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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Bills

Appropriation Bill 2015

Second Reading

Debate resumed.

Mr MARSHALL (Dunstan—Leader of the Opposition) (12:03): Thank you, Deputy Speaker. South Australia is in trouble. We are in the midst of a dangerous jobs crisis. We have the highest unemployment rate in the entire nation. Our population growth is half the national average. Our economy has ground to a halt after 13 years of Labor mismanagement. Our exports are going backwards, and the culmination of all of this is that we have an exodus of young people and capital across our borders into jurisdictions which provide a better environment for the future.

This is a shameful situation and so, on 18 June, when the Treasurer brought down his budget, we were hoping for a bold plan to address the crisis that we have here in South Australia. We were hoping for an emergency response to the crisis which is enveloping South Australia but, unfortunately, we had nothing like that from the Treasurer opposite.

In fact, the government has been deluding themselves now for an extended period of time. They have been out there telling people that we are doing quite well. In fact, only in October last year, the Premier and the Treasurer stood side by side at their press conference promising the people of South Australia 5,000 new jobs in the mining, oil and gas exploration sector in South Australia.

Let us have a look at where we are. Less than 12 months later, we have lost 5,000 jobs. We are now 10,000 jobs away from the hollow promise that was made by this government. They have continued to blame anybody else but themselves: 'It's Tony Abbott's fault; it's a problem of our currency in South Australia; it's big business; it's the global financial crisis.'

There is always something that has delivered the problems in South Australia. More than ever, what we need in South Australia is a government that will take responsibility, a government that will develop a plan to create jobs and opportunity in South Australia, and that is what we need right here in this parliament today. What is the role of the opposition in this? We are unequivocally a constructive opposition.

Time and time again, we have been putting forward positive plans to this government for their consideration to advance the cause of South Australia. I know that we have worked constructively with them to augment the SACAT legislation to provide opportunity for business in South Australia. I know that we have worked very hard, hand in glove, with this government on their return-to-work legislation to address the situation where South Australia had unequivocally the worst workers compensation scheme in the entire nation.

We are continuing to work with them on planning reform in South Australia. In fact, the opposition is pushing the government in terms of planning reform in South Australia. They have not done nearly enough. We supported their royal commission into the nuclear fuel cycle. We are a responsible opposition and, again, we come into the parliament today with our positive plan to create jobs and opportunity for our next generation.

The focus of this plan must be, unequivocally and unashamedly, on creating jobs for our next generation. We on this side of the house do not accept that we should have the highest unemployment rate in the nation. We on this side of the house do not accept that 8,700 full-time jobs were lost in this state only last month. This is completely and utterly unacceptable and we need to take action straightaway.

The government has put forward its agenda and we received that in the house on 18 June. The centre point of this, quite rightly, was on tax reform, but let us take a look at what they actually offered. The centre point of their tax reform agenda in South Australia is to offer stamp duty relief that does not come into full effect until 2018-19, but we are in the midst of a dangerous jobs crisis now. We need an emergency response right now, right here—bring it forward!

If the government genuinely believes that offering stamp duty relief in two, three and four years' time will create the jobs we need in this state to keep our next generation here, then they should bring that forward. Bring forward that tax relief to this very year when we are in the midst of this dangerous jobs crisis.

More than that, when we look closely at the detail of the plan that was put forward by the Treasurer on 18 June, the government chose not a decrease in payroll tax, as we would argue for on this side of the house, but in fact an increase in payroll tax to come into effect on 1 July next year. That is an important date, because 1 July next year is the date on which the South Australian Liberal Party would have implemented its third successive increase in the threshold at which small business pays payroll tax in South Australia, but rather than offer this relief to the small business sector, on 1 July next year, the government will rip away the concession on payroll tax that has been in place.

They want to increase taxes to create jobs. It is completely and utterly dysfunctional. It will not work and I tell the government today that the Liberal Party, those people on this side of the house, will fight every single day between now and the next budget so that the government does not increase payroll tax and starts to implement decreases in our payroll tax threshold in South Australia.

More than that, as we know, in last year's budget, the government actually ripped $90 million away from households in South Australia when this Treasurer implemented what was essentially a land tax on the family home. This is something that previous treasurers have said they would not do without going to the people of South Australia, but that is exactly and precisely what this Treasurer did last year. He ripped $90 million from households, and the reason he gave was quite interesting. He said it was due to federal government cuts in funding to South Australia.

