Appropriation Bill 2015

Second Reading

Adjourned debate on second reading.

(Continued from 8 September 2015.)

The Hon. R.I. LUCAS (17:02): I rise on behalf of Liberal members to support the second reading of the Appropriation Bill. There is, of course, a companion piece of legislation. I am not sure whether it has arrived in the Legislative Council yet but, if not, it will arrive soon and it includes the details of budget and other changes to which I will address a number of technical issues raised with me by some tax lawyers, and others, which will require a detailed response from Treasury officers.

I would assume at some stage, potentially during the committee stage, that there will be an opportunity to put questions to the minister. Whilst it is not in relation to this particular bill, I do foreshadow that there have been a series of questions that have been raised in relation to the Budget Measures Bill. They are essentially of a technical nature, and I propose during the second reading to put the questions and the government will have an opportunity, clearly, at the response to the second reading, to provide some answers. I flag that I would be proposing that there be some gap between the closure of the second reading and receipt of those answers and finalisation of the committee stage to allow me to go back to some stakeholders with the government's response to the detailed questions.

I will now address the bill that is before us at the moment, which is the Appropriation Bill. I do so through almost the sole prism of the jobs crisis that confronts us in South Australia. I want to address some comments about that jobs crisis and then, more particularly, look at what, if anything, this budget does in terms of tackling the jobs crisis in South Australia.

We had the sad news today—sad news for many struggling South Australian families who are not only struggling to pay their bills but also to hold on to their jobs or indeed to find jobs—that South Australia's unemployment position is again the worst in the nation. On the trend figures, unemployment in South Australia increased from 7.9 per cent to 8.1 per cent this month. The national figure is almost a full two percentage points lower at 6.2 per cent. The seasonally adjusted figures—the figures to which the minister in question time referred—are not much better at 7.9 per cent. Again, the national figures are at 6.2 per cent.

Clearly, nationally we have unemployment at around 6 per cent and in South Australia unemployment is around 8 per cent on whatever measure you wish to choose. I can only say, with the greatest respect to the Leader of the Government, that she is either misinformed or delusional, or perhaps both, in terms of her interpretation and her attempted defence of the employment position in South Australia. Let me quote what the minister said on some radio stations today: FIVEaa at 12 noon reports a direct quote from the minister as saying:

The national economy is fairly sluggish at the moment, so we wouldn't expect to see significant changes in the short term, but some of the trend data is looking fairly solid with a general but slow improvement.

How anyone could see a worsening of the trend unemployment figures from 7.9 per cent to 8.1 per cent as being 'fairly solid with a general but slow improvement' defies any reasonable, logical or rational interpretation of the situation at the moment.

This will be a recurring theme of my contribution: sadly, what we see in this government is that, after almost 14 long years of failure in term of managing the state's economy, this government has just lost touch and these ministers have simply lost touch. If they ever had touch prior to coming in to parliament and in to their ministries, they have certainly now, after 14 long years, lost touch with what is really going on out there in the community.

Put simply, all the minister needed to do was to show some empathy, some compassion and some acknowledgement that there are a lot of people suffering out there as a result of what is occurring in the South Australian economy. Clearly, if South Australia is so far and away worse in terms of its economic performance than every other state, this state government and these ministers have to accept some responsibility for that. Of course, we saw today in question time the childish giggling from ministers, the arrogance of other ministers, and the incompetence and naïveté of some ministers in this chamber when asked serious questions about why it is that in South Australia our economic performance, particularly in relation to unemployment, is so much worse than other states was evident for everyone to see.

When the quite logical point is made and when these sorts of issues are debated in sensible circles—and certainly that does not include Weatherill government ministers—the issues are raised as to why, when you look at the economic profile of states like Victoria and South Australia, which for decades have been the two states most reliant on the manufacturing industry and in particular the automotive industry but also other elements of the manufacturing industry, Victoria has a 6.2 per cent unemployment rate and yet South Australia has an 8.1 per cent unemployment rate.

If there were decisions of the federal government that impacted on manufacturing over many decades—and there have been, under federal Liberal governments and federal Labor governments, over many decades—then they must have impacted on Victoria as much as they have impacted on South Australia. There were again puerile attempts at avoiding questions today in relation to this particular issue by saying, 'Well, the problems in South Australia are solely caused by the current federal government getting rid of Holden.'

The obvious response to that was given today by members, 'We have not yet seen the impact of the closure of Holden on these particular figures.' Holden, believe it or not, is still operating in Adelaide. It is projected to close over the next couple of years, and certainly there are initial impacts, but the impact of the closure of Holden is not reflected in these particular figures.

