Supply Bill 2015

Second Reading

Adjourned debate on second reading.

(Continued from 2 June 2015.)

The Hon. T.J. STEPHENS (16:00): I rise today to speak to the Supply Bill 2015. As is the convention, the opposition will be supporting this bill; however, I think it is important for us on this side to ensure that all appropriations are being spent wisely and in accordance with the measures agreed to by the parliament. This appropriation is for $3.29 billion from the Consolidated Account, a figure which seems high enough in itself, and at this point every South Australian capable of doing so should be thinking: what is this being spent on? Are we getting good bang for our buck?

Government expenditure, as a percentage of GSP, is currently 17.2 per cent. With that figure at such a disgracefully high level, how can the South Australian taxpayer be happy with this situation? How can they have confidence in this government? They are clearly being conned by the Premier, by the Treasurer, and ultimately by this Labor government.

The rise in government expenditure has not coincided with a dramatic rise in the size of the public sector. Natural rises, along with population growth, CPI and the like, are to be expected, but ultimately the growth in net public debt to $13 billion is a result of budget blowouts as well as infrastructure spending and cannot be explained simply by these natural rises in cost. To suggest, as the Leader of the Government often does in this place, that the debt is due to the global financial crisis shows a gross misunderstanding of the state's finances and the economy.

Questions on the nature of government spending go to the heart of what South Australians want from their government, and I implore all South Australians to pay more attention to what they need, rather than what they want. It is something of a philosophical difference between the opposition and this government that we would prefer people to keep the money they have earnt, rather than take it away from them, arrogantly suppose what they actually want, and return it to them in the form of subpar and inefficient services.

Many services both sides consider essential include health, education, law enforcement, and emergency services, just to name a new, but the government has an obligation to deliver these services in the most efficient and best way possible, as equally as possible, to all South Australians. This may mean more spending in regional or lower socioeconomic areas of the state, and that should be expected and taken as a given.

If efficiencies are sought and adhered to then the increase to the public sector and therefore government operating expenditure would be modest at best. These increases cannot be justified by capital expenditure on infrastructure projects over the past 13 years, some necessary, others not so, and some having white elephant status. The desalination plant comes to mind. This means that, if in a rare case unbudgeted expenditure is required, it can easily be absorbed.

However, we know that unbudgeted expenditure has not been rare in the life of this government. In fact, the figure is now up to $3.9 billion in a total net public debt of $10.84 billion. If you take this figure and the $1.89 billion cost of the desalination plant, which sits there collecting dust and which also has an operating cost of $130 million per year, total debt is halved, not to mention the future debt saved on interest. The interest paid on this debt alone is over $700,000 per day, totalling $260 million per year. The increasing interest and the borrowing to service it is why debt is predicted to rise to $13.2 billion by 2016-17.

Let's not forget that these figures are calculated with historically low interest rates. Heaven help us when they inevitably rise. Now, the Treasurer assures us that this is a peak figure; however, given many of the other figures we have been promised over the life of this government, how can this be trusted? Given that Labor is so quick to spend for its own political gain, how can the South Australian taxpayer be assured there will not be another spike in spending, leading to even more debt and deficit?

My contribution at this point has largely been on the government's budgetary position, something that may seem relevant only to politicians but not to the average punter. This is not true. Every time the government blows its budget or spends on infrastructure it has to find the money from somewhere, either directly by raising the capital itself or by borrowing; it is no different from the private citizen, except that the raising of capital by government is not by earning and saving but by taxing its citizenry.

State government revenue is raised through payroll tax, land tax, stamp duty and various other fines and levies on the individual. In addition to this, the government is at the mercy of the commonwealth and its GST handout. What this means is that the government of the day is reliant heavily on the strength of the economy as to whether it has the revenue to cover the everyday operating costs, the bills, and the large capital infrastructure projects. Therefore, the government has an obligation to live within its means; it can promise the world in services and shiny new infrastructure, but ultimately it will come to the taxpayer for the money—which is exactly what we have seen.

We hear platitudes from the Premier and the Treasurer about payroll tax relief but we know that land taxes have increased and we see stamp duty relief only in very strict circumstances; however, we have seen exorbitant and extreme increases in the emergency services levy and in water charges, and the debt is still increasing. These increases will only get worse because the government refuses to make savings anywhere else.

