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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Budget Measures Bill 2017

Second Reading

Adjourned debate on second reading (resumed on motion).

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (16:07): Prior to adjournment, I was discussing the concerning impact on jobs in the banking industry in South Australia. I referred to one of the banks employing a number of people in our state, equivalent to three Holden plants, and the impact it could therefore have on more jobs in this state, that is, BankSA, which is owned by Westpac. For the record, I ask that that be noted.

On 27 June, the Australian Bankers' Association confirmed that they employ some 8,000 in their banks in South Australia. The situation is dire not only for consumers but also for those who are employed in the banking industry in South Australia, who are vulnerable to a reduction in hours or loss of employment. That will only exacerbate what will be the result of this ill-conceived tax proposed by this government. As I have said before, some people might think the banks are bastards, but they are amateurs compared with this government.

Mr MARSHALL (Dunstan—Leader of the Opposition) (16:08): I rise to speak on this bill now before the house. This government, as you would be well aware, Deputy Speaker, likes to manufacture confrontations and use them as a device to keep people focused on imagined external enemies and to distract them from what is really happening within South Australia to our economy, to our government finances. No doubt, the Treasurer had another confrontation in mind when he walked the bank levy into the Labor caucus. 'The public hates the banks,' he would have said to them all, 'so let's jump on the bandwagon. Let us tax the banks in South Australia more than they are taxed anywhere else in Australia because that will be wildly popular.' Can you not just hear the Treasurer saying that to his caucus now?

But I wonder what the caucus is now telling the Treasurer here in South Australia. Those nervous marginal members in the Labor caucus would have a very different concept of what the Treasurer put forward. No doubt the Treasurer is no longer seen as the political genius he thought he was because this tax has backfired spectacularly on this government. South Australians have had enough of the arrogance of this 16-year-old tired Labor government and enough of the lazy way that Labor taxes more because it cannot manage its own budget.

The Treasurer told the parliament when he introduced his budget that his tax would generate $370 million over a four-year period. During the estimates committee in this parliament recently, under questioning we found out that in fact it would bring in $417 million, but what is a lazy $47 million to a lazy government? South Australians have revolted against this tax grab because they have had enough of Labor smashing the economy, smashing jobs, smashing opportunity and smashing businesses in this state.

They have had enough of Labor because they know that if Labor is not stopped it will continue to send its wrecking ball through the South Australian economy. After all, this Treasurer has told the house in response to my question about what other businesses may be taxed:

…if there are other parts of the economy that are not paying their fair share of tax compared to the rest of the economy, then we would look at it.

The Treasurer will wear those words like a crown of thorns, but there will be no resurrection for this Treasurer. Since this tax was announced, we have had more evidence of the economic madness of this government. Unemployment has gone up again. We have had the highest unemployment in trend terms for the past 31 consecutive months. Our youth unemployment rate is up more than 4 per cent on a year ago. We also lead the nation in the underutilisation rate. It is almost two percentage points higher than the national average, and this is shameful.

Since the budget, many thousands of consumers have been hit with much higher electricity bills. Four years ago, the government promised South Australians their power prices would fall by 9 per cent. The Treasurer came into this parliament, called his press conference and promised the people of South Australia a 9 per cent energy cost reduction, but since then they have increased by a staggering 66 per cent to the highest cost in the entire world. We cannot trust this government with anything it says about the economy or costs of living in this state.

All we know is that Labor will take our economy down by keeping state taxes up. It is the same government that promised back in 2010 to create 100,000 new jobs in this state and is still about 80,000 jobs short. It is no wonder that South Australians do not believe this government when they say that this bank tax will not be paid for by them. When I am out speaking to people in my community, or the Deputy Speaker is out talking to people in her community, when people right across this parliament are out talking to the people on the street, they know that this tax is going to be paid for by them directly and indirectly because they know that our economy will continue to falter.

Let's consider the facts. This tax increases the cost of borrowing by the banks for specific types of financial instruments. These instruments are highly liquid and allow banks to manage their own borrowing portfolios. By raising the cost of accessing these sources of funding, total borrowing costs will increase. In turn, this will raise the cost of lending to businesses and households, as well as potentially lower the interest paid on deposits of these businesses and households.

The government's willingness to pursue this reckless policy has already raised the risk profile of debt the government has issued previously. Institutional investors have begun to sell off state government bonds, increasing the spread on these bonds. This is likely to result in the market demanding higher coupon rates for the next round of bond issuances or undersubscribed issuances here in South Australia in the future. People should be very concerned about this potential eventuality here in South Australia.

This new tax will drive down returns for shareholders, either by reducing profitability, and therefore value, or by reducing the dividends, which will also translate to lower share prices and capital losses. Superannuation funds are major investors in the banks being taxed on behalf of their clients. Every South Australian with superannuation will be impacted by this tax, with those relying on superannuation for income to be particularly hard hit because of the effect on dividends. This tax is punitive. This tax is discriminatory. It says to all businesses that South Australia has a government prepared to tax them more highly than anywhere else in this country.

Businesses will not invest in South Australia with a Treasurer looking for opportunities to tax anybody who makes profits, a Treasurer given full rein by this Premier and his well-known hatred of the private sector. The head of the government's own Investment Attraction agency, Mr Rob Chapman, has said it would be naive to think that this will not have an impact on investment in this state. But did this government even consult with the head of their Investment Attraction agency before putting this punitive action in place in the budget?

South Australians, though, are not naive when it comes to tax and this government. They remember the emergency services levy increases. They remember this government's attempt to bring in a car park tax in South Australia. They remember this government's call for a 15 per cent GST in South Australia and they remember that this government, this Premier, this Treasurer, are still advocating for a GST on all banking transactions here in South Australia. The Treasurer thought this new tax would be widely accepted because of the recently introduced federal levy.

For decades, the federal government, regardless of the party in power, has provided an implicit guarantee for major banks. This ensures a sovereign government is prepared to step in to prevent bank runs and systemic failure. The federal government has taken a decision to impose a levy to recover part of the costs associated with providing this implicit guarantee. The South Australian government offers no such guarantee. It does nothing to ensure the systemic reliability of our banking system in South Australia or around the country. It does nothing to ensure that Australians can access global finance markets at competitive rates.

This is just another blatant tax grab from a government addicted to taxing South Australians more and more. We on this side of the parliament are fully resolved to oppose this introduction of this toxic tax, which will do nothing to create one single, solitary job here in South Australia.

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (16:17): I have listened carefully to the contribution by the Leader of the Opposition. In particular, I have looked for a positive alternative plan, an alternative budget, an alternative vision about which we could have a meaningful debate. I have listened carefully also to the contribution made by the deputy leader yesterday and to other members.

Missing from the debate so far are any proposals about what the alternative government might do or what sort of a budget it might present. As we have just heard from the leader, it is one thing to rail against a tax, and I must say my position generally would be to resist any tax increase and to look at cutting costs, but I am waiting for suggestions from those opposite about what costs they would cut so as not to require the tax increase.

This is the same debate we had over the emergency services levy and whether or not the exemptions which were there and which were taken away at the last budget should be replaced. I see the opposition has signed itself up for hundreds of millions of dollars worth of tax reform, should they get into government, before they even start looking at what positive things they might do to grow the economy. I am happy to enter into a debate with the opposition about tax versus costs of government, but so far all we have heard is criticism of what the government is doing with no constructive alternative put down.

I want to start with the question I heard the leader end on, which is the bank tax. I thank the banks for the contribution they make to the national economy and to the state economy. A vibrant banking system is essential to us all. It could not be more vibrant. Just today, we had the extraordinary news that the Commonwealth Bank has made nearly $10 billion worth of profit in a single year at the expense of its customers. It is an extraordinarily profitable bank. Shares rose 5.25 per cent over a period of time, and I will come back to that point.

Indeed, Commonwealth Bank shareholders would have every reason to rejoice at that profitability, but of course each of the banks is extraordinarily profitable. They are charging their customers extraordinarily in terms of fees and charges. Interest rates are set where they are set, and the consequence is $10 billion worth of profit for a single bank. There would be a lot of companies that would like to be making that sort of money. It is extraordinary.

However, the reality is: can the banks afford the modest impost proposed in the budget of 30¢ in $100? The leader just gave several impacts that he thinks the bank tax will have. He talked about bond rates, he talked about the effect on shareholders and he talked about the effect on superannuants, but he did not give any details, just generalisations off a banking association media release. I ask him: what effect does he really think it will have on shareholders, this 30¢ in $100 of profit? Does he really think that returns, dividends, are going to be reduced by the equivalent amount of 30¢ in $100?

If you receive a $100 dividend, you are going to receive 30¢ less. Is that going to bankrupt grandparents and retirees all over the state? I think he needs to analyse exactly what he claims the effect will be in terms of an impact on shareholders; similarly, with superannuation funds, exactly what effect does he think it will have, 30¢ in $100? In regard to bond rates, the arguments that have been put out there need some justification. I think that all the leader has done is read off a banking association media release.

That is quite apart from the fact that, through the legislation, they are not able to pass it on but, even if they find a way, being realistic, when you are making $10 billion worth of profit and you are the Commonwealth Bank and this impost is 30¢ in $100, what is the real impact? I will tell you my proposition; that is, I do not think that the tax itself will have one iota of impact on investment in South Australia.

What is having an impact on confidence, what is having an impact on South Australia as an investment destination, is the very expensive media campaign that the banks are running to talk down the state and rubbish the state—the double-page ads, the television campaign and the radio ads, ably assisted by those opposite. What sort of bank and what sort of political party go out determined to rip the state down and ruin its confidence?

Mr Whetstone interjecting:

The DEPUTY SPEAKER: Order, member for Chaffey!

The Hon. M.L.J. HAMILTON-SMITH: It is actually the advertising campaign that is doing the damage, if there is damage to be done, not the tax itself. No-one I have heard has articulated in the house yet in this debate how 30¢ in $100 is going to break the bank, bring the country to its knees and cause everyone to go down to the Brighton jetty and throw themselves off the end of it. The fact is that the argument is being overstated, and we know why: no-one likes to pay tax if they can possibly avoid it.

If the banks can get out of paying this tax they will. They do not want it to be picked up by other states; they are simply looking after their bottom line. These CEOs are extraordinarily well paid—multi-multimillion dollar employees. They are doing extremely well, thanks very much, and they have been given their orders: fight this tax. Where I think the banks would have an argument, and what would have been a more intelligent approach from the opposition, would be to say, 'You are imposing this tax. How are we going to stop other states from pepper potting this tax?'

