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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Bills

South Australian Productivity Commission Bill

Second Reading

Adjourned debate on second reading.

(Continued from 7 June 2018.)

Mr DULUK (Waite) (15:47): It gives me a lot of pleasure to speak on the South Australian Productivity Commission Bill 2018. I note that it was introduced by the Premier very recently. Of course, this is one of the election commitments that we promised and took to the South Australian people. It is one election promise that we said we will introduce in our first 100 days, and that is exactly what we are doing. As I have said in all my contributions in this new parliament, it gives me great pleasure to speak on bills that meet our election commitments. That is what this Liberal government is going to do, and that is what the people of South Australia expect us to do.

I know it may be a little bit nerdy, but I am really excited about this productivity bill. I am actually excited about productivity. South Australia needs to improve its productivity. In so many indicators across the state, we are lagging behind the rest of the nation: in jobs growth; housing approvals; international university students in South Australia; export, whether it be animals, our grain sector or our dairy sector; and resources. In almost every measure, South Australia does not even match its benchmark of where it should be.

Any responsible government—and this is a responsible government—should do all that it can to ensure that the productivity of this state is increased. The debate on productivity has been going on for many years. I must give some credit to the Paul Keating Labor government. It is incredible that we Liberals talk about the Hawke-Keating era as a good Labor government because we have had bad Labor governments since then. The Rudd-Gillard-Rudd government and the Rann-Weatherill governments were pretty hopeless.

The Hawke-Keating government knew that increasing productivity was very important, as did the Howard government. This year, we mark 20 years since the big waterfront reforms that the Howard government took on with then minister Reith and productivity improvements on the waterside, particularly in Melbourne. It was said that it could not be done. The unions were out there. The CFMEU and the MUA said that there was no way we could improve productivity on the waterfront and that it was impossible and an outrage that government would want to seek increased productivity, and yet they have. Australian productivity on the waterfront has increased tremendously since those reforms almost 20 years ago.

Debt and high taxes became the norm under the previous Rann-Weatherill Labor government, impacting the cost of living for everyday South Australians and businesses. By reducing the level of regulation and red tape, businesses will be able to further invest and employ more people and grow the economy. I think that is the most important thing. I am sure there will be those opposite who will make a contribution and will not support a productivity commission. They do not support the deregulation of shop trading hours. They do not really support the reform of payroll tax. They do not want to look at land tax. They actually do not want to do too much because it is all a little bit too hard.

They forget why it is important for a government to reform. As I said before, it is to allow further investment and employment of South Australians—and that can only be a good thing. When we look at the need to invest and to improve employment for South Australians, we have to look at what government can do. Of course, a big area of that is in public sector reform and the need for there to be an efficient public sector in delivering services to the people of South Australia.

There is no doubt that South Australia is lagging behind the other states and other comparable small open economies, such as New Zealand and Singapore, in employment and growth. There has been minimal growth in aggregate hours worked per month in South Australia since the GFC. That was at 4.8 per cent in the June quarter in 2009 to the December quarter 2017. That is a marked contrast to the national rise of some 14.5 per cent growth in that same period. This is despite a 6.8 per cent lift in state and local government employment over that time frame.

Since the GFC in about 2007-08, South Australian public sector and local government employment has grown by about 6.8 per cent, but aggregate hours worked and productivity have grown by only about 4.8 per cent. The Australian Bureau of Statistics data from November 2017 shows that, while our state's gross state product increased in recent times to 2.2 per cent, we are still lagging behind other states and territories. In that same period, the Australian Capital Territory grew at 4.6 per cent, the Northern Territory was 4 per cent, Victoria was 3.3 per cent and New South Wales was 2.9 per cent.

I am reminded to reflect on the New South Wales budget that was handed down today. I must commend Treasurer Perrottet for the state of his books and the investment in a future fund for the state of New South Wales. I look at what a Liberal reformist government has been able to do in New South Wales to restore trust and faith in the New South Wales economy after the corrupt New South Wales Labor governments of recent time. That is the benchmark for reform, for deregulation and for reinvestment in infrastructure especially.

Previous Labor governments have failed to efficiently invest in education and training. Education and training are a huge component of a state's productivity and that is why this Marshall Liberal government is going to fix and invest so much in education and training—in order to provide the workforce with appropriately skilled South Australians. That is certainly what we need. It is a sad reality that our public education standards—primary, secondary and vocational—have declined in recent years in comparison with other states. Public education is critically important to the future capability of our state and future growth and productivity growth as well.

In February 2018, the South Australian Centre for Economic Studies released a report entitled 'To ignore reform is to ignore opportunity: creating a more effective and sustainable public sector'. It is well worth a read for those who are interested. Key elements of the report highlighted the following critical factors in maximising the underlying levels of economic activity and productivity, and these are:

institutional quality (i.e. our public sector);

the quality of government itself;

long-sighted policy objectives and efficient implementation, monitoring and evaluation; and

spending on basic or low-risk essential services and infrastructure.

If you look at those individually, it is important that we have a quality Public Service—that institutional quality. It is important that we have a frank and fearless public sector with public servants who are committed to serving the government of the day. We do not need public servants who are servicing factional interests or former union employees: we need a Public Service that is focused on serving the government of the day and, ultimately, the people of South Australia.

The quality of government itself—I know the Premier has long spoken about the need for accountable Westminster government, and that is what we are going to deliver—is a driver of productivity. Long-sighted policy objectives and the establishment of a productivity commission play into our desire for Infrastructure SA, for long-term planning that seeks investment and attracts job creation in South Australia, a long-term investment plan that will be driven through both this body and Infrastructure South Australia that allows capital to flow into South Australia. We cannot build the infrastructure that we need for tomorrow, and we cannot expand our ports, our roads, our rail infrastructure, if we do not have capital. Access to capital, and access to markets, is so important for businesses and government in South Australia.

We also need spending on basic or low-risk essential service infrastructure. Investment in public health is really important. That is why renewing the Repat and turning it into a genuine health precinct is so important. It is why investing in Modbury Hospital and The QEH is so important. It is why investing in medical science and new technologies that drive economic growth is so important. To drive productivity and economic growth, we must look at these factors to reform and improve. This also means making the tough decisions and arguing the case for reform.

For those who read the paper, I sense that this government is going to have to argue the case for reform, especially around the deregulation of shop trading hours. I saw Ms Bourke from the other place in my community yesterday, and good on her for visiting Blackwood. She was out there talking to some shop traders. When I am back on Friday morning, I will be seeing all my shop traders as well and having a chat to them because they actually know the importance of being able to open when they want and the importance of being able to sell product to my community on an as needs basis.

It is good to see that those opposite are up in my community. I am actually looking forward to the Leader of the Opposition doing his listening tour in my electorate. I am looking forward to asking a few questions about what a Labor government in about 20 or 30 years might want to do for my electorate, so that will be very important.

In June 2015, the ABS released some stats showing that, relative to other states, South Australia's private sector is more reliant on small business activity, especially sole traders (non-employing businesses) to generate private sector employment. Some key stats from that report show that in this area South Australia has the lowest share of employment accounted for by the private sector of all states at 87 per cent, compared with 90 per cent on average across other mainland states; the highest share of non-employing businesses of all states at 65 per cent in total, compared with 61 per cent across other mainland states; and the likely highest proportion of employment in businesses employing fewer than 20 people.

Looking at those numbers, when you extrapolate that, there are some trends in these figures that need to be reversed to improve our state's economy. Our ageing workforce and modest, at best, population growth are stifling our economic output. It is important that we outline a productivity framework to address these matters. As I have said many times in this house, the depopulation of our regional communities and centres, as the member for Narungga knows so well, is having a huge impact on productivity, on growth and on business efficiency in his community, as well as in parts of the member for Heysen's community.

In terms of the legislation before us and what it seeks to do, the commission will be established as a statutory authority governed by the chair of commissioners and reporting to the responsible minister, who at this time, of course, is the Premier. The commission will be a tool to create appropriate and transparent public policy, which is so important. The commission will be politically impartial and provide advice and recommendations to the government on which policies most affect the SA economy and how we can improve the state's financial position.

An impartial commission allows for policy to be developed that focuses on the benefit to community and the broader economy rather than benefiting one sector, industry or lobby group. I think that was the hallmark of the last 16 years of Labor government. Too often, economic policy was created or made maybe on the run to benefit one industry, one lobby group at the time. That is not what we are going to do.

It was great to read the Premier's remarks in the paper today about the need for there to be long-term sustainable platforms so that business and industry know what the rules are, understand how the game works and are not at the beck and call of a government minister seeking favour and seeking government grants which are not properly accounted for and which ultimately hurt the taxpayer. The budget for the commission will be settled through the budget being handed down in September. We will ensure that the new commission is well resourced.

In terms of our Public Service, the state government employs more than 12 per cent of the South Australian workforce, approximately 100,000 employees. It is a very important employer in the state of South Australia. Their productivity affects the entire South Australian economy. We want to see our Public Service, and hopefully the commission will as well, work to build better relations with the private sector to improve our economy together.

We want to see the commission charged with improving economic and productivity growth in South Australia in order to achieve the highest standard of living for all South Australians. That is what we want. Ultimately, we are here as a government to improve the living standards of all South Australians, and that is what we need to do. Productivity is about producing, delivering or achieving more for every unit of resource invested. It is about providing better quality goods and services for more South Australians, using the resources available at that time. The objects of the commission outlined in the bill include:

to increase employment—that is, population growth both in Adelaide and our regions;

to improve the quality and efficiency of services delivered or funded by government;

to improve the competitiveness of private sector investment;

to reduce the cost of regulation and removing red tape;

to facilitate structural changes to our economy; and

to promote regional development.

I think it is important that we do have a commission—and I know that the federal Productivity Commission looks at facilitating the structural changes to our economy—to think a little bit differently. I look at the aged-care and health space and the opportunities for this state to use a current problem, which is an ageing society, as a benefit to drive economic growth and technology improvements to help the life of South Australians.

There are going to be inquiries that the government will seek and have the power to hold, and of course there will be inquiries that the commission itself can run. It is the intention of the government that matters of inquiry referred to the commission relate to new investigations or those which build upon existing bodies of knowledge, rather than replicate existing bodies of work. The government is looking for a new vehicle, a new mechanism, to drive new initiatives in terms of economic growth.

In terms of the federal Productivity Commission, it is important to get some comparisons. In its current form, the federal Productivity Commission was established by the Howard government in 1998, but various commissions have existed in one form or another since 1921. Current and past inquiries of the federal Productivity Commission have looked at a wide range of topics. They have looked at the competitiveness and efficiency of the Australian superannuation system, compensation and rehabilitation for veterans, national water reform, horizontal fiscal equalisation, automotive assistance, overcoming disadvantage and the like.

Like its federal counterpart, the state productivity commission will also look into services that the government provides and where those services can be made more efficient for taxpayers. I think it is important that tough questions will come out of a future South Australian-based productivity commission, and there will be ones that are controversial. There will be recommendations that government might not always like, but I think it is important that we have this process; if only we had had this process established 10, 15 or 16 years ago.

I wonder where the South Australian economy would be today if we had actually had the forward thinking of a productivity commission, mounting a case and coming to government and the government sitting down with the commission and the people of South Australia to make hard decisions about the future of South Australia, and not just a government that racked up debt on the state credit card. I think that is really important.

