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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-12-04 Daily Xml
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South Australian Economy

Mr TARZIA (Hartley) (16:06): I rise to speak on the state of our economy today and the burdensome regulations and start-up fees required of businesses in South Australia and to talk about a particular example called START-UP New York, a model that promotes start-up businesses overseas, which I recently came across. South Australia has the highest start-up fees you will find, Deputy Speaker, the highest payroll tax, the worst business confidence in Australia.

Small business is the highest employer in South Australia. It is part of an economy which is built on the success and failure of small business. The decline of our state's economy is symptomatic because of the struggle that these small businesses face. There is no doubt that this government has abrogated its responsibility, in my opinion, for growing our small business sector and our start-up sector by imposing onerous obligations, regulations and taxes (like payroll tax) on them.

In my discussions with business people in my electorate, I find that, instead of registering new businesses in South Australia, some of them are even thinking of registering them interstate. Recently, I discovered one who registered in Victoria, bypassing the ridiculous hoops that a start-up business would have to go through here. Although these businesses initially conduct their business and employ people in South Australia, the problem has been that the poor business conditions that I have mentioned in South Australia effectively force these businesses to relocate to Victoria and other states where they are already registered, where business conditions are far less burdensome and where they actually encourage growth.

In order for our economy to get back on track and where it needs to be, the Leader of the Opposition outlined a number of policies prior to the last election to release businesses from the shackles of overregulation and fees. I would like to point out an example where the start-up community and start-up businesses have been given a fair go and flourished. It is in New York in the United States, where a model that has recently been implemented is working. It is called START-UP New York.

START-UP New York offers business start-ups a tax-free zone for new businesses in the established zones in New York. In some cases there are zero start-up fees for a business where it is conducted in a tax-free zone. The credit generated would eliminate any tax liability for a period of time. This encourages secure employment opportunities and gives greater impetus for retaining and employing staff as there is a greater credit within the model of that particular business. The result over there has been staggering. It has been a game changer for small businesses across New York, with businesses looking to start up and it has created hundreds of millions of dollars within the business sector already. There are lessons to be learnt from this example.

The New York example is about vibrancy, growth, jobs, organic growth and incentivising businesses—and this is how you do it. I encourage the government to have a look at this example. It is one of many examples which are being implemented right around the world and which this government could take heed from, and which the Labor Party could certainly learn a lot from. It is important that, with the decline of business confidence, deregulation in business start-ups and reduced taxation are looked at. There is a number of aggressive strategies the government could implement. Some of these aggressive strategies are needed to stop the mass exodus of small businesses from South Australia, which is as a result of government regulations.

Something like this is certainly needed at the moment for businesses to flourish in South Australia. If the state government ever wants to revive this economy—and it says it does—and be in a position over time to recover what is becoming our dwindling revenue, then helping the backbone of our economy—the small businesses of this great state—would be a good place to start.

I encourage the government to make bold decisions which allow businesses to thrive and to employ people. Look at the example I have provided. Help make our city more vibrant. I encourage them to talk to our federal colleagues because this is not something we can do alone—we will need help from our federal colleagues—and I would ask them to work together with them, to explore ways to inspire and incentivise businesses to actually want to come to Adelaide, to start in Adelaide, to grow in Adelaide and to create prosperity for South Australians in Adelaide. I encourage the South Australian government to look at the New York example and learn from it.

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