Business SA calls for road upgrades, payroll tax tweaks in State Budget wishlist

A key stretch of road between Port Wakefield and Port Augusta should be duplicated and payroll tax tweaked to attract new companies to SA, the state’s peak business lobby says.

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A key stretch of road between Port Wakefield and Port Augusta should be duplicated and payroll tax tweaked to attract new companies to South Australia, the state’s peak business lobby has said in its State Budget wish list.

And council amalgamations should be firmly back on the agenda, with Business SA saying the small size of Adelaide metropolitan councils is “significantly out of step” with other states, creating a large cost burden on ratepayers.

Business SA will today release its pre-Budget submission, laying out 17 recommendations to boost the economy.

Foremost among those is reducing the payroll tax rate from 4.95 per cent to 4.5 per cent by mid-2023, “making it the most competitive in Australia”, excluding a regional Victorian rate.

Business SA wants this reduced rate available only to bigger firms which either move to, or retain their headquarters in SA.

“This proposal would not only attract new companies to headquarter in South Australia with a lower payroll tax rate than other state and territories, but ensure existing companies which retain their headquarters here are advantaged over those which shift their headquarters either interstate or overseas,’’ the submission says.

A road train heads down the Augusta highway in South Australia. Picture: Bernard Humphreys

This change would affect businesses with payrolls of more than $1.7 million, with those below that threshold already the beneficiaries of payroll tax reform under which they pay no payroll tax up to a payroll of $1.5 million and a variable rate between $1.5 million and $1.7 million.

Business SA would also like to see the reintroduction of payroll tax exemptions for apprentices and trainees, and a payroll tax incentive for small to medium enterprises which employ PhD graduates in science, technology, engineering and maths (STEM) fields, giving them a 200 per cent payroll tax exemption.

On the infrastructure front, Business SA says with the Upper Spencer Gulf benefiting from proposed significant investments by GFG Alliance at Whyalla, in the steelworks and renewable energy, examining an upgrade of the 200km stretch of the Augusta Highway between Port Wakefield and Port Augusta should be considered.

“Business SA encourages investigation of the Augusta Highway duplication as a key regional economic development piece which would provide benefits across the entire economy, and importantly deliver much improved road safety outcomes,’’ it says.

“The mining sector’s steady resurgence in South Australia has also been centred around Port Augusta, including the gradual completion of Oz Mineral’s Carrapateena copper mine. Port Pirie has also experienced an economic resurgence in recent years, assisted through investment related to Nyrstar and more broadly through central business district upgrades and their new $24m sports precinct.’’

The RAA and the Civil Contractors’ federation have previously thrown their weight behind the duplication, while Business SA is proposing initially that a business case be prepared.

The RAA has previously pledged to make the duplication of a 200km stretch from Port Wakefield to Port Augusta a federal election issue, and the stretch of road has previously been called a “death corridor” by the Civil Contractors Federation of SA, which estimated it would cost $1.2 billion to duplicate in 2016.

“While we recognise the project may not be immediately viable, no differently to projects including GlobeLink, the State Government needs to continue to think long-term and consider which fundamentals future economic opportunities are likely to rest upon,’’ the Business SA submission says.

“There is no doubt dual-lane access to South Australia’s most northern city will increasingly make sense, and analogous to how stages are being gradually completed to provide a continuous North-South Corridor through Adelaide, the State Government could equally consider staged approaches to regional infrastructure needs.’’

Business SA’s executive director of industry and government engagement, Anthony Penney, said while council amalgamations weren’t strictly a Budget issue, they should be considered in light of the cost burden our over-serviced third tier of government imposes upon ratepayers.

“South Australia has 68 local councils which serve an average of 24,790 people each. This is significantly out of step with local council representation in other states,’’ the submission states.

“Councils in Queensland, New South Wales and Victoria serve an average of 55,100 people each.’’

Mr Penney pointed out that our smallest council — Walkerville — had fewer than 8000 people while Onkaparinga had more than 170,000.

“South Australian councils impose the highest rates per capita, and they have grown faster than the national average,’’ the submission says.

“In 2013-14 South Australian council rates per capita were $774.16, compared to the Australian average of $627.4. Modelling by ACIL Allen, commissioned by the Property Council of Australia, considered a reduction of 19 metropolitan councils to nine and found $34.8m in savings could be achieved.’’

Business SA also suggests that the 12-month period during which public servants with no defined role can “languish in redeployment pools” before being made redundant should be curtailed, with other states having a maximum of six months and Victoria and New South Wales just three months.

In order to help businesses with energy costs, Business SA has suggested the government now tackle the gas side of the equation, and put in a place a “gas options program” to help mitigate against high prices.

The State Budget is scheduled to be handed down in June.

Business SA key recommendations

Skills & Training

1. Review the system of registration for employers to employ an apprentice or trainee in South Australia to reduce delays, particularly in rural areas.

2. Commence the long-delayed review of the Training and Skills Development Act 2008 to identify areas for improvement.

3. Increase transition funding to the Human Services sector, to assist South Australian businesses dealing with structural disability sector changes and glaring needs in the aged care and community service sectors.

Energy

4. Implement a Gas Options Program to ensure appropriate assistance is available to businesses to mitigate against ongoing high prices.

Population & Migration

5. Following the recent decision for regional public schools, abolish the requirement for temporary working visa holders to pay additional student contribution fees in South Australia’s metropolitan public schools.

Infrastructure

6. Fund a business case to investigate duplicating the Augusta Highway from Port Wakefield to Port Augusta.

7. Develop a broader network of cycling paths, particularly in areas such as the city loop, Adelaide Hills, Barossa Valley and McLaren Vale to promote South Australia as Australia’s premier cycling tourism destination.

Taxation

8. In the process of reducing the payroll tax rate to 4.5 per cent by 1 July 2023, ensure the reduced rate is only

available to companies which either move to, or retain, their headquarters in South Australia.

9. Introduce a payroll tax incentive for Science, Technology, Engineering & Maths (STEM) PhD graduates to increase collaboration between universities and business, with an exemption equivalent to 200 per cent of wages.

10. Re-introduce the payroll tax exemption for wages paid to apprentices and trainees.

Public Sector

11. Consider all options to rationalise Local Government in metropolitan Adelaide through council amalgamations, increasing efficiency for stakeholders and ratepayers.

12. Proceed with a review of the Local Government Act 1999 (SA) and associated regulations to ensure consistency across municipal boundaries, responsible management of council employee wages and to ensure any alleged code of conduct breaches by elected officials can be effectively managed.

13. Commit to a meaningful redeployment time frame for excess public sector workers.

14. Commit to funding market engagement events for SMEs to meet with Government procurement specialists.

Work, Health & Safety

15. Increase funding for SafeWork SA’s educational functions with consideration of high risk and regional

employers.

Trade

16. Continue the focus on State Government-led trade missions, including an advanced forward plan, particularly to enable opportunities for small and medium-sized businesses to access export sales in more challenging markets.

17. Continue funding support for South Australia’s flagship Export Ready Program, delivered by Business SA, which assists small to medium size businesses to adequately position themselves for international success.