I thought I would take a look; I thought I would check to see if the Treasurer was speaking the truth. To do that, I took a look at the last budget that was handed down by Wayne Swan. Wayne Swan was the federal Labor treasurer and he handed down his budget in May 2013. Over the forward estimates, it provided federal government funding under the Labor administration to South Australia through to the end of 2016-17.

I compared that with the budget that was handed down by Mr Hockey in May this year. It is fair to say that I was a little bit surprised with the results because, as we know, the government has spent millions of dollars of taxpayer dollars in South Australia on their spurious campaign telling the people of South Australia about these terrible cuts.

Let's have a look at what happened—there we go. If we look at the difference this current financial year between what was promised under Wayne Swan and the Labor Party and what was promised by Joe Hockey and the Coalition, there is a $273 million increase in funding from the federal government. Let's take a look at next year: a $671 million increase in funding from the federal government, to be followed up the year after by a $1.256 billion increase in federal government funding from the Coalition, over and above what Wayne Swan had promised from the Labor administration.

That brings us to a total of $2.2 billion worth of additional money, additional money that the Treasurer said was not coming to South Australia. In fact, he said that there were cuts; he ran very expensive television advertising telling the lie that South Australia's funding from the federal government was cut—it was increased. It was increased this year; it is increasing next year and the year after. So is the Treasurer a man of his word? He said repeatedly that, if there were not these cuts from the federal government, there would be no need for this $90 million ESL removal of the remission. There is no need, Treasurer. Restore the remissions and give that money back to the households.

More than just tax relief to the people of South Australia, we need a wholesale focus on deregulation in South Australia. Our businesses have been bound up in increasing red tape after 13 years of Labor administration in this state. You do not have to go very far to hear about the appalling state of business confidence in South Australia. You just have to switch on the television at night, or open the paper, to hear about more business failure in South Australia, businesses downscaling or businesses going out of business.

Red tape is killing our businesses in South Australia. The government routinely talks about trimming red tape here and trimming red tape there. Well, the time has passed for trimming red tape. We need wholesale deregulation in South Australia and we are proposing that the government moves away from its long-held position with the Economic Development Board as its sole independent advice on managing our economy and moves to establish the first state-based productivity commission in South Australia.

I have no quarrel with the EDB, or the members of the Economic Development Board in South Australia. Individually, they are outstanding contributors. They are leaders, business leaders, community leaders and highly credentialled achievers in their own right, but collectively, either they have not been providing the advice to this government or the government has not been listening to the advice of this board. Whichever it is, South Australia is not performing well. Our economy has ground to a halt, and we need a different mechanism to get our economy moving in the right direction.

The Productivity Commission methodology has been in place for decades and decades. It has operated at the federal level. It has been supported by both Labor and Liberal administrations over that time and it has driven a productivity improvement in Australia. We are the 53rd most populous nation in the world; we have the 12th largest economy. A lot of that drive has come from the independent advice of the Productivity Commission, but we have fallen behind in South Australia. That is why we on this side of the house are advocating the first state-based productivity commission to remove barriers to creating employment in South Australia and to drive and direct our productivity improvement as a state.

Another great source of productivity is through enabling infrastructure and, again, this is an area where this government has dropped the ball. In fact, when the Treasurer made his speech to this house only a few weeks ago, he said that we were going to have a massive $1.3 billion infrastructure expenditure next year. Well, that is his budget. Let me tell you what he did not tell you: if you look at the average over the last five years, it has been closer to $2 billion. In other words, the Treasurer is presiding over a massive slashing of the capital budget in South Australia. There is not one single major announcement in terms of infrastructure in their budget, and that is not good enough.

Infrastructure creates jobs, but it also creates that enabling productivity improvement to have sustainable jobs going forward, and that is what we need in South Australia. That is why we say on this side of the house, 'Get on with the Northern Connector.' The government has been talking about the Northern Connector for an extended period of time but get on with it, bring it forward, deliver it for the people of South Australia. Create the jobs and create the productivity improvement, but do not just stop there. We know that the Prime Minister of Australia, the Hon. Tony Abbott, made an announcement in 2013 committing to a continuously flowing north-south corridor in South Australia to be delivered within 10 years. We are calling upon the government to bring forward future stages of the north-south corridor upgrade in South Australia to create jobs and to improve our productivity in South Australia.

Our focus on productive infrastructure should not be limited to metropolitan Adelaide. Our regions have been starved after 13 years of Labor government in South Australia, and that is why we have said that we would like to establish Infrastructure SA, an independent statutory authority looking at developing a long-range productive infrastructure plan for the people of South Australia. This government has focused on pet projects around marginal seats in electoral cycles for too long and they have not delivered the productive infrastructure that we need to support our exporters to create jobs and to grow our economy. That is what Infrastructure SA would do.