It is 0.3 in South Australia. What if WA introduced 0.4? What if Queensland introduced 0.5? What if Victoria introduced 0.2 and the banks had to adjust to different tax regimes in different states? A more intelligent approach would be to say, 'Could the Prime Minister and the premiers get together and fix this so that there is certainty, fix this at a given rate so that we know it will not be ratcheted up, fix this at the affordable 30¢ in $100 position and have all the states and the Prime Minister agree?' You could even argue that, as with the GST, the commonwealth should raise the money and reallocate it to the states. We could be debating how the bank tax could be made more manageable rather than whether or not we should even have it.

I go back to the point: what is this bank tax being used for? It is being used for tax reform. It is being used to enable payroll tax concessions, property tax concessions and other tax concessions to small business, and as the Minister for Small Business can I say that those little guys are in greater need. They are not making $10 billion a year and they need the breaks far more than those who can afford to pay 30¢ in $100—one-third of 1 per cent.

The $200 million jobs fund, including $120 million in grants and loans, $60 million for investment in industry attraction and $20 million in other measures, as well as the payroll tax cuts and other tax cuts and benefits that have been outlined in the budget are funded by the bank tax, by and large. The problem the opposition will have is that, if they block the bank tax, they block the other benefits flowing to small business. The question is: whose side are the opposition on? Are they on the side of big business or are they on the side of small business? Are they on the side of the little guys or are they on the side of the big guys?

Apart from the $200 million jobs fund, the budget announced the Job Accelerator Grants Scheme providing grants of up to $15,000 for new businesses; small business tax rates locked in and extended, helping an extra 1,300 employers; $9.5 billion worth of infrastructure spend; $1.1 billion for a better health system; Fund My Neighbourhood, $40 million; the energy plan, $550 million, higher quality education and two new schools to roll out $250 million for science, technology, engineering and mathematical school upgrades; and a raft of measures in community benefits and grants across sports, art and culture.

All this is being partly funded by the bank tax. What do they want? They do not want the bank tax but they do not want the other benefits. Which ones will they strip away? We are supposed to be having a meaningful and sensible debate about this. Getting up and whingeing and carping about government initiatives without suggesting alternatives is not a pathway to electoral success or good policy debate.

I just want to mention a couple of other matters. As the minister responsible for the Investment Attraction agency, can I say that the facts do not line up with the opposition's argument or that of the four major banks. Since the announcement of the new $200 million jobs fund, inquiries of the Investment Attraction agency have been at their highest level since the establishment of the agency in October 2015. Just a few weeks ago, a Bendigo and Adelaide Bank project was launched on national TV. Tic Toc is an online mortgage product that responds to your application almost instantly.

There is a competitive investment market at work here and there is no impact from the major banks scare campaign. In fact, the Bendigo and Adelaide Bank and a raft of other banks and institutions are just waiting in the wings for the four major banks to try to pass this on, to come in and undercut them and take their market share. During the GFC, the four major banks consolidated their position, swallowed a lot of their competitors and enforced their control of the banking market.

Members interjecting:

The DEPUTY SPEAKER: Order!

The Hon. M.L.J. HAMILTON-SMITH: This is an opportunity to rectify that imbalance—another reason they do not like it. Even the major bank shareholders and investors are not too worried. In the first 25 share market trading days after the state budget, Westpac shares rose from $29.77 at close on 21 June to $32.45 five weeks later. That is a rise of 9 per cent and a sure sign that the market is not concerned about the levy. Commonwealth Bank shares rose 5.25 per cent, and there is their big announcement today.

The opposition loves to spruik the line that we have the highest unemployment rate in the nation, and it is a problem we need to work on. We always need to. No-one would like to have the highest unemployment rate in the nation. I wish the Liberal Party had not slaughtered the automotive sector. I wish we had the coal of New South Wales and Queensland. I wish we had the iron ore of WA, which exports 42 per cent of Australia's total exports, though I point out that WA has problems of its own.

They do not mention that Queensland's unemployment rate, despite their many benefits in tourism and natural resources, according to the June figures, is only 0.1 of 1 per cent behind South Australia at 6.5 per cent. We are 6.5 per cent and they are 6.4 per cent, so we have the worst rate, but there is only 0.1 of 1 per cent in it. But let's not talk about that or the non-accelerating inflation rate of unemployment or the natural rate of 4½ to 5 per cent, which you will never get below.

No jurisdiction ever has been below that because there is a group of people who for one reason or another, through no fault of their own, cannot be employed. We do not talk about that. The truth is that business conditions in many ways in Australia are the best they have been for a very long time. You can borrow money at extraordinarily low rates of interest at the moment. Unemployment, by historic standards, is at a record low. I remember when it was 12 or 13 per cent, twice what it is today.

The opposition use comparatives that suit their argument. That is why CommSec and Deloitte came out last week and pointed out that business investment is the highest in the nation in South Australia. That is why KPMG rated us as the most competitive state in Australia to do business. That is why the Lonely Planet, The Economist magazine, the New York Post and The Telegraph in London have all said that we are one of the top five or 10 places in the world to live or to work. What do the opposition say? They say South Australia is a basket case. They talk us down. They are a branch of the four major banks.

They want to go around and talk business confidence down and, having done that, like the major banks, they then want to go and survey their customers and say, 'Guess what? We have been telling them that South Australia is a basket case for the last month and, here, they agree with us.' Well, in effect, you are filling out your own survey form. The reality is that South Australians do not agree with you.

Labour market analysis predicted that the gradual reduction in Holden staff numbers over the years to 2017 and associated decisions by component suppliers would deliver double-digit unemployment. Well, they have not—6 per cent is not 10, 11 or 12 per cent, which those opposite argued would occur, and it simply has not happened. ABS figures show that in late 2013 around 795,000 South Australians had a job. The outlook was that that number would fall. Well, it is 820,300 in June 2017 and employment is actually growing.

I could recite the long list of investments that have flooded into the state: $1.1 billion and 6,000 jobs as a result of the work of the Investment Attraction agency. The fact is that South Australians are just not buying it. I can tell you that the advertising that the four major banks are deploying with their friends in the Liberal Party who are lined up with big business, not little business, not the small guys, I suspect will ultimately backfire on them.

The people of South Australia and Australia are quite cynical about the four major banks at the moment. The news we have had about the Commonwealth Bank facing charges and the feedback generally—just ask any of your constituents—are extremely negative. As the Treasurer said in question time today, the banks need to adopt a different approach to reposition themselves. They are important to us, they are vital to the growth of the nation and a strong banking system is the future of our success, but 50¢ in $100 is not going to break the bank and I think they need to rethink their position.

That brings me back to the whole point of this budget. I do not want to lecture the Leader of the Opposition or those opposite about how to—

Mr Whetstone: Then don't.

The Hon. M.L.J. HAMILTON-SMITH: Well, you need it. You really do need it because, I tell you what, you will not get into government by whingeing and complaining. You will not get into government through a small target, low profile, no policy, stand for nothing argument without suggesting some constructive alternatives. This is one of the reasons that I resigned from the Liberal Party.

In all the years I was in the Liberal Party the only time that they had a positive agenda, frankly, was when I was the leader. When I launched the master plan for Adelaide in February 2008 that spelt out a vision for the city west of the River Torrens, for football in the city, a new stadium, a future for the Parklands, roads and infrastructure, public transport, new approaches to the suburbs of Adelaide, all of which were subsequently taken to the 2010 election by another leader, this was the only time the Liberal Party has ever stood for something. It was like herding cats, trying to get them to actually agree on that agenda—

Mr Whetstone: You were the cat.

The DEPUTY SPEAKER: Member for Chaffey!

The Hon. M.L.J. HAMILTON-SMITH: —although I note that a number of people here did. I want to commend the member for Morphett, who was always someone who had some vision, and a lot of other people. But the argument from most of them was, 'You will not get into government by proposing anything new. You will be criticised by the government, so just leave it all until the end. Come out during the campaign with some ideas and people will love you.'

I just remind those opposite of the words of John Howard: 'You cannot fatten the pig on market day.' He made it very clear to me when he was prime minister, and I sought his advice as leader of the opposition. He said, 'Martin, you have to get out there and argue the case for change as if every single week of the four-year cycle is an election campaign. You have to be out there putting the alternative argument.' That is what is missing.

I know what is going on over there. They will not have an energy policy. They do not have an energy policy. I know exactly what is going on. They are having their discussions about it. They will not even have reached a landing yet on what their energy policy is, nor will they have an infrastructure policy, nor will they have a trade and investment policy, and nor will they have a health policy. They would be having their little meetings, and they have nothing yet.

They will probably have those meetings right through Christmas, and it will scupper out sometime in February as a last-minute thing. It will all be done in indecent haste. There will be panic about the costings—and won't there be panic—because the policy work is not being done. If it was being done, you would be out there with your own vision, and you would have been out there two years ago, because it takes time to convince the people of South Australia that you have a better offering. It is one thing to try to sell a Holden, or try to sell a Ford—

The Hon. T.R. Kenyon: Or a Mazda.

The Hon. M.L.J. HAMILTON-SMITH: —or a Mazda, but I can tell you—

Members interjecting:

The DEPUTY SPEAKER: Order!

The Hon. T.R. Kenyon interjecting:

The DEPUTY SPEAKER: Member for Newland!

The Hon. M.L.J. HAMILTON-SMITH: —you will not convince people to buy your car if you put all your effort into rubbishing the other guy's car. At some point, you have to offer your product, and it has to be a product someone wants to buy. If the opposition think, and the Leader of the Opposition thinks, on the basis of this debate and the offerings from those opposite, that they have something South Australians want to buy, it is time to think again.

I must commend the Premier and this government for delivering many of the things I set out in the February 2008 master plan for Adelaide because at least the Premier has a vision. The government is determined to make reforms, and Transforming Health is an example. Tough, though, those reforms may be, they have had the guts to have a go. What I would like to see from those opposite is some political courage and a sense of what they would do if they were elected. I have heard nothing but silence.

Ms Digance: It's deafening.

The DEPUTY SPEAKER: Order! The member for Chaffey is going to make a contribution.

Mr WHETSTONE (Chaffey) (16:37): Thank goodness he is on that side of the house.

Members interjecting:

The DEPUTY SPEAKER: Order!

Mr WHETSTONE: Thank goodness.

Members interjecting:

The DEPUTY SPEAKER: Order!

