Bills

Appropriation Bill 2014

Second Reading

Debate resumed.

The Hon. S.E. CLOSE (Port Adelaide—Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for the Public Sector) (12:39): I rise today to provide my contribution to the budget debate. This government is determined to deliver on its election commitments. The promises we took to the election to build South Australia are being delivered in this budget, and I commend the Treasurer for framing this budget during very difficult times.

The federal government, through both its attack on the most vulnerable in its first budget and its determination to shut down the automotive industry in this country, has created a very challenging environment for South Australia. This makes it more important than ever that this state Labor government take a principled stand to deliver a budget that ensures that trust is not lost forever from the political landscape—trust that develops when, once elected, a government does exactly what it says it will do and honours its commitments to the electorate.

This is a budget that delivers for the pensioners, the workers and the families hit hard by the mean-spirited federal budget. Within my electorate of Port Adelaide reside many pensioners and concession cardholders who would have been hit hard by the commonwealth's attack on senior citizens. This budget protects pensioners and low-income earners by maintaining their concessions for the next year.

Unlike the Abbott government that dishonoured its pledge not to cut pensions, we are making good on our election commitments. This budget contains $41.7 million to provide a $50 increase to the annual heating and cooling concessions paid to eligible recipients, and it provides $32 million to protect pensioners from the commonwealth Liberal government cuts in 2014-15.

The people of Port Adelaide, like many in this state, are also concerned about law and order; that is why I am pleased that this budget maintains the government's election commitment of recruiting an additional 300 police officers who will be trained at Fort Largs in the electorate of Port Adelaide. This budget also provides $2 million to reinvigorate the role of Neighbourhood Watch—a crime prevention program that is well supported in my community—and it also provides grants to local councils to improve neighbourhood safety through the installation of CCTV cameras, improved lighting and other technologies.

This budget also supports parents who want their children to be active and have fun by taking part in organised sport. The $50 vouchers for the parents of primary school children taking part in organised sport and attending recreation clubs throughout the state make good on our election commitment and are funded through a $7.7 million allocation over four years. Many South Australian families are working hard to manage their bills, so these $50 vouchers will be welcome to help cover the costs of their children's sporting commitments.

This is a budget that recognises the importance of retaining and creating jobs. This is a budget that accepts that our economy faces enormous challenges and tackles them head on. This is a budget that will assist our automotive industry, the suppliers and the workers in the massive transformation they face in the three years before Holden closes its doors at Elizabeth. As a government, we have said that doing nothing is not an option.

As Minister for Manufacturing and Innovation, and Minister for Automotive Transformation, I have my own role to play in delivering the benefits of this budget to South Australian families. I will be assisted in this role from next month when the highly credentialled Don Russell returns to his home state to lead the new Department of State Development. A former principal adviser to the great reformist prime minister Paul Keating and a former ambassador to the United States, Dr Russell will bring national and international experience to the role of heading a department tasked with the job of growing our economy and creating jobs. South Australia has a positive future, but we need to work now to secure the rapid transition required to lock in that prosperity.

The 2014-15 state budget includes $60.1 million over the next five years to implement the government's comprehensive jobs plan. This funding will support a nimble and responsive task force chaired by the very experienced and highly regarded Greg Combet, which has the job of implementing this plan. Mr Combet is a highly respected former industry minister and ACTU official who has high-level contacts throughout the automotive and other industries with vast experience in achieving structural change within the Australian economy. The state government, through this new task force embedded in the new Department of State Development, will work with businesses so that, whenever a job in the industry can be saved, it will be saved.

The funding from this budget will support the task force to carry out a number of important roles. These include managing the design and delivery of programs and services to businesses and workers in the automotive supply chain and at GM Holden. The task force will also liaise with the commonwealth and Victorian governments in the final design and rollout of the $155 million growth fund. It will also work with GM Holden to help determine the future of the Elizabeth site—an important piece of employment land well placed near Edinburgh Park. The task force will also participate in government-wide strategies to attract investment and jobs to the state, and it will provide a central point of coordination and communication for the rollout of the Our Jobs Plan.

Across the supply chain, GM Holden's activities in South Australia are estimated to generate spending of more than $1.2 billion and that, in turn, supports 13,000 jobs across the state. For the northern suburbs, this is a huge employer and generator of economic activity. We have three years at most to ensure that once that winds down there are alternatives in place to support our economy. Having a task force to drive the implementation of the $60.1 million Our Jobs Plan will ensure that there is sufficient and targeted support for all of those affected workers—support to find new work, support so that businesses in the automotive supply chain can diversify and find new markets, and support to generate activity across the economy that creates alternative jobs for displaced workers.

Not only will there be direct support for workers and suppliers, but this government is continuing to invest in infrastructure that creates jobs and a more efficient and productive economy. Our $10.1 billion spend on infrastructure across the forward estimates will support 4,700 jobs a year at a crucial time when 13,000 jobs are under threat in the automotive sector.