Our first referral would be for an immediate cost benefit analysis on the Strzelecki Track upgrade. This is an important piece of infrastructure. Again, the government want to talk about it—endlessly talk about it—but when are they actually going to do something about it and deliver it? We want a long-range plan in South Australia for roads, rail, ports, water augmentation, electricity augmentation. Where is our ports plan? This government has been talking about another deep-sea port for South Australia for a decade. They have no detail whatsoever and that is why they cannot be trusted to do the job and Infrastructure SA needs to be developed to oversee this important area for the people of South Australia.

Water is a critical part of our infrastructure and, again, this is an area where this government has not performed. Let’s be serious about this. We have the highest water prices in the country and this is again holding back our ability to grow our economy. That is why we say we need an immediate independent inquiry into water pricing in South Australia. We have called upon the government for this; they have ignored it. What have they got to hide? We need to have a look at the way that we are pricing our water in South Australia so that we are not dealing ourselves out of the game because of our extraordinary high prices in South Australia.

More than that, we need to have a plan for water augmentation in South Australia so that we can open up the productive capacity of the Northern Adelaide Plains, the Clare region and, in fact, right across regional South Australia. We can get into further intensive horticulture. We talked about this a great deal in the lead up to the state election and we implore the government to take a very good look at this. Most importantly, we need to look urgently now at opening up third-party access to SA Water infrastructure so that we can drive down prices and improve our productive capacity as a state.

We are not travelling well in terms of our export performance in South Australia and, again, this is something that is holding South Australia back. We know that for every million dollars exported we create a huge number of jobs in South Australia—10 jobs, the economists tell us—and that is why we need to have a major focus on creating these opportunities for South Australia. How have we gone in this area? The figures were published only a few weeks ago for the year to the end of April. We have had a 7 per cent decrease in exports. For years, those opposite have told us that the reason for the decrease in the exports is because of the high valuation of the Australian dollar. Guess what? It is massively devalued, and what has happened to our exports? They have fallen back, ratcheted back yet again.

When this government came to power, we represented almost 8 per cent of the nation's exports. Today, we are little over 4 per cent, and we do not have a focus on this area. We have had vanity projects and jetting overseas, but the outcome has not delivered jobs for South Australia. In fact, if we go back to the 2012-13 budget, the government was budgeting to spend $30 million a year to support our exporters; this year, it is $13 million.

So, there was a lot of talk. We have had the jumbo and it has gone overseas. The 85 public servants have all been over and they have actually got the stamp on their passports. But, unfortunately, when we look at the budget, there is less money going in to supporting our trade-related exports out of South Australia, and that is absolutely shameful.

Deputy Speaker, as you would be aware, last year I travelled to New Zealand and met with the Prime Minister, the Hon. John Key. Let me tell you that the New Zealand economy, under solid, centre-right administration led by John Key and the National Party, has seen an incredible turnaround since 2008. When John Key became the Prime Minister of New Zealand, 3,000 New Zealanders net were leaving New Zealand every single month. Proportionally, it sounds a little bit like South Australia—3,000 every single month.

Fast forward to 2015, they now have a net repatriation of people going back to New Zealand, because they have a quality government which is delivering economic growth for the people of New Zealand. What a powerhouse that economy has been. If we look at the last four years, there has been a 7.9 per cent increase or growth in the size of their economy. South Australia has been languishing, bumping along the bottom, at 3.7 per cent.

Last week, I had the good fortune of meeting with the Hon. Bill English, who is the finance minister and Deputy Prime Minister of New Zealand. Fundamental to New Zealand's turnaround have been two things: firstly, a major focus on growing the size of the economy through exports; and, secondly, improving the productivity of the public services in that country. How do you actually grow the output? How do you actually deliver better services to the people of New Zealand in a constrained fiscal environment?

Bill English gave a great speech in Melbourne last week which focused upon not just pouring more and more money into public services but looking at reforming them, understanding the cost drivers and focusing on the output. How many times, when we have asked questions in this parliament about how the government's performance and their outputs are going in an area, have the government responded, 'We put more money in'?

What we are calling on the government to do is to work with the Public Service to develop and improve productivity with a greater focus on outputs. In business, we have been doing this for years. We have understood the great asset, which is the people who work in our organisations. Yet, in the Public Service in South Australia, we have a government which treats them as a cost centre, not a great source of ideas, and not a great source of reform or productivity improvement or to improve output, but a cost. We have seen this time and time again, and it is about time the government changed their stance. This has got to be a major focus for them going forward.