Members interjecting:

Mr WHETSTONE: Deputy Speaker, I will not be distracted—

The DEPUTY SPEAKER: Alright, I am standing up. Sit down, member for Chaffey. It is not funny. I cannot hear what he is saying. You are going to prolong the debate, which is hardly a good idea, I would have thought. Everyone wants to go home tonight, I believe. We will be staying until we finish. Member for Chaffey.

Mr WHETSTONE: Thank you, Deputy Speaker. I will make a contribution to this year's tax budget bill. It refreshes me to hear the Minister for Investment and Trade give us his view of the world. It does bolster an opposition party when a minister, who is a traitor, has crossed the floor and is now working with the government. It is fantastic.

We will start off with the bank tax, which is a $370 million tax over four years. We have just listened to the minister asking why the banks do not get a better strategy. The strategy is about creating confidence. The strategy is about business confidence to invest in their own business. It is about people wanting to invest in new business. It is about attracting international investment. It is actually even about local business attracting a new workforce. It is about employing more people. It is about a national workforce that wants to come to South Australia.

When we have a bank tax like the one that has been put in front of this year's budget as one of the platforms that will resurrect the South Australian economy, we have to ask: how did we get into this position in the first place? How did we get into this? Because we have a government that are hell-bent on taxing the bejesus out of everything they can get their hands on.

We talk about the big banks and we talk about the four banks and the profits they are making. We are not talking about a billion-dollar business: we are talking about a trillion-dollar business. We are talking about the big end of town, yes, and they are the institutions that fund, support and invest in our economy. They are the people who employ South Australians. They are the people who lend money to businesses so that they can expand and export to the world. They are the businesses that invest heavily in the superannuation funds. They are the people who put their good judgement, their good guidance, into putting our investment, our super money, into bonds, into areas of investment so that they can make money for us—not make money for the government.

We have heard many contributions from both sides of the house, and I must say that I am absolutely flabbergasted by the government's last contribution. In relation to the foreign investment tax, I heard the minister get up today in question time and talk about international education and how he is going to reach his 35,500 international students by the end of the year. What sort of message does a foreign investment tax send to potential investors who send their children over here for their education?

All of a sudden they want to invest in buying a piece of real estate, they want to invest in their child's education, so they say, 'We'll go elsewhere. We're going to go to Victoria where we can see that there is no disincentive to come to this great country.' It is a simple analogy. International investors are going to look for any advantage they can get when they want to invest their money, when they want to come to a country and invest in it. They want confidence that their investment will return and that their investment will be looked after by a government that has their best interests at heart.

If we move along to the emergency services levy, there is another tax. It is a wealth tax, yes. We accept that, but what we do not accept is that the government continue to increase that emergency services levy. It is called gouging: we are not seeing the extra funds going into emergency services and we are not seeing the extra funds going into all of those services that really matter: it is going into that little black hole next to the Treasurer's desk. We have already dealt with the car park tax. We have dealt with the Treasurer rolling out his brilliant concoction of a 15 per cent GST, and bringing that into this country. He is addicted to tax. He is addicted to getting in the way of business.

It is pretty clear that in a previous life as a businessman, if I were looking to invest money into a South Australian business or a Victorian business, or a New South Wales, Queensland or Western Australian business—wherever in Australia—I would not come to South Australia if I knew that I was about to get a further tax, more than any other state, and a disadvantage in setting up a business.

We have seen the reliance the state government have put on businesses in South Australia, whether they are SMEs or large business, whether they are want-to-be businesses or whether they want-to-be exporters. It is all about, 'As a business, can we get a grant?' The government now have a dependency on grants and handouts, so anyone who has a grant or a handout from the government is now part of that government institution because, once they get that government money, they are compelled to remain focused on milestone reports and compelled to be a part of the government's charter, and that is to be reliant and continue to be reliant on handouts.

We heard the minister saying that we have had nothing to offer. We have offered tax reduction, removing tax, removing red tape and removing regulation. It is pretty simple that those who have not been in business do not get it. Those who have not been in business probably have never had to deal with the red tape and regulation that most businesses in South Australia have to deal with. Every SME business in South Australia is horrified by the amount of continual paperwork that they have.

Rather than focus on their business and where they can make money, they are focused on filling out paperwork day by day. They are not only focused on paperwork, but they are also focused on the multiplication of regulation, paperwork they have to fill out. Particularly in the electorate of Chaffey, many businesses come to me to tell me that they have had to employ an extra person just to fill out the paperwork. So, rather than try to grow their business, they are just complying with red tape and regulation.

We talk about pork-barrelling, and of course that goes without saying. The government has been in for way too long. They have a constituency base that they continue to support: it is called incumbency seats. Some of the latest grant funding that has come out makes people want to puke, when they see the same old seats and same old areas of the state getting the support they cannot get. There should be some piece of legislation, some form of rule, that ensures that every part of the state is able to share equally government grants and funding. They should not play favourites.

I want to touch on the bank tax and the banks. We seem to be focused on the four big banks. Do they pay payroll tax? They are probably one of the largest payroll taxpayers in the state. Do they employ people? Yes, they do. Do they invest in this great state? Yes, they do. I noticed the member for Elder was out there spruiking the little banks, that they will be the saviours. They are not the banks that are prepared to take risk on investment. They are not the ones that will stand up and say, 'Yes, we're going to lend you the money at a risk, and there will be a margin put on that loan, yes.' That allows a business to expand and employ more people.

Small banking institutions and small financial lenders are not prepared to take a risk, so they do not come into the equation when we talk about big investment and big job creation. It does not have to be about big business making big investments or job creation; SMEs are doing that every day. Every single day, those people are putting their livelihoods on the line. They are putting at risk their life savings, their life's work, their determination and dedication, by borrowing more money to invest, to employ more people and to grow, manufacture and process more product, so that we can put food on the table and invest in export markets and grow our economy.

That is why we are not seeing an increase in exports and that is why we are not seeing an increase in the confidence of SME exporters. We are seeing a continual regurgitation by the minister and by this government that is standing next to an exporter, who has put their dedication into a project, and taking credit for it. It has to be seen to be believed.

At the moment, some of the largest foreign investors that come to South Australia are from the US, and if it is not the US it is the UK, South-East Asia, North Asia or New Zealand. Many of the countries that South Australia and even the nation rely on are international investors. If an international investor looks at a foreign investment tax in South Australia, what will they say? 'I'm going to look at my other options,' and of course they will look at their other options.

Businesses in Chaffey have now diversified and expanded into New South Wales and Victoria. They are not investing in South Australia because it is too expensive and there is too much regulation. They go to New South Wales and tell the government there that they would like to invest in the state, and the state government say, 'What can we do to help? Where would you like us to help? In what area can we be of assistance?'

When they come to South Australia and tell the government they want to expand, that they need power augmentation, the government says, 'Well, that's going to cost you X number of dollars,' and if they say they have to hook up the water, the government says, 'That's going to cost you that much more again.' That is why industry, manufacturing and value-adding industry are not investing in the Riverland. They are now investing in the MIA and they are investing in other horticulture jurisdictions because it is easier to do business and there is less burden and fewer taxes. It goes to show that if the government were serious about investing, stimulating an economy and growing an economy, they would be out there helping, rather than taxing and burdening those businesses.

What I would like to say is that one of the great platforms that South Australia relies on is the River Murray, and what we have seen over the last sitting week is more politicising about the Murray-Darling Basin Plan. I urge everyone in this place that we as a state support the Murray-Darling Basin Plan. Yes, the government support it. Yes, the opposition support it. Yes, the crossbenches support it. The Murray-Darling Basin Plan is one of the great reform packages that this country will have to negotiate in the current times.

When I read a ministerial statement from a lazy, foul-mouthed water minister in another place, I really have to ask the question: where is South Australia's future within water reform? Where is South Australia's future when they, as irrigation communities, irrigators and SMEs, are giving up their financial platform? They are giving up their water licences so they can put water back into the environment. I want to correct a couple of things on the record in the ministerial statement. He discredited the pledge of a 4,000-gigalitre basin plan.

Days after the Premier knifed the then premier Rann in the back, he came up to the Riverland, and I congratulated him on it. He said that he would fight for a 4,000-gigalitre Murray-Darling Basin Plan and that no water should come from the South Australian irrigators. That is what he said, yet this foul-mouthed minister is discrediting what was actually factual. Days after the Premier was put into the top job, he came up and said that that was what he would be fighting for. The minister has said that there was never a promise of a 4,000-gigalitre plan, remembering that this plan is the sustainable plan to continue economic growth here in South Australia.

I criticise the government for not putting one drop of water in efficiency gains from the government or from SA Water—not one drop. It is all very well for the minister to say, 'Haven't you heard about the $240 million River Murray sustainability program called SARMS?' Minister, it was $265 million. It was commonwealth money and the state government is administering that money, so really the state government are the profiteers here. They are not giving up the water. They are clipping the ticket from commonwealth funds. Again, that will be water that will be put back into South Australia's 183 gigalitres of entitlement.

And 183 gigalitres of water creates many, many hundreds of thousands of jobs and that water that is going to be put back into the environment is a good thing. It is about the commonwealth government supporting those farmers, irrigators and communities. It is about supporting the state to adjust and to do more with less, but it is also about the transition, and that is something the current government never got. They would not even take the $20 million that the federal government offered them as a transition package—$20 million and the Treasurer and the Premier said, 'We are not taking that money because we have to pay GST on it.' Well, blow me over. When you cannot see a good deal, you do not know what you are on for.

I want to call the Minister for Water to account. He has not achieved any government efficiency gains below Lock 1. I am talking about SA Water. I am talking about government licences. I am not talking about putting a regulator in a wetland. I am talking about the government having skin in the game so that they can actually have credibility when we next have a drought because we are going to have another drought. It is coming, and every day that goes by that drought gets closer.

When we do have a drought and South Australia goes cap in hand to the other basin states and says, 'It's not fair. You've got more water than us,' it is about South Australia having done the due diligence. It is about doing what needs to be done for environmental works and measures so that, when we do not have enough water within the system and when we do not have the flows, we have the best environmental outcomes possible so that we do not have to put up with the rot that happened below Lock 1 in the last drought.

The reason I am saying this is that it is about sustainability. It is about a continual economy. It is about actually supporting the people who drive South Australia's economy. The Riverine Recovery Project is a commonwealth-funded project. What I would like to say is that when I see a ministerial statement from a minister of the Crown and he puts this absolute rubbish in a statement, he needs to get his facts right.

