State Budget Reply

I indicate that I will be the lead speaker for the opposition on this bill, and I indicate that we will be supporting this as convention dictates. Do we support every aspect of this bill? Absolutely not. This is another example of a complete and utter wasted opportunity by this failed 14-year-old Labor administration to address the fundamental concerns affecting the lives of the people of this state.

May I remind the house that the economic growth rate for Australia post the resources and mining boom has actually been extraordinarily strong. In fact, Australia has grown at a staggering 3.1 per cent in the 12 months to the end of March 2016. By any metric this is a wonderful result for the people of our nation. But how did South Australia fare? I will tell you, Deputy Speaker. South Australia failed to get to half the national growth rate for the 12 months to the end of March, and we as a state were just a fraction of the fast growth states of this nation and therein lies the problem.

South Australia is behind the fast growth states in Australia and we are continuing to get even further behind. The peloton is leaving us. We are seeing it in the distance and we are getting further and further behind, and now, of course, we have this extraordinarily and unacceptably high rate of unemployment in this state. In fact, we have the unenviable mantle of having the highest unemployment rate in the nation for almost two years now.

As a result the government says, ‘What we’re going to do is to bring down a jobs budget.’ We have had two jobs budgets in a row. Last year’s budget was a jobs budget. Did it result in any additional jobs for the people of South Australia? The Treasurer thinks that it did. In fact, in a recent interview on the ABC with Matt and Dave at breakfast when asked the question, ‘How many jobs have you actually created?’ he said, and I quote, ‘we have created 6,000 jobs since the last budget.’ So we have the question that was fired back directly from the interviewers in that session, ‘Were these full-time jobs?’ He said, ‘Yes, I believe they were.’

Herein lies the problem for the people of South Australia. The largest problem affecting the lives of the people living in this state is the unacceptably high unemployment rate, yet the Treasurer, charged with the responsibility of bringing down a budget which is going to transform the environment in which we live and transform the economy in which we are trying to find employment and prosper as a state, does not even know the basic statistics. He did not even know that far from creating 6,000 jobs, as he claimed in prime time radio, we had actually lost jobs.

Let’s have a look at the actual situation, and this is what most disturbing: in the 12 months to June 2016, South Australia lost almost 3,700 full-time jobs; he had it wrong by almost 10,000 jobs. He claimed that we had actually created 6,000 jobs with the job-creating settings that he moved in last year’s budget. The reality is that we lost almost 4,000 full-time jobs in South Australia. It would be laughable if it was not so serious and such an impediment on the people of South Australia getting on with their lives.

The government decided that it would bring down a new jobs budget this year. What credibility does the Treasurer have when we look at the results from last year? Do not take my word, take a look at what Treasury officials themselves say about the budget that has been brought down for this current financial year. Again, the Treasury forecast for employment growth in South Australia for this year is less than half the national employment growth rate—less than half. This is completely and utterly unacceptable.

A Liberal government in this state would not stand for a situation where our employment growth rate was projected to be less than half of that for the nation. Moreover, Treasury officials actually give this year’s budget a lower mark than they gave to last year’s budget. Their forecast for employment growth from last year’s budget was actually higher than their employment growth forecast for this year.

Therein lies the problem. We have a dangerous jobs crisis in South Australia and we have 145,000 South Australians who are now looking for work. The government said it was going to bring down a jobs budget last year and it resulted in thousands and thousands of people losing their full-time jobs in South Australia, and this year there is absolutely no evidence to suggest that there is going to be a changed situation whatsoever.

In fact, when we look at the detail of this ‘jobs budget’ there is one program—a $109 million program over two years—so we are talking in round terms about $55 million dedicated to job creation in this state for this year out of a budget total of $18 billion. So we have an $18,000 million budget of which $55 million is going to be spent on the thing that we all identify as being the single biggest problem. It is not nearly enough.

When we look at some of the failed programs that Labor has put in place in the past, it fills us with even less confidence. Deputy Speaker, I will just remind you, and the parliament, of some of the failed programs that have been implemented, most of them tossed out, in this parliament since the last election. One of my favourites, of course, was the $4 million regional loans program. This was really designed and targeted to address our unacceptably high unemployment rate in regional South Australia. Those of us on this side of the parliament will do anything that we possibly can to advance the cause of regional South Australia. We see that the unemployment rate at the moment is unacceptably high.