It was a disappointing budget. It did not deliver the emergency response we desperately needed here in South Australia. Our party, the Liberal Party of Australia, was formed 71 years ago by Robert Gordon Menzies. Robert Gordon Menzies founded this party based upon the rights and responsibilities of the individual. He wanted the individual to be the best that they possibly could be; he wanted the individual to achieve their optimum, unencumbered by government. He talked about the forgotten people: he talked about the farmers, the shopkeepers, the tradesmen—the people who put their capital on the line to create opportunities for our nation and for our state. Sir Robert Menzies understood about these forgotten people, and he addressed it.

At a time in South Australia when we have the highest unemployment rate in the nation, when we have a state growth which has essentially ground to a halt, when we have population growth half the national average, when we have more and more of our young people leaving our state, when we have exports going backwards, there has never been a more important time for our state to recommit to the forgotten people, to recommit to those people who have the capacity to create jobs, to create enterprise and to advance our state.

That is why today, in this parliament, we call upon this government to focus on the forgotten people, for this government to accelerate their tax reforms, to bring forward their capital investment, to deregulate and to focus on exports.

Mr VAN HOLST PELLEKAAN (Stuart) (12:25): It is a pleasure to follow such a fine speech by the Leader of the Opposition. He has done an absolutely outstanding job, as he does day in day out, leading us and holding the government to account, but it is my turn to respond to this year's budget on behalf of the people of Stuart. Let me just say that of course no budget is all good or all bad, but there is a lot more disappointment in this budget than we were led to believe would be the case. Let me touch on a couple of positives to begin with, and then I will probably use the remaining 19 minutes of my time to talk on the other aspects of the budget.

The additional funding for tourism is a positive aspect of this budget. It will help metropolitan South Australia, it will help regional South Australia, and I welcome that. I hope the money is spent very wisely. There are a lot of very capable people working within SATC and we need to get that money out. We need to make it as effective as possible and get it out so that it actually contributes to effective marketing and to growing the efficiency of our existing businesses. To me, one of the most important aspects of growing tourism is improving tourism product and developing the product that is out there.

Of course, we welcome the tax relief. Any tax relief is welcomed by households or businesses, or employees for that matter, because employees are part of households and businesses, so they benefit as well. The extension of one year of the increased threshold for payroll tax is certainly welcome, but I cannot see why this government just wants to extend it for one year and one year and one year, unless, of course, it is because they do not want the full liability of that decision to be throughout the forward estimates. They only want the liability to be in the next year and so they hide the true picture.

The reduction in stamp duty is very positive, but why is the government having the vast bulk of that relief in the fourth year of the forward estimates after the next election? I can only imagine, again, that they are holding off on providing the benefits to our state, but they are also holding off on attributing the genuine cost to the budget. They are trying to make themselves look better than they actually are. Yes, of course we welcome the tax relief, but they have not gone nearly far enough.

We need to pursue employment, and greater employment needs to be the highest goal of this government and the budget. We need to do that by supporting business to employ people, not so that we have wealthy business operators—that is a lovely by-product, and good luck to them and their families—but so that they can have productive businesses and can employ people, and employ more people, and so that the people they employ can have secure employment. That is the reason to support businesses: so that they can provide secure, ongoing employment to their staff so that those people then can improve their lives with some security, so that they can go to the bank and get a mortgage, so that they can be sure that they can look after their kids and their families as they grow up, so that they can get a car loan and so that they can pay off their mortgage and have security. That is the reason to support businesses but, unfortunately, this budget is not doing that.

The Treasurer does talk about it but, unfortunately, it is just not happening to nearly the extent it should. I have given a couple of examples of where they are talking about benefits that do not actually accrue for a very long time and, if they were genuine about trying to support those businesses so that they could provide secure employment, they would bring forward those benefits.

The most recent figure we have for unemployment across our state is 7.6 per cent. It is the highest unemployment in the nation. It is an absolutely disgraceful position to be in. Guess what, Deputy Speaker: this budget provides us with the lowest jobs growth target of any state in the nation. Those two things just do not go together. If you are in a dreadful situation with regard to unemployment, you should have a very hardworking, ambitious budget that unlocks the productive capacity of our state and provides an employment growth target of much greater than 1 per cent and certainly not be targeting, again, to be the lowest in the nation.