What I would like to say is that South Australian irrigators, the Riverland and upper and lower river communities are doing the right thing. They are engaging in efficiencies and they are engaging in the future of South Australia's economy, particularly with horticulture, agriculture and viticulture. It pains me that a minister continues to politicise an issue, a reform package, that is of no concern to him. As he has said to me on a number of occasions, 'There are no votes in it for me,' just as the Premier said the other day when he was interviewed about using GM products or allowing them to be legal in South Australia, but that is a debate for another day.

I will say that this budget is not in the best interests of South Australia. The bank tax is a bad tax. The bank tax is not good for investment, it is not good for South Australia and it is not good for investors coming here. It is not about looking at the banks. We had a minister who went from 30¢ in $100 to 50¢ in $100 by the end of his contribution; maybe he factored in interest, but I am not quite sure just where he was going. It is a pity that the minister continues to have battle scars from a previous life. As I said, the bank tax is not good. The bank tax is not putting South Australia on the front foot.

While I have made only a short contribution, I want to acknowledge that this bank tax will also impact all the good people in the new areas of the electorate of Chaffey: Cadell, Morgan, Blanchetown, Cambrai and Murbko. All those districts are reliant on good water reform. They are all reliant on commodity prices. They are all reliant on investment in their towns and regions. They are reliant on being supported by the banks, the majority of which are the four big banks . When they need that support, when they need that finance, when they need that help to increase their business and employ more people, whether they are going to pay off debt, whether they are going to adjust debt, it is about going back to the bank and being able to get that support.

International attraction agencies and business partnership programs, what are they going to be about when we are looking for international investment? Again, I have talked about the brand in South Australia, and that is what it is about—tarnishing the brand of South Australia. South Australia is a great state. It is a state that businesses do want to invest in, but when we have a government that is hell-bent on increasing taxes, introducing new taxes, with not a care about an SME, it makes me really sad. The bank tax is a bad tax and it is something that this side of the house will not support.

Dr McFETRIDGE (Morphett) (16:58): The Budget Measures Bill introduces a range of changes to taxes and levies to help the government do its job, and in many cases those changes are seen as having some long-term benefit and there are others that are seen as having some significant impact. The one that is obviously on everybody's lips in this debate is the bank tax.

Any new tax is a regrettable form of impost on South Australians, who are doing it extremely tough at the moment. We know that the cost of living is extremely high, taxation is high, power prices are at world-high prices, and water and sewerage rates are up there. Every time the South Australian taxpayers turn around, there is another impost on them. The cost of living in South Australia is extremely high and we are not doing ourselves any favours if we continue to go down this line of taxing and spending. We have to get things under control.

If you are going to introduce a tax, let's look at those who are able to afford that tax. I think the banks can afford this tax. I have said before in this place that I do not think that this is a good form of taxation. It is part of a state tax system that we were supposed to get rid of under the GST—the BAD taxes and the FID taxes, and this is similar to those. That said, this particular tax is one that I look at and ask: what can you do with this sort of revenue to give tax relief to South Australians and do it here, do it now and do it today, if this bank tax was to be supported in this place?

If you want to go down the conventional line of supporting the Budget Measures Bill—if you do not, you are creating a precedent that can come back to bite you—opposing the tax, or removing it later on if you are in a position of power, then that is something you have to make up your own mind on. Let me tell you about the discussions I am having with the government because, as an Independent, I am now in a position where I can go and put my own opinions to the government, they can express their views and we can discuss them.

I can say that I have had discussions with members of the government about what they would do to get my support for the bank tax and possibly the support of other members, whether in this place or the other place. I have put to them, as I did in a previous speech in this place, that I would support the bank tax if—if—the ESL remissions were brought back. I do not mean brought back next January or after the election next year: I mean 1 September, the last quarter of this year. I have had access to some figures about the benefit South Australians would receive if the ESL remissions were put back, and that is the deal I will be agreeing to if the bank tax is retained.

The deal will be that ESL remissions are brought back in full, for every household, every business, every farm and every industry in South Australia, and it will be done on 1 September. Let me tell everybody on both sides of this house what the impact of my proposition to the government would be—and I can say that it has been received positively by the government. It would be that 651,738 businesses, residences, commercial and rural properties and even vacant and community properties would benefit from the ESL remissions coming back. Over 650,000 properties would benefit.

We know that the bank tax is about $90 million a year. The total return to taxpayers now, back in their pockets, would be over $100 million. They are going to be way ahead. If the banks are stupid enough to try to claw back this bank tax through fees and charges and put that impost on South Australians, let it be on their heads. They might be b's, but they are not stupid b's. They need to know the consequences of their actions.

We know that when the banks are paying their tax, after they have put in their doubtful and bad loans and reduced their tax significantly, they are able to benefit from the system that is in place. This bank tax is not a tax I am comfortable with but, if it is going to go through as part of the Budget Measures Bill, then South Australians should be able to benefit, and not benefit if a Liberal government is elected in March next year—not a maybe: they need to be able to benefit now, 1 September. Bring these remissions back in so 651,738 properties would benefit.

Let me give some examples of the benefits to South Australian pockets as of 1 September. This would apply to a lot of my electors in Glenelg who are asset rich, but not necessarily income rich, and income poor, because property values have gone up significantly in Glenelg. For a $1 million property in the Bay, with the remissions taken out they are currently paying $534.80 for their ESL. If the remissions are reinstated, they would be paying $154. They are saving $380, with a 247 per cent reduction in the cost of their ESL. That is just one example.

At the other end of the scale, those living in less expensive and lower value houses of, say, $300,000, would have their ESL bill go from $195.40 to $81.20—a saving of $114.20 in their pocket now. If the banks want to try to claw back this bank tax through fees and charges to their customers, that may be so—be it on their heads. I encourage bank customers to shop around because we know that the banks are really looking after themselves.

In regard to the bank profit announced by the Commonwealth Bank today, congratulations on making such a huge profit and having such a successful business; from recent revelations in the media, you have a lot of questions to answer about the way you have made that profit. Certainly, questions are being asked about the way interest rates have been adjusted or fixed in some cases. The way the business is being run is a real issue for everybody. The banks also need to answer the question: will they continue to shift jobs offshore? They have shifted thousands and thousands of jobs offshore to places like the Philippines, Bangladesh and places where they are paying a pittance to workers compared with what they would be paying in South Australia.

I understand that about 25,000 bank jobs have gone overseas. Will the banks bring those jobs back if the bank tax is not in place? Let them answer that. Will the banks claw back through fees and charges every bit of this bank tax? Let them answer that. Will the banks stop adding to their bad and doubtful loans to try to minimise their tax every year and see how little tax they can pay? Let them answer that. In the meantime, let the banks also say why South Australian taxpayers should not receive the benefit of the ESL remissions coming back in. The Liberal Party have said that they will bring back the ESL remissions if elected next year.

We have seen members on the Liberal Party side say that they want to support small and medium enterprises. We all want to do that, but I also want to support the mums and dads, the farmers and every business that is paying the ESL without the remissions in place. There is $100 million to go back into the economy and back into the pockets of South Australians if those ESL remissions are put back in place. That is why, if the Liberal Party want to divide on this clause of this bill, I will be voting with the government on the fact that they have spoken to me in good faith about reintroducing the ESL remissions.

The benefit to 651,738 property owners in South Australia will far outweigh any impost of the bank tax. The Budget Measures Bill is a very important bill. We have seen it amended before in relation to the car park tax. This is one tax that I do not think the banks will have the nerve to push South Australians on. How much are they paying every day for full-page adverts in the paper and on the radio and on television?

Ms Digance: Outrageous.

Dr McFETRIDGE: It is an outrageous use and abuse of their investors. They are using the mum-and-dad investors of South Australia as human shields for their profits and they have to stop that. The scare campaign being run by the banks is only matched by the scare campaign that former premier Rann put in place during the 2004 nuclear waste debate. It worked exceptionally well then. I understand that my name is being mentioned in dispatches in Sydney and other places. I have somebody from Westpac coming to see me tomorrow about the bank tax.

Do not come to me crying crocodile tears unless you can tell me that you are going to bring those 25,000 jobs back here and you are going to stop putting your rates up every time the RBA puts their rates down. If you are going to make sure that South Australians are getting a good deal for their investment and their trust in you— not just your shareholders, not just your board, not just your general managers—then you can start talking to me on terms that I will be happy to listen to. Until the banks start making those significant honest, decent changes, they are not being held in high regard by me.

I do not like the way this tax is being put in. I say again that it is bringing back some of the taxes we meant to get rid of but, if I am able to hold the government to their word and get the ESL remissions back in, I am happy to vote with the government on this because there are 100 million reasons why South Australians will be better off. The 651,738 property owners will be better off. My electors in Morphett whose houses are worth $1 million will be saving $380 a year; if they are worth $1½ million dollars, they are saving $571 a year; or if they are at the other end of the scale, worth, say, half a million, they will still be saving $190 a year. That is money in their pockets now—not waiting for a bank dividend, not waiting for an election result. That is going into their pockets now.

I ask people on both sides in this place and people in the other place who read this contribution to think about the immediate impact on South Australians of supporting this bank tax by making the government put those ESL remissions back in on 1 September, the last quarter of this year. Help every South Australian reduce their taxes and their levies and help them ease the cost of living. This is not an easy position to be in, but it takes courage to look at the best outcome for South Australians, and as an Independent in this place that is what I will be doing. I will be looking after my electors in Morphett and looking after all South Australians. If the long-term result is a better outcome, then why won't you go down that path? That is the path I am going down.

The Hon. S.C. MULLIGHAN (Lee—Minister for Transport and Infrastructure, Minister for Housing and Urban Development) (17:09): It gives me great pleasure to rise and speak about this bill. This is an important bill. This bill, as part of the broader budget package, provides for significant support for businesses in South Australia to grow their businesses, to help them employ more people, to grow jobs in our economy, to grow economic activity, to grow the state's economy and provide opportunities in the future for South Australians.

I speak, of course, following on the back of the contributions from the member for Morphett and, before him, the member for Chaffey. I must say that it was far more instructive and interesting listening to the contribution from the member for Morphett than listening to his predecessor, the member for Chaffey, but what would you expect from a person who so gallingly rises from his position in this chamber to make a contribution on this bill in the way that the member for Chaffey does? He continued his time-honoured tradition of selling his constituents quite literally down the river with his position on this bill.

When I last spoke in this chamber on a budget-related bill it was about the Appropriation Bill. The night before I spoke on that bill, I spent some time looking up what the banks' contributions had been to regional communities in South Australia in the last two or three years. I read into Hansard the 41 different regional communities that have suffered a branch closure from only two of the big four banks in the last two years in South Australia—41 regional communities, represented almost exclusively by those members opposite.