The commission will be empowered to provide its own analyses and recommendations free from interference. The commission will be required to publish final reports on its website, ensuring that its analyses and recommendations are known to the public. Making their work publicly accessible is important for transparency purposes. I go back to the recent South Australian Centre for Economic Studies paper talking about the transparency of government—the more the government puts out up-front, and is open and accountable, the better the decision-making process will be for all South Australians.

Of course, the commission will be able to have provisions for dealing with conflicts of interest. They are considered necessary because of the highly specialised expertise required by the commissioners and are consistent with some provision in legislation governing ESCOSA.

It is most important that this legislation passes through the parliament so that we can get down to the business of creating a new framework for South Australia. It is an important commitment. It is one we took to the election. This legislation will allow an independent body to be established to provide recommendations to support productivity growth and create new economic jobs for South Australia, for South Australians and for South Australian families. If there is one thing that government should always do, it is look after the jobs of South Australians and their families. I certainly support this bill through the house.

Mr MULLIGHAN (Lee) (16:05): I rise to speak on the South Australian Productivity Commission Bill 2018. In doing so, I ask the house to be aware that I am the lead speaker on behalf of the opposition on this bill. I thank the member for Waite—I am sorry; I was about to use the d-word—for his comments and contribution. I mean the electoral d-word, not any other you might have been referring to.

This bill is the legislative manifestation of an election commitment by the Liberal Party in the lead-up to the last election to develop a productivity commission for South Australia. Indeed, there was a commitment that the membership of the productivity commission will be determined within the first 30 days of government.

The Hon. S.S. Marshall interjecting:

Mr MULLIGHAN: Despite the Premier interjecting, saying that the membership has been determined, we look forward to exploring that during the committee stage of the bill. On 8 May, 50 days after forming government, the Premier advised the house that the South Australian productivity commission as well as the proposed Infrastructure South Australia would actually be bodies created via legislation rather than established through executive powers, hence the delay in not establishing them previously, let alone determining their membership as committed to in their first '100 days' website document.

The ministerial statement made by the Premier claimed that immediately on forming government he sought out members for the productivity commission. Only he will know whether that was the case or not. Certainly, there have been a number of people who have been reported to have been asked but who politely declined the opportunity of being on the South Australian productivity commission.

Nonetheless, by 7 June the Premier introduced this bill into the house, some 50 days after the 30-day commitment to establish the productivity commission and determine its membership. Whether it will be established within 100 days is contingent not just on its passage through this place but also on its passage through the other place. Given the sitting schedule and given their legislative alacrity—or lack thereof—I would not be putting money on it.

It is a bill I have to pay a compliment to the Premier on, however, because unlike a number of others introduced into this place in recent times, this bill at least was able to lie before the house for a period, enabling members, including the opposition, the opportunity of being briefed on the bill before debate immediately started.

Mr Pederick: Those with short memory.

Mr MULLIGHAN: The member for Hammond interjects. He must think this is a reflection on him, but it is not a reflection on him at all.

An honourable member: Do you want to pad this out for an hour?

Mr MULLIGHAN: That briefly?

An honourable member interjecting:

The DEPUTY SPEAKER: The member for Lee will continue his contribution in silence.

Mr MULLIGHAN: I am just waiting for silence, Deputy Speaker, before I continue my remarks. I was not reflecting at all on the member for Hammond; he is an effective and assiduous member of this house, let alone in his role as Government Whip. I was about to lament the absence of the member for Morialta, who does like to keep a tight rein on how matters progress through this house. We missed him dearly in those last two weeks, although of course we were happy to give him up because he was attending to far more important duties, becoming a father for the first time.

Let us hope that with the Premier's introduction of this bill, letting it lie before the house and affording members the opportunity to have a briefing, we can put an end to the opposition being put in a position where it is not ready to speak on matters and hopefully, perhaps, where we will never see again a succession of 16 government members giving almost verbatim the same speech about the importance of amendments to the gift card regime we have here in South Australia. That was—

The DEPUTY SPEAKER: Member for Lee, I do not think that bill is over yet.

Mr MULLIGHAN: That was the extent of my reflection on it, Deputy Speaker.

Mr PEDERICK: Point of order: that bill is before the house.

The DEPUTY SPEAKER: Thank you. Member for Lee.

Mr MULLIGHAN: As I draw my comments on that matter to a close, perhaps I can offer to the house that that was an experience best enjoyed once and once only.

Mr Pederick: So was your five-hour speech.

Mr MULLIGHAN: Thank you, Deputy Speaker, and thank you once again to the member for Hammond for his interjection and instruction on these important matters. I will say one thing about it more generally, and that is that, despite introducing this bill and letting it lie before the house for some time, the government providing only 48 hours' notice to all members of parliament for a briefing to be conducted on a Friday morning—when many of us are likely to be previously committed, as I was, with electoral duties and also, in my case, with an event in my electorate—puts us in a difficult position to go through the normal course of business in speaking with the government about its bill and making sure we are in a position to deal with it as swiftly as the government would like.

I do not say that critically, except to ask that as these bills continue to come on from the government perhaps some invitation is extended to the opposition—through the leader's office or, if they are confident they know which shadow minister might be dealing with it, perhaps organising that a bit more effectively—so that we could spend less time in committee and more time on that briefing outside the house. That would be appreciated.

We still have further bills like this to come—I think the Premier foreshadowed more at the beginning of question time today—and it is likely that, given the establishment of a similar body, Infrastructure South Australia, some of the issues that might be raised in the context of the discussion of this bill might be pertinent to the discussion of that bill as well. It might be in everyone's interest if we can contract that process for that subsequent bill.

Of itself, this is a relatively brief bill to establish a South Australian productivity commission. Amongst other things, it establishes it as a legal entity, and it establishes what it calls objects of the commission, membership, commissioners, the conduct of inquiries, staffing and operations of the commission. It is a brief bill, as I said, and not one without precedent given that a Productivity Commission was established at the commonwealth level. More recently, one was established in Queensland in 2015. It seems to be one of an increasing number of agencies and entities that are in the process of being created by the new government to provide it with advice on economic matters.

The current government made a commitment in the lead-up to the election that it would be dissolving and disbanding the Economic Development Board and replacing it with an economic advisory council, I believe, which would have a reduced membership. Principally of concern to the Treasurer, it would be reduced in cost. As to what role it will play amongst the operations of this new government, we are not yet sure as existing agencies provide economic advice to government—principally, the Department of Treasury and Finance and the Department of the Premier and Cabinet, as well as other industry-facing agencies, which are likely to fall out of what we understand are the machinery of government changes within this new administration.

In the case of Treasury, which is usually responsible for economic and fiscal policy development, we also have the Essential Services Commission of South Australia. While it was established in the very early 2000s to play more of an interventionist role than a role on behalf of the government of the day and the public of South Australia to review the arrangements which were newly established with the privatisation of South Australia's electricity assets, it was also established in legislation with an ability to conduct research inquiries and other related efforts on behalf of the minister, being the current Treasurer.

We already have a number of pre-existing bodies in the government: the two departments I spoke of, as well as the Essential Services Commission. The Essential Services Commission has conducted the exact same work previously for government on reference from a minister to look at micro-economic policy issues to either identify opportunities for change or reform, or at least provide some light, some focus, on the activities of an industry for the benefit of the government and, in turn, the people of South Australia.

We know that the Essential Services Commission has already made an entreaty to the current Treasurer that it be looked upon to play this role, which is to be established by the productivity commission. We know this from documents released to the opposition under freedom of information determinations, that they have specifically offered that opportunity to the government. Given the type of work, looking at the regulatory environments particularly around industries in South Australia and reporting on them, and reporting opportunities to improve them, it strikes me and the opposition as a little odd that that should be immediately overlooked in deference to this new body to be established by legislation.

The government made it clear that they would set out on this path, and this bill makes that clear. However, you have to ask why this government seeks a productivity commission, and some reasons have been given most recently in a contribution from the member for Waite and also in the Premier's second reading contribution. It is worthwhile looking at a brief history of the Productivity Commission, which was established at the federal level by an act of the commonwealth parliament in 1998, to see how that body has operated and what it has been able to offer, particularly what it has been able to offer under different governments since it was established.

As I mentioned, it was established in 1998. It was an early initiative of the then Howard government, and it was established in 1996, not long after the collapse of a number of agencies and commissions that between them had responsibilities for providing economic and policy advice, particularly around regulatory environments and micro-economic reform opportunities. They were the industry commission, the bureau of industry economics and the economic planning advisory commission.

Of course, we remember that 1996 was the year the Howard government was elected. It is not perhaps unusual in that context to expect that there was a collapse of these pre-existing functions and commissions into this new body because they made it clear that they wanted to shake things up fairly dramatically at a federal level. The 1996 election was the first time that a conservative government had been elected at a federal level for 13 years since the Hawke government was elected in 1983.

It is worth reflecting in the context of this bill that the Hawke and Keating governments are roundly recognised, widely recognised, as being the most reformist governments in terms of monetary policy, fiscal policy, economic policy and, in particular, micro-economic policy. They were able to do so relying on those agencies existent at the federal level without a productivity commission. They relied very heavily on the advice that was provided to them by the commonwealth Treasury. They relied very heavily on the advice that was provided to them by the Department of the Prime Minister and Cabinet, as well as from time to time some of those departments that were industry facing and facing specific industries.

It was an extraordinary reform record to achieve in a climate where there was not necessarily an external bureau or agency or commission that was relied on to tackle what in today's political environment would be considered very difficult or very thorny issues of economic reform. That simply was not required. What was required back then was a government that knew what it was seeking to achieve via the processes of reform in fiscal or monetary policy or micro-economic policy reform.

You only need to look at recollections of people like former prime ministers Bob Hawke and Paul Keating, as well as ministers within those cabinets, about what they were trying to achieve. They knew inherently that the path to improved standards of living, greater social equality and equity of opportunity for the Australian people could well be achieved through improvements to the Australian economy and sectors within it. They were able to take on and map out this reform agenda because they had not only that understanding but an inherent trust and faith in the Public Service that was advising them.

It is very easy to talk about trust in a public service but not necessarily so easy to talk about in the context of the Public Service that was advising the Hawke government in the early days when it formed government, remembering of course that there were a lot of very senior public servants, particularly in the federal Treasury, who had traditionally been viewed as acolytes or allies of the outgoing conservative government that lost that election in 1983.

However, there was a faith, there was a confidence, in those individuals and their capacity to develop policies that cut largely against the grain of what the economic orthodoxy was within the Australian Public Service at the time. I raise that point because what we hear from those opposite in government is that they seek to change, they seek to redefine, the role of government in pursuing economic reform in South Australia, and the purpose of the establishment of this body is to enable them to do so.

Well, not only have I said that there are agencies already existing within government that should be and, I would argue, are very well placed to provide sufficient analysis, investigative efforts and reform options to the new Liberal government, and would be able to take on that advice and pursue a reform agenda for them, but it is interesting that the government are not taking the opportunity to take advantage of those resources that have been placed at their disposal.

If you look at the conversion of the Australian economy from the early 1980s to the mid-1990s, it is remarkable. The Australian economy was one of the most highly protected economies in the Western world in the 1980s. If I can pick a small number, a small grab bag of the economic reform achievements of those governments, including floating the dollar, deregulating the banks, introducing new taxation regimes (principally through capital gains and fringe benefits taxes), the establishment of enterprise bargaining, the removing of import tariffs and quotas and the introduction of National Competition Policy, no government of any persuasion has come close to having a successfully implemented economic reform agenda of that government—all achieved without necessarily having or being able to refer to a separate, independent external body to provide advice on such matters.

