Supply Bill 2018

Second Reading

Adjourned debate on second reading.

(Continued from 5 June 2018.)

The Hon. E.S. BOURKE (15:56): I thank the government for bringing this bill to the council. History has its eyes on us. History can look back on the state as it stands right now and witness the proud legacy left by a Rann-Weatherill Labor government, a legacy that has the state boasting a budget surplus, low unemployment figures, business confidence, strong economic growth, and as being a global leader in renewable energy. But, we can do better, and of course we must.

I am not in this chamber because I think the hard work is done; it will never be complete. As the Supply Bill comes across our desk for consideration, I join the many who have already done so in reflecting on recent history because, as I said, history is always watching. I recently had the pleasure of listening to a remarkable South Australian at the University of Adelaide Town and Gown Gala Dinner. I believe the Hon. John Dawkins, the Hon. Clare Scriven and yourself, Mr President, also attended this event.

Former scholar and guest speaker, Andrea Boyd, captivated the room with her story that made most probably feel a little inadequate. Ms Boyd shared her childhood story, a story I am sure many children dream of achieving: to fly to the stars. After completing a Bachelor of Engineering in 2008 at the University of Adelaide, Ms Boyd became an International Space Station flight operations engineer.

Mr President, I am sure you would agree I could stand here for hours speaking about how inspirational this young woman is, whose voice is beamed from space station to space station—the comforting voice of a young Adelaide leader—but I will try my hardest not to divert during these remarks. The reason I bring up Ms Boyd is because one thing she could not stop reflecting on was how much the City of Adelaide and how much our great state has transformed; how much South Australia has transformed into a place that attracts the minds and the interest of the world. It is a transformation the former Labor government made possible, from hosting the world's largest space conference to investing in Gig City.

Ms Boyd shared how proud she felt welcoming space industry leaders from around the world to join her at the world's largest international space conference in her hometown of Adelaide and how her colleagues also fell in love with our great city: a state that has opened the door to new industries and world leaders like Elon Musk.

The opposition welcomes the government's commitment to continue this space legacy, ensuring the state will be a key and increasingly prominent player in the space industry nationally and internationally. As the government well knows, growing the space industry and opportunities, therefore, are bound to be a crucial part of this state's future.

Ms Boyd is a young leader who looks to the stars, and among them sees Adelaide as the brightest star of them all. As we can see from Ms Boyd's comments, it is not just history that is watching us now, it is also the rest of the world, and they are taking notice. Time and again South Australia has been celebrated as an exceptional city in which to live. Adelaide has been ranked the world's fifth most liveable city for the sixth consecutive year, providing another economic boost for the budget through the boundless tourism opportunities it will bring.

This accolade is of no surprise to Adelaideans: Adelaide is a great place to live. Our housing is affordable, and we have some of the best beaches, restaurants and entertainment and sporting events. Not only that, but Adelaide and South Australia as a whole is a great place to conduct business, and businesses around the nation and the world know this. Not only have they invested in South Australia and in the great City of Adelaide, they have also invested in regional South Australia.

Some of these examples of increased regional investment under the former Labor government are:

In 2014, Labor made a commitment to support regional South Australia with a package of incentives worth more than $142 million over four years. Not only did Labor meet that commitment, but Labor built on it, with regional expenditure totalling more than $400 million over the four-year term of the previous Labor government.

Labor saved steelworkers in Whyalla with the sale of Arrium.

Labor saved metal processing jobs at Port Pirie with the redevelopment of Nyrstar.

Labor secured $265 million in federal funds for the river communities and the future health of our state's River Murray region through the South Australian River Murray sustainability program, an investment which has already generated about $1 billion of economic activity and more than 1,500 jobs.

Labor created renewable energy jobs in regional South Australia through the world's biggest factory with Tesla at Jamestown, and by securing the world's biggest solar thermal plant at Port Augusta. In fact, since 2002, 24 large-scale renewable energy projects have been built or are under construction in South Australia, many of them in regional South Australia.

South Australia has achieved renewable energy investments of $7.6 billion across the state, with $5.1 billion of that in regional South Australia.

Much of our state's increased appeal could also be attributed to another great Labor commitment, and that is the Future Jobs Fund. There was $50 million in grants and $70 million in loans—targeted investments to dozens and dozens of South Australian companies to help them grow jobs and boost the economy.