If one wants to look at it in relation to federal governments, both Labor and Liberal, in terms of the impact on the car industry over many decades, as has again been pointed out, the other major car employer in South Australia, Mitsubishi, closed under the Labor government's watch. If one wants to sheet home blame for automotive manufacturers in South Australia, then this government can accept on behalf of its own party responsibility for the closure of Mitsubishi in South Australia.

We have seen the decisions already in relation to Ford and Toyota in Victoria, and the impact has already been felt in Victoria over a number of years of the decline of the importance of the automotive industry in terms of employment in that particular state. The reality is that these figures in South Australia can be validly compared with another manufacturing state like Victoria. For all the childish giggling in terms of ignoring the question—put that to the side—there is no response from the government why Victoria has managed to perform at around about the national level in terms of the 6 per cent unemployment rate (or just over), yet South Australia has an unemployment rate of around about 8 per cent.

Clearly, the key difference, in part, must be due to the incompetence, the negligence and the poor performance of the state Labor government in South Australia. As I said, the delusional responses that we see from ministers like minister Gago in question time today, and her public responses to the 8 per cent unemployment figure today, are proof positive of particular contention.

In terms of looking at the economic position in South Australia and the jobs position in South Australia, it has some independent commentators. The South Australian Centre for Economic Studies released a number of reports this year—in June, 'Should South Australians really be "down in the mouth"? macroeconomic performance'. It is a look at the macroeconomic performance in South Australia over the last 24 years. It states:

The accepted narrative about South Australia's economy is one of sustained underperformance relative to the other states, with the exception of Tasmania.

This narrative is borne out by the headline data on economic performance. For example, gross state product (GSP) grew at an average rate of 2.3 per cent per annum over the 24 years to 2013/14, significantly lower than the national average over that period of 3.1 per cent per annum.

Again on page 1 of that particular report, it further states:

This weak performance in growth of economic output has been reflected in the labour market. Over the same time period, South Australia experienced the second lowest employment growth among the states at 1.3 per cent per annum, with only Tasmania experiencing lower growth (1 per cent) and well below the national average of 2.1 per cent. The labour market participation rate in South Australia was only 62.4 per cent of the population aged over 15 compared to 65 per cent nationally. And over the last four years South Australia has had an unemployment rate below the national average in only 6 of the 48 months.

There are many more quotes and figures in SACES' report of June 2015. I will not go through all of those because they make for depressing reading, but what they show is a sustained period of underperformance in South Australia and the reality is that for much of the last 30 to 40 years the Labor Party in South Australia has been the party in government and therefore primarily responsible in terms of the economic performance reflected in those particular figures.

The other point I highlight, when I compare them to some more recent figures, is that in this analysis over 24 years the only comforting factor was that we were not actually bottom. There was one other state over the 24-year time period which always performed worse than us and that was Tasmania. That is small comfort but, nevertheless, we were not bottom of the pile. Tasmania was bottom of the pile in looking at that 24-year period of analysis.

The federal Department of Employment has produced some figures which were released in August of this year which released their five-year employment forecasts. They forecast employment growth between November 2014 and November 2019 for the various states. For New South Wales the forecast is for a creation of 358,800 jobs; Victoria will create 308,700 jobs; Queensland will create 243,600 jobs; but South Australia in that five-year period is forecast to only add 53,800 jobs. In percentage terms, South Australia's estimated jobs growth of 6.7 per cent over five years is clearly the lowest of all of the states and territories and even worse, on those particular figures, than Tasmania which, as I said, over the 24-year time period had been bottom of the pile.

I will have a look now at an analysis by Professor Dick Blandy when he wrote in InDaily an article headed 'No credible plan to fix jobs crisis'. I recommend to those members who have not read the full article to have a look at it. Let me just quote the two figures in that which I think are particularly worrying. He looks at the recent and the next year forecast for jobs growth in South Australia compared to the national figures and what he shows there is that in 2013-14, jobs growth nationally was sluggish at 0.75 per cent, but in South Australia it actually went backwards by 1.2 per cent.

For the last financial year 2014-15, jobs growth nationally was 1.5 per cent. In South Australia jobs growth was only 0.5 per cent, and the forecast for 2015-16 is that jobs growth nationally will be 1.5 per cent, but employment growth in South Australia is forecast to be just 1 per cent. The recent performance and the projected performance for this financial year in terms of employment in South Australia compared to the national figures again shows the significant problem we have in terms of jobs growth.

