Senate debates

Wednesday, 5 March 2014

Matters of Public Interest

South Australia State Election

12:50 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | | Hansard source

I rise to contribute to this matters of public interest debate on a matter of extreme importance to my home state of South Australia. In just 10 days time, on Saturday, 15 March, South Australia will reach a crossroad—a defining moment for the state's future. It will be a moment in which South Australians will choose whether to continue down the same path—a path that is taking South Australia in the direction of becoming truly a mendicant state, reliant almost entirely upon the largesse of the federal government, upon redistribution of wealth from other states and upon government spending, seeing the continual demise of any sense of industry, private enterprise or job creation in South Australia—or to change direction, to take a new path in which it has a strong and prosperous future, where it works to restore its competitiveness, where it works to again become a productive and innovative state. These are the stark choices that South Australians face on 15 March when the state election is held.

It is perhaps an indictment of the campaigning skills of my party that we have governed in South Australia for only 11 of the last 44 years. We have won only three of the last 13 elections. While these statistics may show that the Labor Party have been better political campaigners, it also demonstrates that the state of affairs in South Australia is the sole responsibility of the Labor Party and that the melee and the rot that have set into the South Australian economy sits firmly at the feet of the Labor Party, who have governed the state in the overwhelming majority of the last four decades.

Let the facts speak for themselves. On an economic front, CommSec's State of the States report released in December last year found South Australia to have the worst economic performance of the mainland states. SA was the fifth state for business investment in terms of economic rankings, and then either sixth or seventh on every other economic performance indicator. Deloitte, in their December 2013 economic growth forecast, found South Australia's potential economic growth for 2014-15 to be the worst of all states. That is not just mainland states but all states. It had a growth rate at half of the national rate.

The Australian Bureau of Statistics, in September 2013, found that South Australia's state final demand contracted by half a per cent in the September quarter. It is the only state to so contract. The South Australian economy, measured by state final demand and net exports, contracted overall by 1.1 per cent in the September quarter. Deloitte, in their December 2013 report, found that in 2012-13 SA was the only state to record a decline in exports. They went on to forecast that exports from South Australia were expected to continue to decline in each of the next two years. The ABS found that spending on mining exploration in South Australia fell by 48 per cent in the 12 months to September 2013. Again, it is the worst result of all the states. Quarterly SA mining exploration spending sits at an eight-year low.

Retail trade, a good sign of where consumer sentiment sits, grew in SA by 1.3 per cent in the last 12 months, as compared to a national increase of 3.2 per cent. Once again, it is the worst result of all the states. This is reflecting itself in population trends as it affects South Australia. SA's population growth of 0.9 per cent in 2012-13 was half of the national growth rate and the lowest on the mainland. Net interstate migration out of SA rose by 78 per cent in 2012-13. Under the current Labor government, in net terms, 34,000 people have left South Australia. They are voting with their feet.

The ABS also found that in the last two years the number of venture capital investee companies in SA decreased by 36 per cent, demonstrating that the future looks rather grim in terms of new innovation and investment. Whilst, on the other side of the ledger, insolvencies in 2013 increased from 394 to 452. That is the highest single figure in 15 years in South Australia. It is an increase of 14.7 per cent in just 12 months. Again, it is the worst of all the states.

NAB, in their small business conditions report of 2013, found that South Australian businesses have the worst business conditions on the mainland, the worst business confidence on the mainland and the weakest cash flows on the mainland. Clearly, the state of the economy in South Australia is in a parlous position and it is something that desperately needs turning around. This reflects itself in jobs, because economic statistics are just statistics. How they play out is in the jobs and economic opportunities for individual people.

In the employment market, South Australia has the sad statistic of having the highest percentage of underemployed workers on mainland Australia. In the year to September 2013, the number of underemployed workers increased by 11,200 or 18 per cent. The state has lost 25,000 full-time jobs since the 2013-14 state budget was released. Just in that period of time, some seven or eight months, there were 1,000 full-time jobs lost according to the ABS in January. South Australia's unemployment rate, at 6.6 per cent, is the highest on the mainland and has been persistently so under this Labor government. They are at 26 per cent, with more South Australians jobless under this government.

South Australia's jobs in total declined by 1.9 per cent last year. That is the worse result of all the states. The youth jobless rate climbed from 34.4 per cent to 36.1 per cent in January of this year. Once again, it is the highest in the mainland states. The national rate stands at 27.8 per cent, for comparison, which is nearly 10 points lower. People are checking out of the labour market because of the dire straits of the economy and the jobs market. South Australia's trend workforce participation rate stands at 61.9 per cent, which is the lowest level it has been for eight years. Again, it shows that South Australians are in some ways giving up hope.

