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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2020-03-04 Daily Xml
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State Final Demand

Mr MALINAUSKAS (Croydon—Leader of the Opposition) (14:10): My question is to the Premier. Can the Premier explain why state final demand contracted for calendar year 2019 in South Australia?

The Hon. S.S. MARSHALL (Dunstan—Premier) (14:10): My understanding is that the trend figures stayed exactly the same. I agree with the Leader of the Opposition in his assertion that this is unacceptable, and it's one of the reasons why we have put our Growth State plan in place. Last year, when we look at the circumstances that affected us, they were many and varied.

If we look at last financial year's results, for example, we see economic growth in metropolitan Adelaide at 3.2 per cent, which was actually above Australia at 1.9 per cent, but then, when we look at regional and rural South Australia, we see a contraction—a very significant contraction in some regional and rural communities in South Australia. It's one of the reasons why we believe unequivocally that we've got to be working hard every single day to broaden our economy and our resilience in regional South Australia.

With dry and drought conditions now affecting up to 70 per cent of regional and rural South Australia, there are some dire situations. Most recently, I have travelled to some of the areas that have been most adversely affected last year. I travelled to Cleve. I travelled to Hawker, Orroroo and Marree. I was joined by the Minister for Energy and Mining in South Australia, and I also met with the member for Flinders when I was over on the Upper Eyre Peninsula. It is fair to say that some of those communities have not just had drought for one season or two seasons, some of them are now in very significant conditions where they have had to destock and they have had to sell assets, and people in regional and rural South Australia have been doing it hard.

So the Leader of the Opposition asks the question can I explain the reason for the flat state final demand over 2019. Dry and drought conditions is certainly one of those, but we cannot remain immune from what is happening around the rest of Australia. I think it's pretty evident to anybody who picks up a paper or watches the television news that Australia has been in a contracting situation for a period of time and therefore we have seen movements made by the federal government and also by the Reserve Bank of Australia.

In fact, we had multiple official interest rate reductions last year with the Reserve Bank doing what they can to stimulate economic activity. We had tax cuts at the federal level and we had increased infrastructure spending at the federal level, and we did exactly the same—

Mr Brown interjecting:

The SPEAKER: Order, member for Playford!

The Hon. S.S. MARSHALL: —at the state level looking at our taxation rates and also looking at our infrastructure expenditure. We were criticised by those opposite when we decided to borrow more money to invest in productive infrastructure in South Australia, and people opposite were saying this was outrageous, that we shouldn't be putting the government into further debt. But we think on this side of the house that this is a good time for the state to be investing in productive infrastructure. It's countercyclical with the private sector at the moment—

Members interjecting:

The SPEAKER: Order!

The Hon. S.S. MARSHALL: —so we are not taking finite resources away from the private sector. It's a good utilisation of those finite resources whilst there are flat conditions in the private sector for us to be investing. Moreover, I make the point that interest rates—

Mr Brown: Not flat—they've gone backwards.

The SPEAKER: The member for Playford is warned.

The Hon. S.S. MARSHALL: —are at a historic low here, certainly in my lifetime. The official rate yesterday that came out was at 0.5 of a per cent. I don't know how many people in this chamber can remember any time when the official rate in Australia has been at 0.5 per cent. If you believe the speculation in the media today, there are further interest rates coming. We are in unprecedented times in Australia at the moment, and globally, and we are taking the necessary action to do everything we can to have cause for optimism into the future.

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