Along with the Job Accelerator grants, these grants assisted industries to continue employing more South Australians, to help grow jobs at a time in the economic cycle when we needed it most. More than 13,000 new employees have been registered by South Australian businesses for the grant. Despite this, the new Treasurer, the Hon. Rob Lucas, has said that he will reassess every contract and agreement entered into by the former Labor government in the Future Jobs Fund.

It is disappointing that this new government would place small businesses in such an unsure position, but then again this has come from the same government that thinks the deregulation of shop trading hours will increase jobs in South Australia and be an economic benefit. The government can continue to throw around the line that shoppers will have more choice to shop when and where they like. It is an easy line; it is a politician's line.

Just yesterday, the Treasurer himself confirmed that the government has not undertaken any economic modelling on the impact deregulated trading hours will have in South Australia. Instead, the Treasurer is basing the government's reform on one sentence from the 2017 productivity report that he and his government so like to refer to—one sentence on page 225:

The net benefits of removing such restrictions have been assessed in the order of $200 million in Queensland alone. These benefits should be similar for Western Australia and South Australia.

'Should be similar'. The government is basing its argument on a 'should be'. They are deconstructing a trading hours balance that has worked on a 'should be'. Furthermore, the regulations that were undertaken in Queensland at the time of the productivity report were much more restrictive than our current regime. For example, these changes included lifting the restrictions on the number of employees of a shop and not the size of the shop. The definition of a small shop in South Australia is based on floor size, not employees per shop.

To use one of the government's favourite lines 'we all know who is pulling your strings', it is not small business, it is not local suppliers, it is the big end of town, the big end of town who want to consume the marketplace and push the mum and dad businesses out. Australian Retailers Association Executive Director, Russell Zimmerman, provided commentary through an Adelaidenow article, published on 9 December 2017, in favour of the government's position to deregulate trading hours in South Australia, even going as far as to say that Adelaide needs to wake up and live in the real world. But hidden at the bottom of that article, Mr Zimmerman went on to say:

SA has a better retail mix than most other states and while the market is strong enough for others to come in, the impact on local supermarket owners needs to be watched.

Why does it need to be watched? Because Mr Zimmerman knows exactly what is going to happen. Regulated trading hours have enabled South Australia to have more independent retailers than any other state—more competition—competition that gives consumers lower prices at the checkout. On this statement I agree with Mr Zimmerman: South Australia has a better retail mix than most other states. Deregulation will benefit big interstate chains like Coles and Woolworths at the expense of small South Australian family-owned businesses and suppliers.

The Treasurer might claim there are only a handful of small businesses raising the alarm. He might claim that it is just the union and Labor making noise, but it is not. It is florists, butchers, newsagents, producers, wholesalers, retailers, and it is workers. The Treasurer may have listened to a handful of small retailers but he certainly has not heard their calls to keep the current balance, the balance that keeps their doors open. Labor has listened and we have heard their calls and that is why Labor is backing South Australian jobs, farms and workers—the local businesses that keep their profits in South Australia, the businesses that employ South Australians.

In government, Labor backed local businesses to grow and create jobs. The former government made South Australia the best place to do business through nation-leading tax reforms which will return $2.5 billion to businesses and the community over the next decade. The former treasurer's reforms included abolishing stamp duty on all non-residential property transactions in South Australia.

Labor reformed the WorkCover regime, which is saving registered businesses in South Australia $220 million a year. Payroll taxes have been reduced seven times since 2002. Businesses are now paying about $230 million less in payroll tax a year. This means about three-quarters of a billion dollars a year in tax relief provided to largely South Australian businesses, and the Labor opposition backs further payroll tax relief for South Australian businesses, relief put forward by the government.

It would be remiss of me to mention all of these achievements without going on to commend the former treasurer and current member for West Torrens. The member for West Torrens was instrumental in not only helping to implement many of these initiatives and projects but also in alleviating tax burdens on our small business owners. The member for West Torrens was, and I believe still is, the only state treasurer in Australia who managed to navigate admirably through this tax system.