We have seen the Treasurer sell off the Motor Accident Commission, which is predicted by the government to produce rivers of gold, but this remains to be seen. Unlike what the previous Liberal government did following the State Bank, none of this will lead to a dramatic pay-down of debt, which is what is required. The paying down of debt frees up the funds being spent on interest, and around it goes. The lower the levels of debt, the more can be spent on operating costs, which will lead to surpluses which can then be used for infrastructure upgrades or more competitive tax rates. This would spur on the economy, driving government revenue up through greater economic participation from business and consumers.

A stronger economy means more people in employment and less people reliant on government services, further reducing the financial burden on government. So it can be seen that the nitty-gritty of the budget and government expenditure actually does have a ripple effect which affects everyone within the state, and this should be realised by the Treasurer and the government. The effect of a strong economy on government revenue is something that clearly is not realised by this government, or that the government serves the people and not the other way around. The big government project from the Premier has led to a clouding of what is important.

It is plain to see that South Australia is floundering economically under this government. We have the highest unemployment rate in the nation, the lowest rate of start-ups, the highest tax rates, and burdensome regulation and red tape. It is difficult to start a business here even if one would want to, and clearly people do not.

On many of these economic indicators we have now fallen behind Tasmania. This has happened only in the past 18 months, which, curiously, aligns with the term of the newly elected Hodgman Liberal government. I will let honourable members draw their own conclusions, but I hope the people of South Australia are wary of that coincidence. With those few words I commend the bill to the council.

The Hon. J.S. LEE (16:08): I rise today to also support the second reading of the Supply Bill 2015, and would like to make a few remarks regarding that. Essentially, the government is asking permission of the parliament to spend $3.291 billion to cover the government's activities until the budget is brought down. Like every other year, my colleagues and I support the passage of this bill as it is needed to cover the wages and expenses within the government. Of course, we are hoping that the government will spend our money wisely.

Unfortunately, after 13 long years of Labor, the Weatherill government does not have a strong track record in the financial management of our state. South Australia's key performance indicators are shocking. Labor's economic mismanagement has resulted in South Australia having a net debt of $10.8 billion in 2014-15, as the Hon. Terry Stephens has already pointed out, and we are heading for record debt of $13 billion in 2016-17

South Australia remains the highest taxed state in the nation, and we are becoming less and less competitive. The unemployment rate is the highest in the nation, and I am not sure where the 100,000 new jobs by 2016 that the Labor government promised will come from. Questions have been asked over and over again in this chamber and the other place, but the government is unable to provide a truthful answer—because perhaps it simply does not know.

South Australians and businesses are struggling to pay their bills and make ends meet due to the high cost of living within South Australia. In 2012-13, 10,100 South Australian dwellings had their power cut off because they could not pay their bills. This is a jump of 50 per cent from 10 years ago. Other reports have shown that the number of customers who could not pay their water bills has also increased to about 6,000 customers per year.

The Labor government is putting South Australian families and businesses under more financial pressure by introducing yet another emergency services levy increase. There is absolutely no justification for another ESL hike, given that the Weatherill Labor government is set to receive an additional $857 million in unbudgeted GST revenue from the federal government. The Weatherill government's massive increases in the emergency services levy tax does not just hit house owners, it is levied on sporting clubs, community organisations, churches and independent schools. Let's face it, the ESL is a tax on families, businesses and the whole community.

Everywhere I go, whether speaking to community members in the multicultural sector or small business operators, they are shaking their heads in disbelief and disapproval of the Labor government's disgraceful and irresponsible actions. Increasing the ESL again shows just how out of touch Premier Weatherill is with South Australians, given that South Australians are struggling to make ends meet. It is completely unacceptable!

Small businesses are the engine room of our economy. They are run by people with families and each of them has to manage their business finance as well as a household budget. Any business that wants to grow their business or employ more people will be hit harder by the ESL increase. Anyone who has a building business or is contributing to the state's economy is affected the hardest by the ESL increase, particularly landowners and farmers because they are asset rich and perhaps financially or cash poor.

Along with all these additional taxes imposed on the average South Australian household, what is also concerning is the lack of confidence within businesses and consumers. As shadow parliamentary secretary for small business I have consulted with various business owners far and wide, and they have all raised with me how tough it is to do business in South Australia and how difficult it is for their business to survive under harsh economic conditions. The March 2015 Sensis' survey shows a sharp 13 point fall in business confidence in South Australia, meaning that South Australia continues to have the lowest business confidence of any state or territory in the nation.

