Premier Steven Marshall flags ‘rapid-fire projects’ to boost SA economy in second wave of stimulus ahead of State Budget
Stimulus to blunt the impact of the recession cannot wait until the November budget, the Premier says, as new figures reveal the extent of the devastating economic blow.
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Premier Steven Marshall has flagged a new second wave of fast-response economic stimulus, as the Reserve Bank urges the states to do more heavy lifting to create jobs.
Amid new figures showing the “devastating” scale of Australia’s first recession in three decades, Mr Marshall has confirmed there will be significant new announcements in November’s Budget.
However, he said it had been made clear that the State Government “can’t wait” until then, and promised a series of targeted economic stimulus measures over the coming months.
The government has already announced tailored South Australian projects to boost the economy.
These included an $88 million skills investment to get school-leavers and the unemployed into growth areas, such as defence and health, as well as a paid pandemic sick leave.
Mr Marshall was the first state leader to announce a local stimulus package in March, but has been criticised for spending less as a proportion of the economy than others.
As Federal Treasurer Josh Frydenberg described as “devastating” the economic cost of the COVID-19 crisis, Mr Marshall told The Advertiser a briefing to national Cabinet a week ago from RBA Governor Philip Lowe had clarified the need for states to take an even more aggressive line on stimulus.
Mr Marshall said that would include both traditional infrastructure building projects, as well as cash support to assist in areas such as skills training and supporting business to survive.
“We obviously have our Budget that is coming up in November, and there will be further stimulus and support put in place there,” he said. “But we’re not waiting.
“We have got to move much faster. People can expect that there will be further significant support provided to our economy in the lead-up to the State Budget.”
Following the national Cabinet briefing on the economy, both Dr Lowe and Prime Minister Scott Morrison called on the states to use their budgets to both save and create jobs. “Over time, in the recovery phase, there will need to be greater focus on direct creation of jobs through government spending and through improving the investment and hiring environment,” Dr Lowe said last month.
SA has added back a huge 20,000 jobs in the past two months as restrictions lift, but still needs to grow another 29,800 positions to return to the record of 855,700 people employed last year.
Mr Marshall said the SA Government would “continue with our very heavy infrastructure investment” but add “rapid-fire projects that are going to stimulate economic activity”.
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“They have got to be jobs that are involved in the construction phase, but also have ongoing jobs available and continuing,” he said. “States need to do a lot of the heavy lifting. Wage subsidy has been a key feature of Australia’s success in managing the economic headwinds. The vast majority of the support has come from the Federal Government. We also are doing some work at the state level.”
Mr Marshall said low interest rates meant SA could borrow confidently.
SA’s debt is already expected to rise from $16bn to more than $30 billion. “It doesn’t mean that we can just spend money without getting a return,” Mr Marshall said.
“Every time we spend a cent of South Australians’ money, we have got to make sure that happens, because ultimately all of this money does have to be paid back.”
Opposition treasury spokesman Stephen Mullighan said Mr Marshall had failed to go hard enough early enough, and could have stopped more people from losing jobs. “No one will forgive Steven Marshall and Treasurer Rob Lucas for penny-pinching their way to a recovery. How much they spend will determine how long and deep the recession is in SA,” he said.
Panel technician apprentice Joe Persico likes the challenge of the work he’s doing with technology company SAGE Automation. He hopes to build a lasting career despite the recession.
“Automation is a big thing at the moment and it’s more technical than just running wires,” he said. “I’m hoping to get into the site team and work my way up from there.”