Finally, Labor was a government that invested in our youth and education. Labor transformed the public education system by investing in science, technology, engineering and mathematics, so students could go on to reach their dreams, just like Andrea Boyd. Despite many challenges, some of which were forced on us by the federal Liberal government, some from overseas, this state is a great place.

Again, as I mentioned, history has its eyes on us; history is watching to see what happens next. The building blocks, the legacy that Labor has carefully put in place over the past 16 years, has presented this government with a solid foundation upon which great things can be built. I, for one, hope that foundation is used wisely. Despite our political differences, I truly hope that history has some good things to say about what is built over the next four years.

The Hon. J.E. HANSON (16:10): I rise to speak on the Supply Bill. In doing so, I think it is worth noting that I do so at a time of some possible great difficulty facing our state at the federal level. A federal Productivity Commission draft report released in October put forward a number of possible scenarios that may greatly impact South Australia's share of the GST.

The report outlines scenarios of equalising to the second-highest or the average level, which would, if implemented, cost the state in the vicinity of $250 million per annum, according to their report and their numbers. If the full range of scenarios were implemented, it could cost South Australia $500 million per annum. If the state average equalisation model were implemented, this figure would further expand and cost South Australia closer to $2 billion per annum, with the full equalisation per capita model.

Sadly, I have to reflect that possibly not everyone in the Liberal Party running for a seat in this state sees this outcome as necessarily a bad thing. Some seeking to hold office in this state have in fact been employed in organisations that have actively advocated for these kinds of models which would see our state lose hundreds of millions of dollars in GST revenue. It is something that that same person has chosen not to contradict in the media. Some seeking office for the Liberal Party in this state have in fact actively advocated for policies that would see our federal government introduce a law forcing the government to spend no more than it is projected to earn—something that is crazy at a time of such low interest rates.

While I have very little doubt that there should be a good understanding from everyone in this chamber that such an outcome would be appalling for this state, no matter what your political stripe, it has never been more important that, while we focus in debate such as this on the best manner of solving the problems that face our state, we also decry those who would make it so much harder.

While it is not hard to find an article in any east coast paper trumpeting their economic data compared to the other states, and similarly, it is not hard to turn on the television and find a popular show about the ever-expanding suburbs of Sydney and Melbourne, I am also constantly observing that there is significant economic data indicating that the cost of living is becoming unsustainable because of that very same growth, and that the productivity of those living there is dropping as a result. Recently, Sydney, for instance, has been declared by some data to be among the top 10 most expensive cities in the world to live, with the cost of living now higher than in New York or London.

Such articles are particularly alarming at a time when we are also seeing articles stating that housing prices—one of the major drivers of the cost of living in these cities—are possibly set to fall. Such an outcome could leave many east coast Australians feeling significant social and economic pain in the short term without any certainty in the long term.

It is these kinds of factors that will also slow or halt productivity, not just in South Australia but nationally, as credit becomes increasingly scarce and spikes occur in the cost of living as wages or mortgages are impacted. While South Australia doubtlessly has some significant challenges ahead of it, when these are contrasted with the economic and social warning signs we are beginning to see on the east coast, it puts our difficulties in context and informs us how best to play to our strengths, at least in the short term.

Indeed, South Australia is once again seeing in the media and in public discourse a heightened level of attention to a growing business and public confidence that has been occurring over the best part of a decade. Furthermore, as many members of this place have said before, South Australia has been consistently rated in The Economist as the fifth most liveable city in the world, or thereabouts, and over the last six years running as well. It is also ranked highly in the Lonely Planet guide and other international magazines that promote both living and tourism.

Even more recent media attention, as the Hon. Mr Ridgway is well aware of, has focused on the very positive news that confidence in the South Australian economy is the best it has been in eight years, with almost one in three businesses directly aware of the opportunities provided by the previous state government administration to assist them. This is a result that should see this new state government acting quickly to translate this confidence, which Labor so carefully crafted whilst in government, into long-term good employment figures and growth for our state.

While I have no wish to place words into any other honourable members' mouths, I have been reading through the contributions of many members of the government in this place and in the other place, and it is clear that our new state government has not been short on its stated belief that it wants to grow the state in terms of its population, industry and quality of life. This is a laudable, if somewhat trite, goal. It is somewhat less trite to step into the debate of how this goal might best be achieved. In this regard, I think this new state government should look carefully at what kinds of conditions will best promote sustainable long-term growth for the state.