It is the last of those that I mentioned, the establishment of a National Competition Policy, which arguably led to the genesis of the federal Productivity Commission, and that is because the National Competition Policy, amongst other things, sought not only at the federal level but also at the jurisdictional level across the states and territories to seek micro-economic reform in industries that were largely regulated by those jurisdictional governments.

That reform project was extremely broad and far reaching. There were few industries that you could nominate today that were not subject to industry reviews and implementation of significant legislative reforms to flense away the significant amount of regulation and red tape which had often been applied at a state level and which had often been applied inconsistently with other jurisdictions—and troublingly, given the fundamental tenets of the Australian Constitution, sometimes in conflict with what the federal government, let alone the federal parliament, was seeking to achieve in that regulatory environment.

Out of that competition policy was a particular focus on government enterprises, government-run businesses, that were established by governments to provide services and sometimes the sale of goods to communities where there may be also private sector entities seeking to provide those same goods and services. One of the most concerning things, I think, that came out of the period of National Competition Policy examination and reform was the concept of competitive neutrality of those government business enterprises at all levels of government—making sure, in short, that the operating conditions of a government enterprise did not create some inherent advantage against those others seeking to provide similar goods and services in the private sector.

That principle of competitive neutrality has, because of National Competition Policy and the establishment of the Productivity Commission, now largely been baked into government enterprises across Australia. Indeed, there is a specific reference in the federal Productivity Commission Act for complaints regarding competitive neutrality to be made to the Productivity Commission for investigation. So you could argue, from a regulatory perspective, that a vast agenda of work has already been identified and attended to in the federal context and also in the state context.

Of course, we are living in a time many years on from the period when National Competition Policy petered out. We are seeing massive changes in the industrial landscape in Australia and across jurisdictions, which in some cases make those reforms outdated and needing to be revisited. That is appropriate but, again, I come back to the point: why do we need a productivity commission to undertake that? I would also like to think that here in South Australia there has been some good reform—economic, regulatory and other policy reform—that has left South Australia in much better shape, particularly in the last 20 years.

If the purpose is, for example, to facilitate industries that can provide very large employment opportunities for South Australians, or if the objective is to reduce business costs or the cost of doing business in South Australia, or if there is an opportunity to better guide the efforts of service delivery by public and private sectors, then there has been a substantial body of achievement in South Australia, particularly over the last 20 years. We see in the local paper this week that there is a tremendous effort to publicise to the people of South Australia and also capitalise on the opportunities that the defence spending at the Techport precinct will provide to South Australia. That is a terrific thing, of course.

Techport was built by the former Labor government principally to win the air warfare destroyer project but also to establish South Australia as the obvious location for the future submarines to be built. As we now know, not only are they getting towards the end of that air warfare destroyer project and are in the planning stages for the Future Submarines project but, because of the delay between the two platforms being built, there will be more defence work down there. That is a good thing. That is how governments, through the advice provided to them, can identify industry development opportunities and prosecute them successfully for the benefit of the state economy and for the benefit of job opportunities in South Australia.

There is a similar story to tell in the minerals and resources sectors of the state economy. Through the plan for accelerated development, there was a tremendous increase in spending in mining exploration and proving up future mining and energy developments in our state to the extent that, just before the global financial crisis—before the amount of exploration expenditure started to dry up as access to capital was substantially reduced through that period—South Australia was the most prospective jurisdiction in Australia.

I think it was the fifth most prospective in the world when it came to the amount of money being spent on exploration and predevelopment activities across the regions. That is terrific. Of course, as we start to see the industrial opportunities, the export opportunities and the availability of capital start to return, the appetite to take on that capital starts to return and, as we see the biggest and perhaps most important swing item on the list, the commodity prices, move in the right direction, we are starting to see a lot more activity in this area.

In the last six to 12 months, we have seen announcements around Carrapateena. We have seen a buyer willing to take on the steelworks at Whyalla and expand further through industrial opportunities. It is a great thing that governments have been able to identify those economic opportunities and prosecute them successfully for the benefit of the state.

In terms of regulatory reform, you would not have to go too far past the reform to the WorkCover scheme to see how that can reduce business costs significantly for South Australian companies, as well as the very significant reductions to the payroll tax liabilities of South Australian companies. This year, South Australian businesses, through successive reductions in payroll tax liabilities, will be saving in the order of $220 million against the payroll tax rates and threshold that were in existence before the former Labor government came to power.

Regarding land tax reform, there is a saving to private households and businesses of well over $100 million a year and, in terms of stamp duties and other transactional taxes, a further $250 million each and every year. It is no wonder that, when you relieve South Australian households and businesses of a taxation burden in excess of three-quarters of a billion dollars each and every year, KPMG often rates South Australia as Australia's most competitive place to do business. Indeed, it was only yesterday that the Financial Review reported South Australia as the third lowest taxing jurisdiction in Australia.

These are good things and when you put on top of that the large reforms to industry regulation, such as the planning reform taken on by the member for Enfield, in conjunction with the mapping out of activities of the industries interested in planning and development matters, such as the 30-Year Plan for Greater Adelaide, and when you provide them guidance, as we provided to the mining sector and energy sector with the Regional Mining and Infrastructure Plan, and when you provide a pipeline of bankable projects, as we did through the 30-year Integrated Transport and Land Use Plan, then you can see that a significant body of work can be achieved not just at the federal level, as was done prior to the Productivity Commission being established at that level, but also here in South Australia.

In the lead-up to the last election and also since the state election, it has been interesting to hear from an economic perspective what the government has been setting themselves out to achieve through the lens of economic policy or reform. While even the Premier himself has been quick to admit in forums like talkback radio that, of course, he has been more than happy to leave his former job behind of merely opposing the government of the day for the sake of it and get on with governing for the benefit of the state, that has meant that at times there were mixed messages from those opposite on matters to do with the state economy and the superintendence of some of those policy levers that influence economic interactions, such as state taxes and industry policy.

I can remember when the member for West Torrens, the former treasurer, first introduced the reforms, time limited as they were back then, to payroll tax for small businesses by reducing the rate and dramatically increasing the threshold. The Labor government was criticised by those opposite for doing so and, of course, as we now hear, those payroll tax cuts are not just to be maintained but they are to be further built on, with further changes to the payroll tax regime for small business in South Australia.

We have heard that the new government will not be supporting industry assistance and will not be supporting any provision of direct financial assistance to individual companies here in South Australia. When that statement was reiterated recently, the Premier was asked whether that would extend to somewhere like Liberty OneSteel at Whyalla. The answer was, 'Oh, no, of course not. That is something entirely different.' In fact, even today, the member for Schubert, the minister for re-announcing Labor initiatives, was taking, as I understand it, an unsuccessful ride in an autonomous vehicle.

Members interjecting:

Mr MULLIGHAN: I feel his pain there. I am the first to make light of hitting that kangaroo, but there is a misconception about it. It is referred to as a blow-up kangaroo, but members might be interested to know that it was actually stuffed. Without the additional weight of the filling of that kangaroo, the disconcertingly pleasing thud as it made contact with the front of the vehicle would not have been perceptible on Channel 7 news that night. I will move on from that small correction of the record from the interjection of the member for Hammond.

The member for Schubert reiterates the Premier's line that he will not be supporting direct financial assistance to industries or to specific ventures within companies, yet this morning he was down snipping the ribbon on just one such endeavour. It is interesting to see, perhaps at this stage, that the walk is not quite reflecting the talk coming from this government. What we have heard from the Premier, and also again the member for Schubert, is that there will be an aggressive deregulation agenda from this government. Perhaps we would be bemused if that were the environment in which we should experience reforms coming from the new government that the bills which have so far been considered by this place were actually to increase the regulatory burden.

The Hon. S.S. Marshall: How? How is the productivity commission increasing the regulatory burden?

Mr MULLIGHAN: You ask, and so I will advise, if I am not in serious breach of standing orders. The thing that people stop me in the street the most about is gift card reform, of course. That is one example. The other one, which—

The Hon. S.S. Marshall: We care about consumers.

Mr MULLIGHAN: No, that is right, and if the Premier had paid attention to my insubstantial comments on that bill he would note that we do care about consumers. In fact, it was a Labor government that introduced the Trade Practices Act and the Fair Trading Act in South Australia. While it was perhaps somewhat onerous to sit through that debate, that is a bill that we have supported. But, I make the point that, amongst the first pieces of legislation to come into this place, they were not removing regulation: they were, in fact, increasing it.

We will wait to see how this aggressive deregulation agenda is going to manifest itself. Of course, we are still awaiting the shop trading hours bill, which is meant to embody this aggressive deregulation. As the Treasurer notes, it has been a difficult bill, apparently, to draft, which is interesting to those of us on this side. Obviously, he has to delineate between the religious importance of Christmas Day on 25 December each year and the resurrection of Christ, which is on Easter Sunday.

The DEPUTY SPEAKER: Member for Lee, that particular bill is still before the house.

Mr MULLIGHAN: Shop trading hours?

The DEPUTY SPEAKER: No, gift cards, to which you referred.

Mr MULLIGHAN: I was talking about shop trading hours. I had moved on.

The DEPUTY SPEAKER: My apologies. Regardless of that, let us bring the comments back to the South Australian Productivity Commission Bill.

Mr MULLIGHAN: Thank you for your guidance, Deputy Speaker. Political commentators are quite keen to say that, in the current political context, it can be desirable to have a productivity commission. The reason for that is that it is useful to have a body beyond government, outside of government, that can test economic policies and research economic reform initiatives which perhaps would be beyond the pale of a government of the day to have the wherewithal or the courage to take on. That in itself is a very poor reason to establish one of these bodies.

I have already spoken in some detail about the substantial and truly aggressive economic reform agenda of the Hawke and Keating governments, done only by researching and inquiring into policy reform options from within the Public Service. I think it says an unflattering amount about how these political commentators see politicians today at any level of government, or perhaps it is an unflattering reflection on our capacities as politicians today that we cannot take on economic reform opportunities if we do not have the courage to initiate those reform inquiries and the development of those policy options from within government.

Why are we here if we have an agenda we believe in and which we would like to see implemented if we are not game to be honest with the people of South Australia, if we are not game to be up-front about it and if we are not game to task the independent Public Service to get cracking on? What can be so alarming or so egregious to the public of South Australia in terms of economic policy reform that the government needs to be inoculated for the period in which it is examined and these policy options are developed?

To provide some context around that query, perhaps it is worth looking at some of the work that the Productivity Commission at the federal level has undertaken in more recent times. When the Rudd Labor government was elected in 2007, it tasked the Productivity Commission as an extra set of arms and legs to undertake the analysis and investigation of reform options that it had already said it was in favour of. I will give an example.

The consumer policy framework, which was released in 2008 by the Productivity Commission, was released in response to a request from the government to develop a more consistent set of consumer protections across industries across Australia so that consumers who were perhaps purchasing goods and services from one industry sector should not necessarily be better or worse off than they would be if they were purchasing goods or services from another industry sector.

I think that is fair enough. The Premier made an interjection about the importance of consumer protections, and we would all support that, particularly in this day and age when some businesses run such relentless and aggressive campaigns to receive our spending. That is perhaps worthy of another topic of discussion. Coming up with a better framework of policies to protect consumers in those economic interactions is a very good thing. That government also referred off to the Productivity Commission at the time an inquiry into paid maternity, paternity and parental leave.

