Bills

Supply Bill 2014

Second Reading

Debate resumed.

Ms REDMOND (Heysen) (19:50): And might I say, sir, also it is the alma mater of my two sons. So, welcome, boys and masters. I am very pleased to rise to speak on the Supply Bill and, as I do every time this comes up, I begin with a comment about the fact that this bill is indeed necessary only because of the mismanagement of the government over a period of years. In any other business, what you would do is bring down your budget in time for it to be approved before the commencement of the new financial year.

The purpose of the Supply Bill, of course, is to ensure that we continue to pay our public servants and all of the other bills as they come due for the next few weeks until the budget is passed. In my view, there is a very poor record of timing on the part of this government; that would be fair. I think that it is not the only government that has been guilty of that.

Over many years, the government has failed to bring down a budget in time for it to be considered, debated and in place in time for the commencement of the new financial year. But, more importantly, it is the lack of savings that gives rise to it because, after all, if we were running our economy as the New Zealand economy, to which the member for Kavel just alluded, is being run, we would be in surplus—and, indeed, in this state, we should be in surplus.

For the first seven years that it was in power, this government received every single year something in the order of $500 million over what the government budgeted to receive. About $3½ billion, over a period of seven years, came into the coffers. The state was flowing with money, both from the GST—the unexpected windfall that we in this state, in particular, received from the GST—and also from the fact that we had a property boom, so our enormous stamp duty and land taxes were reaping in enormous amounts of money to the tune of an average of $500 million a year over what was anticipated in the budget.

Anyone should be able to understand that, if you are getting an extra $500 million every year, you should have some money in the bank, even if you run over budget a bit. But instead of that, this government not only spent all of the money that came in—all of the extra money that came in—but then ran up debt, and it ran up debt to a huge degree, to the point where now we are going to be paying in excess of $2.6 million each and every day just to pay the interest on the debt it has run up—and that is if things do not get worse, and every indicator that I can see suggests that things will indeed get worse a long time before they get better. So, $2.6 million a day when we should, in fact, have had money in the bank.

Had we had money in the bank, we would have been in a position, presumably, for the government to simply continue paying the Public Service and paying all the other bills pending the passing of its budget because it could have used its savings. That is what most households would do.

I saw on the telly the other night a wonderful New Zealand film called Once Were Warriors. If anyone has not seen it, I recommend it as an exceptionally good film to see. I see one of the members on the other side nodding. It is an exceptional film, but Once Were Warriors, the title of it struck me as I was thinking about this speech today, which I had rather a lot of time to do, because this state was once warriors. We were once a powerhouse. I remember growing up in Sydney being told about the powerhouse of South Australia. This state was a huge manufacturing sector, not just with cars but with all sorts of other machinery. We had the Iron Triangle, which was extraordinarily successful and important for the whole of Australia. We had magnificent agriculture and fantastic seafood. This state ranked third amongst the states.

Where do we rank now? Mostly, we rank at the bottom. Under this government—for 12 years, now, and for another four years, it seems, into the future—we are going backwards at a rate of knots. In fact, most other states, even Tasmania, are now showing signs of recovery after the GFC but we continue to go backwards and buck the national trend in every possible way.

I just want to refer to some of those ways and, firstly, in relation to business investment. Our business investment in this state contracted by 8.1 per cent in the December 2013 quarter. That is the worst performance of all the states, and our business investment is at its lowest quarterly value for three years. That is not just something we have made up: that has come from the ABS as recently as December last year.

In relation to the number of businesses, South Australia had 4,744 businesses, or 3.2 per cent of all businesses, close in the year 2012-13. That is business closures. We had the lowest business start-up rate on the mainland over the last 10 consecutive years. In fact, six years ago, there were more businesses operating in this state than there are today. It is no wonder, then, that the consequence of that is that we also have the worst business confidence on the mainland. Small business is the backbone of the economy, as the member for Kavel just mentioned, yet we have done everything in this state to absolutely cripple small business.

