REAL ESTATE SALES

The Hon. I.F. EVANS (Davenport) (14:47): My question is to the Treasurer. Why does South Australia have the lowest number of real estate sales since 1985, the worst performance in 27 years?

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (14:48): I can speculate. There are probably a couple of reasons. One is that, with the state economy, not only with regard to real estate but with regard to consumption, and not just in South Australia but across the country—

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —we are seeing consumers being incredibly cautious. There is a number of probable reasons for that, one of which is no doubt that they see what is going on in Europe, potential uncertainty with regard to the world economy and talk of there being world recession. All these factors are no doubt driving consumers to show an extreme level of caution. We also have the highest savings ratios as well since the early 1980s. Consumers are putting away a larger proportion of their income into their savings than they have since the early 1980s.

Part of it as well might be an adjustment. There is no doubt that over the last eight to 10 years we saw Australian consumers have the lowest savings ratios that they had had in a very long time. In fact, for a lot of the time during the last decade we actually had negative savings ratios. Australian consumers were in fact spending more than they were receiving in income.

The Hon. I.F. Evans interjecting:

The Hon. J.J. SNELLING: It is wonderful to see the member for Davenport finally come out of hibernation. He has been in hibernation for a long time. It is wonderful to see—

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —him out of hibernation, wonderful to see.

Mrs REDMOND: Point of order. Surely the comments of the Treasurer are debate?

The SPEAKER: I thought it sounded fairly topical for today; we've been talking about this all day. Be careful with your wording please, Treasurer; and get back to the substance of the question.

The Hon. J.J. SNELLING: Indeed, I very happily return to the substance of the question, Madam Speaker. There is no doubt that the same sentiment that is driving high savings ratios amongst consumers is also having an effect on our property market. I suspect—

Members interjecting:

The Hon. J.J. SNELLING: This is not a phenomenon that is unique to South Australia; this is something that we see across the country. I have lost my train of thought now, because I was so rudely interrupted.

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: My simple point is—

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: I think one of the other things that has happened in the real estate market is that there is an expectation that prices will go down in the market. People are holding off buying because they think there will be a reduction in prices, and people are not willing to sell because—

An honourable member interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —they do not think they will get the price they want. All those things are having an effect on our state economy. They are certainly having a rather profound effect on our state revenues, with both stamp duty and GST intrinsically linked to both property turnover and consumption spending by households.