Grievance Debate

SOUTH AUSTRALIAN ECONOMY

The Hon. I.F. EVANS (Davenport) (15:10): There has been a lot of debate of late about the economic performance of the state. I will just make the point that this government has the same economic approach as premier John Bannon and the same budget approach as premier John Bannon. John Bannon used to run around saying, 'Don't worry about the economy. Everything's fine; look at the number of cranes.' That is exactly the same process that the current Premier and, indeed, the current Treasurer are going through. I just make the point to the Premier that the famous economist was John Maynard Keynes, not John Maynard Cranes.

We also have exactly the same problem with their budget management. It was the John Bannon government that was running budget deficits of around $350 million a year, and it is this government that is running budget deficits of $350 million a year—so exactly the same approach. Let's have a look at the economic performance of the state: the figures speak for themselves.

The reality is that over the last weeks there have been numerous economic reports released, most of them bad news for the state. South Australia has the worst economic growth—the nation's worst economic growth, the nation's worst business confidence, the nation's worst business confidence, the nation's worst retail figures, and the nation's worst housing finance commitments.

If you look at the issues in relation to the building industry in particular, we have the worst building approvals in 11 years, we have the lowest quarterly dwelling commencements in 10 years, and we have the worst real estate sales figures in 27 years. There is a common thread running through all that. If you look at those industries that are doing it really tough—the real estate industry and housing industry in particular—they are the industries that are most hit by two of the most aggressive taxation regimes the government has: its land tax and its stamp duty regimes. In South Australia, this government applies those taxations at a higher rate—a much higher rate—than the Australian average.

The land tax charges in South Australia are applied at a value that is 40 per cent higher than the Australian average. Insurance duties are charged at 53 per cent above the Australian average, and stamp duties are charged at 27 per cent above the Australian average. It is no secret that you have the housing industry really struggling with low levels of approvals, low levels of housing finance, and you have the real estate industry struggling with the worst sales performance since 1985—the worst sales performance in 27 years. They are the two industries that are struggling under that very heavy tax regime. It is absolutely no coincidence at all that those two industries are struggling.

The government can spin it whichever way it wants. The reality is this government has been there 10 years. It is this government that has delivered this economic result. When you have economists out there talking about the state being in recession, of course the opposition is going to ask questions on it. Do they really want us to sit here like meek, mild mice and not ask questions about the state being in recession?

Even Bill Evans, in the amended response given to the Premier, says that when you have two quarters of negative growth some people call that a recession—even he admitted that, and I note the Minister for Finance nodding. The reality is that Bill Evans did not take the opportunity to say South Australia is not in a recession; he did not actually say that. He actually said, as the chief economist to Westpac, 'Some people say that when you have two consecutive quarters of negative growth, that's called a recession.'

Then, the Premier, of course, comes out and says, 'Oh, you don't include exports.' Well, he did put out a press release about exports. The reality is that in the September quarter and the December quarter South Australian exports also went backwards. So, let's be clear: for the September quarter to the December quarter state final demand went backwards and exports went backwards as well. That is why some people in the community are saying the state is in a recession, and it is in a recession because this government has been there 10 years. We have the highest taxes in Australia, the worst WorkCover scheme in Australia and they are expecting businesses to compete on the international market with such high costs. They have the budget in May and they should use the budget to stimulate the economy and stimulate economic growth.