The government responded to this problem—and they recognised this at the last election—by saying after the election, 'We are going to start listening to the people of regional South Australia', and they put this program in place to address this problem. The $4 million regional loans program was shut down after less than two years, after failing to issue one single, solitary loan. This is the level of incompetence that we see. Their major program to address regional unemployment in this state was shut down before it had even given one single loan.

One of the other programs that I would like to address today is the $50 million Unlocking Capital fund. This is another program that was designed by this government to provide opportunities for South Australian firms to grow. But, after almost two years of this program operating, it has given just one single, solitary loan. The point is that there is no way that these programs, put in place by this inept government and supported by the Independents, have any chance whatsoever of transforming our economy here in South Australia.

Another one of the failed programs that is being administered by this incompetent government is of course the investment attraction fund, now the Economic Investment Fund. This is a particularly interesting example because this is a program that administers, or has administered, $15 million worth of grants, and prima facie this seems like a good idea. We should be doing every single, solitary thing we possibly can, as a parliament and as a state, to attract investment dollars into our jurisdiction. What has been the cost to this government of administering this $15 million worth of grants? I will tell you: $13.8 million was spent to administer $15 million—

This is a certain type of incompetence, that a government, propped up by Independents in this state, would spend $13.8 million to administer a grant program of only $15 million. If you need any further proof of just how incompetent this government is, take a look at the outcomes, not necessarily the inputs, but take a look at the outputs—economic growth is stagnant, growing at less than half the national average, nowhere near the fast growth states, and we have unemployment that is topping the nation.

I would like to throw in one more statistic here, because it is very important for the future of our state, and that is the net interstate migration out of this state. Last year 4,967 people from South Australia gave up hope. That is the net figure, not the gross figure—4,967. What was it in Tasmania? I will tell you what it was in Tasmania: 79. People are wanting to remain in Tasmania, which has a solid economy, lower unemployment than in South Australia and a good Liberal reformist agenda being implemented by the Hon. Will Hodgman, Premier of Tasmania. But they are leaving South Australia in droves because they can see the level of incompetence that is being presided over by this government.

One of the great boasts by the Treasurer when he brought down his budget almost three weeks ago was that the government had finally, finally, finally moved back into surplus. Whilst those of us on this side of the house strongly support the concept of presenting balanced budgets each and every year, we needed to just check the Treasurer's figures, not that we did not trust him, but we just thought it would be prudent to check whether we had actually posted a surplus.

It turns out that we have posted a technical surplus, but we remain with a structural deficit. I do not think anyone is really amazed that there might have been something a little bit dodgy about the figures. When we take a look at it, it is quite clear to us that there was a major payment from the Motor Accident Commission of $403.5 million back in June, back into the government coffers last financial year, which allowed the Treasurer to post a very, very slender $258 million surplus. Of course, without that transfer we would have remained in a massive deficit in South Australia, a deficit well in excess of $100 million.

The Mid-Year Budget Review, of course, projected a much larger surplus for last financial year—that was not realised. You have to ask yourself: why was it not realised? It was written down by more than $100 million in a six-month period. I will tell you the reason why and I will tell you the reason why we always fail in this state to realise the budget: it is because there is no fiscal discipline within this Labor administration. If you need any proof of that, just go through, department by department, see what was projected in their fantasy budget lines each year and see what was actually delivered at the end of the year. I would just like to put on the record some of these areas, which should really be of major concern to the people of South Australia.

Let us start with the Department of Planning, Transport and Infrastructure, presided over by the member for Lee. There was a $38 million blowout—a $38 million blowout—in the budget for this department. These are large sums of money. Then there is the Department for Communities and Social Inclusion: there was a blowout last financial year of $49 million. This is the same dollar value as the entire job stimulus program put forward by the government for this current financial year: it was the size of the blowout in just one department last year.

Then, of course, we have the Department for Education and Child Development, an $83 million blowout. You would not mind if we had the best education system in the country, the best NAPLAN results in the country, where we had moved our year 7s to secondary school like every other single state in the nation, but, no, our education standards are not being realised, we are not the top state, and we have these massive blowouts year in, year out—$83 million last year.

Let us take a look at the big daddy of them all, the Department for Health and Ageing: a $274 million budget blowout in that single department alone. I asked a question in this parliament of the Minister for Health last year, and I said, 'How are you tracking against your budget'? 'No problems,' he said, 'absolutely no problems at all'. So, this begs the question: what happened in the last six months? Did we have a $274 million blowout in just a six-month period? Usually, this minister, who loves to handball blame to somebody else—he is always ducking and diving any sort of responsibility himself—blames the flu season, but of course we have not had a flu season in the last six months. So, that $274 million blowout is a blowout that sits fairly and squarely at his feet, and he needs to take responsibility.