They are happy to come into this chamber and they are happy to make statements publicly trying to reframe this debate about a bank tax as being about whether a government is willing to grow jobs and grow the economy rather than the actual impact on regular South Australians. Nothing could demonstrate the impact on regular South Australians better than the behaviour of the banks in those 41 communities. Nothing could demonstrate their contempt and their unwillingness to meet face to face with South Australians to provide them the services that they contracted to provide those South Australians when they first began receiving deposits from them or providing them with credit-related products.

For the member for Chaffey to stand up and say that it is banks that invest here in South Australia, that it is banks that employ people here in South Australia and that that is why it is wrong to tax them and, 'Trust me, I should know, as the member for Chaffey, I am a former businessman,' it is no surprise that he is a former businessman and he is in here. This is the Liberal Party habit, is it not—dumping failed businessmen onto the House of Assembly? We see it time and time again.

When they come in here, they demonstrate chapter and verse their lack of economic nous and skill by making the sorts of comments the member for Chaffey made, saying that it is banks that invest in South Australia and banks that employ people. We just heard from the member for Morphett the reality of that situation: 25,000 jobs offshored by the bank sector in Australia over the past handful of years.

Believe me, I know: I am one of a number of dwindling Finance Sector Union members in South Australia. I say 'dwindling' because the majority of the membership comes from financial institutions like the big four banks and they have, year after year, month after month, continued to scale down and close their operations here in South Australia, off-shoring their operations to lower labour cost jurisdictions overseas. They continue to do this while still maintaining record high levels of interest rate charges for credit products like credit cards for personal use and business overdrafts for the more than 140,000 South Australian small to medium-sized businesses.

Since the global financial crisis, funding rates for the major banks have dropped between 300 and 500 basis points or between 3 per cent and 5 per cent. What has happened to business overdraft rates? Have they dropped below double figures? Of course not, because this is the opportunity for big banks once again to behave like predators on the people of South Australia, and to once again behave like predators on small and medium businesses in South Australia.

Have they dropped the number of charges that they levy on small businesses in South Australia? Have they dropped the number of fees that they impose on businesses in South Australia? No. Not only have they not dropped their interest rates, they have continued to increase and multiply the number of charges that they impose on South Australian businesses. At the same time, in regional areas, not only have they closed 41 branches across 41 regional communities in South Australia but they withdraw the services while still charging ever-increasing fees for the services that they provide to these businesses.

It is extraordinary that someone like the member for Chaffey would have the gall to come in here as a Riverland regional MP and pretend that he is on the side of his community. He is selling out his community, and he is doing it for base political purposes. That is what this invertebrate Liberal opposition does. They do not develop their own policy. They do not tell South Australians what they would do if they ever formed government. They wait like a well-oiled weathervane to see which way the wind is blowing on any particular day, and they get in behind that gust and think that will blow them towards success at the next election. It did not work in 2006, it did not work in 2010, it did not work in 2014 and it is not going to work in 2018.

The only policy they have articulated to take to the next election is this trenchant desire to set council budgets. I do not know if it has dawned on the Leader of the Opposition and his bunch of weak, spineless acolytes that he gathers around him, but that is not the job of the state parliament. The job of the state parliament is to manage our own affairs. If he is interested in being a mayor, I am sure any of us could suggest any number of more than 60 councils that he would be better off superintending or administering, away from us, away from the more serious business of state.

The business of state is about making sure that our hospitals, our schools, our roads, our police forces and all the other services that people look to state government for are adequately provided for, adequately provisioned and adequately maintained and invested in. That is an important consideration on the other side of this debate. In the absence of having access to the revenue raised by the major bank levy, what is the state to do?

We have a pandering opposition that pulls out the old Johnson and Johnson bandaid to try to paper over every single large fissure and fault that arises from the conduct of that insipid, weak, indecisive, misleading federal government that all Australians are burdened with at the moment. Not only are they continuing to rake in record amounts of revenue year after year, at the federal level, but they continue with the pretence that they cannot afford to fund the states adequately for health, for education, for housing, for policing or for roads.

I would have thought that a Liberal Party dominated by regional MPs at least would have understood the argument when it comes to roads. We are a state that has 11 per cent of the nation's road network and approximately 7 per cent of the nation's population, yet receives only 5.5 per cent of the nation's road funding. This is a clear inequity, but do we hear that from those opposite? We hear plenty of complaints about roads, but we never hear what a solution might be.

When we raise the obvious solution, which is for the federal government to return to South Australians our fair share of revenues that we pay up to them in things like a goods and services tax, income tax and Medicare levies, so that, just like the rest of the nation, we might be furnished with decent roads, we might be able to treat patients in our hospitals equitably compared with what happens in the Eastern States, and we may be able to educate our children in schools to the same standard that occurs elsewhere in Australia, the howls of derision we hear from those opposite are loud and, quite frankly, extraordinary.

Who are they pretending to represent? They pretend that South Australians do not pay these taxes and that South Australians are not entitled to receive these revenues for the benefit of our population here. They claim that this is federal money and that we are not doing a good enough job being supplicants for it, that we should somehow bend over for the federal government so that we may be, perhaps every now and then, visited with their largesse so that we can receive a few rose petals as they pass through perhaps once every three years just before a federal election day and be grateful for it. Well, we say no to that.

We know that good federal governments build industries across Australia, they build populations, they build jobs and they build communities. I am thinking of a good federal government, and an example of a good one that did that in South Australia is the Hawke-Keating government. It was the Hawke government that invested in the Collins class submarine build here in South Australia, that developed a 30 to 40-year-shipbuilding capability here at Osborne, that created and continued to support thousands of jobs.

It was Labor governments that invested in generation after generation of automotive manufacturing here in South Australia. It was Labor governments that continued to invest in health and education resources here in South Australia so that South Australian communities were filled with children with bright futures who had families led by parents with stable jobs and decent incomes. That is what Labor governments do. But what do Liberal governments do? As soon as they assume government in this country, they pretend that the great Thatcher project of 1979 needs to be reinstituted here in Australia in 2014.

What did Thatcher do? That is right: she chased automotive manufacturing out of the UK, so perhaps we need to do that here in Australia. That was project No. 1. Project No. 2 was to tear up health agreements with the state governments, including here in South Australia. That is right: under the Thatcher-Major years they buggered up the NHS, so why not see if we can do the same with our healthcare system here in Australia. Let's do our best to defund health services in Australia, and in particular here in South Australia—job No. 2.

It is extraordinary that a group of right-wing zealots, the Liberal Party of Australia—stuck in the neoclassical Reaganomics of the 1980s—still think that they have a place here in society in Australia, let alone here in South Australia, and then dare to question a government, this state Labor government, for ensuring that South Australians and our communities should enjoy that piece of the pie, that prosperity, that increasing quality of life and standard of living, that we should be demanding all over Australia, and indeed in every Western democracy, and that the tools and the money required for those better schools, those better hospitals, those better roads and those safer communities through larger and better equipped police forces, are provided to our state. It should be. It absolutely should be.

What we do not need is the Liberal opposition here in South Australia making the federal government's excuses for them, saying that it is wrong for a Labor government to stand up for South Australians, to stand up in the face of a federal government chasing thousands and thousands of automotive manufacturing jobs out of this country. This is a federal government that tried to sell the build program for our submarines off to Japan and was caught red-handed in doing it, and that continues year after year to underfund South Australia's road network because, unfortunately for South Australia, we have fewer marginal seats than Western Sydney or Queensland, and hence we kick all the money over there.

This is a federal government that tears up the Gonski agreement. Even when we get a simpering, left-wing, moderate federal education minister like Simon Birmingham, even when we think we might have somebody who is somehow a little closer to the centre than the Genghis Khan who used to be the prime minister a couple of years ago, we still get dudded on education funding. It is extraordinary because it is absolutely—

Mr Duluk interjecting:

The Hon. S.C. MULLIGHAN: The member for Davenport says that the Gonski deal, developed and funded and committed to by the Australian government—

Mr Duluk: It was never, ever funded.

The DEPUTY SPEAKER: The member for Davenport, come up here just for a minute.

The Hon. S.C. MULLIGHAN: Thank you. The member for Davenport says—

The DEPUTY SPEAKER: It is unparliamentary to respond to interjections, so do not worry about him. I will look after him.

The Hon. S.C. MULLIGHAN: He claimed that the Gonski funding was rubbish, that putting more money into our schools is rubbish. That is what he might tell the communities of Blackwood and Belair and those other areas that he wants to represent, but that is not what I say to the schools and parents who I represent in Seaton, in Royal Park, in Semaphore Park, the schools that need it the most, the schools that need additional teachers, the kids who need the most help. They think it is all a laugh. They think it is rubbish to provide a decent education to South Australian children

They think it is all a laugh that health funding agreements should not be torn up. They think that is fine. They think that hospitals do not need to be funded properly, that South Australians who pay income tax, who kick up their Medicare levy, should not expect great services out of the Australian community. What kind of people are we are dealing with here? What sort of people are we dealing with here?

The fact is that, when this is pointed out to them, they screech across the chamber, and they seek to take bogus points of order, to interrupt the business of the house because they do not like their dirty laundry being aired or showing how bereft they are of vision, of policy, of strategies to take our state forward, of making sure that our communities have better hospitals, schools, roads, police, housing and other social services. When this is pointed out to them, they seek to yell, almost like a child putting their hands over their ears and singing 'La, la, la', so they do not have to hear it anymore. It is an appalling way to conduct themselves.

We heard a dreadful sort of gutter language from the member for Chaffey beforehand, saying things like 'puke'. It is a rare privilege for 47 of us to represent communities across South Australia. If you need a thesaurus, member for Chaffey, they are not expensive. In fact, I believe there is one in the library, but if you cannot speak decent English in communicating what you are trying to get over, then at least go to see Hansard afterwards and have your dreadful grasp of the English language exhumed and erased from the record in the future so other people might not be tempted to follow you down into the gutter.

I will conclude my remarks by saying this: this budget is absolutely critical for South Australia's future. We are levying this major bank levy on these organisations that can afford it. We have watched their behaviour for decades in this country. We have seen how they treat South Australian individuals and South Australian businesses, and that is with avaricious contempt. They continue to increase the prices of their financial products. They continue to fleece mums and dads, small businesses and medium businesses in South Australia, and they are not growing jobs: they are constricting our community's capability to grow jobs.