Funding for the electrification of the Gawler line to Salisbury will improve rail services for members of my electorate living in Mawson Lakes and Parafield Gardens. Again, it is a great pity that the commonwealth has shirked its responsibilities by refusing to co-fund public transport projects, even in the aftermath of the Holden announcement.

This budget also supports the mineral resources and energy sector and regional development areas of the South Australian economy that will be crucial to jobs growth. Employment growth in South Australia is expected to be 1 per cent in 2014-15, accelerating to 1.25 per cent in 2015-16. To put that in context, this budget aims to support a pickup in the pace of annual jobs growth at a time when the automotive sector faces a huge task of transition and manufacturers remain under pressure from the high Australian dollar.

The closure of Holden is a devastating blow for the workers and families that rely on the automotive industry for their livelihoods, but there is no reason why this blow cannot be softened by a policy framework, supported by this budget, that helps workers to find new opportunities that draw on their specialist skills garnered from years of working in advanced manufacturing. We want those automotive component suppliers that relied on Holden, Ford and Toyota for their businesses to diversify and survive.

South Australia has a long history of innovation, and finding commercial opportunities for our innovators will also be key to our economy's continued strength. Our state's economy has a huge reliance on small business as drivers for growth and job creation. Many of those small and medium enterprises have grown from home-grown ideas and local talent. The strength of our economy lies in its diversity. This budget provides a support for that continued diversity through innovation. This state budget delivers on our election commitment to support entrepreneurs to transform great ideas into iconic products.

As already announced by the Premier, we are investing $2.5 million over three years to establish the Lance Hill Design Centre and Hills D-Shop as nation leaders in innovative support. This investment will be matched dollar for dollar by Hills Holdings, the company that has grown from the innovation of Lance Hill, inventor of the rotary hoist. These two centres will be looking to support the new generations of Lance Hills so that the desktop research and development taking place in our institutions, in our garden sheds and across our kitchen tables can be recognised and nurtured.

This budget also includes $400,000 over four years for training and mentoring programs delivered by Majoran Distillery to develop skills and provide industry contacts. Majoran is Adelaide's co-working community for the tech and creative freelancer communities and start-ups, and encourages people to share its space at its Grenfell Street base. A further $588,000 will fund a grant program for entrepreneurs to establish city premises, including activating vacant buildings, enabling them to pursue exciting new concepts and ventures.

Before the election, Labor said we would support local innovators and entrepreneurs. This state budget delivers on those commitments. That is because Labor knows that our home-grown entrepreneurs can create jobs for the small business sector and grow our economy if we can assist them at the crucial point of turning ideas into commercial products. Innovation and the ability to commercialise ideas will be key to our state's future success and speed our transition to an advanced manufacturing economy.

This budget also continues the government's support for improving the efficiency and international competitiveness of our local manufacturers. Our Manufacturing Works strategy aims to drive and encourage research and development, investment and innovation, and developing our capabilities to find new markets. The strategy dovetails not only with our jobs plan for the automotive industry but also our targeted trade policies that seek to open new markets in India and China.

In the third year of the manufacturing strategy, this government will be looking to build on the work of the past two years where we have supported more than 90 manufacturers to increase their knowledge and capacity to innovate. We will look to continue to build on the successful early stages of the Tonsley Park development that is already attracting firms to set up businesses in this attractive research and development training precinct.

Our Industry Participation Program will continue to assist local companies to bid for major projects and assist firms to build their capability and capacity to successfully bid for contracts. Through the Industry Capability Network this government has helped local companies win $103 million worth of contracts. This budget allows us to continue that work, especially where manufacturers can meet the needs of the expanding mineral resources, oil and gas sector.

Our ability as a government to deliver on the commitments contained in this budget requires a focused and engaged public sector. This budget supports the implementation of the policy outline in 'A Modern Public Service'. This document, launched before the election, not kept secret from the electorate, allows voters to see our policy that harnesses the expertise and professionalism of our public servants. We have already begun to implement projects that are providing greater opportunities for young people in disadvantaged areas to gain employment in the Public Service.

I rise to support this budget because its priorities are the right priorities for the times. Yes, the budget puts South Australia on a pathway to surplus, but it does so with compassion and with an expectation that South Australians want a government that stands with them, not against them. This is a budget built on support for those who need it. This is not a budget that puts the burden on the most vulnerable but rather ensures a safe and secure future all South Australians can share.

Ms REDMOND (Heysen) (12:52): Thank you, Madam Deputy Speaker, and I do note that you are presiding over the first ever occasion on which this house has been peopled entirely by the female gender.

Honourable members: Hear, hear!