There was a substantial drive across many parts of the Australian community that there be better and more consistent provisions of leave arrangements for people who wanted to take time off work to have and to raise children. That report was released in 2009. That inquiry concentrated on support for parents of newborn children up to the age of two years, and provided a thorough consideration of the economic productivity and social costs and benefits of providing that paid maternity, paternity and parental leave.

The inquiry also assessed the current extent of employer-provided provisions of those leave arrangements in Australia and identified the models that could be used to provide such parental support and assess these against a number of agreed criteria. That included those arrangements and as they would impact on business, their cost effectiveness, the labour market consequences, indeed what were the work-family preferences of parents in these situations, child and parental welfare and the interactions with the social security and family assistance systems as they were at the time.

It assessed the impacts and the applicability of these various models across the full range of various forms of employment, such as wage earners, the self-employed, shift workers, farmers, to name just a small number. It assessed the efficiency and effectiveness of government policies that would facilitate the take-up of these models.

I think it was of great relief to most South Australians that, as a result of that inquiry, when the Productivity Commission had been tasked on behalf of the government to work out how they could best implement their desire to provide improved leave arrangements to parents, in the federal budget of 2009-10 the enhanced arrangements were funded and provided for.

That is another good example of how a government can be up-front with what they are seeking to achieve and use a productivity commission as an extra effort around the table to take on the task of developing reform options. It is not, as those social and political commentators often say, getting them to receive some sort of reference on the quiet to prove up the case for some reform which would at best be controversial and at worst be deleterious to some people's financial and economic interests.

Another reform, I think, which was very up-front and very positive from the Productivity Commission was requiring the Productivity Commission to inquire into the performance of the public and private hospital systems. If you cast your mind back to that time in federal government or indeed that time in federal-state financial relations, there was a commitment hanging over from the 2007 federal election from the then prime minister to fix the health issue and to come up with an agreed formula of funding from the commonwealth to the states and territories to better provide for the treatment of Australians in our hospitals and in our public health systems, and for the commonwealth to take on a larger share of the funding task for the public health system.

That inquiry was of incredible importance, given that, other than other transfer payments like the goods and services tax grants, which are made to the states and territories, those funds that are provided by the commonwealth to the states and territories for health constitute the next biggest amount of money. When you had a commonwealth government saying that they wanted to step that up, that they wanted to provide more money, using the Productivity Commission to establish a fair and reasonable basis for doing so was a very welcome thing.

Of course, they developed out of that—and I know that I will not get the nomenclature precisely right—and effectively came up with unit pricing for health services across both the public and private hospitals. That inquiry by the Productivity Commission, in its task of assessing the relative performance of the public and private hospital systems, having particular regard to the cost of performing clinically similar procedures, came up with some interesting findings, some of them self-affirming for the private health system and some self-affirming for the public health system.

I think that was of relief to the health sector at large that both the public hospital system and the private hospital system, as well as other parts of the public and private health networks, had valuable and much-needed roles to continue playing. There is another good example of how government can be up-front from the outset with what they are seeking to achieve and use a body like this, which is at arms length, to be an extra set of arms and legs to make sure that policy reform is executed most beneficially.

Of course the outcome of that was terrific for South Australia. There was the flow of many more hundreds of millions of dollars a year in health funding from the commonwealth to the state—with, of course, some requirements placed on the states and territories. That was very difficult to get used to, unless you work in a professional services firm; an extremely detailed reporting arrangement which needed to be established and conducted regularly. I think that is one example of how the effort the federal government and the Productivity Commission put into getting that funding model right imposed some improved transparency and accountability requirements on the states.

In 2013, the Productivity Commission examined and inquired into ways in which Australia and New Zealand could better forge and grow economic ties between those two nations, the closer economic relations inquiry, and identified ways in which to best take advantage, on both sides of the Tasman, of the economic and people flows that occur. That was terrific.

The inquiry released under the Gillard government in 2012, 'Barriers to effective climate change adaptation'—which, particularly in the context of the National Electricity Market, is a point of significant contention amongst different perspectives—was an important inquiry for a government to initiate. It provided some context and framework, as well as the admission that climate change is occurring and that it is likely to have very profound impacts on the business of government, let alone the impact on communities around Australia. That was a watershed moment where the government, again, used the Productivity Commission for purposes that were declared up-front and that provided a lasting and improved outcome for public policy here in Australia.

The last one I will touch on, which I know is dear to the heart of many regional MPs, is the inquiry conducted into drought support and making sure that the provision of drought support by the commonwealth government, in all its different forms, is being provided in the most effective way possible. Of course there will continue to be arguments, as there should be, with whoever the government of the day is about the timeliness and quantum of drought support, but the recognition of how critical it is and how best to deploy that support was very welcome.

That is a brief clutch of examples of how a government can be up-front with what it is seeking to achieve in a policy perspective and use a productivity commission to better inform and better put together policy changes. Unfortunately, there have also been instances where the same commission, albeit under a different government, has been tasked with inquiries that I would argue have been far more nefarious, particularly in the interests of South Australia. One is outstanding at the moment, and that is the long-awaited final report into the inquiry into horizontal fiscal equalisation.

You do not need to talk to too many jurisdictions around the country and ask them whether they believe in the principle of HFE and whether it is best placed to serve the interests of the federation in ensuring that government services and infrastructure should be reasonably the same across the country and providing funding to the states via the Commonwealth Grants Commission's allocations of GST grant disbursements from the federal Treasury to see if that should be supported.

In recent times, there has been a campaign—I understand popular in Western Australia—that that should be upended because the peaks and troughs of the mining boom have had particular impacts on their state finances and the built-in system of the distribution of GST grants has not quite suited them in a relatively small number of years. If you cast your mind back a little further to the early to mid-2000s, when Western Australia was a net beneficiary of GST grants, you did not hear their treasurers of the day complaining too much about HFE.

Nonetheless, in an effort to perhaps delay being required to solve a political problem, the Turnbull government provided a commission to the Productivity Commission to hold an inquiry into horizontal fiscal equalisation so that they would be able to tell Western Australia and Western Australian members of parliament, 'We are looking into it. There's a process. Don't worry about this. The wheels are in motion.' Well, for the rest of us, and here in South Australia in particular, there could be no greater threat to how a government here provides services and infrastructure and support to South Australians than this review.

We have seen how poor the outcome could be from the draft report, where there could be a change from that principle of horizontal fiscal equalisation to various watered-down forms of equalisation—equalisation to the average or equalisation to the second best—or, at worst, the per capita distributions of goods and services tax revenue. Any of those three circumstances would be a disaster for South Australia, and it was extensively debated and extensively argued.

It is only on the basis of the protections and the provisions of that original intergovernmental agreement on federal-state financial relations, which saw the states agree to and support a new goods and services tax being implemented, and the basis on which that would be distributed, that we are now seeing this being put under substantial threat, and I think that is terrible. It is even more terrible that the government, which issued that inquiry and which is in receipt of the final report, refuses to release that final report—I presume because there is a clutch of by-elections coming, one of which is particularly sensitive for the government and one of which happens to be here in South Australia. That one includes a candidate who, in terms of GST revenue distribution, tends to be a bit of a flat-earther who says that the current system of distributing GST grants is broken, that it needs to be fixed and, by extension, that South Australia is receiving too much revenue.

That would be an absolute disaster. No wonder that case is being so heavily prosecuted in the federal seat of Mayo against the Liberal candidate, Georgina Downer, for her comments made as the research fellow at the right-wing think tank, the Institute of Public Affairs.

The Hon. S.S. Marshall: I'm a member of the IPA.

Mr MULLIGHAN: That doesn't surprise me.

The Hon. S.K. Knoll: So am I.

Mr MULLIGHAN: That does not surprise me at all. In fact, it surprises me even less in the case of the member for Schubert. I am sure there are all sorts of Simpsons-like stonecutter organisations that the member for Schubert may well be a member of that I am not privy to, and that is as it should be.

The Hon. S.K. Knoll: Zero government funding—zero.

Mr MULLIGHAN: Yes, and so it should be.

The DEPUTY SPEAKER: The member for Lee will not respond to interjections.

Mr MULLIGHAN: Not now that you have drawn my attention to it, Deputy Speaker.

The DEPUTY SPEAKER: Not ever, member for Lee.

Mr MULLIGHAN: Of course not. That inquiry into horizontal fiscal equalisation is not the only one. We had the inquiry into Australia's automotive manufacturing industry, which was commissioned by the Abbott government in late 2013. We now know the basis of that was to kill off this industry here in Australia, principally affecting South Australia and Victoria with terrible social and economic consequences.

We know that in the lead-up to the 2013 federal election Holden presented a new business case to the then federal Labor government, with an update on the deal struck in March 2012, for Holden to agree to build the next generation Commodore and Cruze models in Australia between 2016 and 2022, with the then federal government, Victorian government and South Australian government agreeing collectively to provide direct industry assistance of $275 million.

It is important at this juncture to recognise the structural reform that had been underway for the best part of 30 years when it came to industry policy for the automotive manufacturing industry here in Australia. That was essentially to remove tariffs, quotas and other trade protections from that industry and replace that version of industry policy with industry assistance grants predicated on robust business cases put forward by companies like Holden and Mitsubishi here in South Australia, and like Ford over in Victoria.

If I remember correctly, tariffs were as high as 55 per cent or perhaps even higher in those early years of automotive manufacturing in the fifties, sixties, seventies and into the early 1980s. Progressively lowering those tariffs to allow the industry time to adjust in replacing those trade barriers, tariffs and import quotas with direct financial assistance was seen to be and continues to be regarded as a less burdensome way for industry assistance to be provided in terms of consumers because they are not paying the artificially inflated new car prices when they go to purchase a vehicle.

It is also considered to be a more transparent way because it requires car makers to provide a business case for the development and production of future models for assessment and negotiation around industry assistance by government. And, of course, government in a Westminster-responsible government setting is then open to obvious questioning and accountabilities both directly to the public and through the media in assessing those cases.

This was already an industry that had gone through a significant change over a period of 30 years in industry assistance policy. We were seeing these carmakers diversify their models and diversify their product offerings to the public to take account of changing tastes and to respond more quickly to consumer tastes and demands that, perhaps, compared to examples like some of the stuff that was coughed up in previous times—like the Leyland P76, for example. I understand that has a strong fan base that remains, and I seek not to insult them. However, putting that vehicle aside, I am sure we can agree that the Ford Territory, for example, or the VF Series II Commodore, is a vehicle that has been more responsive to consumer tastes and trends.

That inquiry was commissioned to make the economic case specifically for a very dry economic rationalist Coalition government at the federal level to remove industry assistance from the automotive manufacturing industry in Australia to the point where, when there was conjecture about whether Holden was in a position to reaffirm its commitment to the business case that it had put to that former Labor government in 2013 in the lead-up to the election late that year, the subsequent treasurer, Joe Hockey, stood up in federal parliament holding the Financial Review and dared them to leave, dared them to pack up and go. Of course, we know why: because he wanted them to so that he did not have to pay those moneys in industry assistance.

