I rise to speak on the eighth Labor budget; the budget that will define this government going into the state election in March 2010, as it argues the case for a third term. It is a budget from a tired and arrogant government which has spent eight years doing next to nothing and is now trying to promise and borrow its way into a third term.
This is a budget which, in a remarkable move, contains a promised $750 million in expenditure cuts which will be offloaded to an external razor gang whose recommendations will not be known until after the election. This budget makes none of the hard decisions it is supposed to make. The $750 million in savings, made either through tax increases or cuts to jobs in the public sector—and you can be sure there will be many—are on the way, but we will be not told what those cuts will be until after the state election.
Members of the opposition are stunned by this move, and the South Australian public should be, too. How can members opposite defend the Treasurer on this one? It is truly bizarre, and it is a decision that can only have been made in an attempt to avoid public scrutiny. As some of my Liberal colleagues have already stated, we do hope the Public Service Association is paying very close attention. We hope it is watching, because it is very clear what the Rann government is up to. It is a massive con. There is $750 million in savings, but ‘we will tell you all about it on the day after the election.’ It is quite unbelievable.
I will move on to state taxation. Small businesses, hoping to grow and employ more people, have had those hopes dashed by record levels of land tax, payroll tax and WorkCover levies. It is highly regrettable that we are recognised around the nation as being the highest-taxing state in Australia. It is official: under the Rann Labor government, South Australia is the highest‑taxing state in the country. Total state taxation revenue in 2009-10 will be $48 million higher than in 2008‑09.
Tax revenue has steadily increased by 61 per cent since this government came to office. We should be used to it by now. Labor governments, whether they be federal or state, are high‑taxing, high‑spending governments. We saw the Whitlam years, the Hawke and Keating years with high taxing and high spending, and now Rann and Foley—unbelievable!
Increases on property taxes, such as land tax, have been incredibly disappointing. We have seen an increase since the 2001-02 budget from $731 million to $1.428 billion. I have talked to business people and constituents about land tax. They are having to sell properties and their business interests here in South Australia and move interstate where the land tax regime is fair and reasonable. South Australia’s restrictive taxation regime is doing nothing to encourage small business growth in South Australia and, in fact, it is causing small businesses to move interstate.
Earlier in the year in this place I said that I recalled hearing the Treasurer speak on radio responding to a caller who complained that his land tax bill had increased from $15,000 to $58,000 in one year. The Treasurer stated:
‘Well, firstly, I’d be more than happy, if the listener has a complaint, to write to us and we will look at it. But he is saying his bill has gone from $15,000 to $58,000. Two things have occurred: it’s either a factor of property value increases and, bearing in mind in South Australia we have a shortage of industrial property and it may well be in fact that he has received a significant increase in the capital value of his land which is a benefit to both him and to his business.’
As I said at the time, I could not believe my ears when listening to the Treasurer. The Treasurer has no understanding that, as the capital value of property increases, it does nothing to affect the actual cash flow of a business or an individual or provide any extra capacity to pay these unfair land tax bills. It just demonstrates how out of touch the Rann government is.
I will now touch briefly on the current situation with WorkCover. As a member of the Statutory Authorities Review Committee, I have had several opportunities to hear directly from representatives from WorkCover. It is always a sobering experience. It is always in a forum open to both the public and the media.
WorkCover’s unfunded liability has blown out from $56 million in 2001 to $1.3 billion in 2009, and that does not include the public sector unfunded liability; if that were added, there would be an increase of almost another $500 million. It represents bad news for the South Australian taxpayer. Let us not forget that this government promised reduced WorkCover levies—another promise this government has failed to deliver on.
Looking at this budget’s fiscal position and outlook—in particular, deficits—we can see in the 2009-10 budget that there are budget deficits on all three accounting measures: the first is a net lending deficit of $1.541 billion this year, a cash deficit of $1.540 billion this year and a net operating deficit of $304 million in this budget year.
The state’s 2008-09 and 2009-10 revenue has strengthened by $130 million and $722 million respectively since the 2008-09 budget, mainly due to bailouts by the federal Labor government. The Rann Labor government has been telling the public that there are huge budget black holes; however, revenue has increased by massive amounts. The Liberal opposition maintains that the government has not really had an issue with revenue. We have had seven years of incredible revenue thanks to the GST revenue from the federal Liberal government—a measure opposed by Labor on all fronts.
However, the Treasurer continues to underestimate revenue collections every year. From 2002-03 to 2008-09, the government will have collected a massive $3.8 billion more than it expected. These revenue windfalls are masking unbudgeted increases in expenses, which have been highlighted by the Auditor-General. Part C, page 6 of the 2007-08 Auditor-General’s Report states, ‘The state has received very large amounts of unbudgeted revenues.’
It has never been about revenue problems for this government: it has an expenses problem. Anyone who knows a little bit about managing a business—and, unlike most government MPs, we on this side do know something about it—knows that managing the state’s economy employs the same principles as those used in managing a business. In business, you must control your expenses. If your expenses are blowing out, your profit is obviously affected and you will run at a loss. This government is not managing expenses efficiently, and we have run into a loss and deficit position for this year and the next.
The government also fails to deliver on its promises. It makes policy on the run. We were promised a Mount Bold Reservoir expansion but, in the next budget, it had vanished. Where is the money? It is nowhere to be seen. Members will recall the Upper Spencer Gulf desalination plant promised in the 2007-08 budget; it is no longer going ahead. We had tramlines to West Lakes, Port Adelaide and Semaphore promised last year; the money for that project is nowhere to be seen in this year’s budget. We were promised an underpass along South Road between Port Road and Grange Road. Where is the money for that in this latest state budget?
Last year, the Treasurer and Premier Rann were down at AAMI Stadium pledging to give $100 million to the South Australian National Football League. It was delayed in the Mid-Year Budget Review, and now it has gone completely. South Australians cannot trust this government to deliver on any of the promises in this budget. It has broken promises in the past and it will break them again. This is a budget full of promises just waiting to be broken.
A state Liberal government would have delivered a budget that provided a long-term vision instead of merely looking to the next state election. The state Liberals have demonstrated vision by releasing policies for the future, policies on water and a master plan for Adelaide that sets out a vision for providing a City West precinct and includes plans to be part of a World Cup soccer bid using first-class sports and entertainment facilities. It is a vision that enhances public transport. It is a vision that brings alive and preserves the Parklands by staking out a greater role for state government in planning decisions in the city and in the Parklands, just as we tried to do with the Victoria Park precinct.
Finally, I want to touch on sport, recreation and racing. Predictably, sport, recreation and racing were some of the lower profile areas that got a raw deal in this budget. As Sport SA and other stakeholders continue to tell the opposition, the Rann government is doing little to tackle the lack of quality sports and recreational facilities In South Australia. One positive aspect of this budget details that $1.7 million will be provided in 2010-11 for an upgrade of the Santos Stadium running track—something we have long been calling for. Again, I am concerned that this is one of those promises that will be lost in the ether of hot air. An upgrade of the Eagle Mountain Bike Park has also been flagged.
There was an entire section dedicated to sport, recreation and racing in the Treasurer’s budget speech last year, but this year there is not a word. For me, that was the first clue that sport, recreation and racing was going to be neglected in this budget. As far as racing is concerned, the industry is already struggling. It is disappointing to find that $2.2 million in government funding pledged over the next four years for the Summer Racing Carnival has now been scrapped. For an industry that is already on its knees, this is a real kick in the stomach. With those comments, I support the bill.