Treasurer Tom Koutsantonis foreshadows heavy suburban infrastructure spending in State Budget

TREASURER Tom Koutsantonis has foreshadowed a suburban spending spree on new infrastructure in the State Budget, calling it a “no regrets” policy that will create jobs as the car industry grinds to a halt.

TREASURER Tom Koutsantonis has foreshadowed a suburban spending spree on new infrastructure in the State Budget, calling it a “no regrets” policy that will create jobs as the car industry grinds to a halt.

He has used his last three budgets to stack up surpluses in readiness for the shuttering of Holden’s Elizabeth plant in October and has told The Advertiser his purse strings will loosen as the State Government now looks to “back winners” in growing industries.

That move will be matched with new direct investment in suburban infrastructure that aims to spread the CBD’s recent revitalisation out into the mortgage belt.

“This Budget is overwhelmingly about jobs and infrastructure,” Mr Koutsantonis said.

“Even our harshest critics cannot complain about the level of infrastructure that we’ve built in the CBD. We’ve really made Adelaide, the city, sparkle. Now it’s time for the suburbs.”

He refused to detail individual projects, but said transport programs could be rolled out quickly and deliver a double benefit by creating construction jobs and boosting economic output.

Mr Koutsantonis said this Budget, to be delivered on Thursday, was the culmination of a long-term financial plan which had built up headroom to deal with the structural shock of Holden.

The sale of Motor Accident Commission assets has delivered an injection of about $2.5 billion for state coffers, and limited spending has put a cap on debt that had been rapidly expanding.

Mr Koutsantonis said it was critical the state stuck to a strategy of surpluses over the long-term, and manageable debt levels, but the times dictated that the government now take a bigger role in the economy.

Minister Tom Koutsantonis and Premier Jay Weatherill announcing an upgrade of the Queen Elizabeth Hospital on Sunday.

“We work in four-year cycles, and knew Holden was closing,” he said. “We need to step up now. “Traditionally, governments have not backed winners. Given we are losing the automotive sector, we really do need to double down on those sectors that are growing and creating jobs.

“The time is right. “It’s a pretty big infrastructure Budget, but focuses on that transition.”

Mr Koutsantonis said growth sectors included advanced manufacturing, food and defence. New infrastructure programs also offered an immediate transition for auto workers, he said.

“We can get the same sort of workers back to work,” Mr Koutsantonis said.

“It’s also a no regrets policy as you’re building your own infrastructure, not just throwing money out the window, but building things that we then own. An overall jobs strategy is going to be front and centre in the Budget, with infrastructure underpinning it.

“There is no argument that infrastructure creates jobs, it’s just what kind of infrastructure.

“Transport is always an easy one to roll out because it improves the efficiency of the economy.”

Thursday’s Budget is a key milestone in the nine-month campaign between now and a state election in March, where Labor is fighting against the odds and polls for a fifth term.

Mr Koutsantonis insisted there were green shoots for SA, despite its longstanding position as the unemployment capital of the nation. He pointed to recent improvements in state final demand, which is a measure of growth in the economy, as well as the fact SA is creating more jobs than it is losing, as evidence.

He also hinted there may be further tax reform, building on the 2015 announcement to cut business stamp duties before their total abolition in the middle of next year.

Mr Koutsantonis dismissed suggestions of a cut to land tax, saying that could harm job creation by making it easier for people to hold existing portfolios rather than sell for development.

Victoria’s Labor government last month lifted the threshold at which businesses there begin to be charged payroll tax, leaving SA with the lowest ceiling in the nation. Mr Koutsantonis said the rate of payroll tax was “the important part”, rather than the threshold. Asked if a lowering of SA’s payroll tax rate was set for a tinker this week, he said: “You’ll have to wait and see”.

Mr Koutsantonis also indicated his infrastructure plan would lay down a challenge to the Federal Government, which he has accused of neglecting SA in its Budget last month.

“We can say ‘if you can come with us, there’s a lot more we can do’,” he said.

“I think there are some things we can do together and some things we can do separately.”

Opposition treasury spokesman Rob Lucas said Labor must deal with a cost of living crisis confronting SA households, as well as lift the state off the bottom of the unemployment ladder.

“SA households and businesses are struggling under the Weatherill Labor Government’s punishing state taxes,” he said. “Labor is addicted to tax, whether it be through hikes to the ESL, the failed introduction of their car park tax, proposals for increases in the GST, and for a land tax on the family home. “With the highest unemployment in the nation, skyrocketing electricity costs, and increased water bills, South Australians simply can’t afford to be taxed any further.

“The Liberal Party is committed to no new taxes, and in stark contrast to the Weatherill Labor

Government, a Marshall Liberal Government will provide tax relief by cutting ESL bills and

returning $360 million over four years to South Australian households and businesses.”

Treasurer Tom Koutsantonis on this week’s State Budget

Strategy: “Overwhelmingly, we now need to step up and offer a vision for the people who are here who need to restructure.

“It is very heavily focused on the transition, and what are those new jobs.

“This Budget is overwhelmingly about jobs and infrastructure.”

Economy: “Despite the unemployment figure, whether it’s state final demand or (absolute) jobs growth, we are second in the nation consistently.

“The question is how do you double down when you’ve lost a whole industry. The answer is that you back the ones that are growing and back the winners.”

Holden: “We work in four-year cycles, and knew Holden was closing.

“We need to step up now.”

Spending: “It’s got to be sustainable, there’s no use spending more than you have.

“I’m not a fiscal conservative, but I’m still of the Right within the Labor Party. I believe that our debt is affordable, and that we should be investing in infrastructure.”

Infrastructure: “Now it’s time for the suburbs.

“It’s also a no regrets policy as you’re building your own infrastructure, not just throwing money out the window, but building things that we then own.

“There is no argument that infrastructure creates jobs.”

Energy: “There is going to be something new and exciting in energy as well, that we’re going to add on. “My very strong view is that the plan in its entirety will lower prices.

“The way to tackle prices is long-term, concessions are a Band-Aid.”

Tax cuts: “I’m not sure how easing the land tax burden would create jobs. It would probably do the opposite as people just hold property longer rather than developing it.

“If you want to go out and transact, I’m happy to cut your taxes. If you just want to hold and accumulate wealth, that’s a different story.

The Feds: “I think there are some things we can do together and some things we can do separately.

“We can say ‘if you can come with us, there’s a lot more me can do’