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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-06-18 Daily Xml
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Ministerial Statement

BANKSA TRENDS BULLETIN

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:01): I seek leave to make a ministerial statement.

Leave granted.

The Hon. K.O. FOLEY: The June 2009 BankSA Trends bulletin released today shows that South Australia remains best placed of all states to weather the current global economic downturn. The bulletin argues that Australia is in a better position than many other advanced economies and, within that, South Australia is best placed of all states to continue to prosper through the global downturn.

The Trends bulletin notes that Australia was already experiencing high population growth and high levels of engineering and commercial construction work when the crisis hit. We were further protected by our healthy banking system, cuts to interest rates and significant fiscal stimulus that Australian governments, both state and federal, have put in place. In South Australia, the Trends report states:

The [South Australian] government is spending to maintain the momentum and has retained our AAA [credit] rating, placing us in a prime position to prosper through the global downturn.

I welcome this latest report, which follows a string of recent data releases showing that South Australia is holding up well in the face of significant global economic turmoil.

In May, official statistics showed that there was a record number of South Australians in jobs. Total employment has increased by 104,500 jobs since this government came to office in 2002. While we only receive updated gross state product figures annually, recent state final demand figures give us reason for some confidence that our economy is bearing up well. In trend terms, state final demand increased by 0.6 per cent in the March 2009 quarter to be 4.2 per cent higher than a year earlier. South Australia was the only state or territory to record an increase in the March quarter and also recorded the strongest growth over the past year when compared to all other states.

Our housing sector is resilient. The Trends bulletin notes that, in South Australia, finance commitments, building approvals and spending on construction have grown steadily, above national trends. The Trends bulletin singles out the strength of our defence sector and the economic benefits of the mining projects which are coming on stream. These economic benefits were the reason that this government so aggressively pursued defence contracts and opened up mining exploration in this state.

We pursued and won the $8 billion air warfare destroyer project, which is conservatively estimated to create 3,000 jobs. To win that project, this government made an investment of more than $300 million in building the most modern and sophisticated shipbuilding facility in the southern hemisphere—the Techport Australia facility at Osborne. This investment has already paid dividends. It was key to our success in winning the next generation of submarines, which the commonwealth government has confirmed will be built in South Australia.

We have also actively pursued the relocation of the Army's new 7RAR mechanised division. I am advised that construction for the battalion is generating about $100 million worth of investment—actually, I think that is about $700 million—into the South Australian economy, and about 1,600 jobs. I think—and I stand to be corrected—it actually also delivers up to $100 million annually in extra expenditure.

When the government came to office, some seven years ago, South Australia had four operating mines. In 2009 we have 11 mines, and the likelihood that the number will grow to 16 next year. More than 20 additional mineral projects are at the advanced exploration or resource assessment stage or are currently progressing through prefeasibility to mining proposal stage.

This increase in activity is due in part to our very successful Plan for Accelerated Exploration scheme (PACE), which encourages much more exploration. Exploration data released for the March quarter shows the anticipated decline in exploration expenditure across all states in Australia. However, thanks to our PACE scheme, we have had an exploration boom over the last five years, and it has paid significant dividends. We found a range of long life, high quality and diverse resources, and many of these are being actively developed.

Mrs Redmond interjecting:

The Hon. K.O. FOLEY: Isobel, he doesn't vote in your caucus.

The Hon. J.D. Hill: Yet.

The Hon. K.O. FOLEY: Yet, oh right. This means jobs for our regions, and jobs for the service industries which support the mining industry—

Mr Williams interjecting:

The SPEAKER: Order, the member for MacKillop!

The Hon. K.O. FOLEY: What did he say yesterday? He said: 'Will you rule out a leadership challenge?' I think so. The Trends report also highlights the solid pipeline of capital works in South Australia as a reason for confidence. The government remains committed to its infrastructure program to support jobs and build critical transport, health, education and water infrastructure into the future. Our $11.4 billion infrastructure program will support 14,000 jobs over the next 12 months alone.

Current economic times are uncertain, and we are certainly not out of the woods yet. But I believe, as do the authors of the Bank SA Trends bulletin, that we can be confident that this state will emerge from this crisis in a strong position.

The Bank SA Trends bulletin underlines many of the factors considered by the credit ratings agencies—Standard & Poor's and Moody's—when they both decided within hours of our state budget being handed down earlier this month to reaffirm South Australia's AAA credit rating. I believe it also demonstrates—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: —the value of establishing good working relationships with the rating agencies, financial institutions and financial commentators both in Australia and internationally. It is my belief that such a relationship cannot properly be maintained by sitting in my office in Adelaide. Travelling to meet with the agencies to explain our strategy to return the state to surplus while continuing to invest in critical infrastructure was well received at the time and supported by their decision to maintain South Australia as a AAA rated state, a decision that was noted as positive in the BankSA Trends report.

I am aware that there are some on the opposition benches who questioned the strategy. As I have previously advised the house, I was away for a week and not on holiday. For the record, I can say that I was in New York from Monday 18 May to Friday 22 May on business, meeting not only with Moody's but also with other financial institutions and commentators. At the weekends either side of that working week I took the opportunity to visit some friends at my own expense, not the government's. I do wish to correct the record and acknowledge that the total time I was away was longer than a week, as I had previously advised the house.

Ms Chapman interjecting:

The SPEAKER: Order, the deputy leader!

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