That is an example of how productivity commissions can be used as stalking horses for unpalatable and extremely disruptive changes to economic policy settings to the detriment of communities and state-based economies, as it has been here in South Australia. Of course, in 2014, the next year, another inquiry was commissioned by the Abbott government, and that was an inquiry into the workplace relations framework—a favourite avenue of endeavour for the then prime minister, Tony Abbott, and continues to be to this day—to try to find ways essentially to make it easier and cheaper for South Australian employers to engage labour in Australia, reagitating what had been a fairly settled tension between employers and employees about whether people were being adequately remunerated, what their working conditions were and what some of the other arrangements about their paying conditions would be.

What did that inquiry come back with? Well, it is not that hard to see that it was strong recommendations around the reduction and removal of penalty rates from classes of workers. It is a way in which some of our lowest paid workers—some of Australia's workers who find employment difficult to hold, transitory, unstable, most poorly remunerated—can be done over by removing what to them can be very lucrative payment arrangements, which quite often help, for example, retail workers put food on the table for their kids. That is another example of how a productivity commission can be used as a stalking horse by particularly a conservative government to make a policy change that is not in the interests of South Australians and, in this case, South Australian workers.

The last example I will give on this is the inquiry into public infrastructure in 2014, again commissioned by the Abbott government. It inquired into ways to encourage private financing and funding for major infrastructure projects. Of itself, that is not such a bad thing. We have seen the former Labor government in South Australia engage in public-private partnerships to build new schools and finish off the PPPs commenced under the former Liberal government in the late 1990s and very early 2000s for the provision of new regional courtrooms and policing facilities and, of course, the new Royal Adelaide Hospital.

But it came back with a series of recommendations which, amongst other things, recommended toll roads as being a preferred way of financing new or upgraded road infrastructure, something which at least this side of politics continues to rail against. It is very much a 1990s solution to a road financing crisis that is looming towards us over the next 10 to 15 years as we see the gradual decline of fuel excise revenues and a current Coalition government that has just dropped the anchor on infrastructure spending across the country, let alone in South Australia. That well has well and truly dried up, to further mix what was already an uncomfortable metaphor.

Those are a number of examples of why we see this bill come into this house with some trepidation. We see this as an opportunity for this government to be less than forthcoming about what its economic reform agenda is, if indeed it has a reform agenda or is going to appoint a group of individuals to colour in between the lines what this government should be doing when it comes to reform. If you look at those two tranches of examples, where a government can be up-front and clear with the community about what they are seeking to achieve and task a commission with proving up how best the reform is delivered, it can work quite well with paid parental leave, with making sure that governments are ready for climate change adaptation and for making sure we have the balance right in health funding arrangements.

But we can also see where there is huge danger for South Australia when we see the same organisation being used as a stalking horse to take away GST grants from South Australia, to end automotive assistance and chase thousands of jobs out of this state's economy or to levy additional road taxes on people through toll roads with public infrastructure. This government asks this parliament for an enormous indulgence, I think, to consider passing this bill. We are expected, essentially, to take it on trust that what is proposed by this government should be signed up to and enabled knowing that we have seen other conservative governments use these organisations as essentially weaponised economic policy agencies.

Those people who need governments to stand up for them the most in our community—low-paid workers, people confronting the health system in need of its services—as well as things such as having the common standard of infrastructure and service delivery in state governments improved through the fair distribution of GST grants are what conservative governments have placed at risk by using these organisations.

If we look at the bill itself and how it has been structured, we see that this bill appears to be a massively contracted version of the commonwealth act that has been in existence for the last 20 years. There is an almost verbatim copy of section 8 of the federal act in establishing clause 5 of this bill and that is, as I referred to earlier, the objects and functions of the commission. It is almost word for word plagiarism of what is taken from the federal act but with a few notable changes.

The federal section of that act refers to increasing employment, in particular, in regional areas. Here, for some reason, the regions have been forgotten when it comes to employment. That in itself sounds alarm bells, but it does raise the question: if this bill is largely a bill that has been cut and pasted from the federal bill, all nine pages of it, why has it taken so long to bring it into the house? Why has it taken so long to bring it into the house? If the hardest part of the bill, which is establishing what this commission should do, is essentially just lifted from another act in existence elsewhere, you have to wonder why it has taken that long.

There are also some other notable exceptions that perhaps go to why this is such a concise bill. There are some important provisions and protections of the federal act that are simply missing from this bill. There is no minimum requirement for the background or skill set of commissioners for the commission that is to be established under the bill, but there is within the federal act, and that is surprising.

There is also a watered-down set of requirements around the other working arrangements of commissioners and potential conflicts of interest, and that is concerning. There is also, of course, very little in this bill that requires interaction with the parliament. In fact, this act sets up the commission so that the commission's almost sole interactions are with the responsible minister, who is—and I will perhaps ask this question during the committee stage—I assume, either the Premier or the Treasurer.

Indeed, if it were not for the standard requirement for an annual report to be made and furnished to the parliament, you would have to ask why this bill was necessary at all. All this can be done under executive power. The commission can be established, members can be appointed, members can be remunerated, members can be discharged, inquiries can be undertaken and advice received and acted on or not acted on purely within the arrangements of executive power as they currently stand. The passage of this bill does little to further advance the legal requirements of it.

I do perhaps admit that the bill establishes this commission as a body corporate, as is the case with other statutory entities that are established by legislation, but that is pretty much it. We have been kept waiting more than 50 days past the due date for this to be established and the membership to be appointed, and we have a bill that merely pays some lip service to an arrangement that could be done executively rather than legislatively.

I cannot help but suspect that the reason why we have a bill that has such little parliamentary interaction for this commission, that merely seeks to establish a relationship between a body and a minister, is that there is some sort of embarrassment about this not having been done sooner and we need to provide the veneer of needing to go through a parliamentary process in order to miss the deadline. I think it is disappointing, not necessarily from my perspective but certainly from the government's perspective, that that is another promise that has been broken.

There are things, I think, if this parliament is to pass the bill and see it enacted into law, that the bill is seriously deficient in. I am also aware that there are other members of parliament, not necessarily of our political flavour, who feel very much the same. They feel that, if the parliament is going to be asked to establish this organisation, then this organisation, this commission, should have some more formal relationship with this parliament.

In that respect, I foreshadow that there is likely to be a suite of amendments that will be brought to the bill in the Legislative Council and that will be considered in due course. Until that time, I can advise that the opposition will not be standing in the way of the bill passing through this house, but we look forward to improving it quite substantially if and when it appears before the other place.

Mr ELLIS (Narungga) (17:26): I rise to wholeheartedly support the South Australian Productivity Commission Bill 2018 and congratulate Premier Steven Marshall on introducing it. It is wonderful to see a Premier who is committed to an efficient, productive state. I see this as an essential piece of legislation, offering exciting potential to deliver big picture change for this state. The bill's intent is to establish a statutory independent body, not directed in its functions by government, with the prime mission to improve the productivity and efficiency of the South Australian economy.

I see the bill and its intent as being at the core of all that this side is working towards: to lift growth, improve services, lift competitiveness for business by removing unnecessary red tape and reducing the cost of regulation, to generate and create new industry, and to improve transparency and accountability for every single tax dollar collected and spent. As well as these aims, a particular favourite of mine is that a clear objective of the new South Australian productivity commission will be to promote regional development as the recognised potential significant driver it is for future economic growth for our state.

For all these reasons, this important bill was scheduled pre-election to be introduced in our first 100 days in office, and I am very pleased that it has been recognised as urgent in this way. To have an opportunity to stand today in support of the bill and its intent is very pleasing. I value the bill for all the reasons mentioned but also because of the exciting potential a proactive productivity commission can offer this state: the opportunity for research and policy development, creative thinking for innovative solutions and the opportunity to use the best brains across the multiple sectors and industries we have here in this state.

It is exciting to consider that such a platform could be the catalyst for a state growth revival, which could only bring with it fresh new public confidence in our state's leadership and governance to ultimately raise the standards of living for all South Australians. The intent of the bill also epitomises the core of Liberal Party values of individual freedoms and free enterprise, virtues also at the heart of my maiden speech in this place when I talked about the reasons why I decided to stand for election as the member for Narungga and why I believe the electorate has so much untapped potential and is worth standing up for.

I stood for election to build, progress and instigate great change for the people who live within my electorate and to develop policy and regulation to encourage new industry, particularly in the agriculture and primary production industries in rural areas. I am a proud advocate for any policy development that can stop the drain of young people from regional areas to Adelaide and, even worse, then from Adelaide to interstate. I believe that the establishment of an independent commission, such as the South Australian productivity commission, can offer much to address adverse trends such as this.

It is essential that young people, whom we have so well educated, stay in South Australia to live and realise their dreams and aspirations to work, build families, create and support local businesses and services and to be proud South Australians. For this drain to be stopped, there must be jobs growth, new industries created, new businesses encouraged and attractive standards of living created.

More and more, we realise that government cannot entirely be relied on for job creation and that it is time to empower the private sector to fill voids. The bill well matches this core need. The bill before us to establish a state-based productivity commission is a clear-cut one. It establishes a body with clear directions, clear functions, clear leadership and chain of command and clear mandatory public reporting requirements. Objectives of the commission as outlined in the bill include:

to increase employment;

to improve quality and efficiency of services delivered or funded by government;

to improve the competitiveness of private sector investment;

to reduce the cost of regulation;

to facilitate structural changes within our economy;

to promote regional development and development occurring in an ecologically and sustainable way; and

to produce its own body of research relating to new investigations, not replicating any existing bodies of work and without interference from government.

I draw members' attention to the explanation of clauses in the bill and to part 2, clause 6—Independence:

Except as provided under this or any other Act, the Commission is not subject to Ministerial direction in the performance of its functions.

All in this place would be aware that our nation has had a productivity commission at a federal level since 1998 that has been recorded as having shaped major economic, social and environmental reforms since the 1970s. These include tariff reductions and the deregulation of the financial system and, more recently, as having played an important role in the establishment of the National Disability Insurance Scheme.

Interestingly, in an article written by Professor Judith Sloan in 2011, who was a commissioner of Australia's Productivity Commission from 1998 to 2010, it is declared:

…the sheer independence of the organisation and the inability of politicians to control outcomes once a reference has been sent…

are both secrets to its unbridled success and the reason that over the years numerous politicians and bureaucrats from a number of countries have consulted about setting up similar organisations within their own countries only not ever to take any action on it, apart from New Zealand, notably, but more on them later.

Professor Judith Sloan concludes in her 2011 paper, entitled 'How useful is the Productivity Commission?', in relation to Australia's national Productivity Commission:

While this may seem scary and unconstrained, the independence and commitment to open and transparent processes underscore the commission's strength as a force for good in policymaking.

She goes on to assert:

The commission has made major contributions to the public policy debate in Australia. It has dealt with core economic issues and important social policy topics. It has produced innovative work on the environment. Its regular reporting of the provision of government services across the states and territories continues to provide useful information. The data it produces in relation to Indigenous disadvantage add value to policymaking in that area. Working from the premise that regulation should be light-handed, effective and efficient, the commission has recommended many changes along these lines in its reports. As an independent advisory body, and spared the requirement of servicing any government minister on a routine basis, the commission has made substantial contributions to the quality of policy outcomes.

Much has also been written about the success of New Zealand's Productivity Commission, set up as an independent Crown entity in April 2011 with its principal purpose, as quoted under the New Zealand Productivity Commission Act 2010:

…to provide advice to the Government on improving productivity in a way that is directed to supporting the overall well-being of New Zealanders, having regard to a wide range of communities of interest and population groups in New Zealand society.