As I said, we were very fortunate to have these unbudgeted windfall gains from the Motor Accident Commission. We never even contemplated these sort of transfers three, four, or five years ago. We first heard about the government's plan to close the Motor Accident Commission insurance division back in the 2014-15 budget. We have had some very major transfers since that period of time: $853 million in the 2014-15 year; $448 million last financial year. This year the budget bottom line is being propped up by a massive transfer of $620 million in a single year.

Our major concern on this side of the house, of course, is for the people who pay their CTP insurance. When the government first raised the issue of selling the Motor Accident Commission, or privatising the Motor Accident Commission as the Treasurer refers to it as, we asked the question: what will this do for ordinary South Australians' CTP charges, the compulsory third-party insurance premium?

When other jurisdictions privatised these services, guess what happened? The insurance premiums went up, but we were assured by this Treasurer, when we raised these valid concerns, that this would not happen in South Australia. Why will it not happen in South Australia? Why will it happen in every other jurisdiction but not in South Australia? He says, 'Because we are going to put regulations in place which will cap any increase in the CTP levy.'

He then went on to say that we are not going to cap this indefinitely, we are just going to cap it until the next election. We are just going to cap it for a three-year period, and we are going to cap it at CPI. Here is the real deception on the people of South Australia, because we now have a locked‑in increase for the next three years, and that increase is at 2.9 per cent. I thought: what is the forecast CPI increase for this financial year? I was astounded that it was going to be 2.9 per cent. This would be a very large increase on what it was last year or the year before.

As it turns out, the CPI increase is 1.75 per cent—another broken promise from the Treasurer, from those opposite, who said that there would be no increase in the CTP charges on the people of South Australia above CPI. At the very first opportunity for the Treasurer to demonstrate that he is a man of his word, and that is exactly what he is going to do, he failed. He failed the people of South Australia with a massive increase over and above inflation, the CPI figure for South Australia.

I make the point that this is not a business which has been sold off. The Treasurer often talks about this business as being privatised. What has essentially happened is we have ceased to operate. There was an overaccumulation in terms of the accumulated CTP charges paid for by the motorists of South Australia, and they have ultimately been transferred into government coffers. They have propped up the fantasy surplus that was posted last year, and will do exactly the same for the foreseeable years to come. Ultimately, road users in South Australia will be paying for this windfall gain that the government has had in the last couple of years.

We believe that this budget has not delivered for the people of South Australia, it has not delivered in terms of economic growth, it has not delivered in terms of jobs, it has not delivered the promised surplus and it has not delivered for young people deciding where they are going to be living in South Australia. We have flogged off an asset, or closed an asset, and we are going to be paying more with our CTP insurance.

The final thing I will address in my few minutes in the parliament today is one of the issues that I think will become a very large issue for the people of South Australia going forward, that is, electricity prices. What we have had for a long period of time are warning bells, warning bells that have been ringing. They must have been ringing in the ears of the Premier and the Treasurer, and they have been absolutely and unequivocally ignored. In fact, we have seen five or six different positions by this Treasurer with regard to electricity.

We have been raising this issue diligently in this parliament for a very long period of time, and we get this sort of undergraduate-type debating response: the Liberals privatised ETSA. Well, guess what? The lowest electricity price in the nation comes from Victoria, and they have privatised their infrastructure in their state. Then we get the argument that they are all climate change deniers on that side of the house. This is a debate worthy of a proper investigation, but we have had absolutely nothing from those opposite.

What are the consequences of this? We are now hearing that the contract prices that people are now signing up to are often 20 or 30 or 40 or sometimes 50 per cent higher than in other jurisdictions around Australia. We have heard somewhere the prices paid by South Australians are double that of Victoria. This is putting us at a competitive disadvantage from those people with whom we need to compete. Again, what is the government's response? In November last year, to their credit the government said, 'Let's call a crisis meeting.' Admittedly, this could have occurred two or three years previously, but they finally got around to calling a crisis meeting with users and consumers and generators in the room last November.