In terms of jobs, there are 18,000 fewer full-time jobs since the 2013 state budget. It is less than a year since the budget was brought down and less than a year that it has been operating and, in that time, there are 18,000 fewer full-time jobs in this state and our jobless rate has increased by almost 50 per cent, from 4.8 per cent to 6.3 per cent, since the Labor government made its promise in 2010 that it was going to create 100,000 new jobs. Far from creating 100,000 new jobs, in the last year we have lost 18,000 full-time jobs in this state. With a rate of 6.3 per cent of jobless, that is well above the national average of 5.8 per cent. In fact, the Labor Party itself used to say any number with a 5 in front of it was pretty good. Well, I hate to tell you, but it is well past having a 5 in front of it.

Job vacancies are the same problem. Our jobless numbers increased over the last year by 33 per cent since the promise of 100,000 new jobs, and we have the worst new job performance in the nation, worse even than Tasmania. Tasmania is always considered a basket case and has a population significantly lower than this state with far fewer natural assets upon which it can call, and even Tasmania is doing better than us. In relation to job vacancies—

The Hon. A. Koutsantonis interjecting:

Ms REDMOND: The Treasurer says it is not true. He disagrees with the Australian Bureau of Statistics and the figures it put out in April 2014. Just in March of this year job vacancies fell by 1.1 per cent and, again, that is the worst performance of all the states. Our internet job vacancy levels are now at half the levels they were in 2006. That is the worst performance, also, of all the states during that period. One would have thought that in 2006 the internet, as the place to seek jobs, was not necessarily as prevalent as it is today.

On any measure, you would expect there would be more jobs advertised on the internet but our job vacancies are at half the level they were in 2006. That is just extraordinary. Now we know that our jobless rate is up overall by almost 28 per cent on the decade average level and, again, it is the worst performance of all the states. That figure comes from CommSec in April 2014.

So, it is no surprise then that business competitiveness is poor in this state as well. Adelaide was the eighth most expensive city in the world for manufacturing out of 131 cities—eighth worst out of 131 cities—yet this government does not believe its taxing regime is crippling business, particularly small business, in this state. Adelaide was ranked as the second most expensive city in the world in its population bracket—the second most expensive in the world in its population bracket! They are extraordinary figures.

If you did not have people who have jobs and have confidence in the future, that then impacts on retail and business, so what do we find? In the past 12 months in South Australia retail sales rose by just 1.9 per cent, which was the worst performance of all the states. National growth of retail sales was precisely double that. Nationally there was a 3.8 per cent growth in retail sales, and poor old South Australia, bottom of the barrel, 1.9 per cent.

Then, to look at the value of building work, because another good indicator of how the economy is going is whether people feel confident about the future and are buying and building houses, and so on: in South Australia it fell 4.3 per cent in the December quarter, and again this is the worst performance of all the states.

The Hon. A. Koutsantonis: It's not true.

Ms REDMOND: Again, the Treasurer says 'It's not true', but again I point out that these figures have come directly from the ABS figures published in December 2013. Then, of course, we get to people who are prepared to invest in the state. In the last two years the number of venture capital investee companies in South Australia went down by 36 per cent—again the worst result of all the states.

The Treasurer keeps talking about it not being true, but I can tell you that in my electorate I actually had someone come into my electorate office who was an investor in this state. He loved living in South Australia, but he came in to tell me that after a whole lifetime—he is about my age and he had spent his entire working life creating a portfolio of investment properties in this state (residential properties, flats and independent houses, and so on)—of creating this portfolio that was worth about $15 million, he said, 'I cannot stay in this state with this investment portfolio because the rates and taxes here are killing me'.

He said, 'I have to take the first six months of rent that I earn on these properties just to pay the land tax. After I pay the land tax I then have to pay the insurance, the maintenance, the council rates and all the other expenses.' He said, 'I'm lucky if I make one or two weeks profit out of the entire year's income. That is just not viable; I would be better off selling all the properties and putting the money in the bank because I would get better return on the investment'. But, he said, 'In fact, I can get an even better return by selling all the properties here and moving to another state or territory where I can expect an investment of that size to make some money.'

Of course the government wants to blame all of this on the GFC and on the federal government. I will not go over what the member for Kavel already said about the federal government and what nonsense it is for the government here to try to blame our federal colleagues for what they are doing and for what is happening in this state, but it is a nonsense to continue to blame the GFC. If the GFC was the problem, then what is the explanation for the fact that this state continues to do so poorly compared with all the other states? This state has no excuse, and the problem, as the member for Kavel mentioned, is their tax, borrow and spend mentality.