Its definition of productivity is also interesting, and I quote from the New Zealand Productivity Commission website, with its mantra of 'Productivity growth for maximum wellbeing':

'Productivity' is about how well people combine resources to produce goods and services. For countries, it is about creating more from available resources—such as raw materials, labour, skills, capital equipment, land, intellectual property, managerial capability and financial capital. With the right choices, higher production, higher value and higher incomes can be achieved for every hour worked.

The next question answered on the website is: why does productivity matter? It states:

Generally speaking, the higher the productivity of a country, the higher the living standards that it can afford and the more options it has to choose from to improve wellbeing. Wellbeing can be increased by things like quality healthcare and education; excellent roads and other infrastructure; safer communities; stronger support for people who need it; and improved environmental standards.

High productivity societies are characterised by smart choices about savings and investment versus current consumption; dynamic and competitive markets; openness to trade and to international connectedness; high awareness of external influences; rapid uptake and smart application of new technologies, products and processes; and increasing demand for highly skilled and creative people. These are the successful societies that attract and retain people, ideas and capital.

They are all things we desperately need here in South Australia.

The need to improve productivity was particularly important to New Zealanders back in 2010, when it slipped from the top 10 to No. 21 in the list of wealthiest countries in the OECD. It was recognised that any lag in relative productivity matters a lot over time and that a tide of loss of New Zealanders, in the multiple hundreds of thousands choosing to live abroad for higher living standards and options such as wider employment choices, higher incomes and better quality social services, had to be stemmed.

'To sustain and hopefully improve New Zealand’s wellbeing, our incomes need to grow,' stated a recent New Zealand Productivity Commission report. With New Zealanders already amongst the hardest working people in the OECD in terms of hours worked, improving productivity is the most likely way of achieving higher incomes. Even small increases in productivity growth, if sustained, can have a big impact on income and wellbeing.

The same article also states there is no simple formula for lifting productivity, but it does offer the following:

A country’s productivity performance is also influenced by factors that governments cannot do much about, such as size, natural resource endowment and distance from global markets. Even then, successful countries develop policies and strategies to mitigate or accommodate such factors. More generally, there is no room for complacency—ongoing improvement of the broad framework that shapes and incentivises productivity is essential.

That is precisely what the productivity commission of South Australia will do.

Closer to home, Victoria has had a state-based productivity commission for about 20 years. Queensland established theirs next, and as recently as February this year New South Wales announced its establishment of a productivity commission with the direct aim to:

…come up with ways to improve housing affordability, lower living costs and make it easier to move to NSW and do business in the state.

In announcing the New South Wales commission, Treasurer Dominic Perrottet said that the new commission would help drive the next frontier in reform for New South Wales. It would 'drive a micro-economic reform agenda' and 'give us huge momentum to change NSW for the better'. How successful that has been. The media of the day referenced our federal Productivity Commission as having recently estimated that reducing regulatory compliance costs by about 20 per cent could boost New South Wales' gross state product by $6 billion a year in the long run.

Former New South Wales auditor-general, Peter Achterstraat, who is well remembered for having found a $1 billion error in the New South Wales accounts in 2012, prompting him to warn that the state was a billion-dollar business not a school tuckshop, was named the first head of the new New South Wales commission and took up his post only about three weeks ago, on 21 May. He said that among the commission’s first tasks will be examining the build-to-rent sector, which encourages institutions to construct homes that are destined for rental rather than for sale; exploring common expiry dates for multiple vehicles; reviewing government procurement practices; and investigating mutual recognition of licences and certificates with other jurisdictions.

The New South Wales Treasurer was quoted as saying that Mr Achterstraat would have a mandate to bust red tape and make New South Wales the easiest place to do business and that, 'If we are going to keep lifting living standards, tackling productivity is non-negotiable.' The situation is no different here in South Australia: tackling productivity is non-negotiable here as well.

This is not an abdication from decision-making by this new government but, rather, an effort to arm ourselves with sufficient evidence to make informed decisions. Where the former government was more interested in pork-barrelling certain seats, this government will ensure that each project or undertaking is given proper consideration on its merits with the best possible information available. As I have already highlighted throughout my speech, there are comparable jurisdictions that utilise the immense advantage that having a productivity commission can provide. That it is working so well in other jurisdictions should be evidence enough for members in this and the other place to support the speedy passage of this legislation through the parliament.

One wonders about the benefits of having a productivity commission in the past and going forward into the future. I wonder about the benefits for regional communities that the productivity commission will support in its pursuit of regional development and a number of decisions that it may not have supported or might have found lacking that were available in the past. I suspect a productivity commission would never have supported the lowering of speed limits on regional roads in lieu of investing in the maintenance of those roads.

Without the electoral imperatives, as they were entitled by a former premier, to invest in regional roads, the previous government made a conscious decision to decrease productivity. Consider how much longer it takes truck drivers to deliver the product of primary producers to port on poor quality roads on lower speed limits. It would amount to a matter of days by the end of the harvest and would be a severe impost on primary producers in regional areas.

Similarly, I suspect that going forward into the future the productivity commission would provide emphatic support for the Liberal Party plan to lift the payroll tax threshold here in South Australia. There is no way that a tax on jobs can be considered productive or efficient in any way, and I look forward to supporting the passage of that bill through this house as well.

All policies developed by the Liberal Party are about increasing productivity for all sectors of South Australia, ensuring that government becomes streamlined and efficient, providing opportunity to the private sector to thrive by removing unnecessary regulations and rules and, importantly, providing essential infrastructure for all regions in this state to fulfil the tasks that keep the state functioning. Establishing the South Australian productivity commission will aid this government in obtaining information to support that pursuit.

I commend this important bill to establish a South Australian productivity commission to the house as soon as practicably possible and look forward to the expeditious passage of the bill through the house. I encourage all in this place to offer similar support for the good of our state going forward.

Mr COWDREY (Colton) (17:42): I also rise today to support the South Australian Productivity Commission Bill 2018. The introduction of this bill delivers on one of this government's key election commitments, to establish a state-based productivity commission here in South Australia. It also fulfils another of our major commitments to be delivered in the first 100 days, and is part of a strong reform agenda this government is taking forward. I believe this particular policy will be greatly beneficial and will deliver positive outcomes for our economy both in the short and longer term.

The South Australian productivity commission will be a body that plays an important role in growing investment and jobs and improving the economic environment here in South Australia. Importantly, it will be an independent body, mirroring the arrangement at the federal level. The commission will be established as a statutory authority governed by a chair and have commissioners who report through the responsible minister—in this case, the Premier.

Having one to four commissioners will provide greater flexibility to appoint individuals with a range of skills and experience. The remit of a productivity commissioner is often quite wide, taking in all types of sectors of the economy as well as different issues, and having flexibility of appointment will allow these particular individuals to lead specific inquiries relevant to their skill sets.

The resourcing requirements of the commission will be met through existing resources within the Simpler Regulation Unit of the Department of Treasury and Finance, which will be transferred into the commission. Appropriate additional resources will also be provided given the larger remit and responsibility that the South Australian productivity commission will have.

Inquiries, including the terms of reference, will be referred to the commissioner by the relevant minister. The body will fulfil this remit by making recommendations to government to remove existing regulatory barriers and to directly support productivity growth, realising new economic opportunities and creating new jobs. These are of course key objectives of this government, objectives that this government is dedicated to delivering for the people of South Australia.

It is important to note that the federal Productivity Commission was created as an independent authority in April 1998, some 20 years ago, under the Productivity Commission Act 1998. Past federal Productivity Commission inquiries include an inquiry entitled 'Australia's international tourism industry', which examined trends, drivers and barriers to growth in the Australian international tourism industry.

A further report of the commission, entitled 'An ageing Australia: preparing for the future', focused on the effects of ageing on economic output underpinned by changes in population, participation and productivity and the resulting implications for government budgets where current policy settings were to be maintained. Obviously, this ageing proposition is something that both this government and the previous government have seen as providing a great opportunity here in South Australia. Another piece of work undertaken by the federal Productivity Commission is the report, entitled 'Digital disruption: what do governments need to do?', which focused on the role of government in the face of potentially disruptive technological change.

As well as the federal Productivity Commission, there are also a number of state-based productivity commissions in existence. The Queensland example, being a Labor government, has a state-based productivity commission. The most recent report of this body explored opportunities around the future of the manufacturing sector in Queensland. I also note that the New South Wales government is in the process of establishing a state-based productivity commission.

I mention these other bodies and the work and inquiries undertaken by them for good reason. It is not the intention of this government to replicate existing bodies of work undertaken previously, but to refer matters of inquiry to the South Australian productivity commission that relate to new investigations or inquiries that build upon existing bodies of knowledge. Again, we are not seeking to replicate work already undertaken.

Productivity as a concept is an important driver of both present and future economic growth and performance. For too long our state's productivity has floundered under the former government. We are consistently lagging behind other states when it comes to productivity measures and rates achieved by other broader economies. Improved performance in this area of productivity will help improve business competitiveness and real per capita income growth and, in turn, improve living standards and wellbeing for all South Australians. That is why the objectives of this commission, as outlined in the bill, are to increase employment, improve the quality and efficiency of services delivered or funded by government, improve the competitiveness of private sector investment, reduce the cost of regulation, facilitate structural changes in our economy and promote regional development.

I outlined the number of productivity commissions present in Australia, but we also know of examples overseas. The member for Narungga mentioned the New Zealand example. Obviously, the proposition of introducing a productivity commission at this stage allows us to take lessons learned from the introduction of these examples, state-based examples, particularly as we bring forward this legislation in the house.

The purpose of this body is very clear: it is about assisting informed and improved decision-making. We have many highly capable people engaged in developing public policy in this state, both in the public sector and, probably despite the views of many, here in this parliament. However, it is important that we continue to challenge our thinking, that we go as far as possible to ensure that our assumptions and analysis are thoroughly tested, and that we look for innovative approaches to solutions and problems that affect all South Australians.

This legislation will require the commission to publish final reports on its website, ensuring that the body of knowledge collected, the analysis and the recommendations are known to the public. The commission's activities will instil a high level of public confidence that the advice and recommendations that it provides are based on rigorous analysis and political impartiality. Should the government of the day choose to adopt all, some or none of the recommendations made by the commission, it would have to justify these decisions to the public.

In terms of two incredibly important roles that the productivity commission will have, the first is around improving regulation. We are committed to bringing a new approach to government, to government regulation, and to service provision, and that stems from removing unnecessary regulation—as the member for Schubert has talked about with great gusto on many occasions so far in this 54th parliament—regulations that have been a handbrake on our economy for far too long, but also from modernising and simplifying regulation that has become outdated or imposes unnecessary costs on South Australian businesses and families.

Efficiency is another key concept that the productivity commission will have to deal with. The body will be tasked with dealing with the efficient use of taxpayer funds and the delivery of services and infrastructure. This is not about reducing the quality of outcomes achieved by government spending but, rather, about improving both quality and efficiency for every dollar spent. We have seen many examples of poor and inefficient use of public money over the past 16 years.

The purpose of this body is not to investigate the mistakes of years past but to investigate mechanisms that can improve our economy, grow our economy, grow jobs and improve the value delivered by every dollar of tax that the people of South Australia contribute to government, because these contributions that everyday South Australians make to government come with an expectation that their money is spent in a way that delivers the best return to the people of South Australia. I could speak at much greater length, but at this stage I want to let everybody know that these are the reasons why I support the bill and encourage all members to support its passage.

