Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

In the previous debate I was talking about matters of economic management and drawing a comparison between the steps we are taking as a new government at the federal level to bring our budget back under control and to create an environment where our economy can grow, where jobs can grow and where there is good and sound opportunity for people. I highlighted some of the outstanding work that has been done in a state budget earlier this week, which was handed down in New South Wales, where these types of steps have been taken. Then I contrasted it with the state budget handed down in South Australia today. It is quite a contrast between where this government is going, a direction started in the MYEFO statement and continued in our budget, and where other governments, in particular the Labor government of South Australia, have headed. I was highlighting the fact that they have handed down a budget today that shows a budget deficit for this year alone in South Australia of $1.232 billion, which is continuing in deficit next year and is somehow promising a surplus down the track.

The problem is that economic growth in the state has fallen through the floor from 2½ per cent, which was forecast for the current year, down to just 1.75 per cent, and 1.75 per cent is, of course, barely an economic growth at all. It is certainly not enough to generate the jobs necessary to create opportunities for young people entering the workforce. It is little surprise then that with such a parlous level of economic growth the job market has shrunk. It has shrunk, in fact, by 1.25 per cent in SA this year. That is how bad things have become. South Australia is the state with the second worst unemployment in the country and, sadly, under the current Weatherill government, it is doing its best to rival Tasmania for the highest level of unemployment, which is currently sitting at 6.8 per cent.

The SA government are claiming they will reverse the 1.25 per cent loss of jobs this year and manage to turn it around to a one per cent growth rate next year. A one per cent growth rate is what the aspiration is under this current budget and, frankly, even that looks unrealistic. It looks unrealistic because the level of tax take, the enormity of the tax hike, in a budget for 2014-15 sees the total level of taxation forecast to be collected in SA going up by 10 per cent next year. That is a whole 10 per cent increase in the tax take in one year. And this is going to turn around the economy? Hardly. It will take money out of the pockets of households, it will reduce spending and, of course, it will see SA become an even less competitive place for businesses to operate in and for people to invest in.

Some of the specific areas where they are introducing reforms will directly hit households and businesses. We will see the small-business payroll tax concession lost in a year's time. So, of course, it will cost more to hire people. I am pretty sure that is not going to help the South Australian government turn around their jobs in an economic growth crisis. They have upped the emergency services levy, which is essentially a land tax that applies in SA. The average family will be $150 per annum worse off in extra tax they will have to pay under this levy, but that will apply also to insuring cars, paying the fees on houses, as well as commercial businesses and industrial businesses. So upping the tax rate through this form of land tax, the emergency services levy, which will raise some $355 million extra overall, stripped out of households and businesses, is hardly going to turn around the state of the economy in SA. That is hardly going to create a situation where jobs actually grow and where we see some opportunity created for South Australians.

This is a dire budget situation. We see cuts in SA to all manner of services, taxes going up by 10 per cent and still, for the next year, a $500 million deficit. That is how bad the situation is. Of course, we are headed well and truly now into the type of territory of state bank debt levels that will ultimately see South Australians paying billions of dollars in interest every single year just to service the debt and with no opportunity to invest in the future infrastructure or services the state so desperately needs. (Time expired)

Question agreed to.