What were the consequences? This was a meeting that was attended by the Premier of South Australia. They said, 'We are going to come back with a plan as quickly as we possibly can.' Well, here we are in July, and there is no plan. This is what is missing from this state budget—a focus on addressing a problem that is only going to get larger, a problem that they have had a warning on for many years, a warning that has been completely and utterly ignored.

So, what is in the budget with regard to electricity policy in this state? I think you would all be as surprised as I am to learn that there is actually a lot of money spent in South Australia on policy and programs when it comes to electricity. In fact, the energy policy and program sub-program has a budget this year of $28.6 million which begs the question: what sort of policy advice are these people actually providing the government? Can we see some evidence of the policy which has landed us with the electricity price crisis that is currently enveloping businesses and households in this state?

We are talking about $28.6 million, and I note that over the last years they have been cutting back this expenditure, just as we are heading into a crisis and the government says, 'Let's cut the advice that has been provided to the government.' So, there are two questions for the government: what advice have you been given, and why are you cutting this back at a time when there is such a need for some proper robust energy policy development in South Australia?

We see a miserly $500,000 mentioned in this budget going towards a study of a new interconnector for South Australia—$500,000 in the budget to address the single biggest issue confronting our competitiveness as a state. This is a situation that has been presided over by Labor for 14 years in South Australia. So, $500,000 will not deliver an interconnector and, in fact, when we asked when this will be done, it is going to be done in the next 12 months. There is no great alacrity on this issue, they are not pursuing it with great vigour and courage. They are saying, 'We are going to commission a study.'

They commissioned a larger study to update Cleland Wildlife Park's koala reserve yesterday. They are basically putting the koalas and the future jobs of South Australia on exactly the same level in this budget which almost beggars belief. Having said that, I went up to Cleland the weekend before last, and it is a fantastic facility. I am not sure whose electorate it is in. (Ms Chapman: Mine).

The deputy leader's, so she looks after it as a great custodian, and she is up there on a regular basis. But I make the point that there is no focus on the single biggest issue—$500,000 for a study, the study will be delivered in a year's time, they are as casual as can be. How much is the interconnector going to cost? We are told it could be anywhere from $400 million, $600 million up to $800 million, and it could be delivered in four to six years' time. South Australia will be gone. Business and households will have given up if we have these massive increases in electricity which are now being projected by the AER, the ASX energy futures wholesale price index, by Deloitte Access Economics. All of these warning bells have been sounding for a long period of time.

What should the government be doing in terms of electricity? They need to reconvene their crisis meeting. They need to be doing what we have been saying for a long period of time and that is establish a permanent productivity commission, the first state-based productivity commission, to be doing the important work of predicting what is going to happen and taking corrective action, making recommendations to the government independently. They need to be focused a lot more on demand management, lowering the total cost of electricity, the total demand for electricity in this state.

At the last election, the Liberal Party took a policy to the election which said that we wanted to look at demand management with the introduction of voluntary smart meters and differential tariffs so that we can lower the total cost for electricity consumers in this state. Has the government made any movement on this? No, none whatsoever. We want to see a situation in which any future increase in wind capacity in South Australia is providing the planning application with a market impact assessment. Before we take on any more, let's make sure we are not exacerbating the situation. The government has rejected this out of hand.

We say, sure, do the study into greater interconnection, but why was this not done five years ago? We very strongly recommend to the government that they need to be doing everything they possibly can to increase the storage capacity for these renewables in South Australia. It is a ridiculous situation that we have this abundance of renewable energy in South Australia but it cannot be used when consumers and businesses actually need it, so I think it is bleedingly obvious that we need to put more money into investigating ways that we can use this renewable energy when we actually need it.

We are also hearing continually that there are rumours that submissions have been put to the government to put an incentive back in place for base load power in South Australia. I think it is now time for the government to come clean with this. Do we need to put an incentive back in place to bring back base load for this transition period, either until we get am connector or until storage capability rises to an acceptable level?

I will just say, on behalf of the Liberal Party, that we would be putting the people of South Australia first. We would not take one single solitary thing off the table. We do need to be addressing the issue of electricity prices in South Australia. There is no point continuing to do what Labor has done for 14 years, that is, to have this blind obsession with increasing renewables in South Australia with reckless abandon, with no eye to what it is going to do for ordinary South Australians and for job creation going forward.

I reiterate that the Liberal Party would be looking at every single option. That is exactly what this government should be doing. It is a disappointing budget. It is a disappointing budget because it fails to address the major issues confronting the people of South Australia: jobs, economic growth and, of course, increasing electricity prices.