South Australian Economy

The Hon. T.J. STEPHENS (15:39): I wish to speak today about the dire state of the South Australian economy. Everyone in this place would be aware that the Liberal Party ran on a platform of reinvigorating the economy through a combination of tax cuts and lowering government spending. Unfortunately, the election result, while close, did not see a change of government, but it does not mean that a similar outcome cannot be achieved. I implore the government to seriously consider reforming these areas to reinvigorate the state. I am not the only one who knows that South Australia is in dire economic straits.

We have seen statistic after statistic from the ABS, the South Australian Centre for Economic Studies, and other like organisations, clearly showing that South Australia remains at the bottom of many economic indicators. A proven formula, and a philosophy that this side of the house believes strongly, is that keeping government spending and regulation low allows the government to keep taxes low. This results in an economy that is undistorted by constant and burdensome government intervention and a population that is freer and better resourced to participate within the same.

An economy unburdened by government intervention operates much truer to accepted economic theory and understanding; it therefore can be better analysed and more efficiently regulated. An economy that is over-regulated is harder to assist through intervention. Put simply, it is absurd to be continually correcting an overcorrection. Regulation and intervention should only ever be temporary and should be viewed as such by government.

It is not only the opposition that is imploring the government to focus on fixing the economy. Daniel Wills of The Advertiser, in an article on 19 April, entitled 'Budget: the ideal moment to get our house in order', says that South Australia is 'in desperate need of vision' and 'a plan for economic restoration'. A more accurate reflection of the state's woes could not be articulated. He goes on further to say that 'unemployment is rising alarmingly and needs urgent attention'.

What is the government's plan to address unemployment, particularly in the northern areas and amongst youth? In reference to the economic philosophy outlined above, it should not be to create endless task forces and commission departments to do study after study and hand down report after report. If the government cut regulation and taxes, freeing businesses of the shackles, it would allow businesses to dedicate more resources to productive activity. This would assist the wider economy and allow businesses the ability to hire once again.

All this goes to the heart of business confidence, which Mr Wills also identifies, saying that 'while South Australia's economic fundamentals are unarguably limp, its greatest problem is low confidence'. If business is good, confidence is high. While confidence can be intangible, it is not a hard concept to grasp, and it is an important indicator of economic performance. It is interesting that a Property Council ANZ study, which Mr Wills refers to in the article, shows that industry confidence has plunged since the election.

The business sector knows that Labor is not the party of business and delivers only poor policy outcomes for the economy. Mr Wills highlights that, stating:

…appalling job figures released last week showed it is harder to find work in South Australia now than at any time in the last 12 years.

These figures are clear evidence that everything that this government has tried has failed and that it is time to heed the advice of economists and those active in the business community by cutting taxes and regulation. We have seen this government time and again talk in a roundabout manner of similar themes, but what is obvious to us on this side is that the results do not follow the rhetoric.

The Premier promised payroll tax relief following the release of the Liberal Party's election policy, but it was significantly less than what is needed and what the Liberals committed to. These sorts of empty promises are demonstrative of a government that has long abandoned any desire for reform. It is tired and only concerned with preserving the woodwork and their lucrative positions in government. Mr Wills forewarns of another empty promise in the government's planned public sector reforms, as follows:

The government went to the election with a policy of shrinking the public service by about 4,000 jobs over four years. It has set similar targets in the past and come nowhere near them.

Those words should be embarrassing and damning enough for the government without my asking: if this is the standard, how do you expect business confidence to be strong and the business community to trust you?

While I would like to see the policy rationale of supply-side economics implemented here in South Australia, I understand that many opposite do not get it and will never understand how the economy works. Perhaps then they can start by sticking to the promises they have made to business and the South Australian taxpayer.