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Civil Contractors Federation SA

CCF SA BUDGET REPORT

STATE BUDGET – A CAMPFIRE WHEN IT SHOULD HAVE BEEN A BONFIRE!

 

  • While the government clearly recognizes the parlous state of South Australia’s economy, and makes some attempt to use the budget as a vehicle to stimulate economic growth and create jobs it falls short of the big bang necessary to light a fire under the state economy and address the escalating jobless rate. The budget does not reflect the urgency necessary to turn the state’s economic fortunes around in the near term. A much more targeted and detailed approach focussing on maximizing the state’s strengths (fishing, agriculture, mining, defence, education, wine, tourism, lifestyle) would yield better results.

 

  • The abolition of a number of taxes and the reduction in tax related red tape in some areas is commended. While the continuation of the payroll tax rebate for a further twelve months is beneficial to small business, tax relief in this area does not go far enough and it remains a tax on employment for most businesses in South Australia.

 

  • The increase in road maintenance funding (to $330m over the next four years) is welcomed but falls far short of the road maintenance backlog estimated at $1billion. With interest rates at record lows government borrowing capacity could be at an all-time high. Borrowing to invest in productive infrastructure is sound economics. Investment in South Australia’s regions particularly improving the freight corridors required much more budget attention.

 

  • Government must investigate alternative successful funding options (locally and abroad) for transport and other infrastructure, particularly those that incentivise private investment into capital projects. Further Federal government financial support for transport infrastructure in South Australia is contingent upon this.

 

  • The budget recognizes previously announced spending on transport infrastructure, the Gawler East Connector Link Road ($55m) is a welcome addition to the pipeline of projects. It is imperative that the project planning and tendering phase is expedited to enable early construction. Aggressive strategies including investment designed to increase the state’s population would have been welcomed to enable the development highlighted to come to fruition.

 

  • While the budget intent is sound, it is missing strategies that would have an immediate state-wide economic stimulatory and job creation effect. For example, giving every council in South Australia $3m to spend on local projects using local people and businesses would come at a cost of $204m and deliver the spark necessary to light up the economy on a state-wide basis. Economists tell us that for every dollar spent on infrastructure the economy receives an up to ten fold return. Nearly every council in South Australia has shovel ready projects on their books waiting for financing.

 

  • Declaring some regions special economic zones with favourable tax treatment and regulatory regimes would recognize that South Australia is comprised of a series of micro-economies, and that a one size fits all approach to the state finances has more to do with the past than the future.

 

  • Further improving the budget would have been a budget provision that had the effect of unlocking the power of our growing army of older citizens – who have much to offer in expertise and experience would have been fantastic.  This includes strategies that encourage volunteerism, part time and casual work opportunities for this demographic.

 

  • Importantly, government has recognized the crucial relationship it has with business, and to that end it would have been beneficial to have indicated it was going to establish a Productivity Commission of Audit to examine every facet of the relationship between government and business and eliminate impediments to productivity.

 

Kind Regards

Phil Sutherland

Chief Executive Officer

 

 


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Civil Contractors Federation (CCF SA) is an industry association that promotes, protects and represents companies and other organisations with business interest in civil (construction) contracting. The CCF SA helps its Members obtain more work, work more effectively and make more money.