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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-04-28 Daily Xml
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SOUTH AUSTRALIAN ECONOMY

Ms PORTOLESI (Hartley) (15:27): Will the Treasurer advise the house of two reports released recently containing outlooks for the South Australian economy?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:27): Can I have that question again? The Leader of the Opposition was interjecting and talking to me across the chamber.

Members interjecting:

The SPEAKER: Order! The member for Hartley.

Ms PORTOLESI: Thank you, sir. Will the Treasurer advise the house of two recent reports released containing outlooks for the South Australian economy?

The Hon. K.O. FOLEY: That was a surprise question. I do not do Dorothy Dixers—well, I do, so I cannot mislead the house, but I have two questions. As I have said repeatedly in this house, we are going through the most extraordinary of times, both economically and financially, that the world has seen since the Great Depression, and some commentators are now saying that in many facets of this global financial meltdown it is more severe than what was seen in the 1920s and 1930s. It is an event which we have been unable to stop impacting on Australia and, obviously, South Australia.

Indeed, I was pleased before lunch to hear the shadow minister for finance being so open when he acknowledged that there is a significant financial global crisis which is putting great strain and stresses—I am paraphrasing here—on the budget and how we will cope with it. I thank the honourable member for his openness and honesty. These are matters beyond our control.

Mr Williams interjecting:

The Hon. K.O. FOLEY: Well, it is what I am saying today, and if you think any differently you are up there with Lawrence Springborg thinking that this is not having an impact on us.

Mr Williams interjecting:

The Hon. K.O. FOLEY: He did not say that.

The Hon. M.J. Atkinson: A lot of cheek from someone who has been demoted!

The Hon. K.O. FOLEY: The member for MacKillop has been demoted. He has had energy stripped off him. The member for Morphett has had infrastructure and general transport ripped off him. Look at them—they have been demoted.

The Hon. M.J. Atkinson: An under-performer.

The Hon. K.O. FOLEY: He snuck out the reshuffle on a Saturday afternoon. He made no changes but stripped a few shadow portfolios from the under-performers. Isobel should be up here next to Vickie but Vickie won't have her next to her—that's the truth. They cannot have them sitting together. The dynamic would not work—as much as it would be amusing for us.

Importantly, what we are seeing is that in countries such as Germany they are expecting a contraction of their economy in the order of up to 7 per cent; in the United Kingdom, it could be as much as 5 per cent; and, in the US, 4 per cent. Globally, for the first time, I think, since the Second World War, if not the Great Depression, there will be global contraction entirely. These are quite extraordinary events.

Australia is better placed than most to deal with the contraction of the global economy. Within Australia, our state is extremely well positioned to be less affected than it otherwise would be had it not been for this government when compared with other states. That is not to say that we will not have higher unemployment; we will. That is not to say that we will not lose our AAA credit rating; we probably will. That is not to say we will not run deficits; we certainly will.

However, we are better positioned than any other Australian state. It is not a hardworking government saying that; it is very noted commentators. The National Australia Bank's March business confidence survey was published two weeks ago, and the Access Economics Business Outlook for March was published this morning. The NAB survey said of business conditions (and I hope this will be reported):

By State, there has been a general deterioration in business conditions across States since mid 2008, with all States now experiencing poor or negative conditions…South Australia has shown a surprise improvement, to be the best performing State.

The National Australia Bank's senior market economist, David de Garis, said:

It's certainly true that the South Australian economy has done better than the rest of Australia. Macro indicators suggest that South Australia should do no worse and in fact be better that other States in the year ahead.

The Access Economics report in its Business Outlook observes:

South Australia's Economy has done solidly in recent years…and that..the State will have a smaller recession than the Australian average, with population growth still OK. Rental vacancies are extremely tight, and the First Home Owners Grant and Boost have been particularly effective in a State where those dollars go further towards buying the average home.

Those are quite extraordinary statements, and they are a ringing endorsement, despite the incredibly harsh financial times in which we will almost certainly go into recession (if we are not there), in which there will be a significant increase in employment and in which almost certainly the state's AAA credit rating will be lost, with the loss of GST revenue and state-based revenues.

Notwithstanding those incredibly distressing and disappointing elements, we are still doing better than the rest of Australia, and this should be the moment to reflect on where we will be when we come out of recession and where we will be placed with the enormous infrastructure spend we are now doing on rail, hospitals, prisons, roads, underpasses and schools, as well as the Prime Minister's Infrastructure Australia program and the desal plant. We are turbocharging the future years for construction, capital growth and jobs. As much as our budget in June will be a very tough document and sober reading, it will also be about the critical function of government—that is, job creation.

I conclude by saying that it does not matter how much whingeing, whining, negative commentary and almost glee at every poor indicator and poor statistic that comes out, the opposition cannot deny the fact that independent economic forecasters are stating publicly that this state is better positioned than any other state in Australia. As much as I could say that that is the work of our government, it is not about how good we are as a government; it is about the hope and the confidence in the future. With the performance we have provided, there is a great opportunity to grow this economy out of this recession and to be bigger, better and stronger than ever.

The SPEAKER: Order! I remind the cameramen in the gallery that they are to film only members on their feet.

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