It goes without saying, and I am sure that many honourable members of the government here would expect me to say so, that I would rush to add that a major cause of the recent positive headlines and positive economic data for our state has been Labor's investment of more than $33 billion into the South Australian economy over the last 16 years, including many billions during the last eight years. This has kept hospitals, roads, schools and public transport all growing to serve our citizens and private companies. This all occurred because co-investment into sectors of the economy to drive private investment and micro-economic reform is a hallmark of the economic growth in South Australia since the Labor government first came into office in the early 2000s.

To illustrate, and I know honourable members here will be so happy that I am willing to, I am going to give some practical examples. Since coming into office in 2002, Labor supported the economy through co-investment, with jobs being the main focus. That is why we fought and won the $50 billion Future Submarines contract at Osborne. This contract created thousands of defence jobs in South Australia, pumping millions of dollars into the local economy and having flow-on effects on other small businesses and contractors along the supply chain.

When in government, we fought for regional jobs and investment, as the Hon. Ms Bourke has just pointed out. While the Treasurer may not fully support Nyrstar, judging by his relatively negative comments in this place, we in the Labor Party stood with regional communities through our investment when in government. We helped to protect jobs at the Whyalla Steelworks through the sale of Arrium, future investments in renewable energy being made by the GFG Alliance and the Gupta family and metal processing jobs at Port Pirie by investing in the redevelopment of Nyrstar.

We knew that in order for young South Australians to get a quality, high-paid job they must receive a quality education. That is why, since we first came into office in 2002, we invested heavily in the education of young South Australians. We more than doubled our investment in public schools and education since 2002, as we believe the key to success and achievement is through a high-quality public education for all South Australian young people.

Science, technology, engineering and mathematics are key areas of knowledge and investment for young South Australians to prepare them for an economy that is transitioning from manufacturing to a gig economy. Our focus was to support young minds by investing in 139 new science and maths laboratories in South Australian schools to prepare students for the jobs of the future.

The skills we invested in will assist young South Australians in finding careers in the renewable energy sector and gaining opportunities to work on world-leading projects, such as the world's largest lithium-ion battery at Jamestown in South Australia's north. While members opposite talk down the positive impacts, this battery, along with our other electricity initiatives, will lead to downward pressures on South Australia's electricity market. These practical examples aside, I encourage the new state government to look carefully at the settings of the previous Labor administrations to help guide the settings that it will doubtlessly be crafting through any proposed productivity commission.

To put these somewhat partisan statements and examples into better context, while it is true that we have seen recent good economic data and improving local economic conditions in South Australia, credit growth across the nation, particularly in the volatile east coast states I mentioned, is slowing.

The structure of our federation means that states and territories, of course, are responsible for the regulation and delivery of most economic and social infrastructure services. However, we also have a federation where the Australian government retains the majority of the total revenue-raising capacity, including income, consumption and corporate taxation. Any steps taken on a recommendation from any proposed productivity commission should recognise these aspects of our federation and be looking at what this slowing credit environment means for our state and the resulting kind of economic environment that we live in now and that we may live in for some time.

Any state government has to embrace its duty entrusted to it as part of federation and continue to provide delivery of economic and social infrastructure. While it is important to have settings that protect the growth that we have recently seen in the state, it is also important to create conditions that continue to sustain growth in a way that is positive to our community. Having a focus for the infrastructure in our economy that is both community focused and efficient, will enable our state to generate more from our vast natural resources in regional South Australia and our highly skilled workforce located regionally and in the metropolitan area.

Many members in this place and the other place have also indicated a key feature of their economic plan is to attract young people back to the state, and this is a definite and laudable goal. Australia's population is now projected to grow to over 30 million people by 2031 and South Australia needs to make sure it has a sustainable share of that population. However, if we wish to attract more population growth to the state we need to look at making sure that the jobs they perform and the amount they produce is similarly positive for our community.