I seek leave to have inserted into Hansard without my reading it a table, which is purely statistical, in terms of employment forecasts for 2015-16.

Leave granted.

The Hon. R.I. LUCAS: This table simply takes from the most recent budgets, with the exception of Queensland's number, which at the time of the preparation of this table was not available, so this is the 2014-15 estimate for Queensland. What that shows is the estimated jobs growth for 2015-16 in each of the budget documents.

That just reinforces the figure I have just put in terms of South Australia's performance relative to the national employment growth forecast, because what the budget documents in New South Wales show is that they project a 1.75 per cent jobs growth for this year; Victoria projects 1.5 per cent; Queensland, in the 2014-15 budget, was projecting a 1.5 per cent jobs growth for 2015-16; Western Australia was projecting a 1.75 per cent jobs growth; and South Australia is at 1 per cent—1 per cent, when all of the others are somewhere between 1½ per cent and 1¾ per cent in terms of jobs growth in their own budget documents.

I refer to a graph of varying estimates of jobs growth for 2015-16 which, as I said, this is in South Australia. This budget document is estimating a jobs growth of 1 per cent for 2015-16, but if we go back just three years in the 2012-13 budget document, they indicated then—'they' being the South Australian government—that by 2015-16, we would be seeing 1.75 per cent jobs growth in the 2015-16 financial year.

In the 2013-14 budget, that estimate for 2015-16 jobs growth dropped from 1.75 per cent down to 1.5 per cent. Then in the 2014-15 budget, it dropped again to 1.25 per cent. Then finally, in this year's budget it is down to 1 per cent. So, over those four budgets the employment forecast, the jobs forecast for 2015-16, started off as 1.75 per cent, dropped to 1.5 per cent, dropped to 1.25 per cent and is now dropping to 1 per cent. I think most economic commentators are indicating that it is highly unlikely that that 1 per cent jobs growth figure will be achieved.

All of those figures are just simply saying that this government is claiming that this budget is a jobs budget, but the lie to that particular claim is that the government and the Treasurer's own figures indicate that they are only predicting a 1 per cent jobs growth in South Australia in 2015-16. As the tables and the figures I have referred to before indicate, that is the lowest estimate of jobs growth of all of the state governments, and in terms of the other estimates it is significantly lower than the national figures and the national estimates that are done in terms of comparisons as well.

If this Premier, this Treasurer, this government is claiming that this budget is all about jobs, then their own figures demonstrate the failure of this particular budget because if it was genuinely about jobs, then they would have some confidence to be able to say that jobs growth would match the national average or, indeed, even outperform the national average. Yet, as I said, their own jobs growth figure estimates clearly indicate the failure of this particular budget. It will barely replace, as Professor Dick Blandy has pointed out, labour-force growth and population growth in South Australia in terms of the number of jobs that are being generated.

What this is showing is that this is a failure of a budget in addressing the key issue that needs to be addressed in South Australia, and that is the jobs crisis. It again demonstrates the point that after 14 long years this government is following, and has been following, the wrong policy and the wrong policies in terms of tackling the key economic problems facing the state of South Australia and, in particular, the jobs crisis.

What we have seen is a government that is addicted to either increasing taxes or introducing new taxes. We have seen the massive slug on the family home in terms of the massive increase in the emergency services levy in South Australia over the last two years. So on a house with a value of $500,000 in the space of two budgets the $102 ESL slug has now jumped by $205 to $307, a $205 increase on a $102 ESL charge in the space of just two budgets—and that is for a house valued at $500,000. When you go to higher house values, $750,000 for example, the increase goes from $128 up to $435, a more than $300 increase on that particular house value. Of course, the increases get bigger the higher the value of the particular property.

We have seen the government introduce the 'fun tax', or the passenger transport tax, which has increased the costs of, for example, football and sporting events and other entertainment events at the Adelaide Oval and other venues. We have seen the government's attempts to introduce the car park tax, which were defeated. In the last week we have seen another announcement from Premier Weatherill in relation to a new planning tax that the government is going to attempt to introduce.

We are now seeing the government—and I will not take too much time today, but I will certainly go back over the promises and statements that have been made over the last 10 years in relation to the GST—Premier Weatherill and Treasurer Koutsantonis, breaking every promise they made and their Labor colleagues have made over the last 12 years in relation to the GST by supporting a 50 per cent increase in the rate of the GST; that is, an increase in the rate from 10 per cent to 15 per cent.