Small businesses are struggling under high taxation and are in urgent need of relief. My colleague in the other place the member for Stuart has highlighted that 60 per cent of government contracts are given to interstate companies. How can that be? Why would over half of South Australia's governmental contracts be given to interstate companies? Do we not have capacity in this state to handle government contracts or does this state Labor government ignore the fact that we have capacities in this state to do the job well? Does the government know what impact it has on local industry when contracts are allocated to interstate firms? With a government that does not even have confidence in local businesses, it is no wonder business confidence in South Australia is continuing to decline and continuing to go downhill.

Small businesses are the economic engine room and job creator for the state. Therefore, if we do not support small businesses and allow them to expand and grow within a healthy economic environment, we will start to see damaging effects in employment, consumer confidence and business confidence and it will affect the economic growth of this state. Business confidence in South Australia now sits at just +6 whilst the national rate is +27, and the rate in New South Wales has soared to +38.

We renew our call for state Treasurer Koutsantonis to follow the commonwealth government's lead and back small business to grow our economy in next month's state budget. The Weatherill government needs to deliver genuine taxation relief to South Australian business, because it is currently struggling under the nation's highest tax regime.

The South Australian unemployment rate is 7.5 per cent, whilst the national rate sits at 6.2 per cent. Tax relief, a reduction in red tape and a government committed to generating economic growth is needed to improve confidence for small business in South Australia. We call on the Weatherill government to stop playing games with people's lives. We call on Treasurer Koutsantonis to do the right thing by reversing tax increases such as the emergency services levy.

Like many, I welcome and congratulate the commonwealth government on their $5.5 billion jobs and small business package announced in their 2015 budget. I, and many of my colleagues, were at the Prescott's budget lunch with federal Treasurer, Hon. Joe Hockey, as the guest speaker. Some of us also attended the SACOME and Property Council Australia's business luncheon where the Prime Minister, Hon. Tony Abbott, was the guest speaker. The business community is overwhelmingly supportive of the small business and jobs creation packages announced by the federal government. They see this as a great way to kickstart our state's economy.

The federal Liberal Coalition government has listened attentively to the business sector, unlike the Weatherill Labor government, and they have acted responsively by providing much-needed tax relief, a reduction in red tape and numerous other specific initiatives to get our economy back on track. Growth in small business, including the expansion of existing businesses and new start-ups, will open up opportunities for employment and serve to address the jobs crisis in South Australia.

There is no doubt that a robust small business sector can play a significant role in filling the gap when Holden ceases manufacturing in 2017. It is vital that government and industry work together to provide encouragement and to get the conditions right for small business to invest more, to grow our economy and to create new jobs. I join the leader Steven Marshall and state Liberals who call on the Premier and Treasurer to learn from the commonwealth government and start having a better focus on small business in next month's state budget.

As we know, many small businesses in South Australia are exporters. It is great that South Australian products are in great demand overseas. I want to turn my attention to international trade, which is also in my portfolio. In the week that Premier Weatherill has returned from China, the latest ABS data has revealed that the value of South Australia's merchandise exports has hit a crisis point. South Australia's value of merchandise exports were valued at $878 million in April 2015, which is 16.9 per cent lower than the corresponding period 12 months ago. The value of merchandise exports has plummeted 7.1 per cent to $11.43 billion over the last 12 months in South Australia. These statistics show that the South Australian export industry has reached a crisis point under the Weatherill Labor government.

This is not surprising, of course, because since the 2011-12 budget Labor has slashed funding for the main state government program aimed at stimulating exports from $30 million to $19 million. The Weatherill Labor government has continuously reduced funding to assist exporters and has missed prime opportunities to open new export markets. South Australia currently does not have individual trade strategies for a number of countries which are key export partners. This Labor government has closed and reduced funding to programs that assist our state to become more competitive on an international scale and its time investment is improved in an area that is critical to the state's economy.

I would also like to turn my attention to the high unemployment rate and the disastrous WorkReady program. I think many questions have already been asked in this chamber throughout the week, but this WorkReady program denies young, unemployed South Australians critical training to enhance their job prospects and denies current employees training to improve their work skills.

These disastrous decisions to cut critical job training programs will further impede South Australia's struggling economy and reduce investment and employment in this state. We call on the Weatherill government to look at some of the decisions made and start looking at the priorities they have. I hope for all of our constituents that there will be some relief in sight for small businesses, employment and average households in the next budget. With these words, I commend the Supply Bill to the chamber.

Debate adjourned on motion of Hon. J.M. Gazzola.