Question Time

State Economy

Ms SAVVAS (Newland) (14:22): My question is to the Treasurer. Can the Treasurer update the house on the South Australian economy?

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries) (14:22): I am very pleased to receive the question from the member for Newland, because there has been further good news during the course of this week on the performance of the state's economy. While we see the nation's economy respond to the challenges of high interest rates and higher prices, South Australian households and businesses are still demonstrating a capacity to invest and grow and support high levels of economic activity.

Today the ABS released its consumer price index (CPI) or inflation figures for the most recent September quarter. Pleasingly, the inflation rate in Adelaide has dropped to 3.2 per cent, only fractionally above the target band of the Reserve Bank and a significant drop from 4.5 per cent recorded as the through-the-year inflation rate from the previous quarter.

That is very good news, because it aligns with a significant reduction in the national inflation figures that we see today: a drop to 2.8 per cent, just within the Reserve Bank's target band. That will come as significant relief for the nation's economy, particularly for households and for small businesses that have been struggling under the burden of high inflation coming off the back, of course, of COVID and the more than $0.5 trillion of fiscal and monetary stimulus that was unleashed into the national economy in 2020 and 2021.

While this will raise expectations of changes to interest rates I am not sure we are in a position to be predicting that for Melbourne Cup Day, but we are hoping that this gives the Reserve Bank the confidence, in the coming months, to consider finally moving down the cash rate and providing some welcome relief to households and small businesses across the country.

With regard to the state's inflation figures, they continue to be driven by very high insurance costs. Anyone who has received an insurance renewal notice for their motor vehicle or home or business premises will be acutely aware of the escalating cost of insurance in the current market, as well as housing costs, and we have just heard from the Premier about the absolute necessity for this government to invest unprecedented amounts of public spending to get more houses built across the community.

Of course, earlier this week we had the latest CommSec State of the States report where, for the previous three quarters, South Australia had been rated the best performing economy in the nation. The good news is that we are still up there. We are not number one but we are number two, just pipped at the post by Western Australia, of course, which not only has the benefit of their—

The Hon. V.A. Tarzia interjecting:

The Hon. S.C. MULLIGHAN: Right. You're talking to us about being a runner-up, are you? Really? That's the best one you've got, is it? Get back in the limo and keep practising, would be my advice.

So, a strong performing economy, second only to Western Australia—which enjoys not only the benefit of a resources industry but also the remainder of the nation's additional GST—which is really good news for the state's economy. We should not pretend that the next 12 months will be plain sailing for the national economy, and the South Australian economy will not be immune from these national pressures, but we are performing very well and we enter those challenges from a very strong base.