Government Whip in the Legislative Council

Liberal Member in the Parliament of South Australia




Supply Bill 2015

Thursday 4 June, 2015

I rise today to speak to the Supply Bill 2015. As is the convention, the opposition will be supporting this bill; however, I think it is important for us on this side to ensure that all appropriations are being spent wisely and in accordance with the measures agreed to by the parliament. This appropriation is for $3.29 billion from the Consolidated Account, a figure which seems high enough in itself, and at this point every South Australian capable of doing so should be thinking: what is this being spent on? Are we getting good bang for our buck? Government expenditure, as a percentage of GSP, is currently 17.2 per cent. With that figure at such a disgracefully high level, how can the South Australian taxpayer be happy with this situation? How can they have confidence in this government? They are clearly being conned by the Premier, by the Treasurer, and ultimately by this Labor government. The rise in government expenditure has not coincided with a dramatic rise in the size of the public sector. Natural rises, along with population growth, CPI and the like, are to be expected, but ultimately the growth in net public debt to $13 billion is a result of budget blowouts as well as infrastructure spending and cannot be explained simply by these natural rises in cost. To suggest, as the Leader of the Government often does in this place, that the debt is due to the global financial crisis shows a gross misunderstanding of the state's finances and the economy. Questions on the nature of government spending go to the heart of what South Australians want from their government, and I implore all South Australians to pay more attention to what they need, rather than what they want. It is something of a philosophical difference between the opposition and this government that we would prefer people to keep the money they have earnt, rather than take it away from them, arrogantly suppose what they actually want, and return it to them in the form of subpar and inefficient services. Many services both sides consider essential include health, education, law enforcement, and emergency services, just to name a new, but the government has an obligation to deliver these services in the most efficient and best way possible, as equally as possible, to all South Australians. This may mean more spending in regional or lower socioeconomic areas of the state, and that should be expected and taken as a given. If efficiencies are sought and adhered to then the increase to the public sector and therefore government operating expenditure would be modest at best. These increases cannot be justified by capital expenditure on infrastructure projects over the past 13 years, some necessary, others not so, and some having white elephant status. The desalination plant comes to mind. This means that, if in a rare case unbudgeted expenditure is required, it can easily be absorbed. However, we know that unbudgeted expenditure has not been rare in the life of this government. In fact, the figure is now up to $3.9 billion in a total net public debt of $10.84 billion. If you take this figure and the $1.89 billion cost of the desalination plant, which sits there collecting dust and which also has an operating cost of $130 million per year, total debt is halved, not to mention the future debt saved on interest. The interest paid on this debt alone is over $700,000 per day, totalling $260 million per year. The increasing interest and the borrowing to service it is why debt is predicted to rise to $13.2 billion by 2016-17. Let's not forget that these figures are calculated with historically low interest rates. Heaven help us when they inevitably rise. Now, the Treasurer assures us that this is a peak figure; however, given many of the other figures we have been promised over the life of this government, how can this be trusted? Given that Labor is so quick to spend for its own political gain, how can the South Australian taxpayer be assured there will not be another spike in spending, leading to even more debt and deficit? My contribution at this point has largely been on the government's budgetary position, something that may seem relevant only to politicians but not to the average punter. This is not true. Every time the government blows its budget or spends on infrastructure it has to find the money from somewhere, either directly by raising the capital itself or by borrowing; it is no different from the private citizen, except that the raising of capital by government is not by earning and saving but by taxing its citizenry. State government revenue is raised through payroll tax, land tax, stamp duty and various other fines and levies on the individual. In addition to this, the government is at the mercy of the commonwealth and its GST handout. What this means is that the government of the day is reliant heavily on the strength of the economy as to whether it has the revenue to cover the everyday operating costs, the bills, and the large capital infrastructure projects. Therefore, the government has an obligation to live within its means; it can promise the world in services and shiny new infrastructure, but ultimately it will come to the taxpayer for the money—which is exactly what we have seen. We hear platitudes from the Premier and the Treasurer about payroll tax relief but we know that land taxes have increased and we see stamp duty relief only in very strict circumstances; however, we have seen exorbitant and extreme increases in the emergency services levy and in water charges, and the debt is still increasing. These increases will only get worse because the government refuses to make savings anywhere else. We have seen the Treasurer sell off the Motor Accident Commission, which is predicted by the government to produce rivers of gold, but this remains to be seen. Unlike what the previous Liberal government did following the State Bank, none of this will lead to a dramatic pay-down of debt, which is what is required. The paying down of debt frees up the funds being spent on interest, and around it goes. The lower the levels of debt, the more can be spent on operating costs, which will lead to surpluses which can then be used for infrastructure upgrades or more competitive tax rates. This would spur on the economy, driving government revenue up through greater economic participation from business and consumers. A stronger economy means more people in employment and less people reliant on government services, further reducing the financial burden on government. So it can be seen that the nitty-gritty of the budget and government expenditure actually does have a ripple effect which affects everyone within the state, and this should be realised by the Treasurer and the government. The effect of a strong economy on government revenue is something that clearly is not realised by this government, or that the government serves the people and not the other way around. The big government project from the Premier has led to a clouding of what is important. It is plain to see that South Australia is floundering economically under this government. We have the highest unemployment rate in the nation, the lowest rate of start-ups, the highest tax rates, and burdensome regulation and red tape. It is difficult to start a business here even if one would want to, and clearly people do not. On many of these economic indicators we have now fallen behind Tasmania. This has happened only in the past 18 months, which, curiously, aligns with the term of the newly elected Hodgman Liberal government. I will let honourable members draw their own conclusions, but I hope the people of South Australia are wary of that coincidence. With those few words I commend the bill to the council.

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