Dr HARVEY (Newland) (17:52): I rise today very much in support of this bill to establish a productivity commission in South Australia, and I would like to congratulate the Premier on the work he has done in putting the bill before the house, and the work he has done in advocating the very important case for improving productivity and improving the economy in South Australia. The productivity commission is a key plank of the government's economic reform agenda and one that we took to the last election and committed to bringing to this parliament within the first 100 days.

It is another example of how this government is delivering on what we have committed to do. This is a point that we make time and time again on this side because, after 16 years, delivering on those things that we said we would do is a novel concept in South Australia. After many years of overpromising and underdelivering, and creating the impression of activity when really there was not any, it is now time for change, and we are very keen to bring it about.

Our economic reform agenda is ultimately about creating more jobs and more opportunities, particularly opportunities for our younger people so that they are not forced to move interstate or overseas to find opportunities that do not exist here. In so many ways, the South Australian economy has been lagging compared with that of the rest of the nation, and this is simply unacceptable to us on this side. In fact, for much of the last term of the last parliament, South Australia suffered amongst the highest unemployment rates in the nation. This means that so many people in our community are missing out on opportunities to provide for their families and to further themselves, and this is simply unacceptable.

This issue around the state's economy was raised with me time and time again before the election. So many people came to me and were fearful of what the future in South Australia held for them and their families. They were concerned that after their kids went through school, left school, went to university or maybe did something else, what would be there for them in this state? That was a real concern shared by so many.

There are also a lot of issues around the ability to do business in South Australia and the friendliness of South Australia to business activity. I can give a particular example where a constituent of mine told me that their husband operated a concreting business. This business had operated in South Australia. They were so bogged down in regulation here that they decided to move their business interstate. They still live in Adelaide, but they commute to Melbourne on weekdays to operate their business interstate. The fact that that is profitable and makes business sense says a lot about what is wrong with the economy in South Australia at the moment.

However, given what could be described as doom and gloom, the South Australian economy has begun to improve in recent times. The recent Business SA and Statewide Super survey of business confidence has demonstrated a dramatic surge in confidence since the election of the Marshall Liberal government. In fact, business confidence in South Australia is now at its highest level in almost a decade, again, after 16 years during which things had been incredibly unfriendly to business. Sometimes those in business were described as the 'employer class', which is particularly disappointing and very unhelpful in dividing our community rather than seeking to support it.

This surge in confidence since the election really reflects the desire for change that exists in the community and the support for the government's plans to create more jobs, lower costs and deliver better services. This surge in business confidence is, in and of itself, great for the economy; however, we on this side are by no stretch of the imagination satisfied with achieving only an improvement in confidence. There is a great deal more work for us to do to make the necessary structural changes to ensure lasting prosperity and improved standards of living for all South Australians into the future. At the local level, it is also about improving the confidence of the people of South Australia in our economy.

What we are proposing to do is set up a commission that would be an independent statutory authority. It would be charged with providing evidence-based recommendations for reform that will help improve productivity within South Australia, again, in stark contrast to the ideological and electoral cycle-driven behaviour of the previous government. The commission will be governed by the chair and commissioners reporting through the responsible minister, which in this case will be the Premier. Productivity, which is the key to the commission's role, is ultimately about producing, delivering and achieving more for every unit of resource that is invested.

Sitting suspended from 17:59 to 19:30.

Dr HARVEY: The productivity commission is tasked with providing evidence-based recommendations for reform that will help improve productivity within South Australia, which is clearly in stark contrast to the previous administration. In essence, what productivity is about—literally what it is about—is delivering or achieving more for every unit of resource invested, which ultimately leads to improved standards of living.

The objects of the commission, as outlined in the bill, include increasing employment, improving the quality and efficiency of services delivered or funded by government, improving the competitiveness of private sector investment, reducing the cost of regulation, facilitating structural changes in our economy and promoting regional development. Inquiries, including the terms of reference, will be referred to the commission by the minister. It is the intention of the government to work with the chair of the commission in these referrals.

The bill enables the commission to produce its own body of research, but the instigation of referrals remains the responsibility of the minister. It is the intention of the government that matters of inquiry referred to the commission relate to new investigations, or those which build upon existing bodies of knowledge, rather than simply replicate existing bodies of work. An important part of this policy is its independence and transparency. A minister is not able to direct the commission outside the provisions of the act. The commission will be empowered to provide its own analysis and recommendations free from interference.

The commission will be required to publish final reports on its website, ensuring its analysis and recommendations are known to the public. Should the government of the day choose to adopt some or none of the recommendations made by the commission, it would have to justify its decision to the public. Provisions for dealing with conflicts of interest are considered necessary because of the highly specialised expertise required of the commissioners and are consistent with similar provisions in legislation governing ESCOSA.

Finally, in regard to commissioners, the appointment of commissioners, including the chair, will be finalised upon the passage of the legislation. Having one to four commissioners will provide flexibility to appoint individuals with a range of skills and experience, including particular individuals to lead specific inquiries. This is a fundamental part of our plan to improve the economy in South Australia to create jobs and opportunities, particularly for the next generation, but for all South Australians, which will provide longer term prosperity and ensure that our state is no longer languishing at the bottom of the national pile. I am very happy to commend the bill to the house.

Mr PATTERSON (Morphett) (19:33): The South Australian Productivity Commission Bill 2018 creates a statutory body that will be charged with improving the economic and productivity growth in South Australia in order to achieve higher standards of living for all South Australians. Its introduction fulfils another major commitment in the Marshall Liberal government's 100-day plan.

Productivity is commonly defined as the ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of goods and services. Productivity is considered a key source of economic growth and competitiveness and, as such, is basic statistical information that is used for many comparisons and performance assessments between both countries and state jurisdictions.

One of the main productivity measures is labour productivity, which is the ratio between a measure of the output volume and a measure of the input use, such as the total number of hours worked or the total employment. The more that can be produced for the same amount of labour creates an increase in productivity and therefore more capital value. There is also capital productivity, which is more related to the investment in assets, which can then also drive productivity. We have seen through the Industrial Revolution, moving through into the information age, how technology and assets have been great drivers in productivity. One of the most widely used measures of productivity is gross domestic product.

Moving on from those productivity measures, another measure of productivity is the multifactor productivity, which reflects the overall efficiency with which those labour and capital inputs are used together in the production process. Factors that feed into this multifactor productivity are changes in management practices, organisational change, general knowledge, networking effects, economies of scale, and other intangibles such as brand. These all impact on productivity as well, especially where they cannot be related back to either a labour or a capital input. In the Premier's second reading of this bill, he noted that our state has missed opportunities to grow this multifactor productivity, something that, if continued, will drag on the state's growth and prosperity.

In summary, productivity is about producing, delivering or achieving more for every unit of resource invested. It is about creating better quality goods and services for more people, using the resources that are available at the time. Some people question why productivity is important. It is worth noting that the American Nobel laureate economist Paul Krugman has observed that in the long run almost nothing counts as much for a nation's material wellbeing as its rate of productivity growth.

If we as a state fail to grow our productivity over lengthy periods of time, naturally our state income will also not grow. Conversely, if there is productivity growth in a sustainable way for future generations, it will allow them to enjoy higher living standards. Therefore, productivity is an important determinant of living standards and wellbeing for all South Australians. Productivity growth provides a capacity for high incomes but also for poverty alleviation, either directly through higher wages or indirectly by increasing the capacity for funding transfers to lower income households.

Recognising this, the commonwealth government created the Productivity Commission, an independent authority, by an act of federal parliament in 1998. The Productivity Commission is the Australian government's independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of Australians. Its role is to help governments make better policies in the long-term interest of the Australian community.

Similarly, in South Australia the proposed establishment of a state productivity commission will focus on getting our state's economy back on track. The Marshall Liberal government understands that if we grow the economy, it will create jobs so that we keep the next generation of South Australians here in this state. The productivity commission will be established as a statutory authority governed by a chair and commissioners and reporting to the responsible minister, which will be the Premier in this instance. It will do this by providing advice on issues identified by the government.

Broadly, the objects of the commission are as follows: to improve the rate of economic growth and productivity of the South Australian economy in order to achieve higher living standards for South Australians; to improve the accessibility, efficiency and quality of services delivered or funded by government; to improve South Australia's competitiveness for private sector investment; to reduce the cost of regulation; to facilitate structural economic changes whilst minimising the social and economic hardship that may result from those changes; to take into account the interests of industries, employees, consumers and the community; to increase employment; to promote regional development; and to develop South Australia in a way that is ecologically sustainable.

All these aims articulated above will help support the Marshall Liberal government's plan to create more jobs, lower costs and provide better services. In conducting its work, the productivity commission will have regard to the need for South Australia to increase public and private sector productivity, increase private sector employment and also improve living standards through alleviating cost-of-living pressures.

In summary, the productivity commission will focus on getting our economy back on track and creating an environment where the private sector can flourish because, as we have seen, governments cannot fund all the growth. If they are working in partnership with the private sector, we can leverage both arms and improve the quality of life and standard of living for all South Australians. On that, it is also worth noting that there are other states that also have productivity commissions.

In 2015, Queensland set up theirs, and in February just this year the New South Wales government set up their productivity commission. At the time, the commonwealth Productivity Commission chairman, Peter Harris, commented that a state productivity commission in New South Wales should be very helpful in addressing the kinds of reform opportunities in the federal-state environment that were identified in the recent 2017 Shifting the Dial report.

Consequently, the establishment of such a body in South Australia will have a similar benefit to South Australia. The commonwealth Productivity Commission's 'Shifting the dial: 5 year productivity review', tabled in the federal parliament in August 2017, identifies, amongst other things, how governments can influence productivity. Key areas identified in this report were infrastructure, education and health care—all areas that the Marshall Liberal government's plan over the next four years seeks to address.

While productivity improves through investments and decisions made by employers and employees, government policy can alter the incentive for firms and individuals to make those decisions. Businesses are drivers of long-run productivity improvement in the market economy, but, additionally, all levels of government play a role in that market economy because governments set many of the frameworks for these key institutions and their own key institutions, the laws, standards, regulations, taxes and also their economic policies. Through this, if there is any one level of government that has the greatest responsibility in these areas it is, in fact, the state level.

Governments can play a major role in making the rules that are essential to establish confidence and thus make markets work well, while at the same time governments need also to be cognisant that the policy that they create can play a critical role in increasing productivity in the economy through not only removing market-distorting regulation but also sharpening incentives to increase competition.

The productivity commission will advise the government on ways to modernise and simplify regulation which has become outdated or which imposes unnecessary costs on South Australian businesses and families. Coupled with other initiatives, such as the reduction in the emergency services levy and abolishing payroll tax for small businesses, it will help businesses to grow and thus create jobs. We know that jobs not only provide a source of income and help families raise their standard of living but they also provide a source of self-esteem and purpose through making a contribution to society.

At the same time as regulating, government is also a dominant provider and funder of many non-market services, and so its performance in these roles is also critical to productivity. Government can encourage efficiency in the business world by being efficient itself, but also by being transparent and predictable. State governments often have the most responsibility for service delivery and therefore the strongest capacity to introduce policy innovations and productivity gains.

Government policy can have a direct effect on productivity, such as in the area of physical infrastructure. Through investing in infrastructure, governments can facilitate more efficient methods of trade and promote more efficient allocation of activity. Recent research by the OECD suggests that investments into infrastructure benefit long-term output more than any other type of investment.

