Appropriation Bill 2015

01 July 2015

Mr SPEIRS ( Bright ) ( 16:29:00 ): This bill, which is before the house, obviously enables the government to appropriate funding, but it is an opportunity for us on this side of the house to provide a commentary on the state of South Australia's economy and to place on record my personal concerns and the concerns of many of my constituents about the significant economic challenges facing our state. In the lead-up to the 2015 state budget, we were informed that this budget was to be all about business. Government would be backing business to trigger a business and jobs-led recovery.

In fact, the Treasurer praised the federal government's small business focused budget, and he has publicly stated that he was inspired by the small business package put together by federal small business minister, Bruce Billson. With such rhetoric, I have to admit that I awaited the state budget with genuine anticipation because I believe that it is only through reinvigorating our business sector that South Australia's moribund economy can have an opportunity for real and sustained recovery—a recovery which can create jobs and lift the quality of life of thousands of South Australians who are unemployed or underemployed or who have the uncertainty of losing their employment in the coming years.

My eagerness for this budget may have been somewhat misplaced, but I do acknowledge that there are good elements in this budget and they must be celebrated and supported. Yet, dig below the headlines, and I am not sure if this could be described as a reformist budget. It has good elements, granted, but much of it appears quite pedestrian.

I congratulate the government on its determination to reform stamp duty on commercial transactions. The abolition of stamp duty on commercial transactions by 2018-19 is a good move, but I would have to worry that the slow phasing down of stamp duty may actually create a hesitancy among many businesses to invest this financial year or in the next as they wait for the tax to be entirely removed. As the Leader of the Opposition stated in his contribution to this bill, if the government believes that this will stimulate the economy and deliver confidence which will in turn create much-needed jobs, it must happen in full now, not at a distant point in the forward estimates.

This budget to me seems like a half-hearted punt. It looks to the business sector, gives a shrug and says to it, 'Do what you can with this.' It is not terrible, but it is not great either, and it is far from inspirational. It is not going to reinvigorate business in the short term, and that is what business in South Australia needs. It needs a real, solid boost to get our entrepreneurs and business leaders out there confidently growing their businesses.

I tentatively welcome the stamp duty reform, but it has always been my belief that the government's real focus should be on payroll tax relief. Payroll tax is the most nonsensical tax in this state, and it has some competition to retain that title. The Treasurer tells us that only 10 per cent of businesses pay payroll tax in South Australia—10 per cent too many, in my opinion. Payroll tax is a misnomer. This is simply a jobs tax: a tax on job creation, a tax on business growth and a tax on investment in human capital. It discourages employers from employing.

Let's not underestimate the power of a job. Huge life change comes with having a job. A secure job with a guaranteed source of income forges a pathway of opportunity which allows people to buy a home, invest in their further education and invest in their children's education. Studies show that people involved in regular work are more likely to be involved in their communities and engaged in charitable works. Full employment has health benefits and social outcomes, particularly lowering crime rates and the incidence of violence. The availability of jobs is transformational at both the individual and the societal level. Let's not forget that those who have jobs are taxed and generally able to give more to the economy so, by having more people in work, the government is more likely to derive other sources of income from them.

The unemployment crisis gripping South Australia is a state-wide disaster, but it is at its very worst amongst our young people. Youth unemployment is a catastrophe which is stealing the futures of thousands of young South Australians but, more than that, it is stealing our state's future. It is denying us the potential which flows from our young people's energy and ideas—elements that can only be harnessed when they are present. Today too many of our young people are leaving for interstate and overseas, or they are getting trapped in a cycle of poverty and missed opportunities rendering them increasingly vulnerable to the generational unemployment which takes hold in too many parts of our city and state. Let me tell you, Deputy Speaker, turning up in Leigh Creek in a duffle coat and T-shirt will not get people in South Australia back to work. Real tax reform will, and that starts with payroll tax.

But I do take the member for Elder's advice and I do want to move to the positive, because, although there are great challenges facing our state's economy and there are major problems with employment in this state, we must not get distracted by the negatives. As an opposition we must highlight them because that is our job, but we must also cast an alternative vision.

Our state is in desperate need of a positive brand of leadership which is not obsessed with the culture of blame and distracted by clinging on to the spoils of office at all costs. Our state is crying out for a government which believes in our geographical and climatic advantages, who understands the strength and character of our people, who love this place and who are prepared to fight for our survival and who will take the risks that are needed to stimulate, grow and prosper South Australia.