That is not to do as the original GST was designed to do, to introduce a GST and remove a whole range of state-based taxes and charges such as the financial institutions duty, the bed tax, and a range of stamp duties which where the original package approved by governments back in 2000 and 2001. This particular increase in the GST, the 50 per cent increase in the rate of the GST proposed and supported by the Premier and the Treasurer, is proposed to fund increased expenditure on spending by the South Australian government, and other governments as well. We all know that is completely contrary to every promise and commitment that the Premier and Treasurer gave over the last few years, and that previous premiers and treasurers have given on behalf of Labor governments during that period.

To other issues, in relation to an analysis of this budget I seek leave to have incorporated into Hansard a purely statistical table which highlights the increases in commonwealth government funding to the state of South Australia.

Leave granted.

Table 3.14: Grant revenue ($million)

The Hon. R.I. LUCAS: This headline is Commonwealth Grant Revenue. It is table 3.14 from the budget documents. Without going through all the detail of it, what it demonstrates is that if one looks at the 2014-15 year and compares it to the estimates for 2018-19 (that is, in the forward estimates), there is an increase per year of $2.3 billion of commonwealth funding to the state of South Australia. That is a combination of current grants, GST, and capital grants. That is, total commonwealth funding to the state of South Australia increases from $8.3 billion last year to $10.6 billion in 2018-19, and the Under Treasurer, Mr Rowse, confirmed at the Budget and Finance Committee that it was a fair interpretation of those figures that there would be this $2.3 billion per year increase in funding by 2018-19.

Whilst the opposition has accepted that a number of the commitments that had been given in relation to health and education in particular by the federal government had not been kept in the last two federal budgets, what this shows is that despite that there is still $2.3 billion of increased funding coming to the state of South Australia and a significant portion of that is through GST which is unallocated. We have often heard from the Treasurer and the Premier, 'Well, yes, we are now getting this extra commonwealth funding, but it is all tied up to roads and whatever else it is.' A significant portion of this extra $2.3 billion comes by the way of GST funding which is unallocated; that is, the state of South Australia can spend it on whatever priority it so chooses.

I seek leave to have incorporated in Hansard another table headed, 'Public sector growth', which is purely statistical.

Leave granted.

Employees in SA Public Sector

Source: SA Public Sector Workforce Information June 2014 Table 2, ABS cat.6302.0

The Hon. R.I. LUCAS: This particular table is one that has been constructed by the well known economist in South Australia and public commentator, Darryl Gobbett. It is headed, 'Public sector growth.' It is an analysis of the employees in the South Australian public sector and it is an analysis that he has done having looked at source documents such as the South Australian Public Sector Workforce Information over a number of years. I put it in my contribution for those members who might be interested in Darryl Gobbett's analysis of budget pressures.

He demonstrates in that that in the space of the last 12 years (from 2002 to 2014) the number of employees in the South Australian public sector has increased from 69,670 to 85,371. He then does some analysis in relation to persons per 1,000 population per 1,000 employed and he also does some analysis in relation to salary costs in the state of South Australia compared to some other states as well.

For the sake of those who want to follow the Appropriation Bill debates more closely, Darryl Gobbett's analysis, as with Professor Dick Blandy's, are of interest. I do not accept everything that is included in both the Blandy and Gobbett analyses, but they certainly merit debate, discussion and consideration by those who want to have a genuine look at the budget problems that confront the state of South Australia.

To that end, just to add to the Gobbett analysis in relation to his 12-year analysis of workforce figures in South Australia, I seek leave to include in Hansard a purely statistical table in relation to, 'Budget estimates for Public Service—June 2015.'

Leave granted.

Budget estimates for public service—June 2015

The Hon. R.I. LUCAS: This table indicates, over the last two years, the various estimates from the state Labor government as to how many public servants there would be in South Australia as at the date of June 2015. It starts off looking at two years ago, the 2013-14 budget, and says: okay, what did the state Labor government say, that by June 2015 (that was to be two years later) how many public servants would they have in South Australia? Their estimate at that stage was 77,643. They said they were going to be reducing by some thousands the number of full-time equivalent public servants.

When one traces through the various midyear budget reviews, the budgets and then the most recent budget in 2015-16, instead of 77,643 full-time equivalent public servants, as at June 2015 there were actually 81,665 full-time equivalent public servants. That is 4,022 full-time equivalent public servants higher than the Weatherill Labor government said there would be just two years ago.

