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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-02-14 Daily Xml
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INTERNATIONAL INVESTORS

Ms BEDFORD (Florey) (15:12): My question is to the Treasurer. Can he tell the house how he is promoting South Australia to international investors?

Members interjecting:

The SPEAKER: Order! The member for Hammond, you are warned for a second time.

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (15:12): What was Sue Lawrie's vote at Port Adelaide? Did it get into double digits? Twelve per cent. What was the swing against the Liberal Party? It must be about a 20 per cent to 30 per cent swing against the Liberal Party, according to the thinking of the opposition.

Madam Speaker, I would like to thank the member for Florey. Last week I travelled to Asia to promote South Australia to major investors in Hong Kong, South Korea, Japan and Singapore. This included overseas companies with significant interests in South Australia, as well as major investors in SAFA debt securities.

The debt investors I visited included some of Asia's largest central banks, sovereign wealth funds, asset managers and pension funds. All of these investors are holders of Australian government debt, either issued by the commonwealth or the various state borrowing authorities. In nearly all cases, the debt investors we met currently hold SAFA bonds. These investors are very well informed about Australia and its position in the world economy. The trip gave me the opportunity to understand their views on world financial and economic conditions and the impact on their investments, with specific reference to South Australia.

I gave a presentation to the investors on the South Australian fiscal position following the 2011-12 Mid-Year Budget Review and indicated that the state has witnessed a significant reduction in revenues. I told them that despite the challenges being faced by many economies in the wake of the global financial crisis and ongoing European sovereign debt problems, South Australia still has a strong position, now and into the future, and a great economic story to tell with our mining and agriculture sectors performing particularly well.

Investors were appreciative that in response to our revenue challenges, the state government is committed to fiscal responsibility and has released a revised set of fiscal targets that reinforce this commitment. This includes the delivery of a net operating surplus by the end of the forward estimates, a cap on operating expenditure that will limit its growth to that of household income, and a maximum net debt-to-revenue ratio of 50 per cent. Investors were very comfortable that, when placed in a global context, South Australia's net debt to gross state product ratio is at 4.7 per cent, which is extremely low. By comparison, some countries have debt to GDP levels in excess of 100 per cent.

I have explained that the government remains committed and focused on the delivery of our capital investment program of $9.5 billion over the next four years to invest in the state's economic and social infrastructure to accommodate future needs of South Australians. The government is continuing with projects such as the Southern Expressway duplication, the new Royal Adelaide Hospital and upgrades to our public transport infrastructure in order to secure jobs and to safeguard the state economy for future generations.

My visit with SAFA officials reinforced the positive light in which South Australia is viewed by international markets. Investors were very interested to hear about the expansion of the Olympic Dam mine, which has the potential to boost state GSP by 8.7 per cent and employment by 6.4 per cent once—

An honourable member interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —it is fully operational. Importantly, the main message received from Asian investors is that the market, in view of South Australia, is a good place to invest and that they consider bonds issued by South Australia as attractive investments to hold in their portfolios, given the performance of the state compared to other global opportunities.

While the opposition chooses instead to talk down the state economy, the state government is doing all it can to promote it and to secure investment opportunities that boost the economy, create jobs and boost the prosperity of all South Australians. The Weatherill government will continue to pursue the important work of maintaining the state's existing relationships with international investors and ensure that new relationships are formed to attract and drive investment in South Australia.

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