I direct all honourable members of this place to a report titled The Dimensions of Insecure Work: A Factbook by Dr Tanya Carney and Dr Jim Stanford, which is most instructive of my point in this regard. A particularly relevant excerpt is as follows:

Recent media and regulatory inquiries have exposed widespread disregard for minimum wage laws and other basic labour standards among temporary migrant workers in Australia. Their lack of permanent status in Australia, accentuated in many cases by lack of information (or misinformation) regarding their basic legal rights, makes temporary visa workers particularly vulnerable to exploitation and insecurity.

Counting foreign students, working holiday makers, and temporary migrant workers under 457 visas—

I think they are now called temporary skill shortage visas, a somewhat strange name—

there were close to 900,000 temporary migrants with work privileges in Australia in 2017. That represented an increase of 40 per cent in the previous five years–led by an 80 per cent increase in foreign students. These three categories of temporary migrant alone represent a potential pool of labour equal to 7 per cent of Australia's labour force.

Immigration can make a very positive contribution to Australia's economic and social development, if supported with education, settlement assistance and legal protections. Temporary migrant labour, in contrast, is highly vulnerable to insecurity, isolation, and exploitation. The growing use of this form of labour by employers has clearly contributed to the generalised problem of insecure work in Australia.

The erosion of the standard employment relationship has been experienced most directly, and most painfully, by young workers. They confront the prevalence of insecure work head-on, unprotected by the traditional arrangements that carry over in many long-standing jobs. Few young people can attain permanent, full-time, decently paid work. 55 per cent of employees under age 25 are in casual jobs. Almost 40 per cent are paid according to the minimum terms of a modern award. Average earnings for workers under 25 are just $561 per week—less than half the average for the overall labour market.

Young workers face prolonged difficulties landing decent, steady work, even well into young adulthood. For example, among workers under 30 in 2017, just 38.9 per cent held full-time employment of any kind (including casual work and contractor positions), down about 4 percentage points from just five years ago. In sum, young workers confront the worst features of the precarious labour market, despite higher educational attainment than any other previous cohort of Australians. Indeed, almost 50 per cent of workers aged 25-34 have completed tertiary education, one of the highest post-secondary education rates in the world, but the prevalence of insecure work prevents most from applying their skills to the fullest.

Hopefully, any proposed productivity commission should make sure that workforce participation, the notion that work is shared equally across all age groups in our community, is a factor it seeks to address. We need to continue to invest in our economy, to encourage companies to create the jobs of the future for younger South Australians. Workforce participation may wish to look more broadly than just who is employed but also how many hours that person is employed.

South Australians produce roughly twice what they produced in the 1970s. This is roughly in line with the national average. A great result of this productivity outcome is that we will also earn roughly twice the level of income. While this sounds like a laudable outcome, and it is, the story should not and cannot end there. It is the state government's role to continue to facilitate this ongoing push towards better productivity and to make sure that all South Australians are given an opportunity to participate in it by making sure that it does not lose focus on assisting individuals and businesses by providing an environment that supports innovation, increasing education levels, new technologies and to promote trade and investment.

Any investment in infrastructure needs to be aimed at the long-term assistance that focuses on real appreciable assets like road, rail and fibre and on the more social, less tangible assets like assisted housing, education and skills. But while the focus of this investment should be to create the jobs of the future, any ministers reading through any proposed Productivity Commission recommendations should also keep in mind that those jobs should be full time and not seek to exploit those very same young workers we are seeking to attract.

I have also noted, from comments made by members of this place and the other place, that there is a lot of concern about securing ongoing infrastructure investment to regional areas. This concern has come from both major parties in this place, and rightfully so. Despite a lot of negative rhetoric put out by the current state government, regional South Australia was a major focus of the past Labor administration. The previous Labor government built hundreds of millions in critical infrastructure in roads, hospitals, schools and energy in regional areas. But more than this, we co-invested into the sectors of the economy to drive private investment, most notably and very publicly in Nyrstar and Arrium, but also in dozens of other smaller, less notable businesses and industries.

This investment has attracted interest in further private investment in our state. While it is easy to look at the comments of billionaires on their Twitter feeds or media statements, a more concerted look would reveal that many new industries, from agriculture to space to defence to medicine, have started to take a new look at South Australia as a result of the proactive attitude to long-term sustainable growth and the large-scale public investment in infrastructure that Labor administrations took.