Ms REDMOND: I would like to say that I am pleased to rise to support the Appropriation Bill but that is hardly the right wording. I thought about starting with, 'Once upon a time,' but then when I heard the opening remarks of the member for Port Adelaide talking about trust and being part of a government that, according to her, does exactly what it says it will do, I cannot resist pointing out that this government over many years promised no new taxes, no privatisations. It promised surpluses, jobs, lower electricity prices, and indeed the member for Port Adelaide's very own predecessor as the member for Port Adelaide who was then the treasurer said famously:

You do not have the moral fibre to go back on your promise. I have…

Thus we come to my comments on this budget which is just appalling. I thought that rather than starting where I have started on every other budget speech that I can remember in this place, and that has been 12 years of them, I would start with talking about what the effect is on ordinary people, particularly those least able to afford it, those on low and fixed incomes and self-funded retirees.

I note the member for Port Adelaide's remarks were about being a compassionate government that cares about people, but in fact in my electorate—and it is generally looked at as a relatively wealthy electorate—there are a lot of people who have lived there for a very long time, often generations, and they happen to have houses which now are relatively valuable but that does not make them wealthy by any means. Therefore, they are asset rich and often income poor, and many of them are in this situation of being on fixed, low incomes or being dependent as self-funded retirees on very low interest rates which are paying them very scarce amounts of money.

Of course, we have already heard this morning, during private members' time, about the biggest impact, I think, that is going to come out of this budget, and that is the so-called emergency services levy. As has been pointed out by a number of earlier speakers, the fact is that the emergency services levy that is now going to be recovered by this government in excessive amounts is, in fact, not being applied towards emergency services at all—I will not say 'at all'; it is already partly providing funding for emergency services. I think it was the member for Morphett who pointed out that there has been very little increase and nothing in this budget to show an improvement in funding for emergency services. Indeed, he mentioned that there were people in CFS groups he is close to who have had to do chook raffles to pay for their first-aid training.

So, it is clear that the government is not planning to collect all of this money and apply it to emergency services. What the government is planning to apply it to is simply its budget shortcomings, and those shortcomings have been obvious for quite a number of years. In fact, the original speech this morning by a former minister, the member for Davenport, about the introduction of the emergency services levy was absolutely on point, and that is that this levy was introduced not to fund the government's poor budgeting but to provide an equitable mechanism whereby everyone in the state contributed an appropriate amount towards the provision of fire services.

Paying a fire levy on your insurance policy had been the previous situation, which led to people who did not take out insurance still having the fire brigade come to their house to rescue them. Instead of people insuring with a company that was either interstate or overseas, where the fire levy was not paid in this state, everyone had to pay their fair share, and we have all been doing that for some considerable time.

That is not what is happening here. Although it is called an emergency services levy, it is clearly a land tax. This government, quite dishonestly, went to the election never mentioning to the people of South Australia that it was about to impose a land tax on every premises within the state and on every vehicle and I think even every boat within the state.

The average house, they say, is $150 a year. So, even if you have an average house, it is $150, plus for a car another $8. Indeed, if you have a $400,000 house, and I would think that would be a reasonable average around Adelaide at least, it would be $241 per annum. If you happen to have a $750,000 house, which would not be out of the realms of possibility for many people who are just living in ordinary suburban homes but the value of the house has gone up, that goes up to $408 and, if they happen to have a couple of cars, there is another $16 on top of it.

So, that is an extraordinary increase. In fact, after allowing for inflation, since this government came in, the amount that is being paid has gone up something like 195 per cent; it is just an extraordinary amount. What is more, even stamp duty is going up. This government, which is talking about trying to get the economy going, is still going to increase things such as stamp duty. Stamp duty, by the way, has gone up 55 per cent after inflation since this government came in.

Water prices are up by 236 per cent under this government. Where CPI went up only 40 per cent, our water prices have gone up 236 per cent. We pay the highest cost for water of any capital city in Australia, and that is just ridiculous. We are now almost $600 per annum more for the average water bill than we were in 2002. Part of that cost is because of the desalination plant. Some of the newer members may not recall, but what happened with that desalination plant is that it was originally proposed by the Liberal Party. We did a lot of investigation. I was one of the people who went to Perth. We talked to the people over there, and we said, 'How much would it cost us to build a desalination plant just like this one you're building if we signed the contract today?' They said, '$450 million.'

We came back and we had this policy: $450 million for a desalination plant, 50 gigalitres. What the government did was to say, 'No, we don't need a desalination plant.' For two years, they said, 'We don't need a desalination plant.' After two years, having delayed that long, they decided not only that we needed a desalination plant but that we needed one that was double the size, that was 100 gigalitres.

The Productivity Commissioner and other people have since done their examinations of it and have said that there is absolutely no justification for a 100 gigalitre desalination plant; nevertheless, that is what this government decided to do. Of course, over the two years, plus the doubling, that meant that the cost had blown out from a $450 million plant that we could have signed on the dotted line when we proposed it, it cost us instead $2.2 billion. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:01 to 14:00.