The reality is that this government's mismanagement of the economy is all down to this government. In 12 years they have wasted money, spent money they did not have, and now they are leaving it to the people of this state to pick up the pieces and pay for it all. I come back to the fact that the people of this state will be paying $2.6 million per day, every single day—over $1 billion a year—just to pay the interest—not to pay down the debt, but just to pay the interest.

Last night I had the pleasure of attending the Australian Society for Medical Research dinner, and heard a very interesting speaker. Every year they have wonderful people doing fantastic work in the medical research field. I was talking to the people at the table about imagining what medical research could do if, even for a week, we could say to them, 'Here, you have that $2.6 million today and today and today', instead of having to pay interest on a debt that we simply should not have, but this government has led us into a situation where we have to focus on paying our debts.

Our budget is in a disgraceful state. Our debt is at $14 billion by the year 2016. In fact, it is well described by saying that it increases by $4.1 million every single day for eight years. Now, that is inconceivable, the level of debt increasing $4.1 million every single day for eight years. What is more, there will be another $212 million blowout in the 2017-18 budget according to the government's own figures.

As I have already mentioned, the interest on the debt is going to be a billion dollars a year and our total liabilities will soon exceed $25 billion—$25,000 million. We have the highest taxes in the nation and this government still fails to understand that you cannot tax your way out of trouble. You cannot keep imposing on business more and more taxes as this government wants to do at every turn. All that does is force more and more businesses out of business, more and more people out of work and that leads to an incredibly untidy and unhappy state in terms of where we can go to economically.

I have not spent very much time talking about our workers compensation system, but in addition to the taxes our workers compensation system has long been known to be the absolute worst in the nation. We have the lowest return to work rate and we have the highest workers compensation levy rates. Indeed, the national average is 1.76 per cent; here, the highest in the nation at 2.75 per cent. The rest of the nation on average has their workers compensation system funded to 112 per cent; ours is funded to only 67 per cent.

There are dreadful problems in our economy and this government, as the member for Kavel said, simply thinks that they can tax and spend their way out of trouble and not recognise that, every time they spend more money when they have not actually got the money to spend, they are creating a debt not just for us but for our children and our grandchildren. I remember the former Treasurer, before he was tossed aside, the Hon. Jack Snelling, when he was Treasurer, I remember him saying, 'I am not going to get up—

The SPEAKER: Just the Minister for Health would be best.

Ms REDMOND: Sorry, the Minister for Health, when he was Treasurer I remember one of his first utterances was, 'I am not going to run up a credit card debt for our children and our grandchildren', but that is precisely what this government has done. Where are we going to get the income that is going to pay $2.6 million every single day on an ongoing basis, not just for a year, not just for two years, but on an ongoing basis and that is if it does not get worse? Where are we going to get that?

I invite the members opposite to contemplate what this state would look like if instead of giving that money in an interest payment on a debt that we should not have, that we were able to say, 'Here Glenelg, have $2.6 million today. Here Port Pirie, have $2.6 million today. Here Riverland area, have $2.6 million today' day upon day upon day. Imagine what this state would look like if that was what we were able to do with that money.

Instead of that we are paying interest on a debt this government has no-one but itself to thank for and it is nothing to do with the GFC, it is nothing to do with the federal politicians: it is entirely down to the way this government has mismanaged the affairs of this state. Mr Speaker, I fear that I am going to run out of time to canvass the other areas, but no doubt I will have a chance when it is time to do a grievance to come back and say a bit more about issues of education, health and a range of other issues concerned in our economy and the mismanagement by this government. Suffice to say there is—

The SPEAKER: Suffice.

Ms REDMOND: That is what I said, I thought, sir.

The SPEAKER: Good, excellent.

Ms REDMOND: I did say suffice to say. I hope that Hansard caught it as suffice to say. I am sorry if I mumbled. The fact is that with our debt, our interest, our total liabilities, our state taxes, the whole thing has led to an unmanageable economy and this government remains blind to the idea that we need to take all the burden off business to allow business to succeed, because only when business succeeds do we have the chance for them to be paying taxes at a reasonable rate, employing people who will again pay taxes who will spend money and get the economy going again. This state is in the malaise of a dreadful economy run by this government and one which has led to a massive loss of confidence.