it does not matter what they are, whether it is a butcher bringing on a trainee, a business in the motor vehicle industry, a carpenter or a builder—should pay payroll tax on trainee labour.

One really good part of the budget that has not really been talked about and I think is sort of tucked away in the agency papers is support for newsagencies and lottery agencies, which will hopefully see a pay rise for employers and employees. In the budget, there are mooted to be changes to the State Lotteries Act to remove agent commissions from the calculation of net gambling revenue in South Australia. This will allow the level of lottery agents' gross commissions payable by Tabcorp on lottery products sold in South Australia to rise from around 7 per cent to 10.3 per cent.

The taxation mechanism within the act has long prevented any adjustments to agent commissions. This will enable our hardworking lottery agents to receive their first commission rate change in a very long time—a rise of more than 40 per cent—and will bring their commissions in line with other lottery retailers around the country.

I know that in my community, whether it is Alan, who runs the Blackwood newsagency, or Ben, who runs the Mitcham newsagency and obviously sells a whole suite of products, including lottery tickets, this is great news for them. They are small business traders, they are open six or seven days a week and they are a really important part of our communities. You know as well in your community, sir, how important the local newsagency is. Of course, this measure is supported by Tabcorp, the Australian Lottery and Newsagents' Association, the AHA and Clubs SA.

Another thing I am always very supportive of is investment in sporting clubs and community groups. Of course, I am glad to see there is a sport and rec plan with additional funding and $35 million for new community sporting and recreational infrastructure, including an expansion and extension of the existing grassroots football, cricket and netball program to now incorporate all sports, because we know that in our communities people do not just play footy, cricket and netball. They play softball, basketball, volleyball— Soccer, of course, thank you, member for Elizabeth. The Sturt Lions Football Club is one of the biggest clubs in the state and they play all throughout my electorate. I look forward to working with my community clubs in ensuring that they participate in the upcoming grant funding rounds.

School is so important. Education is the key to anyone's future, and we are continuing to see a rollout of the year 7 to high school programs. In my electorate, that is additional funding for Unley High School and Urrbrae Agricultural High School. But one thing that has come to me, especially through my local schools, is sometimes the inability for the department to meet the needs of the school community because of the requirements to tick many boxes.

It is great to see big capital investment in schools and I am very supportive of the early childhood centre $20,000 capital investment project. There is no doubt that all primary schools across the state, including the schools within my community—Eden Hills Primary School, Coromandel Valley Primary School and Bellevue Heights Primary School—are looking for funding for additional projects that I know will create immediate workforce jobs for them to be met.

At this stage, they have had trouble negotiating with the department because they do not tick the necessary boxes. At Eden Hills, they are looking for a replacement of their astroturf. Coromandel Valley is in much need of new landscaping due to the topography of the school, as many of the garden beds are shifting and there are cracks in the concrete. Bellevue Heights Primary School is looking for new air conditioning for the gym.

One of the biggest impacts of COVID on primary schools has been their inability to hold fundraisers this year. Normally, these capital works projects that need investments of $30,000, $40,000 or $50,000—the parents and friends associations or school governing councils have not been able to hold their quiz nights and movie nights, etc., to raise these important funds. It would be fantastic if the department could meet the schools halfway on these matters.

Infrastructure is so important and it is good to see in the budget the north-south corridor will be happening. I think there probably have been one or two missed opportunities in terms of looking at statewide nation-building infrastructure projects. In terms of responding to the budget, Ross Womersley, CEO of SACOSS, said that the budget 'has missed the opportunity to really make some very big investments back into the social housing system', and I could not agree with him more.

Master Builders Association of South Australia's CEO, Ian Markos, said, 'There are no new large-scale construction projects in the budget.' That is quite an interesting comment from Ian. As we know, he is a passionate advocate for his industry. On that note, I would like to thank Ian Markos for his service to the MBA over the past five years. I think they have done a great job representing their industry in the time he has been the CEO. The Master Builders Association represents thousands of South Australians and their industry. I wish Ian all the best in his retirement and look forward to working with Will Frogley, the new CEO of the MBA. COTA CEO, Jane Mussared, said:

Without funding for incentives and training, there is no clear pathway back to work for older people who continue to face ageism in their job search.

I think that is another important statement from the CEO of COTA, as of course South Australia still has some of the highest unemployment in the nation and we need to encourage people at all levels— not just young apprentices and school-leavers but also older South Australians—to continue to be in the workforce.