They are closing branches in regional communities—41 regional communities across South Australia—and that means that the elderly citizens in those communities cannot go to extract money from a teller, that they cannot have banking services explained to them and that farmers cannot go to see a bank manager when the drought hits. All of this is okay for the Liberal Party. That is absolutely fine for them because they would rather look after their mates in big business than look after South Australians, and that is the choice.

So we are going to tax these banks and we are going to put that money back into the pockets of South Australian small to medium businesses and help them grow jobs and do the job that they actually do: growing the economy. It is not the banks that do it: it is South Australians. It is mums and dads and those small businesses. I commend the bill to the house.

Mr DULUK (Davenport) (17:29): I rise to make a small contribution to this debate. I would like to be the first in this house to acknowledge the passing of Johno Johnson who, of course, was a Labor luminary of the New South Wales right. He passed away at age 87. What we just heard from the member for Lee is certainly channelling the late Johno Johnson. Johno himself would be so proud of—

The Hon. T.R. Kenyon: We are even more for it then. We are even more for it and you should be too.

The DEPUTY SPEAKER: Stop the clock. Member for Newland, you might like to come and speak to me while the member for Davenport continues his contribution.

An honourable member: About time.

The DEPUTY SPEAKER: You will be right behind him, if you are not careful. Member for Davenport. Start the clock.

Mr DULUK: Johno Johnson would be so proud to hear the transport minister get up in this house and bring up this sort of class rhetoric that we have just heard in the last 20 minutes. The Liberals are some evil capitalist beholden to the memory of Margaret Thatcher, and it is only the member for Lee, the member for West Torrens, the member for Kaurna and the member for Little Para who can save South Australia from itself and save South Australia from the evils of the Liberal conservative government that actually may want to do something positive to invest in jobs and may want to do something positive for the people of South Australia.

It is the Labor way. It is the Johno Johnson way. It is the Labor right way just to tax and spend because that is all they know how to do—tax and spend, tax and spend, tax and spend. When you are not sure what to do when you have a problem, let's tax and spend. Let's tax and spend our way out of our situation that we have right here. That is all this bill is about.

This bank levy is not a referendum on the banks. It is not about decisions that corporate institutions, such as the banks, make. It is not, as the Premier went out today and described, some big class war. It is actually about this Labor government and the awful decisions they have been making over the last 16 years, and that is all it is. We have a problem. Treasurer Koutsantonis knows we have a problem and the problem is that spending by this Labor government is out of control after 16 hard years of Labor.

For those opposite who do not know, unbudgeted spending over the life of this Weatherill and Rann government is sitting at about $4.04 billion. That is year after year. Between 2002 and today, the Labor government, who have been in charge of the Treasury benches for that whole period of time, have spent $4 billion more than they budgeted for year on year on year. Believe it or not, whether this bank tax passes the parliament or not, when we roll up and see the Mid-Year Budget Review later in December, and when we debate next year's state budget, you will see that we have overspent again, and that is just the reality of this government.

In his contribution, the member for Lee would have the South Australian public believe that this debate is all about evil banks and big bankers in pinstripe suits. Before entering this place, I did own a pinstripe suit because I did work for a bank, but they would have you believe that there is this big, evil, bogey bank man who does not care about Australia and just wants to pilfer. That is how they are heading this debate, but that is not what this debate is about.

This debate is about taxation and why this government needs to raise more revenue, and the reason why it needs to raise more revenue is that it cannot control its spending. It is as simple as that. Every time Labor has a spending problem, it looks to a tax. We obviously have the state bank tax that we are talking about at the moment. Year on year, we have seen ESL increases. We have seen the proposed car park tax. This government has had a windfall of GST revenue coming into it. This year, in 2017-18, the state government will receive an extra $369 million in GST revenue than it budgeted for. That is about equivalent to the state bank tax it is proposing. Of course, there is the foreign investor surcharge on stamp duty and there is the ongoing land tax.

Ultimately, someone has to pay for Labor's errors, and unfortunately, Deputy Speaker, it is the people in your constituency and the people in my constituency. It is all the small businesses across South Australia, the farmers, the irrigators—every single one of us has to pay for Labor's error. At some point, it has to be passed on to the consumer because that is how tax works: tax is paid by the consumer; it is not ultimately paid by government. I am not here to defend the banks, as they can defend themselves, but I am here to defend good public policy, and this is bad public policy. That is the problem.

The reality is that it is a punitive tax. It will be paid by businesses operating in South Australia. When the Treasurer says that it will not dampen investment, of course it will dampen investment. We know that all taxation dampens investment. That is just the reality of tax. The debate we should be having in South Australia is: what do we need to be doing to increase investment? What are we doing to increase investment in this state? What are we doing to reduce government debt as another means of freeing up income for the state government? That is where we need to be looking in regard to this debate.

Nothing surprises me anymore with this government but, sitting through budget estimates and inquiring of the Treasurer, I find it incredible that the government is prepared to bring in a brand-new tax, as it is proposing to do, without doing any modelling. That is completely and utterly irresponsible of this government. Not only that, but how can every single member who supports this government—every single member of the Labor Party and the Independents who supports the government and who is going to vote this measure through the parliament—vote for a tax measure that we know is going to put such a big impost on the people of South Australia knowing that the government has not done any modelling? Treasury has not done any modelling on this taxation.

You would not buy a new car without driving it first and knowing what it is, so I do not know why, when it comes to anything this government is undertaking, Treasury would not want to do any modelling. The reality is that they do not want to do any modelling because they do not want to know what the answer will be that the modelling brings to the fore. There is no doubt that if proper modelling were done on a state bank tax, it would show that it actually would be bad for investment and that it would diminish business confidence in this state—and we know business confidence in this state.

Last night, I was fortunate enough to meet with three small local businesses from my electorate, all mum-and-dad businesses: one a car mechanic and tyre shop, another a grain fodder store and the other one a fruit and veg wholesaler, all within my electorate. I posed this question to them: what are your thoughts on this bank tax? These are mum-and-dad, suburban business owners, who put in 80 hours a week, who work Saturdays and Sundays, who are up at six in the morning and who do all the hard things. Their Sunday nights are spent filling out paperwork and compliance on behalf of the government, and they do their bit because it is what they believe in. I asked: how do you think this bank tax is going to affect South Australia? And they all unequivocally said that it would have a negative impact on business confidence—

The Hon. A. Koutsantonis: All of them?

Mr DULUK: All of them, Treasurer. All unequivocally said that it would have a negative impact—

The Hon. A. Koutsantonis interjecting:

The DEPUTY SPEAKER: Order!

Mr DULUK: —on business confidence and a negative impact on business confidence—

The DEPUTY SPEAKER: The Treasurer is on two warnings and will leave the chamber the next time he says something.

Mr DULUK: —it will affect their ability to sell their product because if people are not confident, they are not spending. The Treasurer would not know this: he has spent his entire life inside the union movement. He has not borrowed money, he has not mortgaged his home against a small business, he is not paying the GST, he is not filling out forms paying for payroll tax and he is not burdened by the decisions he makes. Ultimately, the small business owners of South Australia are burdened by the decisions we make, so I would have thought that before this government, which pretends to believe in small business in South Australia, actually decided to burden the businesses, small businesses, the lenders and investors of South Australia, they would actually do some economic modelling. I think that is probably the most disgusting part of this new tax, that no modelling has been done.

Treasury does not know how much it is going to raise overall. In estimates, the Treasurer could not tell us what the implication of the South Australian bank tax would be if other jurisdictions went down the same path and then we had across the federation, across every jurisdiction, a state bank tax and a federal bank tax as well. No modelling in that regard was done and, as soon as the government made its announcement, we saw the Western Australian Labor government moot the possibility of their bringing in a state tax.

What is the implication for South Australia should other jurisdictions embark on respective state bank taxes? Has any modelling been undertaken in that regard? None whatsoever. I am not going to be in this parliament and support measures that we know are going to hurt South Australians without seeing some modelling on the back of it. I urge members, and I especially urge the Independent members of this house, to truly consider the implications of passing this measure and what it is going to do to South Australia and to the economy.

As I said at the beginning of my remarks, this tax is not actually about the banks: it is about plastering over 16 years of failed Labor economic policy. We have $4 billion of unbudgeted spending over the life of this government, we have about $580 million of contingencies in this state budget for this year and, as the member for Lee said in his remarks, this is a budget we need. This is a budget that the Labor government needs to be re-elected, and that is all it is about. It is about the re-election of this tired, incompetent Labor government.

They will pork-barrel their way through the election, they will pick their projects and they think it is cool to pick on small business but, in reality, this tax is nothing more than a bit of Selleys No More Gaps that they are trying to insert into the bricks and mortar of the South Australian economy to hide their incompetence. I think that the people of South Australia can see through this. They see a rat, they smell a rat, they know what they are on about. The South Australian public know that this tax is nothing more than a tax on them and a tax on investment.

South Australians want to see something different. They do not want to see lazy government: they want to see a proactive government that will work side by side with them, a government that will be collaborative and take on a collaborative position with small business and investors so that we can grow the economy together. Instead, what we have from this government is more debt, more deficit and a taxation regime that will ultimately punish all South Australians.

The Hon. T.R. KENYON (Newland) (17:42): I am looking forward to the Treasurer's contribution, so I will not take long. I will make a few comments about the banks and their arguments against this tax that is proposed in the Budget Measures Bill we are now debating.

One of them is this idea that they are one of the largest employers in this state. That may be true, but they certainly do not want to be. That is why we are seeing a continual decline in employment by banks across the country, including in South Australia. They are running around, winding up their employees and saying, 'Go see your local member and tell them how evil this is and how it is going to hurt employment; I might lose my job.' Those people are probably going to lose their jobs anyway if the banks have anything to do with it because they are investing very heavily in financial technology, known as fintech.

They are not doing that out of the goodness of their hearts, and they are not doing that because they think these start-up companies need a little bit of help: they are doing it because they can see that they will be able to use this technology to reduce the number of employees they have and massively boost their profits. They are not alone in doing that. Most companies are always looking to reduce costs and, if they can do that by reducing employee numbers, they will. That is a disappointing trend across the economy, but those other companies are not out there saying, 'We are the biggest employer, and you should not tax us because we employ people.'

Banks are out there making this crazy argument that somehow they are going to continue to employ people and that, given the option of using fintech or employing people, they will not use fintech—of course they will. Investments in fintech have increased from $185 million in 2015 to $626 million last year, 2016. We see this massive increase in fintech investments not out of the goodness of their hearts, not out of some desire to employ more people or just to improve the economy generally by financing start-ups: they are doing it to reduce their own staff numbers.