Labor knew that regional SA contributes many billions of dollars each year to our state economy, and more than this, it drives the critical export markets which take our state to the world in more ways than one. We are key factors in the nation's agricultural success in many established markets such as barley and grapes but also in relatively new markets such as aquaculture. Regional South Australia has also been a key factor in driving the changing face of the energy market in South Australia. It now produces around a third of the nation's renewable energy that has begun to pique private interest in even further investment.

Of course, this has been another success of the previous Labor administration's policies around a future-focused mix of energy that contains a commitment to renewables and also a success of that public investment in infrastructure which I have previously spoken about. The previous Labor administration had a commitment to help keep regional SA as the state's economic engine room—a commitment which was not matched by the federal Liberal government during the previous decade and not matched again by the current federal Liberal government in its failure to deliver on the much spruiked but clearly misleading $1.8 billion false dawn in the last federal budget, a budget which we know will only deliver on about $160 million of this $1.8 billion figure.

I also keenly await to see how much the state Liberal Party will actually be delivering to the regional communities through its royalty for regional roads policy it took to the last election. We note at this time that the new state government has intentions, and that is good, but the minister is yet to make any announcements about how and how much. It is an interesting metaphor that there are members of this state government in the other place who would advocate the increase of speed limits on regional roads now before the road investment and ongoing maintenance to ensure that safety is locked into place. While the rhetoric of the royalty for regional roads policy sounds promising, I am wondering still just how much it will deliver and where the rubber hits the road, to use a metaphor which seems apt. I certainly hope it is not a pork-barrelling exercise that will only materialise come the 2022 election.

I have also noted in this place previously that the Labor government's commitment to, and, more critically, the Liberal Party's failure to deliver for, regional SA has not escaped the notice of regional voters. Voters in Frome have long noted that it was only the state government—the Labor state government—that stepped up to the plate in underwriting the reinvestment in that community, and voters would again have noted the Treasurer's recent media releases regarding threats of litigation. Little wonder that the Liberal Party continues to struggle for votes in that thriving regional community.

Equally, the electors in Giles resoundingly returned Labor again, and we have seen Labor retain the seat of Mawson, even though it includes the very regional voters of Kangaroo Island. Those voters knew at the last election the value of electing truly local members who believe in driving economic reform through strong public coinvestment. It certainly also did not escape the notice of electors in the federal seat of Grey when they reduced the margin to the lowest it has been in over three decades at the last federal election. I wonder what will happen at the next one.

We know that the Liberal Party has not learned from these mistakes. We know this because with the Mayo by-election occurring in a few weeks' time, the Liberal Party factions have once again literally shown how shallow their commitment is to the people of regional South Australia. They have preselected a Victorian with a gentrified last name to run for them, literally moving back to SA in the past few weeks to have a visit, a Victorian who was recently openly stating that she would not return to a place she referred to as 'the serial killer capital'.

It really is a worry. At least, the Liberal Party should be worried about its regional voting base that has seen them lose four of their supposed regional seat strongholds to Labor or Independents. It was very nearly five, if a few hundred votes in Heysen had gone another way. I implore the new state government to start learning from its mistakes in regional South Australia. I ask that it look to the reward for acting in the interests of South Australian regional voters, voters who have started to show the Labor Party, and other committed actual local South Australians who live there, a strong return in support when it comes to elections.

A good start for the new state government would be to stand up to its big buddies in Canberra, that it not allow comments like that of our current Liberal Prime Minister, who upon visiting South Australia recently declared that he thinks not having lived here for quite some time when seeking to represent the state is not an issue.

We need our local state government to be honest with the Prime Minister when it comes to preselections of candidates and seriously question how good a candidate is if they choose not to live here, and if they actually like the state or if they just regard it as a hassle. The new state government may need to stop just having meetings with the federal government and instead start demanding, or at least seeking more than just what is given. It may need to start looking to its regional voters, who are crying out for ongoing public investment and regional jobs, and review its stated intention to tell them to look elsewhere.

In closing on this topic, I want to note the recent thoughtful comments of Port Augusta Mayor Sam Johnson on regional South Australia and on South Australia generally:

Regional SA is a credit to the state, as is Adelaide and its people. So let us recognise this combined success, and grow together. Without each other, the other is destined to fail.

On that, I will finish.

Debate adjourned on motion of Hon. T.J. Stephens.