South Australia has an incredible history of innovation and creativity. So often we hear government ministers say this in the introductions they write in glossy government documents. We hear it in ministerial statements delivered in this place and we hear it in hifalutin public speeches. Yes, we do have a history of innovation, and our state can look back on a heritage built on pioneering governance, but just because we have a history of such behaviour does not mean that we are immune from losing it.

Is it really part of our state's DNA? It is part of our heritage, yes, but I do not believe that it is here forever. In fact, I would be bold enough to say that it is slipping away. This environment of innovation must be maintained, nurtured and enhanced. Government's role in creating this environment can be achieved through a number of approaches. The most significant is through deregulation and government getting out of the way of good business ideas, government investing in research and development initiatives, government supporting incubation and entrepreneurial projects, such as the Flinders University's New Venture Institute, which plays an exciting role in supporting, mentoring and growing new business ideas.

I have had quite a bit to do in recent years with the New Venture Institute, which is now based at the Tonsley site at Clovelly Park, and I am particularly impressed with the work of Matt Salier and Ben Flink in supporting and mentoring businesses to get off the ground to survive and to thrive. Government has a role in creating a business environment which has a significant emphasis on small business start-ups and which ensures that South Australia becomes renowned as a start-up state—the place where small business is given a fighting chance to survive. Support programs, tax breaks and mentoring—this sort of thing is incredibly exciting and can get start-ups off the ground. South Australia should be right there in the thick of it.

That heritage and culture of innovation and entrepreneurial spirit must be fought for, it must be invested in and it must be brought to life. We have the heritage and it is a proud heritage but heritage alone is not enough. There needs to be an ongoing focus of government of maintaining and driving innovation in South Australia.

Economic recovery is often led by concentrating on an economy's strengths. In South Australia our great economic powerhouse remains our regions. Despite regional populations declining our agricultural sector remains buoyant, despite operating under the jurisdiction of a sometimes unsympathetic government, but with the right support it can further prosper. Although I represent a metropolitan electorate, I understand the need to learn more about what our state's regions are capable of. A 2014 study called 'Positioning Prosperity, Building the Lucky Country' by Deloitte highlighted the critical importance of agribusiness as one of a 'fantastic five' wealth creation industries in Australia's future economy.

Here in South Australia agribusiness has the potential to lead our state's economic recovery as the demand for food, and in particular high-quality food, grows dramatically as middle classes expand and develop in countries in our region. As Asia emerges into a series of middle-class economies, diets switch from cereals and grains towards meats, dairy products, fruits and vegetables. Similarly, growing middle classes correspond with a greater demand for foods which are characterised as green, clean, organic and healthy. While many traditional industries find their bases declining, agribusiness has the certainty of increasing demand with increasing population and as a consequence demands huge government support.

The same report by Deloitte indicated that tourism was another of the 'fantastic five' and, again, this industry's potential is laden in our regions. While 23 per cent of South Australia's population is located in our regions, 44 per cent of all tourism expenditure occurs in the regions. Our regional tourism destinations are unique across the world, and as I said here before we must aim to become the playground of South-East Asia. Destinations such as Kangaroo Island, the Fleurieu Peninsula, our outback, and the Barossa and Clare valleys are right here in South Australia. They need to be promoted. They need to be supported. This is an industry which has huge potential and must be a great pillar of our economic recovery.

We need initiatives to grow our regional populations, recognising that while our regions are the workhorse of our economy and while Adelaide's geography places limitations on the ability of our city's footprint to grow, our regional towns and cities are crying out for population growth. Regional population initiatives, combined with investment and productive infrastructure such as a deep water port, the sealing of the Strzelecki Track and investment in regional road maintenance, are all important nation-building activities which we can base in our regions.

From backing our regions, I would like to move on to planning reform. Planning reform is something that does not necessarily cost the government money but can deliver significant economic benefits, and that is what we need to be looking at in difficult economic times—projects and initiatives which the government can look at which can grow and drive our economy, but which do not necessarily need a lot of government investment.

I see continual planning reform as a key economic driver and I am awaiting with some anticipation the arrival of the government's planning legislation in this place in the coming months. I see examples all the time where planning laws are strangling economic development and an efficient, agile system which drives economic growth must be the ultimate aim of any new planning reforms. This is not something I am pointing the finger at the state government about. I think there is a willingness to change this and I am certain that the opposition will be right behind them in creating a planning system which effectively backs economic development and economic growth.