To spend $8 million or $9 million across the state advertising how great an employer they are when they are busily investing hundreds of millions of dollars across all the banks and across the sector to reduce employee numbers is ridiculous. They are moving offshore. At every opportunity, they will move help desks or other employees offshore where it is cheaper. They are destroying Australian jobs and creating jobs overseas simply to reduce their employment costs—such is the level of their desire for profits.

Their banking practices have become so slack that you we have seen recent news articles about possible terrorist funding going through their deposit machines and money laundering through the Commonwealth Bank, all because of their desire to increase their profits. Their desire for profits has become so great that any meaningful oversight of where those profits are coming from, any meaningful review of these lucrative deposits and everything else is just being overlooked as they try to take that money in. If that is not hurting businesses and individuals in South Australia, nothing will. If that is not hurting, I will eat my hat. I have a few hats actually, so I could do that.

Finally, this bank tax is actually paying for other tax cuts. It is paying for reductions in payroll tax in part. It is paying for a reduction in stamp duties. It is paying for reductions right across the board and also for incentives to actually increase employment across the economy. We are not hoarding it. We are not spending it on tickets for hats to go to Europe, as former Liberal governments might have done, when the former chief of staff Vicki Thomson to the former premier John Olsen bought a ticket for a hat to fly from Australia to England for Ascot. You should have a hat for Ascot, but surely you could have bought one in England.

Mr Odenwalder interjecting:

The Hon. T.R. KENYON: Yes, or you could have bought it from one of the duty-free trolleys they run. There might have been a hat there. They did not have to buy a whole ticket for a hat, but they did. With those words, the Budget Measures Bill has my support. The bank tax is important. I would like to see it instituted right around the country.

The federal Liberal government's own measures indicate that the banks are undertaxed. That is why the federal Liberal government introduced its own bank tax. That is why we saw that: they know banks should be paying more. I reckon that, in their heart of hearts, the banks know they should be paying more. They just cannot be the ones to see this. They just want South Australia to breach the dam because they know that the rest of the states will follow. That is why they are coming after us so heavily. They are trying to stop this breach of the dam, knowing that they are undertaxed. They do not even have the integrity to make up that tax.

Sitting extended beyond 18:00 on motion of Hon. A. Koutsantonis.

Mr PICTON (Kaurna) (17:48): I know it is unparliamentary to talk about whether or not members are present—

The DEPUTY SPEAKER: Then do not do it. Just make your contribution.

Mr PICTON: I would—

The DEPUTY SPEAKER: Make your contribution.

Mr PICTON: I do not think I was going to have any points of order made against me during that period. I would like to make some comments in relation to the Budget Measures Bill, further to my extensive comments during the debate on the Appropriation Bill, in which I discussed the major bank levy for South Australia and the reasons why it is appropriate public policy for our state and for other states in the country to take action—

Mr Duluk: So you support a nationwide bank tax?

The DEPUTY SPEAKER: Member for Davenport! The member for Davenport needs to come and speak to me now.

Mr PICTON: Yes, I—

The DEPUTY SPEAKER: Member for Kaurna, it is unparliamentary to respond; just continue with your remarks.

Mr PICTON: In fact, I do support the major bank levy that the federal Liberal Treasurer, Scott Morrison, brought in. It is very appropriate that he brought it in at a national level, and we have now seen that it is appropriate to bring this in at a state level. I outlined in my previous speech how this represents such a tiny proportion of the major banks' profits—the huge profits that these banks are making.

It was estimated then at some $30,000 million across the country for these five banks, but we have had a bit of news since I gave my last speech in the house. There are a couple of bits of news. First, it was revealed today that the Commonwealth Bank, one of those five major banks, announced a record profit—a record $9.9 billion profit that they are making from the people of Australia. If they were to be taxed about $20 million from this major bank levy, that would represent about 0.2 per cent of their profit.

As the Treasurer outlined in question time, they could pay the major bank levy every year for the next 500 years with their profit from just this one year. It is an astonishing amount of money the Commonwealth Bank has been making and this major bank levy will not cause them the slightest worry in the world. You just have to look at the comments from the ANZ chief executive when he said that this is an affordable levy. It is very affordable for the major banks to pay.

Of course, the other news that has happened since my last contribution is that there have been a few legal matters with the Commonwealth Bank. I refer to a media release from AUSTRAC, which is the commonwealth's main crime fighting agency against online criminal transactions. They work with the Federal Police to stop money laundering and counterterrorism funding in Australia. I quote:

Australia's financial intelligence and regulatory agency, AUSTRAC, today initiated civil penalty proceedings in the Federal Court against the Commonwealth Bank of Australia…for serious and systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006…

How many contributions were made by the Commonwealth Bank against the Anti-Money Laundering and Counter-Terrorism Financing Act? It just so happens that there were allegedly 53,700 contraventions of the act. The CBA did not comply with the requirements of the program relating to monitoring transactions on 778,370 accounts. They failed to give 53,506 threshold transaction reports to AUSTRAC on time for cash transactions of $10,000 or more. These late transaction reports represent approximately 95 per cent of the threshold transactions that occurred through the bank's intelligent deposit machines, representing a value of approximately $624 million.

Further, and I think very seriously, AUSTRAC alleges that the bank failed to report suspicious matters either on time or not at all involving transactions totalling over $77 million. Most damningly, AUSTRAC say that, even after the Commonwealth Bank became aware of suspected money laundering or structuring on CBA accounts, it did not monitor its customers to mitigate and manage the money laundering and terrorism financing risk, including the ongoing risks of doing business with those customers.

So here we have one of our five major banks that has been found out by one of our key regulatory agencies in Australia of turning a blind eye to clear money laundering that has been occurring, sending money overseas. Clearly outlined in the documents that have been filed is the number of different instances where this has happened, the number of different syndicates that have managed to get illegal proceeds of drug importations outside the country through Commonwealth Bank IDMs, and the fact that the Commonwealth Bank turned a blind eye to all this action occurring. This is a very clear example of where the major banks, sadly, are letting Australia and South Australia down.

I think they should be doing a lot more to improve their own reputation, and doing a lot more to improve their ability to comply with the law and to put the people of Australia first, rather than spending their time and their shareholders' money putting ads up across Australia. What they are doing is basically bagging South Australia because they do not want to see any increased taxation level on the super, super profits they are making across Australia.

I concur with all the remarks previously supporting the major bank levy, as well as my comments previously on the Appropriation Bill debate, but I want to note that we have seen, since those comments, more profits made and more disgusting behaviour on the part of our major banks in Australia, which in my mind even furthers my support for the bank levy remaining as part of this bill.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (17:55): I would like to thank all the participants in the debate, and of course the house for such a speedy passage of the second reading speech. Before I delve into the measures, I just point out again, in a sad way, that this is the first time in the history of this place that a South Australian budget is being openly undermined by an opposition. It has never occurred before in our history.

The threat the government is being faced with is that, unless we agree to the amendments moved by the opposition, they will block all budget measures in the upper house. The consequence of that recalcitrant behaviour by the opposition is that they are not only trashing a well thought-out and well-designed tradition by the constitutional founders of this state but they are also telling anyone buying an apartment off the plan that the incentives that we have put in place will now no longer occur.

They will be telling small business that the nearly $50 million worth of tax cuts coming their way because of this budget will be defeated. They are telling people that the five major Australian banks, as has been quite eloquently pointed out by my parliamentary friends the member for Kaurna, the member for Lee and the member for Newland and others, have found an ally in the opposition on the basis that they oppose this tax because they believe that this levy will somehow make South Australia and the banks less investable.

Since the announcement of the major bank levy, bank share prices have gone up. Since the announcement of the major bank levy, there have been two internationally renowned billionaires making investments in South Australia. The first is Sanjeev Gupta, who has purchased the Arrium group, which is based largely in Whyalla; and the second of course is one of the great disruptors and new entrepreneurs in the world, Mr Elon Musk of Tesla, in a joint venture with Neoen to produce the world's largest lithium ion battery.

Of course, we are going to see more very large investments over the next months and years made by internationally renowned organisations who are investing in South Australia. Unfortunately for us, we, the people of South Australia, are facing a coalition of people who are determined to do everything they can to ruin the reputation of South Australia. I understand philosophically the debate the Liberal Party is putting up. They claim that they are a party of lower taxes. They claim that they are a party that is about incentivising business, and they also claim that they want to govern—

Mr Bell: Good Liberal.

The DEPUTY SPEAKER: Member for Mount Gambier!

The Hon. A. KOUTSANTONIS: —if they are elected. There is a problem with that argument. If the Liberal Party were serious conservatives, and they were interested in the institutions we have built up since settlement began here, they would not trash a convention of allowing budgets to pass. What the Liberal Party would have done instead is say, 'If we are elected in March, the first piece of legislation in the first budget we introduce will repeal the major bank levy.' That is what responsible oppositions do if they are opposed to a measure, but we do not have a responsible opposition.

We have an opposition that is desperate. We have an opposition that is led by a man who snatched defeat from the jaws of victory at the last election through his own incompetence, through his own failed disclosures about his business dealings, who was unable to conduct a press conference to its termination, who on the day the campaign was announced bungled his first-ever press conference and ended it quite nicely by telling everyone to vote Labor 33 days later.

They are so desperate to win the next election that they are prepared to tear up the institutions we have built up since we arrived, and those institutions are important. Our founding fathers designed our constitution in that way so that this house can amend budget and money bills and the other place can only make suggestions. The reason they designed it in that way is that our founding fathers knew that we were a smaller state, that things were stacked up against us and that the last thing we needed was gridlock.

They wanted governments to govern, and if the people decide to change the government, the government then has that mandate and that constitutional power to then govern. But what the Leader of the Opposition is saying is, 'I have been here six years. I know better, so I am going to trash that convention.' Parliamentary tactics now, from this day, from this amendment lodged by the Leader of the Opposition have changed forever—forever.

Mr Whetstone: Excellent.

The Hon. A. KOUTSANTONIS: Excellent. Member for Chaffey, the great tactical genius that he is, has said 'excellent'. Remember those words.

Mr Whetstone: Scare me.

The DEPUTY SPEAKER: No. No, you are not in your spot.

The Hon. A. KOUTSANTONIS: Yes, he is.

The DEPUTY SPEAKER: No, he is not in his spot.

The Hon. A. KOUTSANTONIS: Yes, he is.

The DEPUTY SPEAKER: You should not be responding to his interjection.