One issue I constantly talk about and I think is another missed opportunity in this budget, as it could be a fantastic nation-building project, is an alternative freight bypass that will ensure that we do not have big freight trucks going down the South Eastern Freeway. Once again, on Tuesday morning, I think, we saw another accident on the South Eastern Freeway involving a truck and the delay that caused.

The KPMG report that was released by the government earlier this year stated that South Australia has some of the slowest roads in the nation and reported that Adelaide to have the lowest traffic flow speed of all capital cities. Sitting in traffic rather than being productive members of society is what that causes. I believe we need an alternative nonstop corridor diverting road freight from the South Eastern Freeway and away from Cross Road and diverting rail freight out of the Mitcham Hills.

The KPMG report noted that the Melbourne to Adelaide rail corridor is amongst the tightest and steepest corridors, so there is certainly a need to fix that. It has also noted the need for an alternative truck corridor. We know we cannot get B-triples down the South Eastern Freeway. I know that my community does not want B-doubles going down Cross Road

For many, many years, a discussion about an alternative truck bypass through Truro has been mooted. I believe it can be achieved. It would be a perfect time to be part of a state building project that will create many jobs and, not only that, guarantee a safe and reliable truck alternative, which will not only create safety and efficiency for our freight industry but also take away and alleviate so much stress and concern about the constant complexity of the South Eastern Freeway and the constant fight we see between motorists, commuters and the freight industry.

In the budget, it is good to see ongoing funding for existing road projects in my electorate, including the Mitcham Hills corridor, which is so important, and the allocation of that funding. It has been a bit of a slow process, so I look forward to working with the department over the coming months to see further community consultation on that Mitcham Hills road corridor and making those projects shovel ready.

We know there is additional funding for road maintenance in the budget. It is so important that the Civil Contractors Federation has been talking about this a lot this year: the need for shovel-ready projects and to fix the road maintenance backlog in South Australia. Certainly within my electorate, Old Belair Road and James Road, which has been focused on in the Mitcham Hill study, is also prime for investment, as is the resealing of Belair Road at Lynton, below Windy Point. The Laffers Road-Main Road intersection at Belair certainly needs a lot of attention. Sargent Parade and Shepherds Hill Road at Bellevue Heights is another intersection that needs to be looked at and warrants investment from the department, as does Main Road through Coromandel Valley. People who drive along that road know it is in very poor condition.

I am glad to see a lot of investment in the environment in this budget and also an investment, through the Department for Environment and Water, for prescribed burns. That really feeds into the recommendations out of the Keelty review. One of the big numbers in the budget is the staggering $33 billion of net debt that is projected in the forward estimates. For South Australia and our economy, this is a phenomenal number.

Matthew Abraham, veteran political commentator on FIVEaa, made some very interesting points about this debt figure and what it means for South Australia. I would like to quote Matt Abraham. He states:

One of the key figures of the debt isn't the total amount of debt but how much you can afford to pay for that debt as a state. Consider this is your household budget: it's ok if you've got a huge mortgage if you've got a huge salary…

There's a thing called the net debt to revenue ratio. This is your capacity to pay debt. At around the State Bank time that hit an alarming 65 per cent—

so we are talking about 1992 to 1993—

and everyone said we are going to die. The magic number is meant to be around 70 per cent—you go over that you're in huge trouble… Since [around] 1999 it's…slowly coming down. It's been about 3 per cent in 2009, then 2011—[up to] 19 per cent, so it's slowly been going up. Last year it was sitting on 30 per cent. That's ok…this year, 51 per cent. Ok, 51 is not bad. Next year, 78 per cent. 2022: 92 per cent. 2023: 99.8 per cent. By 2024 when our debt is projected to hit $33 billion it will be 104 per cent—way over the tipping point. Is that a worry? Nobody seems to be worried anymore.

Where debt sits on the balance sheet of any budget is very important. We know that we are sitting in a historic low interest rate environment at the moment, but we will not always be in a historic low interest rate environment. Economies and interest rate environments move up and down over time. There is no doubt that over the next five to 10 years we will see interest rates increase and we will not be sitting in historic lows as we are at the moment. Of course, servicing a $30 billion debt at an interest rate of 0.5 per cent is very different to servicing a rate at 5, 6, 7 or 8 per cent. As a state, we cannot be lulled into thinking that, year on year, we can continue to increase this net debt figure over the forward estimates.

We need to invest in productivity to increase our GSP. We need to grow that state pie. We need to grow the population of our state. We need to continue to keep up with the eastern seaboard. Population growth is a huge part of that, a flexible economy is a huge part of that, and investing in productive infrastructure is a huge component of that, as well. Ensuring that over time we balance the budget and responsible financial management are paramount for any government.