We have seen unemployment grow and grow and we have had a lot of very unfortunate shocks. In the mining industry, in November 2014 (seven or eight months ago), the government announced boldly that it was going to create 5,000 new jobs for our state. That is a fantastic target. But, guess what? We have lost that many in less than a year. In the eight months since that target was announced, we have lost as many jobs as the government said they were going to create.

Do you know what is the most disappointing thing about that, apart from the obvious loss of jobs? I heard the Premier stand up at a South Australian Chamber of Mines and Energy awards night a few months ago and say to everybody assembled—hundreds of people from the industry were there—'We have set an ambitious target in government and now it's up to all of you to deliver.' That is exactly what the Premier said, that the government had set an ambitious target but it was up to the industry to deliver on that target. Isn't that a disgraceful way to support industry—to have big banner headlines, that are not even being achieved, and eight months later we have lost as many jobs as were going to be achieved in the industry, and at the same time to shamelessly say that it is up to somebody else to deliver that target? That is where we are at at the moment, and that is completely unacceptable.

Another great disappointment for me in this budget has been a complete lack of support for families and households and any relief whatsoever from cost of living burdens. We have high electricity prices, high water prices and high taxes across the board. The government brags about removing the River Murray levy which will save a household on average $40 each, but they are actually increasing the emergency services levy at the same time and that will cost the average household $205 each. There is no relief for households. In fact, they are pushing up the cost of living for households.

To get back to the employment issue, the emergency services levy is not only a burden on households but also a burden on employment. The emergency services levy is a tax on employment because it is a tax on property. Every single business, whether a self-employing business or a business that employs other people as well, works, in one way or another, in a situation where they have to pay that increase. If they work in owned premises, they pay the increase. If they work in rented commercial premises, they pay the increase through outgoings which the landlord will pass on directly to the business as the tenant. If they work from home, they pay the increase in the emergency services levy. While this government makes big claims about trying to look after business, employment and families, it is doing exactly the opposite.

With regard to infrastructure, infrastructure is incredibly important. The government talks about infrastructure, and has done for a very long time, but it is again not following up with action. We have two key infrastructure projects that need to be pursued at the moment. They are two key regional pieces of infrastructure, and I mention them specifically as a regional member of parliament.

The upgrading of the Strzelecki Track is very important. Sealing that 470-kilometre piece of road will improve the transport and other efficiency of our state enormously. There are three key industries—they are not the only ones—that work in the north-east of our state: oil and gas, particularly in the Cooper Basin; tourism; and the cattle industry, and they will all benefit by having that road upgraded.

Another very important piece of infrastructure is a deep-sea, multi-user export port and, again, the government has talked about this for a very long time. A year ago the government committed to within a year from that point of time—so by now—producing for the public a plan for a new export, deep sea, multi-user port that would support our existing resources and agriculture industries and help them both grow, exporting typically iron ore, grain and other products. We need to have that. A year ago they promised to have a plan. They did not promise to have the port; they promised to have a plan. You cannot build the port if you do not have the plan and we are still waiting for the plan. The government has recommitted and recommitted to providing this plan, but they have not yet developed it. We need to see it.

I do not say that the government needs to fund all the money required to develop a brand-new port. Certainly, they do not need to do that, but they do need to show leadership so that financing will be attracted to this very much needed project. Infrastructure, in general, is incredibly important because jobs are created while the project is developed, but that is actually the second tier priority. That is a big help and we all welcome in regional South Australia or in metropolitan areas when infrastructure is developed, but the key issue is the ongoing jobs (the additional capacity that is created) and the additional efficiency that is created. They are the two things that are very important that come out of infrastructure and if they do not provide those into the future then they are not productive, efficient, worthwhile infrastructure. So, yes, there are jobs while they are being built, but they need to improve our economy and those two projects, the port and the Strzelecki Track, would both do those things.

The employment situation in our state is dreadfully concerning for all of us here, and I am sure government members are very concerned about that as well, but somehow the message is not getting through to cabinet and the senior decision-makers about what needs to be done. We are losing jobs at Holden faster than was predicted. There are now only 1,260 employees left at Holden and, let me tell you, they are doing an outstanding job. The employees working at that Holden factory are doing an enormous job. They are surprisingly winning awards within the entire worldwide GM group for their productivity improvements and their innovation. They are doing everything they possibly can. The workers and management have taken it upon themselves, every man and every woman, to be as good at their job as they possibly can be right until the very last day that that factory is building cars, and I commend them for that.

Unfortunately, they are losing employees faster than was predicted and yet the government is supporting them slower than they said that they would. We are losing employees quicker than was predicted and yet the money in the budget that the government has set aside specifically for programs to help the Holden workers in the north of Adelaide and all of the other people affected by this very unfortunate automotive transformation at the moment is not being expended as quickly as the government said they would.

