New taxes on banks and foreign investors, a focus on jobs and a cash splash on the suburbs are the headline measures in the South Australian Government’s pre-election budget.
Described by Premier Jay Weatherill as a “traditional Labor budget” designed to stimulate employment ahead of Holden’s closure in 119 days’ time, its centrepiece includes a $200 million Future Jobs Fund to support growth industries.
Some $50 million in new money will be spent towards industry-specific grants and $70 million in low-interest loans to support job creation in focused areas.
The announcement does, however, include an existing fund of $60 million for the Industry Attraction South Australia program — due to run out next year — and $14.5 million for the Events and Convention bids fund, leaving just $120 million in new money.
Treasurer Tom Koutsantonis said businesses would get this money “very, very quickly”.
“In 119 days when General Motors Holden closes its doors [at Elizabeth] and we lose that anchor tenant of our automotive industry, we need to rest of the economy to step up.”
The Treasurer has followed the Commonwealth’s lead and gone after the big banks, introducing a major bank levy from July 1 that is expected to raise $370 million over four years.
The levy will apply to bank bonds and deposits over $250,000 but exclude mortgages and ordinary household deposits.
At 0.015 per cent, it represents SA’s estimated share of bank liabilities subject to the Commonwealth’s quarterly levy.
Mr Koutsantonis was unapologetic in targeting the banks, claiming they had been serving the interests of their shareholders at the unfair expense of customers for years.
“In the last year alone, the five banks have collectively made profits of about $30 billion after tax,” Mr Koutsantonis said.
“If they start charging this to superannuants, to their shareholders and their deposit holders in any form of levy, they’ll lose business.”
Foreign property investors targeted
Foreign property buyers have also been targeted with a 4 per cent conveyance duty surcharge on residential properties from January 1, 2018, reflecting similar levies interstate.
“If we don’t charge the surcharge but they’re charging it in every other jurisdiction but here what you’ll see is that foreign investment flood into our residential properties,” Mr Koutsantonis said.
“I don’t want my daughters to move further and further away from me where we’ve raised our family because they can’t afford it because of foreign investment pricing them out of the market.”
Stamp duty concessions of $15,500 for off-the-plan apartments which were due to expire at the end of this financial year will be extended for a further 12 months.
It will be in addition to a new $10,000 pre-construction grant for contracts signed over the next three months for off-the-plan apartments in buildings yet to be built.
A permanent payroll tax reduction to 2.5 per cent will be introduced, provided legislation is successful, and will affect businesses with payrolls between $1 million and $1.5 million.
Geared up for a funding fight
The Government has positioned itself for a fight with the Federal Government on its two major infrastructure spends — the Gawler passenger train line electrification, and the “missing link” in the North-South Corridor from Pym Street, Croydon Park, to Regency Road.
The state budget has allocated $242.5 million to Stage Two of the Gawler electrification, but is seeking a 50/50 commitment to the $462.5 million project from the Federal Government in order for the project to go ahead.
It has also allocated 20 per cent of $415 million for the “relatively small” section of the North-South Corridor, but requires an 80 per cent Commonwealth commitment to funding to continue.
“If the Turnbull Government is genuinely committed to delivering a non-stop North-South Corridor by 2023, we need it to commit its share of funding for these projects so we can get on with delivering them.”
In a new announcement, two new schools will be built by 2022 — one at Munno Para in Adelaide’s north and the other in the Aldinga/Sellicks Beach region in the south.
The facilities will cater for 1,400 students from reception to Year 12, 100 special school students and have a 55-place childcare centre.
The schools will be built under a public-private partnership model — used by the Government previously to construct so-called “super schools” across Adelaide.
Another new announcement includes un-costed plans to upgrade the Springbank, Daws and Goodwood road intersection.
Some $3.5 million has been allocated to upgrade the Blackwood roundabout in the Adelaide foothills. The community has been calling for plans to ease congestion for some time, with many people calling for a new arterial route to service Blackwood Park.
Mr Koutsantonis said such requests could be raised in a new $40 million Fund My Neighbourhood program to be launched in July.
It is designed to give communities a chance to nominate and vote on “neighbourhood improvement projects”.
No new trams but increased train services
The Government also committed $22 million over the next four years to increase evening, weekend and major event train services on all lines.
This includes Gawler, Outer Harbor, Seaford, Tonsley and Belair lines running to a 30-minute frequency instead of 60-minutes during weeknights.
It has also committed $15 million to build multi-level park-and-ride facilities at Tea Tree Plaza and Klemzig in the city’s north.
The budget has also laid groundwork towards a cleaner car future, by allocating $8.2 million to the construction of a hydrogen production facility, refuelling station and a trial for six hydrogen-fuelled buses.
It also allocates $200,000 for 10 parking spaces with electric vehicle charging facilities.
With other previously announced big-ticket items such as the $550 million energy plan, and $1.1 billion in health infrastructure spending, including a new $528 million Women’s Hospital in the CBD, forecast surpluses have been slashed across the forward estimates.
Mr Koutsantonis said the Government had chosen to spend money to create jobs in the lead-up to Holden’s closure.
A surplus of $72 million is now forecast next financial year — down from $382 million promised at last year’s mid-year budget update.