This is nothing to do with what the Liberal Party or independent economic commentators estimated, predicted or said they would do; this is what Premier Weatherill and Treasurer Koutsantonis said just two years ago—what they would do in terms of managing the state budget and in terms of saying, 'Okay, what is the appropriate number of full-time equivalent public servants in two years' time?' They said, 'The appropriate number to deliver all the services, to protect the doctors and the nurses and the teachers and the police'—so not to touch any of those—'we could do all the things we need to do with 77,643 public servants'.

In the end, in two years, the government has overshot the mark by 4,000 full-time equivalent public servants. If one does the estimates of approximately $80,000 to $100,000 per public servant, you can come to a very quick calculation as to what the increased estimated cost per year of overshooting the mark by 4,000 public servants in South Australia would be. These are, as I said—and I hasten to say—the Labor government's own estimates; they are nothing to do with commitments made by other political parties or by independent commentators.

So what is the problem? The problem we have in South Australia—again, time will not permit today to go into all the detail—is that we have a government that is sadly addicted to waste and financial mismanagement. We have seen it in the big projects like the new Royal Adelaide Hospital. During the 2010 election there was an absolute guarantee from the government that it would cost $1.7 billion. They attacked the Liberal Party's estimates. They said that they had professional estimates done and theirs would be $1.7 billion. The latest estimate is $2.3 billion, a blowout of $600 million on the cost of the new Royal Adelaide Hospital already. That is likely to continue because, clearly, it is going to be delayed and there are going to be significant problems involved there.

There are other IT projects we have seen, like the EPAS project, which was originally estimated to be $200 million; it was going to cover all of the hospitals in South Australia and it is now over $400 million and it is only covering three hospitals. As the Hon. Mr Ngo will know only too well, as a former senior advisor to the health minister, who is responsible for this appalling disaster at great expense to the taxpayers of South Australia, the last estimates were $422 million and the government is having to revise the scope of it. They have had many attempts to try to revise this particular project and yet the minister continues to defend it in a public way.

We have seen it with smaller IT projects such as in Treasurer Koutsantonis's own department—the RISTEC IT project. It was meant to cost $20 million but it is now costing $55 million. The only reason they have limited the haemorrhaging to $55 million is that they have had to reduce the scope of the project. It was originally going to cover all of the tax bases in terms of revenue collection but once they got to a $30 million blowout they had to stop it and say, 'Well, we will just limit the scope. We won't let it cover revenue collection in a range of tax areas because we don't want to go back to the parliament, to the Auditor-General, again to show that the blowout has been even more.' A $20 million project blows out by $30 million.

There were smaller budgets, like the Commissioner for Public Employment. We had the appalling situation where supposedly the model template for good public sector governance, the Commissioner for Public Employment, presented to the Budget and Finance Committee, and we were looking at the $2 million blowout—I cannot remember now whether it was a $5 million or $7 million budget or something on an annual basis. There has been appalling overspending and waste of money on a range of pet projects which are now being attempted to be reined in by the government.

We have seen the appalling mismanagement of the targeted separation package program. If I can put one figure on the public record it is that in the last four years or so this government has spent $377 million on targeted separation packages. The intention was to reduce the number of public servants in about four years. I think the numbers were that between late 2010 to June 2015 the government spent $377 million on targeted separation packages and the goal was to reduce the number of public servants. In that time period, the actual number of public servants increased by 2,160.

The government actually spent $377 million on supposedly reducing the number of public servants by 4,000, yet it increased the number of public servants by 2,160 in that five-year period. What we have is an incompetent government which is shovelling hundreds of thousands of dollars into the pockets of public servants out one door whilst at the same time shovelling people through another door into the Public Service.

We have the situation where government departments are giving targeted separation packages to 79-year old public servants. With the greatest of respect to the 79-year-old public servants, if they are doing a good job, good luck to them and they can continue to be employed under the age discrimination legislation. Why any sensible employer would pay someone up to two years' salary at the age of 79 to leave their job is beyond comprehension but, indeed, that is what has been happening. Ministers in government departments have been paying 79 year olds, 76 year olds and 73 year olds targeted separation packages to leave the Public Service.

If I can let some of these ministers into a little secret, I suspect most of these 79 year olds and 76 year olds are simply continuing to work not because they want to but because they know if they stay there long enough they will get a one-year or two-year payout to leave the Public Service.

The Hon. K.J. Maher: Is that what you are aiming for?

The Hon. R.I. LUCAS: I say that they will get a payout. As the honourable minister knows, there is no payout for length of service in the parliament. That is the brutal reality: $377 million on a program to reduce the number of public servants, yet the government delivers 2,160 extra public servants.