I do not want the government to waste the money. I am not saying just pump it out there, spend it on any old projects and who cares whether it is efficient or not. That is definitely not the case but, goodness gracious, by now they should have some effective, productive, useful programs in place that will help. Holden is getting on with the job. They are spending the $15 million that they have put into South Australia and Victoria to support their people in transition. They have an excellent program working there. They are getting on and doing the job, but the state government saved $2 million out of their program from the financial year that is just finishing today. Of all of the places to try to save money, that is not the place to target. These people need help and they need it faster than we expected they would.

Not saving but overspending by this government has been its nemesis for as long as this government has been in office. It has perpetually overspent and this year is no different. We have a situation where, over the forward estimates, the state government is going to receive from the federal government $892 million of additional federal government income, yet it keeps overspending and overspending. There is a history of this government receiving unbudgeted additional income, yet unbudgeted spending is outstripping that income, and that is a habit that just has not changed.

To its credit, the government is still forecasting a $43 million surplus next financial year—the financial year that starts tomorrow. Let us hope that it achieves it—history tells us that it will not. It has just handed down a deficit well in excess of the deficit that was forecast for the financial year just finishing. I am not at all optimistic that it will reach the surplus it is predicting for the new financial year. However, let me tell members, if it does it will be thanks to the federal government; if it does it will be because the federal government has given it more unexpected additional income than its most likely overspending which is about to commence. So, if it is able to have a surplus do that it will be thanks to the federal government but, unfortunately, it is highly unlikely.

Overspending has been the downfall of this government. We have a situation where hundreds of thousands of dollars is being spent on redundancies for public servants at the same time as the number of public servants in the state is growing. That is just one example of dreadfully inefficient use of money. We have a situation where $176 million, I think it is, needs to be spent unbudgeted—so, an overspend of $176 million—to transfer patients and equipment from the old Royal Adelaide Hospital to the new Royal Adelaide Hospital.

It is impossible to imagine that not one of these people—not one person within government, not one person within the health department, not one person analysing the PPP that put all the financials together, from an orderly doing important work in the hallways of hospitals all the way through to the chief executive of SA Health, or any of the financial people who scrutinise this—thought, 'Gee, we're going to need some money to transfer the patients and the equipment and all of the things that have to go from the old hospital to the new hospital.' I do not believe that they did not think of it. I do believe the government thought about leaving it out of the budget to make the budget a few years ago look a little bit better, and that is the sort of thing that catches the government out.

There are two aspects to its overspending: one fact is that it just spends and spends more than it expects that it will; but the other aspect is that it hides necessary expenses out of budgets to make the budgets look better, and that is exactly what I was getting at with the things I discussed earlier with regard to, for example, extending the payroll tax by one year so that years 2, 3 and 4 do not actually have to show the cost to the budget of forgoing that payroll tax income.

It is not an accident: it is the government's way of making things look better, but, unfortunately, it is not making them look good enough. We could talk about the budget for as long as we like and we can all share our different opinions and agree or disagree, but the most important thing going on in our state at the moment from a budgetary and an economic perspective is our incredibly high unemployment rate—7.6 per cent at last count and we know how many thousands of jobs have been lost across the state since then.

In the last minute I have left, let me just tell you how dreadfully disappointed I am that the government did not put any relief in this budget for the Alinta workers, their families and other employees affected in the communities of Port Augusta and Leigh Creek and surrounding districts. The announcement that those jobs were going to be lost was made a week before the budget. I understand the last minute issues about printing, but I also understand that there would be money made available.

An announcement could easily have been made that there was support for those people and those communities in this budget. It could easily have been explained: 'Look, we haven't got a page, we haven't got a line item, we haven't got something in the budget paper books that have already been prepared, but here is an allocation of money,' because there have been other announcements since the budget was handed down for other things they thought were a priority. I am terribly disappointed that they did not consider the Alinta workers and the other people who will lose their jobs because of Alinta's decision, and affected communities, a high enough priority.

Mr DULUK (Davenport) (12:45): This budget is a failure. It is a failure on infrastructure, it is a failure for business and it is a failure for job seekers. The Labor government has no plan for job creation, debt reduction, there are no new infrastructure projects nor assistance for local exporters and no plan for South Australia's future in this year's budget. We need solutions. Right now South Australia's economy faces some serious challenges. The South Australian economy has been on the decline for the last 10 to 12 years and ongoing struggles are becoming terminal. Our challenges are not new. They have not crept up on us. They have been presenting themselves for some time now.

