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SA pays in jobs for budget failures

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South Australia’s job figures have thrust it into a special place – the worst in the nation and with little or no prospect of change.

For the families of 64,500 unemployed, it makes for a dark and cold winter.

Blaming international currency trends, federal Budget cuts or statistical anomalies doesn’t wash either when the official figures show that every other state is doing better than SA.

Reflecting on June’s unemployment figures, leading economic analyst Michael O’Neil said “the medium to longer-term outlook is in our hands” while the short-term reality of the unemployment rate shows SA is in need of immediate stimulus.

O’Neil and his Adelaide University-based think tank, the SA Centre for Economic Studies, have been warning about structural deficiencies in the local economy for several years.

The State Government, meanwhile, points to the prospect of some new shops opening in Kilburn as an example of job creation.

Perhaps acting Employment Minister Susan Close should take a drive along Adelaide’s main roads and count the number of “for lease” signs on old shopfronts.

O’Neil says the road ahead is a long and difficult one.

“Basically, the economy and the labour market are treading water, flattening due to subdued business and consumer confidence, declining business investment and then ongoing adjustments from the heady days of mining investment,” he told InDaily.

“South Australia has had to rely on Commonwealth road infrastructure funding to get a glimpse of future jobs and due to the build-up of year-on-year  operating deficits and  an increase in state debt, had little room to move on further infrastructure projects (i.e. cancelled hospital investment, rail electrification). ”

In this sense, he says, South Australia is paying for its past failures to deliver State Budgets with a stronger bottom line.

“Victoria and New South Wales were in the fortunate position of budget surpluses and hence had more ‘stimulus arrows in the quiver’.”

With little money left to spend, the SA economy becomes more exposed.

“When the economy is not creating jobs and suffers further job losses such as the announced closure of Penrice Soda then obviously the unemployment rate will rise,” O’Neil said.

“South Australia will tread water for the immediate future.

“In the short term it may get a boost from any positive announcements related to defence contracts – all well and good but still dependent on Commonwealth decisions related to defence spending. ”

It’s not all gloom and doom, O’Neil maintains – a position he’s reminded government of for years.

“(We’re) a state with abundant resources, large open spaces, extensive sources of renewable energy and opportunities in manufacturing, research and development, services related to energy/renewable energy, opportunities for export growth into the ASEAN economies, China, India and others, in aquaculture, agricultural commodities, processed foods, services, medical technologies, products and services, electronics systems.

“The list is endless.

“The opportunities are endless.”

O’Neil said political policy settings need to change.

“The focus of public policy needs to shift to raising education levels and boosting skills in the SA economy, to shift from low wage, low skill, insecure employment to high value added skills, training and then productive output.

“Public policy needs to set this direction, out over 20 years and the market will respond so here the challenge is to set long term goals for new industries such as  energy efficiency, energy storage systems, research and development, food production (and processing) and exports, coupled with removal of stifling business conditions.”

BusinessSA chief Nigel McBride has a similar view.

“The very clear message from these unemployment figures is that much more must be done to create an environment where it is easier for business to do business, so that businesses can thrive and grow and with it create sustainable jobs for us and our young people,” he said.

For its part, the State Government’s response was focused on shops.

“We’re seeing more proof that businesses view our state as a great place to do business and invest,” Acting Employment Minister Susan Close said in response to the stark numbers.

“The Churchill Centre at Kilburn has opened, boasting the first Coles Superstore along with more than 50 specialty stores which will employ around 1000 people.

“In addition, Costco is planning to open a store adjacent to the Churchill Centre, as well as creating around 300 retail jobs along with 30 corporate positions.

“And Leveda disability services have announced they expect to expand their workforce by around 230 staff over the next two years.

“These are all positive signs that demonstrate confidence in our State.”

The numbers gave Opposition employment spokesman David Pisoni another chance to slam the “job creation” mantra of the Weatherill Government.

“For South Australia to have an unemployment rate 1.4 percentage points  above the national average, above even Tasmania’s unemployment rate, after the Weatherill Labor Government’s debt binge is alarming in the extreme,” Pisoni said.

“South Australia now has the highest number of unemployed since 1998 with 14,000 jobs lost since the 2013-14 budget and more than 64,000 South Australians now unemployed.

“Premier Weatherill needs to have the courage to admit he has the wrong policies in place with unemployment increasing by 45 per cent since he became Premier.

“In fact South Australia’s jobless rate has jumped from 5.2 per cent to 7.4 per cent since Mr Weatherill became Premier.

“The Minister for Employment Gail Gago needs to detail exactly how the Weatherill Labor Government is going to create the 100,000 new jobs Labor promised to create in 2010.”

The political arguments will continue. Meanwhile, 64,500 people are out of work and they’d like some answers.

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