The final appalling example in terms of public sector management was the new head honcho of the Department of the Premier and Cabinet (Mr Kym Winter-Dewhirst) who waltzes in on a $550,000 package (supposedly, a $125,000 salary increase except that there were hidden benefits being paid to him which takes his package up to close to $600,000) who, in his first days in office, sacks a series of senior public servants and executives not because of incompetence or nonperformance but because he, and others, decided that they did not want those particular executives in the Department of the Premier and Cabinet.

One particular public servant who was only one year into a five-year executive contract was paid out somewhere between $200,000 and $300,000 in termination payments yet, within weeks, the Weatherill government reemployed that same public servant as an executive in another government agency (SAFECOM). You have a chief executive who sacks someone from one department, pays out of taxpayers' money $200,000 to $300,000 and then within weeks reemploys the same person on an executive contract in another department.

Where is the sense in that sort of public sector management? Where is the sense in the taxpayers paying when you have agencies and individuals complaining about funding cuts, the importance of continued funding in a number of areas—in the health and social welfare areas and the school sector where critical programs are being cut—yet you have the Premier in his own department forking out $200,000 to $300,000 of taxpayers' money to pay a termination payment for an executive and they just reemploy that person immediately afterwards?

I conclude by saying that the Liberal Party has already made it clear that the direction this government has taken the budget and the state is the wrong direction. We were probably the first opposition ever last year, four years before the 2018 election, to launch the first of its major policy initiatives for 2018. Steven Marshall and the Liberal Party committed that, if elected in 2018, they will reverse the $90 million a year slug on ESL on the family home and businesses that the Weatherill government imposed in last year's budget. This was a commitment worth $360 million over a four-year budget estimates period.

The Liberal Party, and Steven Marshall in particular, cannot be accused of not putting out well before the 2018 election its clear policy direction, that is, the massive reduction in ESL charges on struggling South Australian families is the first in a series of policies, but if we are going to turn the state around we are going to have to reduce the costs of doing business for small and medium-size businesses in South Australia. Our businesses need to be able to compete on the national and the international stage and, to do so, taxes and charges, and business costs such as workers compensation premiums, need to be further reduced.

The Liberal government helped the Labor government clean up the mess it created over 12 years, which resulted in 3 per cent workers compensation premiums. That has now dropped to 1.75 per cent, but still most of the other states have premium rates of just over 1 per cent. We need to further drive down workers compensation premium levels on small and medium-size businesses in South Australia. There are a range of other taxes, charges and costs of doing business that need to be tackled by governments in South Australia.

Clearly, this Labor government over almost 14 years has demonstrated its inability or its unwillingness to (a) recognise the problem and then, (b), more importantly, do something about it. As I said, after nearly 14 years of this Labor government, it is time for a change. The people of South Australia and businesses in South Australia are now increasingly acknowledging that after 14 years, whatever it is that this government has been doing, it has not been working.

If you have an 8 per cent unemployment rate in South Australia after 14 years, Victoria has an employment rate of just over 6 per cent and Tasmania is performing better than you are, then whatever you are doing in South Australia is not working. It is time for a change after 14 years, and the challenge for the Liberal Party in 2018 and in the period leading up to 2018 is to further develop the policies that we commenced releasing last year in terms of the ESL to demonstrate to the people of South Australia that Steven Marshall and his team are the ones who have the policy objectives and the policy commitments to turn this jobs crisis around and produce a situation where South Australia's jobs and economic performance at least mirror, if not better, the national performance.

The Hon. G.A. KANDELAARS (17:48): I rise to make a second reading contribution to the Appropriation Bill for the 2015-16 fiscal year. In doing so, I want to concentrate my remarks on the Labor government's reform to taxation and its commitment to infrastructure. South Australia faces serious challenges, and we acknowledge that. The failure of the federal government to invest in our automotive industry, the uncertain future of our submarines, and continued commonwealth cuts to spending in health, education and infrastructure have all had an impact on our economy.

It is a pity those opposite have failed to stand up for this state. They let those in the federal government close down the car industry not only in this state but all over Australia. What a failure. Then let's talk about the submarines: a commitment from the federal government to build submarines here and what do those opposite do? Nothing. Then let's take health and education. What do we have there? What an appalling state in terms of what those opposite do in terms of defending this state—nothing, absolutely nothing. How can they talk?