Successive Labor governments have failed the people of South Australia. They have failed to put the brake on our state's decline, they have failed to diversify our economy and they have certainly failed to create a positive jobs growth agenda: jobs that would attract people to our state; jobs that would keep our young people here. We continue to suffer from a mass exodus of our best and brightest, who are leaving South Australia in search of greater opportunities. They are moving interstate and overseas for opportunities that do not exist in their own backyard.

South Australia is now in the unenviable position of having the highest unemployment rate in the nation at 7.6 per cent. In the period since the Premier was re-elected unemployment has dropped in Queensland, Victoria, New South Wales and it has even fallen in Tasmania, but in South Australia we have bucked that trend. In the last year alone our unemployment rate has jumped from 6.2 per cent to 7.6 per cent and there are grave fears that the worst is yet to come. Jobs at the Port Augusta power plant, Holden and BHP are still to be shed and the full impact of those announcements will not be realised in the jobs stats for another year or so. Add to this the demise of Leigh Creek and our ongoing manufacturing decline, and South Australia is in real trouble.

ABS figures released in June of this year revealed that more than 5,000 mining jobs have disappeared from South Australia; 5,000 jobs lost since the Premier promised to create 5,000 new mining jobs—5,000 jobs lost. This government is not very good at keeping its promises. The Treasurer promised that this state budget would offer some answers, that this budget would be a jobs budget, but his supposed jobs budget is nothing short of a failure.

This year's budget prediction of 1 per cent employment growth for 2015-16 is less than last year's predicted employment growth of 1.25 per cent for the same period. Labor has proven time and time again that it does not have any answers. This Labor government has proven that it cannot keep its promises, promises that included creating 100,000 new jobs by 2016. In reality, just 6,651 jobs have been created since Labor promised 100,000 extra jobs in February 2010.

This government has broken its commitment to create jobs and instead of working to deliver on its promises it has taken a saw to our vocational training centre by axing jobs training programs and announcing funding cuts for non-government training providers. These are cuts that will drive many private training organisations to cease offering courses and reduce the range of vocational training available to South Australians.

Data released by the National Centre for Vocational Education Research in May of this year shows the drastic decline in the number of South Australians in jobs training in 2014, falling from 165,000 to 129,000. The number of students in vocational training has fallen by more than 21 per cent. At a time of soaring unemployment and daily announcements of further job cuts across South Australia, cuts to vocational training could not have come at a worse time for job seekers, job seekers who need training to have a chance of success in this highly competitive jobs market.

This state is at a critical juncture. The decisions we make, the steps we take, will determine whether we look back at this moment as one of lost opportunity or the turning point that delivered enduring prosperity. South Australia can turn around its fortunes; we can reverse the trend of our soaring unemployment, but we need a budget and a government that lowers business costs and lowers them now, a budget that provides incentives for investment in our state. Health, biotech and medical research are industries that could help drive future economic growth. International education, tourism, food and wine are other areas of great potential for South Australia.

I believe in South Australia and its people. South Australia has the foundations to rebuild our economy. We have the ability to transition our state to a new, modern economy. But transitioning the economy is a complex and delicate task. It requires a careful mix of the right short-term and long-term solutions. We need to confront the issues we face today, and also put in place the economic framework that will stand the test of time. But, to achieve success, to turn around our fortunes, we need a bold vision, we need bold decisions and we need bold actions.

Labor has not been bold: Labor has played it safe; Labor has delivered a budget that has no plan for job creation, a budget that has no plan for turning around our failing economy. The state budget again proves that Labor is not up to the challenge. It proves that the Premier and Treasurer cannot, will not, make the tough decisions. Our economy has flatlined. South Australians are paying more and getting less. They are paying more taxes, more for water, more for electricity and further increases to the emergency services levy this year, after a massive hit last year.

This budget fails to deliver for South Australians, it fails to provide any real cost of living relief to households, and it fails to deliver a plan for our future. Small business is the heartbeat of this state's economy, but our small business sector is struggling. It is struggling because of bureaucratic red tape and government apathy.

The South Australian business sector needs a budget that drives competitiveness, lowers costs and incentivises investment, and they need that now. The changes to stamp duty announced in this budget will be welcome relief when they are eventually phased in, but they fail to deliver the urgent impact our small business sector is craving, and they fail to deliver the significant impact the small business sector desperately needs.

