Construction sector leads solid SA jobs growth over the past year, but experts and industry warn challenging times could lie ahead

Construction has emerged as the biggest job-creating industry in SA over the past year. Find out why industry leaders fear that could come to a halt, and how your field fared.

Kimberley Gillan is leading the city’s GPO development. Picture: Mark Brake

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Construction has led a jobs boost in South Australia since the state election last year, but industry leaders warn that looming tax changes could stifle growth.

Advertiser analysis of Australian Bureau of Statistics data has found the industry added 8800 jobs in the 12 months to May. Education, science and manufacturing also made big gains, but agriculture took a hit. Premier Steven Marshall has seized on the results as evidence of a private sector-led rebound since his election.

However, experts warn of a fragile few years until shipbuilding is in full swing.

In total, SA has added 16,300 jobs since the election in March last year. It has occurred at a slower rate than in Labor’s final year in office, and the Budget forecasts modest growth until 2023.

Australian Industrial Transformation Institute director John Spoehr was concerned by a slowing rate of jobs growth, as the end of car making in Adelaide continued to take a toll.

He said flow-on effects included higher unemployment among men, and many people who had a job being denied the chance to work as many hours as they wanted.

“Medium-term prospects have certainly improved with confirmation of major shipbuilding projects and securing Whyalla’s future,” he said. “Other significant drivers will be needed.”

Prof Spoehr said it was critical that taxpayer spending on construction stayed at record high levels for the next two years, helping to ease the transition to new projects.

Treasurer Rob Lucas last month announced plans to change the way that land tax bills are calculated, a move that is set to claw back $40 million a year from investors.

Property Council SA executive director Daniel Gannon said increasing land tax was a big risk at a time when construction jobs were driving the state’s growth.

“The risk is currently two-fold because the State Government is revaluing all properties across the state and increasing land tax bills at the same time,” Mr Gannon said. “This means that big and small property owners are being slugged with increases of thousands of dollars every year. That will hurt homeowners, tenants, businesses and your retirement nest egg.”

Speaking before departing for leave at the weekend, Mr Marshall said: “We went to the election promising more jobs for South Australians and that’s what we’ve been able to deliver to date.

“There is much more to be done, but we are encouraged by the green shoots.”

Mr Marshall rejected suggestions the land tax changes would stifle jobs and investment.

“Since coming to government, we have massively reduced taxes,” he said.

“Overall, our plan is to get land taxes down.”

SA Centre for Economic Studies executive director Michael O’Neil said much of the state’s jobs performance was down to factors beyond the Government’s control, including the drought.

“(The Government) does not make it rain, and all the big construction projects were planned well in advance,” he said.

Opposition treasury spokesman Stephen Mullighan said the Government was not doing enough to assist the residential housing sector as it reeled from a series of recent company collapses.

“There’s also been penny-pinching cuts that have been unwarranted and completely counter intuitive at this time, including to Brand SA which actually helps businesses grow,” he said.

Civil Contractors Federation SA chief executive Phil Sutherland said much of the promised public infrastructure spending was too far into the future and needed to be accelerated.

“At best we are seeing a drip feed of public works coming to market,” he said.

“South Australians deserve better than this.”

Charter Hall state representative Kimberley Gillan, who is overseeing the GPO development on King William St, said SA was attracting strong interest from interstate investors looking for better returns. “It is an extremely exciting time for the commercial property sector in this state,” she said.