The Labor government's tax reform stands out, as the Treasurer said, as a beacon for business investment in this state. By July 2018, all business property transactions in South Australia will be tax free—the only jurisdiction in the country to implement such reform. It aims to create an efficient tax system which rewards effort, minimises harm to the economy and incentivises investment decisions made by business by removing destructive transactional taxes. Furthermore, it recognises that improved productivity will come from state-based reform. It aims to lower the cost of doing business in South Australia by unlocking the entrepreneurial spirit that has grown in the state, helping South Australian business to invest and grow.

The reform package over the next four years will abolish eight taxes. In that time almost $670 million in tax reductions will have been provided to businesses and families in this state. From 2018, more than $268 million will have been put into the pockets of South Australia householders and businesses. This is all done without any new taxes. There will be no tolls, no tax on foreign investment and no broad-based land tax on the family home. Over the next decade $2.5 billion will be returned to businesses and the community.

The government plans to abolish share duty; stamp duty on non-real property transfers, including non-fixed plant and equipment; expand the stamp duty concession for exploration tenements to include retention tenements; and expand the eligibility criteria for corporate construction relief. As of 1 July, the government will:

abolish the Save the River Murray levy, saving householders $40 and businesses $182 per year respectively;

introduce the cost of living concession for pensioners and low income earners, protecting the most vulnerable in our community;

offer small businesses a payroll tax rebate;

increase the land tax threshold by around 2.5 per cent;

introduce conveyance duty and land tax exemptions for principal residential properties transferred into special disability trusts for no consideration; and

abolish the Hindmarsh Bridge levy.

Unlike the Abbott government, this government will always fight to protect our most vulnerable. The new cost of living concession will enable 205,000 households to put up to $200 towards their greatest needs, whether it be electricity, gas and water bills or council rates.

As a result of this reform, more South Australian pensioners will be better off. Eligibility for the new cost of living concession has been expanded to include 45,000 pensioners and low income earners in South Australia who are tenants. From the date of assent of the amended legislation, the government will amend the Stamp Duties Act 1923 to:

expand the stamp duty exemption for farm transfers between family members;

extend the definition of family groups in the Stamp Duties Act 1923 to include de facto couples;

replace the stamp duty ex gratia relief administrative schemes for disability service providers, incapacitated persons and property donations to charities with legislative exemptions;

amend the Motor Vehicle Act 1959 to replace a registration fee ex gratia relief administration scheme for vehicles used for the transport of incapacitated minors with legislative relief; and

amend the Taxation Administration Act 1996 to only require 50 per cent of the tax in dispute to be paid before an appeal can be lodged.

From 1 July 2016, the government will reduce by a third the stamp duty on non-residential real property transfers with a further third reduction of stamp duty on non-residential real property transfers from 1 July 2017. On 1 July 2018, the government will abolish stamp duty on non-residential real property transfers, abolish stamp duty on transfers of units in unit trusts and abolish stamp duty on transfers of mining licences and tenements.

By abolishing stamp duty on non-real and non-residential property transfers, we will remove a large barrier to business investment and expansion, encouraging economic growth and job creation. More than 6,800 transfers of non-residential property will benefit each year from these changes. It will provide a lasting improvement to South Australia's economy and encourage the creation of new businesses and new careers for South Australians. Every single business enterprise in South Australia can benefit from these business tax changes.

Moving on to the issue of infrastructure, the government has and will continue to invest in the South Australian economy through the investment in infrastructure. Unlike those opposite, the government does not believe investing in infrastructure is a false economy. We know the public sector investment leverages private sector spend and creates real jobs for real people. Every million dollars invested in construction in South Australia generates $2.9 million and 37 jobs in wider economic benefits. The government has been delivering projects of lasting state significance and supporting thousands of jobs and many businesses. We have invested in economic infrastructure such as:

improving freight import and export efficiencies by deepening the Outer Harbor channel for the Panamax ships;

improving road and rail freight efficiencies with the Port River road and rail bridges and the Port River Expressway;

linking the Mid North and Barossa Valley to our port with the Northern Expressway;

we have duplicated the Southern Expressway;

we are improving freight movement and productivity around the Wingfield transport and logistics precinct with the South Road Superway;

winning the air warfare destroyer program by investing in Techport and the ship lift at Osborne;

ongoing improvements to both the Sturt and Dukes highways, with upgrades with the commonwealth to unlock freight productivity;

we have developed a burgeoning industry here with the new South Australian Health and Medical Research Institute (SAHMRI); and

we are supporting our tourist industry with both stages of the Convention Centre expansion.