The fiscal impact of the stamp duty changes will not be delivered for up to three years, and it is worth reminding members that these same changes were promised by the Labor government in the 2005-06 budget, changes promised by former Labor treasurer, Kevin Foley, until he changed his mind. The small business sector in South Australia needs a government that is pro small business. It needs a government that makes it easy to do business in this state by removing red tape, a government that gets out of the way of business so that business can thrive.

Payroll tax is a huge impediment on growth. It is a tax on jobs, jobs that this state desperately needs. It is a tax on jobs at a time when we have Australia's worst unemployment record, and a record that is sadly trending upwards. Removing payroll tax across the board would have an absolute and immediate positive impact on business. It would free up capital for investment to expand their workforce, capital to invest in their business.

But simplifying taxes is not enough. We must also work with the business sector to help it grow. We need to help South Australian businesses, exporters and producers to find new markets and new opportunities. We need to attract more business, offering incentives and making it easy for businesses to set up shop in our state. We need to increase the number of new businesses, new industries and people moving into South Australia, and we need to do more to help start-ups. There are some amazing entrepreneurial spirits in South Australia, and we must help them unlock their full potential.

Programs such as the South Australian Young Entrepreneur Scheme can play an important role in fostering entrepreneurship and helping enterprising business people, but suitable and sufficient support is crucial for this to occur. I am concerned because support for programs aimed at helping the business sector have fallen in recent times. Since the 2011-12 state budget, funding for the main state government program aimed at boosting exports has been cut by this government from $30 million to $19 million, at a time when unemployment is rising and at a time when export and investment are crucial to this state and its future.

The Labor government has slashed funding to the main state government program aimed at boosting exports. Support for this program has fallen, despite the fact that the current government is nowhere near its target of $18 billion in annual exports by 2017. In fact, during the last 12 months South Australian exports have dropped and merchandise exports have plummeted from 7.1 per cent to $14 billion per annum.

Small states do not become prosperous by selling their produce to themselves. Instead of entering or expanding further into international markets, Labor's lack of adequate assistance means that many businesses have had to turn their focus to survival—not export growth. Attracting inward investment is equally important to promoting exports. The government's $15 million budget commitment to fund and secure new investment in South Australia is a welcome step, but it does not go far enough to address our needs. The Treasurer is picking winners through the provision of targeted assistance rather than providing a vehicle to attract sustainable new business.

It is time to think outside the box. To be bold, we should look at new programs and new initiatives to help kickstart our lagging economy—programs such as the Immigrant Investor Program in the United States, also known as EB-5. The US Congress created that program to attract investors and entrepreneurs from around the globe to attract investment that will create jobs in America. EB-5 makes a limited number of visas available annually to immigrant investors who invest in commercial enterprises and there must be an enterprise that creates at least 10 US jobs in a high unemployment or rural area.

The concept of an EB-5-style program should be explored here in South Australia with potential benefits for many. It provides an alternative to the Treasurer's 'picking winners' strategy. The challenges confronting South Australia are not unique to our state. There are many cities that have also experienced the sharp decline of our key sectors of the economy, surging unemployment, increasing costs and population decline. We can look to these places for ideas—ideas of what has worked and warnings of what has not worked as they transition to a new, modern economy.

The revival of Pittsburgh, Pennsylvania, has lessons for all of us. The City of Bridges—as it is known—has built a bridge from its steel past to become a diverse 21st century economy. Pittsburgh long symbolised the industrial era in the US. When the US steel industry collapsed in the 1980s under foreign competition, Pittsburgh unemployment surged to 17 per cent and its population declined. Yet Pittsburgh found a way forward. The manufacturing sector diversified into advanced manufacturing, health care and education picked up the slack, and entrepreneurs turned the city into a centre for robotics.

It took a coordinated effort by the city's political, economic and non-profit leaders to link education and innovation, nurture new business and turn Pittsburgh into one of America's most liveable cities. In 2009, the city was selected to host the annual G20 Summit and was hailed by the group as 'a model for economic, environmental and quality-of-life transformation'. That transformation did not happen overnight, and it did not happen on the back of safe, unimaginative political leaders.

The city's transformation took vision, it required bold decisions and involved good, long-term planning. Most importantly, it was driven by government coinvestment. The waterfront, once lined with factories, was given over to parks; the city fostered its green technology sector; and the G20 Summit was hosted in the world's first and largest LEED-certified convention centre. Government involvement has been in the right places and to the right extent in Pennsylvania. Entrepreneurship has been fostered, innovational work and a state-aided seed fund has played a vital role in Pittsburgh's technology economy. It provides capital investment, business and technical expertise and access to a network of innovative expert resources. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 12:58 to 14:00.

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