The Hon. A. KOUTSANTONIS: He is exactly in his spot: at the back, sniping in the cheap seats. Let's look at who the Liberal Party have put their lot in with. The Commonwealth Bank has kicked off the reporting season with a $9.9 billion profit. Congratulations to the shareholders, the superannuants, the board and everyone else. That is an excellent result, a great result. In fact, it is a remarkable result given that they do not make anything. They do not produce anything. In fact, they operate under a licence that we as a community grant them.

I cannot go out and buy a Commonwealth Bank product. I can buy a service. So think of it: the most profitable companies are the banks, not our mining companies, not our manufacturers, not our farmers, but our banks. They are the ones who are making the super profits. Why? Because we as a community say they are too large to fail and we will not let them fail, so much so that a prime minister of this country this century, not last century but this century, guaranteed everyone's savings in all the five major banks during the global financial crisis because the banks did not have sufficient solvency if there was a run on the banks.

So we as a community have underwritten them. What we are saying now is that since the states gave up their taxing powers with FID and BAD in exchange for a GST, there is one section of the economy that is growing faster than the rest, and they are contributing less.

Mr Bell interjecting:

The Hon. A. KOUTSANTONIS: We gave it up, yes. The member for Mount Gambier makes a very good point, that we gave it up. We did, but we were told that we would get a GST on financial services, and the commonwealth treasurer at the time said it was too difficult to do. Rather than allow us to maintain those taxes and charges, the commonwealth heads of agreement was that we would revisit this measure, and to their credit the commonwealth government did that in the May budget. But rather than putting that into the general pool, what they have done is lift up their own revenues out of the banks, and good on them for doing so. It is long overdue.

That should free up other revenues to give to the states, which is exactly what we want the commonwealth government to do. We want them to raise more revenue from profitable parts of the economy without doing them any harm, especially when the commonwealth government does so much as a sovereign to guarantee these institutions.

The amount of revenue the states are missing out on from no GST on financial services is about $4 billion per year. It would be increased into the GST pool. It would be allocated around the states according to the relativities and the per capita basis that the HFE formally uses, and we would have that money to spend on hospitals, schools, roads and tax cuts from our own businesses that are facing uncompetitive situations about where they are located.

What we have done is create a body of work that calculated how much the banks were undertaxed. We made an argument at the commonwealth level during the tax reform debate with former premier Baird about a GST on financial services. That was rejected by the commonwealth government. We then campaigned for an increase in the GST and to let the commonwealth government keep that increase in the GST to balance their books, and then to allow us to exchange our national partnerships and special-purpose payments as a proportion of income tax linking us forever to a growth tax, to end this squabble. This country does not have a spending problem: we have a revenue problem because we have been demonising taxation as a community for the last 40 years.

So here we have these institutions making these super profits and, as my friend said, today's profit announced by the Commonwealth Bank is the equivalent of 500 years of their liabilities in South Australia if this measure passes—500 years. This is an organisation that just made $9.9 billion while under investigation for anti-money laundering avoidance and breaches of anti-terrorism provisions—53,000 counts of it, which have a fine of about a trillion dollars. If those fines are actually enacted by the court, do you know who is going to bail them out? The Australian taxpayer. We are going to bail them out.

This theory that the opposition have now, on the basis of the deceitful campaign by BankSA, Westpac and the Commonwealth Bank, is that somehow South Australia is less investable, a less attractive destination to invest in. The NAB survey released just yesterday in their monthly tracking of business confidence showed an increase since the budget, and with all the ads being run, business confidence still went up, but it is a surprise that the BankSA survey was so terrible.

Given all that, the opposition have actually bought the argument that this will make South Australia a place that is unsafe to invest. If that is true, if that remark, that piece of policy, that belief that the opposition have that we are now a less attractive destination is true, what does it say about the nation that we have now just introduced a tax? The same accusations members opposite make about our tax, they could make about the commonwealth levy: it is arbitrary, it was unforeseen, there was no consultation. What will the foreign banks think? Will they think they are next? What about other profitable parts of the economy? Will they be taxed?

There was no such argument put on Australia. Indeed, at the time, the Leader of the Opposition said nothing, yet on our budget day the Leader of the Opposition tells us he opposed the commonwealth tax as well. If he was so passionate about opposing the commonwealth tax, why did he remain silent? It all boils down to this one fundamental principle: if the banks are going to pass this measure on, why are they so worried? What are they concerned about? If it will not affect their profits because they are going to pass it on and we are going to pay it anyway, why run the campaign?

What does it matter if Western Australia, New South Wales, Queensland and everyone else follow and charge exactly the same amount, if they are going to pass it on? What does it matter? It will not come out of their dividends, their share price or their profits because they will just charge us more. That is the argument.

The reason they are running the campaign, the reason they are upset, is that they know that they cannot pass it on. That is why they are so upset. That is why they are spending a fortune on advertising and that is why they now completely own the Liberal Party of South Australia. It makes sense. They are angry because they cannot pass it on, because they cannot recover the lost tax, yet members opposite have bought this argument.

God help us if they form a government, because they cannot reason. Why are the banks upset? Because they cannot pass it on. The banks say, 'Let's make an argument that everyone is going to get this passed on,' and they buy it. That is the argument against the tax. That is what they are saying. They are out there saying, 'Your interest rates will go up. They will charge you more fees.' The banks cannot do that. They know they cannot do that.

Of course, the opposition are very upset about banks passing on fees, so I have checked and there has been not a single press release, to my knowledge, from the opposition since 2010 when Australian banks increased interest rates on South Australians while the RBA cut rates. They are countercyclical increases. Where was the outrage then? Where was the press release from the shadow treasurer to say, 'This is going to make Australia and South Australia a less investable jurisdiction because the banks are increasing interest rates, while the RBA is cutting it'? Where is the outrage?

I say to the opposition one last time: you have changed forever the institutions of this parliament. You are now saying forevermore that every budget, every appropriation bill and every budget measure is open for debate—every single one. Fine. I do not want this. I think it is a mistake. I think what the Liberal Party should do, what the wiser heads should do, is let this pass and then commit that, if they are successful, they will repeal it, but blocking the budget measure changes the game forever.

I can tell the smart alecs who are sniping from the cheap seats, who think that they know better than us, that they do not know what it is like to govern. When they govern and they are frustrated by an opposition who is better than them at this, they will see what it is like to follow a man off the cliff. You will find out what it is like to follow a man off the cliff. I can tell you that the fall is long and hard and that when you hit the ground you do not get up. That is how stupid the Liberal Party have become in this debate.

They are following a man who is not really a Liberal, not really a Tory and not really a conservative. He does not have a conservative bone in his body, but they are following him off the cliff, tearing up these institutions we have had since we got here—oil and gas, mining I understand is next, and now it is budget measures.

Mr Bell interjecting:

The DEPUTY SPEAKER: Order! Member for Mount Gambier, stop.

The Hon. A. KOUTSANTONIS: So here we are now. I understand that there are some members opposite who want to make an argument and fight the election campaign on economic credibility. That is fine, but this Budget Measures Bill follows a tax reform package that is unprecedented in this state's history. We have abolished stamp duty on every commercial property in every commercial transaction. No other state is doing that—not one.

I will point out that when we announced we were abolishing conveyance duty on all business transaction, real or non-real, do you know who criticised us first? Business SA, saying that they were the wrong taxes to cut. How wrong were they? Business SA, the Property Council, the banks and the Liberal Party are now saying that we live in extraordinary times and that that justifies tearing up the institutions that have got us where we are today through so much—through two world wars, a depression and a recession—and built up a state that, quite frankly, is not as bad as members opposite want to portray. There are more people employed today than ever before in our history. Our economy has broken the $100 billion mark for the first time in our history. Homes are affordable—

The Hon. M.L.J. Hamilton-Smith: Interest rates are at record lows.

The Hon. A. KOUTSANTONIS: —interest rates are at record lows, the exchange rate is doing the right thing and we are undergoing a massive transition. We are moving from the old automotive sector into a new unknown transition that, quite frankly, is going to be very disruptive and will cause a lot of destruction, but we are there doing what we can.

The way you intervene in an economy is just to raise revenue on parts of the economy that can afford to do so. I am not increasing taxes on small business, but cutting them by $50 million. I am not increasing taxes on mums and dads; we are cutting them. But the Liberal Party is going to forsake those tax cuts on small business because they know that they cannot amend this bill. The only option they then have is to block the entire budget measures, which means that they are saying to small businesses that the opposition are not supporting a tax rate of 2½ per cent on them. They are supporting, instead, a tax rate of 4.95 per cent because this government is not amending this bill. The opposition has one option, and that is to block it in the upper house. When they block it in the upper house, the game is changed forever.

So I urge members: I hope wiser heads prevail, rather than following the closet leftie you have made your leader. In fact, that is not even fair. I have to say that left-wingers are far more responsible. That is not even fair. What do you call someone who is more Green than they are Labor or Liberal? Well, whatever.

I have to say that I was actually personally surprised that the Liberal Party went down this path. I would have thought that if they believe that this tax is so unpopular, if they believe that this is such an electoral victory, why do they not want it as an issue at the election? Why not say, 'Vote for us and we will get rid of it'? Instead, they are saying, 'We don't want it to be an election issue. We want to block it now.' But then again I am not in your tactics room. You guys are much smarter than the rest of us—what would we know? Anyway, we will see how they go.

They have told everyone in the business community that they are going to block this tax. They have staked their entire reputation on blocking this budget. They have told Business SA, they have told BankSA, Westpac, ANZ and everyone, that they have the numbers to block this. Mr Marshall has put his entire leadership on blocking this measure. Everything hangs on blocking this measure—everything, for this Leader of the Opposition.

I commend the bill to the house. I look forward to the committee stage. I apologise for going past 6 o'clock. I thank members for their contributions and thank them for their support. I have heard the contributions of Independent members about suggestions they are making. I look forward to the debate in the upper house and I look forward to the debates and the remarks of the current shadow treasurer and the former treasurer about his view on the precedent of blocking budgets and what that means.

I also point out to the geniuses opposite that yesterday measures passed the house changing preference flow in the upper house for the upcoming next election. They are banking on having all these numbers in the upper house, but we will see how they go now, given that those changes have been made. You can see the member for Chaffey clicking over in his head; 'What does that mean?' I was not up to date. But, anyway, they know what they are up to. They are the masters of their own destiny. They understand what this means. They can block budgets and get away with it. There will be no consequences. Well, elections have consequences and voting has consequences, and the Liberal Party are about to feel the full consequences of it if they are successful at the next election—that is a big if.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Progress reported; committee to sit again.


At 18:18 the house adjourned until Thursday 10 August 2017 at 10:30.


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