These projects have been matched with other social infrastructure such as the new Royal Adelaide Hospital, the Adelaide Oval, the new school PPPs, the refurbishment of all our metro hospitals plus the significant number of regional hospitals, the tram extension and rail electrification. Despite the opposition's naysayers criticising that investment, and I refer to things like the Adelaide Oval and the RAH, I believe those things will be greatly appreciated by the community at large.

The government will invest $10.8 billion in key projects across all areas of the government over the next four years and a key level of spending equivalent to over 2 per cent of the state's gross state product each year. The $10.8 billion program of investment will support 4,700 jobs per annum. Infrastructure projects in key areas include: $216 million towards education facilities, including a new city high school next to the current Royal Adelaide Hospital and training centres in schools; $50 million towards upgrades and new children's centres; a planned $7 million in the improvement of the Fremont-Elizabeth City High School; $5 million for the Swallowcliffe Primary School in Davoren Park; and $4 million for the Christie Downs Primary School.

An amount of $3.3 billion will go towards vital health facilities, including the redevelopment of major and regional hospitals, such as the new Royal Adelaide Hospital. Transforming Health initiatives include $159.5 million for the Flinders Medical Centre, which is a 55-bed rehabilitation centre and older person mental health service; $32 million for Modbury Hospital for a hydrotherapy pool and the doubling of the rehabilitation beds; $20.4 million for The Queen Elizabeth Hospital for an additional level to the allied health and rehab building and a new hydrotherapy pool; $15.1 million for a post-traumatic stress disorder centre of excellence at Glenside.

Further, $353 million will go towards public transport, including a $160 million extension of the O-Bahn into the city, which supports approximately 450 jobs over the three-year construction period, and the Gawler line electrification of $152 million of work commencing in 2017-18. There will be a $197 million major redevelopment of the Adelaide Festival Centre precinct—

The Hon. J.S.L. Dawkins interjecting:

The PRESIDENT: Order!

The Hon. G.A. KANDELAARS: —including upgrades to the Festival Plaza and the Adelaide Festival Centre, and a new car park. Infrastructure spending of $1.7 billion will include funding of the Kangaroo Creek Dam safety project, water treatment plant upgrades at Bolívar and Glenelg, the relocation of the Murray Bridge wastewater treatment plant, and the Port Wakefield to Pine Point water supply upgrade.

The government is also committed to $1.8 billion in road funding over the next four years. Over four years, $65 million will be used for road upgrades to boost productivity and improve safety on regional and suburban roads. This includes $70 million in additional road maintenance funding over the next four years to deliver more than 150 road upgrades throughout the state. It will also support more than 400 jobs, and it takes our total road maintenance expenditure over the next four years to approximately $400 million.

A total of $40 million will be spent on shoulder sealing on rural and regional roads, funding 35 road safety improvement projects, including shoulder sealing and audio-tactile line marking on high-speed roads across the state. Run-off road crashes and head-on crashes account for 72 per cent of all fatal and serious injury crashes in rural areas. Over five years it is estimated that more than 30 fatal and serious crashes can be prevented, and more than 70 casualty crashes avoided, through this initiative. All tendering will be conducted in accordance with the state's industrial participation policy.

In addition, a further $5 million for road safety work will be invested in upgrades to the Sturt Highway which will include bridge widening and barrier upgrades, new overtaking lanes will also be installed, and there will be shoulder sealing around the Berri bypass. The Sturt Highway forms part of Australia's key national highway network, providing a link between South Australia and interstate. Not only will this project improve safety of this key route, it will also remove limits on the use of higher productivity freight vehicles along this vital interstate connection. The project will commence in 2015-16 and is expected to be completed in 2018-19.

Importantly, the 2015-16 state budget includes a $55 million investment over three years to build the new Gawler East connector link road linking Potts Road and the Springwood development. Building this 2.8 kilometre road will allow a further expansion of a residential development across Gawler east. This project will not only support approximately 100 jobs in northern Adelaide, but housing development the road unlocks will support thousands of construction jobs over the next 10 years. It will also provide for local traffic with direct access to Main North Road bypassing the Gawler town centre, which will reduce travel times for the greater Gawler community.

These projects are in addition to the $1.5 million in funding for the two north-south corridor projects. As I said earlier, the state government continues its investment in the South Australian economy through the investment in infrastructure. This public sector investment leverages private sector spend and, importantly, creates real jobs for real South Australian families. I commend the Appropriation Bill to this chamber.

Debate adjourned on motion of Hon. D.W. Ridgway.