Effective labour markets also do not stand still—occupations, skills and jobs change over the decades. Critical to this adaptation are the skills delivered by the education and training systems. Governments also play a critical role in creating good quality and adaptive education and training systems that both educate and train the South Australian workforce in the skills to match the demand from the labour market and that are also necessary to improve productivity and participation in the workforce.

A well-educated workforce is a fundamental element of a high-tech society and enables innovation, which is a key driver of improving productivity. High-skilled jobs tend to be complementary to this new technology and have the effect of raising productivity. This productivity saving results in lower prices for consumers, higher wages for employees and/or higher profits for businesses, which lead to increased demand for suitably skilled workers.

One of the advantages of better health care, education systems and productive infrastructure in cities and regions is that they provide strong prospects for improving lifetime outcomes for people from all backgrounds. It should be noted that public support for reforms is also more likely when they offer benefits to the bulk of the people. Governments have the capacity to lift public investment in these major areas of education, health and infrastructure—all areas in which the Marshall Liberal government is seeking to work hard. It is the role of this government to maximise the efficient use of taxpayer funds in the delivery of these services and infrastructure.

The productivity commission will help identify opportunities and provide advice on issues identified by the government, such as improving the state's financial position, regulatory reform to cut red tape, improving government service delivery and economic reform, including the key energy markets and the review of other industry sectors, as requested by the Premier. To achieve this, inquiries need to be conducted by the productivity commission and matters are required to be investigated. These matters, including their terms of reference, will be referred to the commission by the minister.

It is the intention of the government to work with the chair of the commission in these referrals. The bill enables the commission to produce its own body of research, but the instigation of referrals remains the responsibility of the minister. Importantly, it is the intention of the government that matters of inquiry referred to the commission relate to new investigations or those that build upon existing bodies of knowledge, rather than replicating existing bodies of work, either from the commonwealth perspective or from other state commissions. Not replicating what is already in existence goes to the heart of productivity.

In terms of the ministerial powers and the independence and transparency of the commission, it should be noted that a minister is not able to direct a commission outside the provisions of the act. The commission will be empowered to provide its own analyses and recommendations, free from interference. This was noted by other speakers to be a key tenet and success factor in other productivity commissions.

The commission will be required to publish final reports on its website, ensuring that its analyses and recommendations are known to the public. Should the government of the day choose to adopt all, some or none of the recommendations made by the commission, it would have to justify its decision to the public. Because of the commission's independent nature, the bill also needs to consider provisions for dealing with conflicts of interest of any of the commissioners. These provisions are considered necessary because of the highly specialised nature of the work and also the expertise required of commissioners. These conflict of interest provisions are consistent with similar provisions in legislation governing ESCOSA.

The appointment of the commissioners, including the chair, will be finalised upon the passage of this legislation, should it pass both houses. The commission will have one to four commissioners, which will provide the flexibility to appoint individuals with a range of skills and experience, including particular individuals to lead specific inquiries under delegated authority. The commissioners will be qualified based on their knowledge and also experience in a broad range of industry, commerce, economics, law or public administration, and they will bring together advice and expertise from both the private and public sectors to improve the quality of outcomes delivered for the South Australian public.

The Premier himself has outlined how the Productivity Commission is not about reducing the quality of outcomes achieved by government spending but, rather, about improving both the quality and efficiency for every dollar spent. The state only has a finite amount of capital to spend, so the money that is invested in productive infrastructure to help grow the economy in areas such as roads, rail, ports, airport and electricity, to name some of these key areas, is vital. These are areas of the economy where private individuals rely on the government to invest wisely on their behalf.

In conclusion, the Productivity Commission will provide a Marshall Liberal government with information and advice to support the actions it will take to give the South Australian public sector a new future and much greater capacity to contribute to the state's economic recovery and growth.

Ms BEDFORD (Florey) (19:51): This bill fulfils a commitment of the new government, part of their 100-day plan to 'receive more and better quality goods and services from the same or fewer dollars'. No-one will argue against the necessity of reducing inefficiencies. Productivity commissions exist in New South Wales and federally, where they have been used to get public service and weaken protection for workers rather than simply cut red tape. The new government has stated there is an expectation a productivity commission will identify:

how South Australia can achieve the productivity gains in the public and private sectors, which will unlock new opportunities and…jobs in our State.

In health, I note that reducing bureaucracy and waste is a particularly mentioned goal:

Unnecessary administration not only costs millions of dollars, it spawns bureaucratic processes which get in the way of the delivery of frontline services where they are needed most.

It may be that the first reference any new commission considers should be health, where processes really do seem to warrant inspection and recommendations—and when I say health I include aged care.

Improvement to government services may also need to initially highlight education and how to deliver more to those on the front line, in schools and TAFEs. I will be asking questions during the committee stage and look forward to the swift passage of the bill in the house.

Mr PEDERICK (Hammond) (19:52): I rise to support the South Australian Productivity Commission Bill 2018. This bill enables the establishment of the South Australian productivity commission as a statutory authority, reporting through the Premier as the responsible minister. This is another Marshall Liberal government commitment. This bill enables the establishment of the commission as an independent body charged with providing the South Australian government independent expert advice on ways to improve the productivity and efficiency of the South Australian economy, both in the public and private sectors.

The objectives and functions of the commission as described in the bill are (a) to improve the rate of economic growth and productivity of the South Australian economy in order to achieve higher living standards for South Australians, (b) to improve the accessibility and quality of services delivered or funded by government, (c) to improve South Australia's competitiveness for private sector investment, (d) to reduce the cost of regulation, (e) to facilitate structural economic changes whilst minimising the social and economic hardship that may result from those changes, (f) to take into account the interests of industries, employees, consumers and the community, (g) to increase employment, (h) to promote regional development, (i) to develop South Australia in a way that is ecologically sustainable. The bill sets out the establishment of the board, its executive leadership and general operating parameters, including referrals of inquiry and provision of reports. The introduction of this bill delivers on a commitment contained within the 100-day plan of the Marshall Liberal team.

The budget for the commission will be settled through the budget to be handed down in September. Existing resources within the simpler regulation unit in the Department of Treasury and Finance will transfer into the commission, and additional resources will be provided. The objective is that this body will be charged with improving economic and productivity growth in South Australia to achieve higher standards of living for all South Australians. Productivity is about producing, delivering or achieving more for every unit of resource invested. It is about providing better quality goods and services for more people, using the resources available at the time.

The objects of the commission, as outlined in the bill, include increasing employment, improving the quality and efficiency of services delivered or funded by government, improving the competitiveness of private sector investment, reducing the cost of regulation, facilitating structural changes in our economy and promoting regional development, which is something very dear to my heart.

Inquiries, including the terms of reference, will be referred to the commission by the minister. It is the intention of the government to work with the chair of the commission on these referrals. The bill enables the commission to produce its own body of research, but the instigation of referrals remains the responsibility of the minister. It is the intention of the government that matters of inquiry referred to the commission relate to new investigations or to those that build upon existing bodies of knowledge, rather than replicating existing bodies of work.

In regard to ministerial powers and the independence and transparency of the commission, a minister is not able to direct the commission outside of the provisions of the act. The commission will be empowered to provide its own analysis and recommendations, free from interference. The commission will be required to publish final reports on its website, ensuring its analysis and recommendations are known to the public. Should the government of the day choose to adopt some or none of the recommendations made by the commission, it would have to justify its decision to the public.

Provisions for dealing with conflicts of interest are considered necessary because of the highly specialised expertise required of commissioners and are consistent with similar provisions in legislation governing ESCOSA. The appointment of commissioners, including the chair, will be finalised upon passage of the legislation. Having one to four commissioners will provide flexibility to appoint individuals with a range of skills and experience, including particular individuals to lead specific inquiries.

I know, from some members on this side of the house who have talked about a few things in regard to productivity, that one thing is roads and speed limits, and certainly in country areas where, for five years now, I have had several roads close to Murray Bridge brought back to 100 km/h because that was the easy option for the government of the day, instead of road maintenance measures to keep up the productivity.

I can tell you, as I have said many times in this place as an almost peri-urban member who looks after the areas between Pinnaroo and Mount Barker, that I do 60,000 kilometres a year. Some members in here do 100,000 kilometres, apart from their flight time, in the farther out electorates. You need to get from A to B. I certainly acknowledge safety, but there is also productivity. We are driving in cars made in 2017 or 2018 and not 1964 EH Holdens anymore. They are far better vehicles than we had back then, though the EH was a good bus in its day.

I want to talk for a couple of minutes about some things that the former government either did or did not do to enhance productivity in this state. In regard to the EPAS scheme for records for health care, we heard today those terrible words 'Transforming Health'. We do not hear them utter those words very often from the other side. It is a rare move these days, but it was their catchcry for many years.

By chance, I ran into a current nurse on Friday night at the Variety gala ball, which is a great event raising money for kids throughout South Australia, who said that EPAS was out of date before it was purchased and it never worked. Keypads and computer screens were put in unworkable places so that people had stress injuries from trying to work it, and it just never functioned. It is my understanding that very close to $500 million was spent on EPAS, which would have got you more than an Adelaide Oval if you took out the $84 million worth of debt that was written off for the South Australian Cricket Association. That is an outrageous use of public money for something that was never going to work from the start.

I want to talk about the River Murray in my closing few remarks. We had a government, with the former premier, the member for Cheltenham, that tried to champion things about the river and the productivity of the river. They thought they were the saviours of the river. How short are their memories? Have they forgotten that back in 2007 all the Labor government wanted to do was build a weir at Wellington, a $200 million sinking structure, which would have destroyed the lower reaches of the river and done nothing to enhance productivity in this state? They were prepared to write it off. Yet they went out, as the member for Cheltenham did when he was premier leading his people, saying what big champions they were of the river, and all I could see was hypocrisy every time they opened their mouths.

We heard from the Minister for Environment and Water today talk about the wounds that he has to heal when he goes to ministerial meetings with other River Murray states just to form relationships again because there were not relationships in the preceding few years with the former water minister from the other place, the Hon. Ian Hunter.

One of the biggest problems that happened with productivity with the former government was their stark refusal to accept $25 million from the diversification fund so that people from the Victorian border through to the mouth of the river down near Goolwa could fund off-river projects so that there could be some employment outcomes, some wealth outcomes and some regional development outcomes for regional communities.

This was the so-called former government that allegedly stuck up for the River Murray. No, they stuck it to the River Murray when they did not care. They refused $25 million for multiple projects through the seats of Chaffey and Hammond, which would have affected people in neighbouring electorates like Schubert, Stuart and Finniss. It is an absolute disgrace, and it should never be forgotten about these people who made out that they were such champions of the riverine environment.

When it came to just accepting commonwealth money for the productivity of the whole river corridor, they turned it down because it did not affect them because it did not affect their seats. It was an absolute disgrace. We are doing something about productivity on this side of the house and we have done it within the first 100 days. I commend the Premier, I commend the Liberal Party and I commend the bill.

The Hon. S.S. MARSHALL (Dunstan—Premier) (20:05): I thank all members of this house who have made a contribution to this important bill which is before the house. They have raised a number of important issues, and I think the general feeling of the house is that this is an important area of focus for the government. Even those opposite have talked about the need for continuous productivity improvement in South Australia. We are putting forward the methodology that we believe will ensure that this happens in the most effective and efficient method possible. A lot of effort has been put in to the Productivity Commission Bill which is before the house at the moment. I thank members for their contributions and I commend the bill to the house.

Bill read a second time.

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