South Australian Economy

The Hon. T.J. STEPHENS (17:11): I rise to make a few comments on the South Australian economy, and in particular the government's handling of it. In an excellent opinion piece in last Tuesday's Advertiser, the commonwealth Minister for Finance, one of the coalition government's shining lights, Senator the Hon. Mathias Cormann, stated some home truths for the people of South Australia. His comments relate to the government's continued campaign of blaming the commonwealth for its budgetary pressures and the resultant pain on working South Australians. Senator Cormann says of the government's campaign:

This is just a desperate attempt to con South Australians into thinking the Australian government is responsible for South Australian Labor's 12 years of bad budget mismanagement.

The minister perfectly articulated what has been our argument on this side of the chamber since the state budget was brought down. I have said repeatedly in this chamber that the government is in a mire of its own making. The budget was in an unsustainable position well before the Abbott government was elected in September last year. Unbudgeted expenditure has continued at extreme levels, blow-outs on infrastructure projects and a failure to execute efficiencies in public sector employment over the past 12 years has led to this awful situation. The state Treasurer has had to resort to drastically cutting spending, as well as significantly increasing taxes, in order to pull back the deficit. As Senator Cormann identifies:

…it's [the state] government that's planning to cut $1.476 million from the South Australian health budget and $210 million from the South Australian education budget while increasing taxes.

This Labor government cannot continue to burden the taxpayer to cover its own incompetence and mismanagement. While the state government makes an effort to rein in spending, the dishonesty and gutlessness in blame shifting these cuts as a result of the commonwealth budget should be clear for all to see. As Senator Cormann points out, the commonwealth contribution to South Australia will actually increase over the forward estimates. As he says:

The truth is our investment in South Australia's hospitals and schools over the next four years increases by 34 per cent and 27 per cent respectively, or an additional $608 million. In fact, over the four years from 2014 to 2016-17, South Australia is now forecast to receive $1.3 billion more in GST revenue than the forecast in federal Labor's last budget from Wayne Swan and Penny Wong.

This makes the government's ESL increases all the more hard to stomach. These increases will raise $90 million per year, yet there is no significant increase in spending on emergency services. For this reason it is not a true emergency services levy but just another land tax, given that the increases are linked to land value.

I thank honourable members on the crossbenches for their resolve in blocking the government's attempts to impose a so-called transport development levy, which similarly raises a lot of revenue while expenditure on the very purpose the levy purports to raise revenue for had nowhere near the same increase. Both of these taxes remain deeply unpopular, as do most taxes. Given that we govern on the people's behalf, we as parliamentarians have an obligation to spend frugally, to keep expenditure low so that taxation may remain low.

This means more efficient government and more money for every South Australian. If South Australians have more money in their back pockets, they will spend more. If businesses have more, they can afford to employ more people. Budding entrepreneurs may finally have enough for that start-up. All of this, Senator Cormann acknowledges.

The reality is that South Australia is the highest-taxed state in the nation and has the lowest rate of business start-ups on the mainland, while the number of businesses in South Australia has grown at half the national rate. It is a simple formula, which I have outlined repeatedly in this place, that the path back to prosperity begins with the cutting of unnecessary government spending. By reducing the size of government back to its original mandate, surplus expenditure can go back into the pockets of tax payers.

These individuals who drive the economy are consumers, business owners and workers. It is not, and should never be, government. The government is responsible for their macroeconomic conditions but the rest is up to the individual. We understand that on this side of the council. The commonwealth government understands this, so it is time for this state Labor government to wake up and really commit to this ideal for the sake of all South Australians.