Today, development plan amendments take far too long to initiate and work through. Often those instituted by the private sector take far too long to be completed and by the time they are, the economic opportunities first predicted have faded away. There needs to be a much more agile approach to rezoning where uncontroversial rezoning opportunities can be moved through the system in a matter of months rather than years.

In my own electorate, a long-awaited redevelopment of a brownfield site at Seacliff Park, known as the Lorenzin site or Cement Hill, is a prime site for medium-density residential development with the opportunity for a small commercial centre. Marino train station is within comfortable walking distance and the site perfectly fits within the government's 30-Year Plan for Greater Adelaide.

Granted, this is a fairly complex site, but it has taken up to three years to work through the development plan amendment. This is three years during which interest rates have been at historic lows and three years during which the developer has been ready to develop a state-of-the-art medium-density housing development in the inner south with up to 700 dwellings planned in the development. With such a cumbersome process and one characterised by so much uncertainty, often a result of local government inefficiencies and lack of capacity, you can see why those looking to invest in South Australia often take their money elsewhere.

On another rezoning matter, main arterial roads which pass through multiple council areas find themselves moving in and out of commercial and residential zones. Our planning legislation should allow rapid rezoning of these roads to allow mixed use development. These corridors should be identified, highlighted on a map and rezoned across the city, in an instant.

The City of Marion has recently prioritised a long list of rezoning opportunities but does not have the capacity to progress these all at once so, over the coming couple of years, it will slowly but surely tackle them one by one. Many are simple and uncontroversial, but they will take years to consult on due to the capacity and resources of the council. It is the same picture all across our city, and it is time for serious and detailed planning law reform. I look forward to the government bringing that updated legislation into this house and I look forward to working closely with the government to ensure that that sort of economic development role can be placed at the heart of our planning laws.

Moving on to another matter, I was pleased that recently the Economic and Finance Committee, which I am part of, offered bipartisan support for an inquiry that the Liberal members proposed into rate capping. While this has been Liberal Party policy in the past, I can speak for my colleagues when I say that we enter that inquiry with an open mind. We are keen to look at the way in which local government asserts significant cost of living pressures on South Australian households and businesses and explore ways to curb this. Rate capping is one of these methods that has been used effectively in New South Wales and Victoria, and I am interested to see how it could be used here.

I am also interested to explore other ways that local government raises revenue, including the differential rates that it places on commercial interests. I know, from my own experience, that the City of Marion places an 80 per cent differential rate on commercial premises within that local government area, and that has a significant impact on business—a negative impact. I believe we need to look at local government's use of these differential rates, particularly when they impact business in this difficult economic time. Some local governments choose not to have differential rates for commercial premises, but far too many of them do.

The cost pressures placed by local government on South Australian households are not my only interest in reforming the sector. This is something I have spoken on time and time again in this place. I have many concerns about the capacity of elected members, the need for compulsory voting in local government (something I firmly believe would weed out the more eccentric folks who are controlling budgets of tens of millions of dollars), the need for us to take a serious look at strategic boundary reviews to maximise economic development opportunities and, perhaps most importantly, the need for us to re-engineer the culture within councils, so they see themselves as drivers of economic development, rather than inhibitors.

Some councils do this quite well; many do not. The Minister for Local Government's second reading explanation this morning, concerning amendments to the Local Government Act, outlined a range of process-focused reforms to local government but did not reach into the heart of local government and outline a new vision to reform this often tired and stale sector. I would be delighted if the government would look at that in a serious way.

Elected public office is a great privilege, a substantial blessing that can be used to create great good. Even from opposition, ideas can be driven and good things achieved for the communities we represent, but with such privilege comes a huge amount of responsibility. That responsibility must be executed in an authentic and informed way and that can only be done by engaging with our communities, finding out what drives them, what their concerns are and how we can help.

There is no doubt in my mind that, after a lengthy period in office, a government can run out of ideas and become out of touch and arrogant. The challenges facing South Australia are substantial, and a reformist agenda around taxation, governance and economic development is vital. The state government must recognise that there is a jobs crisis in South Australia and that those of us who are blessed to be elected to this place are expected by our constituents to put forward the ideas and advance these to lead a recovery. We must shun complacency and recognise that these reforms are urgent.

Extracted from Hansard