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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-10-27 Daily Xml
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State of the States Report

The Hon. D.G.E. HOOD (15:05): I seek leave to make a brief explanation before asking the Minister for Business Services and Consumers questions regarding the State of the States Report issued by CommSec.

Leave granted.

The Hon. D.G.E. HOOD: As the minister is no doubt aware, the October 2015 State of the States Report ranked each state and territory's overall economic performance and was released yesterday, the latest one by CommSec, and compares performance on eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance; and, dwelling commencements.

South Australia reported some $25.5 billion in economic performance, and this compares with New South Wales reporting something like $107 billion. This result placed South Australia seventh of all states and territories, and ahead only of Tasmania. However, the report noted that in economic performance Tasmania shows better momentum; that is, it is growing at a faster rate. CommSec Chief Economist noted:

We are now seeing that transition to housing-led growth, so it is the states that are stronger in population growth that are leading the way, as you might expect.

Unfortunately for South Australia, housing finance and dwelling starts are also significantly lower than other states. Further, as was announced with the 2015 budget, the net debt is expected to increase in South Australia over the forward estimates from $4.1 billion, as of 30 June 2015, to a peak of $6.5 billion, as at 30 June 2017, whilst employment was projected to grow by a paltry 1 per cent in 2015-16, and the economy will only grow by 2 per cent, compared with Australia's forecast economic growth of 2.75 per cent. Not surprisingly, the report was not positive about the prospects of economic growth in South Australia. My questions are:

1. What is the government doing to ensure affordable housing to improve the immediate rankings on the housing finance and dwelling commencement indicators and subsequently move our economy from reliance on former industries to a more diverse group of industries, as outlined in the report?

2. What concessions is the state making to ensure growth in the retail and construction sectors, including such things as reviewing the burdensome regulations and barriers to entry?

3. Will the government move to quickly reduce the very high level of taxation that currently applies, particularly to the residential building sector?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:08): I thank the honourable member for his most important question. Indeed, South Australia is facing considerable challenges at this point in time. We know that one of the reasons we are facing these challenges is because the federal government withdrew its support from the automotive industry and sat by and let it collapse here in South Australia. In fact, the former Liberal treasurer goaded them to leave, and that is how out of touch the Hon. David Ridgway is. That is how out of touch and incompetent he is.

Holden's have already contracted by about 750 jobs, and it is not over. There are thousands of jobs to go. That is how incompetent the Hon. David Ridgway is. They have already contracted by 750 jobs, with thousands to go within the foreseeable future. So, the federal Liberal government would not stand up for jobs here in South Australia, would not stand up for industries here. The audacity—the audacity. We also know that South Australia's economy is particularly reliant on commodity prices and we know that they have dropped significantly and this is—

The Hon. D.W. Ridgway interjecting:

The PRESIDENT: Order! The Hon. Mr Ridgway, you asked the minister a question, which she is answering. I think you should just give her the respect of allowing her to answer it in silence.

The Hon. D.W. Ridgway: Mr Hood asked the question. I'd like to correct you, Mr President.

The PRESIDENT: Well, it doesn't matter. You still should have the respect to listen to the—

The Hon. D.W. Ridgway: I don't think he's really interested in her silly answer.

The PRESIDENT: Well, he looks very interested to me. Minister, finish your answer.

The Hon. G.E. GAGO: Thank you, Mr President. As I said, the drop in commodity prices, particularly around iron ore, has had a considerable impact on the industries here in South Australia as well. Of course, we also know that the federal Liberal government has slashed hundreds of millions of dollars from health, education, science and research, and the VET training sector—hundreds of millions of dollars the Liberal government has slashed out of spending here in this state. It's not surprising that we do face challenges. Indeed, as the Hon. Dennis Hood refers—

The Hon. T.J. Stephens interjecting:

The PRESIDENT: The Hon. Mr Stephens, would you please desist from interrupting.

The Hon. G.E. GAGO: They squeal like stuck pigs, don't they, Mr President? As the Hon. Dennis Hood made reference, the latest CommSec report shows that South Australia's economy is showing signs that we are weaker than most other states, and it should be noted that according to CommSec report there is little that separates the economies of Queensland, ACT, South Australia and Tasmania. However, in some areas, such as population growth and equipment investment in South Australia, they are still ranking quite strongly here, being third in the nation. As I have said before, the competitiveness of key industries in South Australia was impacted on by the high Australian dollar, with some effects still being felt.

The Hon. R.I. Lucas: That affects the other states too.

The Hon. G.E. GAGO: Here we have the failed former Liberal treasurer saying, 'Oh yes, but it affects other states too.' This is like a tsunami. If they don't get it, they're incompetent. Not only is the Hon. David Ridgway incompetent, so is the Hon. Rob Lucas. It's a tsunami of things that have happened, and because South Australia's economy has been so heavily reliant—more heavily than other states—on those aspects, commodity prices and the automotive industry together have had a compounded effect our economy.

However, some analysts are saying that it is anticipated that the depreciating Australian dollar may very well underpin rebound competitiveness and a resurgence in key industries, such as manufacturing, agriculture, tourism and education services to international students. There are some positive signs in relation to our state's economy, which show a number of indicators at high level, including investment, retail turnover and the value of exported goods, education services and international visitors, including international students studying here.

The state government has chosen initiatives to diversify the economy by undertaking long-term structural reform while investing in new and growth industries to protect and create jobs. I have talked about the return to work reforms that have delivered savings of more than $180 million to South Australian businesses. We are working with businesses to help generate investment here, to grow businesses, to grow jobs as we transition from the old economy to a new economy, where we look to new and emerging industries and jobs. That's why we work so hard with WorkReady, to make sure that we have our workers skilled up, so that those who need reskilling are able to meet new and emerging jobs.

The last budget built on these reforms, through some of the largest tax cuts ever seen. More recently, we have seen the announcement of Qatar Airways beginning a daily flight to Adelaide from next year—good news in one of our growth sectors. We have also ensured that 15 per cent of tender evaluations for South Australian government contracts worth $220,000 and above had a focus on local jobs and local products, so that will assist in helping local jobs grow as well.

As I said, we have put a range of reforms in place. We continue to roll out major tax reforms. We have already delivered considerable relief to businesses in relation to the WorkCover levy changes. Businesses have benefited by I think it was something like $180 million-odd in savings as a result of that. As I said, we continue to work to attract investment, to work with businesses to help them grow their businesses and to grow jobs here in South Australia.

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