Worse still, despite a tanking economy and a parlous jobs record, South Australians are facing ever escalating cost-of-living pressures. In the 12 years of this Labor government, South Australia's CPI has increased 39 per cent, housing rentals have increased 53 per cent, property charges have gone up 87 per cent, state taxes have gone up 92 per cent, gas bills have gone up 136 per cent, electricity bills have gone up 140 per cent and water bills—thanks to the mismanagement of water investments by the state government—have gone up 227 per cent. South Australians face a situation where they have less chance of getting a job and less chance of earning an income, and yet they have ever increasing costs that they have to bear.

All of this is equally reflected in the mismanagement of the state's budget. We saw a worsening, by some $380 million, in the state's budget position in just 50 days since the mid-year budget update. We see deficits piling up on top of one another—six deficits in seven years. Labor promised in the time that they would deliver $2.6 billion in surpluses. Instead they have delivered $2.9 billion in deficits. Debt has blown out by $14 billion in 2016 and it increased under Labor by $4.1 million a day over the last eight years. Another blow-out of $212 million is forecast for state debt in 2017-18. Interest on that debt will be around $1 million per day by 2017, which is more than the state's entire police budget. Total liabilities will soon exceed $25 billion. All of this debt is mounting up despite the fact that South Australia is the highest taxed state in the nation.

South Australia's workers compensation levy rate sits at 2.75 per cent, compared to a national average of 1.76 per cent. And what do the credit rating agencies have to say about the outlook for South Australia's budget? Standard and Poor's, in September 2013, found 'the budgetary performance to be very weak, debt burden rapidly rising to a sizeable level, and assumptions within the state's budget in recent years were lower than forecasted'. They have downgraded South Australia's rating five times in two years. Moody's found 'the rapid rise in SA's debt burden flags potential deterioration, an economic profile that is weaker than other states, and the government's resolve to implement measures necessary to reverse budget deterioration has diminished in recent years'.

It is indeed a sorry state of affairs. It is little wonder, though, that Labor do not seem capable of turning it around in SA, because the Premier himself does not really seem to know what the problem is. On 20 June 2012 the Premier admitted to the parliament that 'we are a high-cost jurisdiction'. And yet, on 5AA radio during the election campaign just recently, he said: 'Let's get away from this nonsense about South Australia being a high-cost jurisdiction.' Well, the truth is that South Australia is a high-cost jurisdiction and, just as high costs from the Commonwealth have crippled much of the nation's economy, it is those high costs in South Australia that are crippling the South Australian economy and impacting on jobs in SA.

I said at the outset that the state faces a decision point, a crossroads, on 15 March—and indeed it does. The choice is between a government which, Mr Weatherill admits, believes government is the solution and a government under Steven Marshall and the state Liberals which would get government out of the way and restore a level of competitiveness. If elected, Steven Marshall's government will not go ahead with Labor's new car-parking tax which would add another level of tax to the South Australian economy—another $26 million per annum tax to the state's city centre itself. He will implement reforms to our land tax regime—the highest in the nation. He will increase from $316,000 to $400,000 the threshold for land tax and he will decrease from 3.7 per cent to three per cent the peak rate of land tax for properties valued up to $5 million.

Steven Marshall will implement reforms to payroll tax. Currently South Australia's $600,000 payroll tax threshold is the second lowest of all states, meaning payroll tax is paid by many more small businesses in South Australia than in other states. The reforms that the Marshall government, if elected, will implement will result in savings to more than 8,000 businesses, ensuring more than 1,100 businesses will no longer have to pay payroll tax. It will provide savings of up to $9,000 per year to businesses and make South Australia's payroll tax regime, for small businesses with wages of $800,000 per annum or less, more competitive than Victoria, New South Wales and Western Australia and in line with Tasmania and Queensland.

These are just some of the concrete policy proposals that the Marshall Liberal team have put out to provide a very clear point of difference to Labor's high-spending, high-taxing, high-debt, high-waste ways. A Marshall government will be a leaner government, a smaller government, a government of less tax that will set South Australia on a pathway to restore its level of competitiveness, allow it to compete and be productive, and align it with the direction in which the federal government is going to restore business confidence and competitiveness overall. I urge my fellow South Australians to embrace change on 15 March and allow our state to return to its heyday.