The State Government will spend $15 million chasing new international investment as it seeks long-term answers to a “structural deficit” – if not an actual one – in today’s Budget.
Premier Jay Weatherill told InDaily Liberal defector Martin Hamilton-Smith had been appointed to oversee a new “Investment Attraction Agency”, with funds and staff seconded from other departments and a $15 million ‘fighting fund’ to scour the globe for partnership opportunities.
He said the agency would network interstate and overseas, liaising with potential investors “in the same way we’ve attracted companies like OZ Minerals and Hewlett Packard”.
“Obviously it takes a lot of resources and sustained effort to attract these (companies),” he said.
“It’s about understanding the organisation, what we can offer them and what they need … the critical thing is to sustain a relationship so they can grow here.”
Check back in to InDaily from 3pm for our full Budget coverage.
Interestingly, the Weatherill Government recently enticed OZ Minerals to set up shop in SA on the back of a $10 million dollar taxpayer-funded lure — two-thirds of the new agency’s entire war-chest.
Hamilton-Smith, the Investment and Trade Minister, said the agency would focus on “existing capabilities and strategic strengths” such as agribusiness, resources, health services and advanced manufacturing.
He also suggested the model would drive public sector efficiencies, saying the agency would “champion structural and cultural change across the public service to deliver responsive and dynamic services”.
But there appears to be no tangible benchmark by which to measure the success or otherwise of the venture, which Weatherill says is modelled on successful blueprints in Singapore and Ireland.
The only measure of success, says Weatherill, is jobs.
“It’s got a really clear-eyed focus on jobs, it’s not investment for the sake of it,” he said.
“It’s got to create employment; if it doesn’t create jobs it won’t be successful.”
And jobs – rather than a surplus – is what Treasurer Tom Koutsantonis’s pre-budget spin focussed on yesterday.
Last year’s budget, his first as Treasurer, forecast a return to surplus in 2015-16, anticipating the books to be $406 million in the black. By the Mid-year Budget Review, the forecast surplus had been whittled down to $265 million.
But Opposition Leader Steven Marshall argues even if the surplus does materialise today, “it will only be created by extraordinary one-off transfers, asset sales or raiding the Motor Accident Commission”.
The economy remains, he argues, in “structural deficit”.
“Any potential investors won’t be convinced until they see the budget returned to surplus in a sustainable way,” he said.
“I don’t think there’s anything strong about transferring the money from one balance sheet to another … it doesn’t improve anything whatsoever.”
Marshall anticipates this year’s budget will see unbudgeted expenditure over the life of the Labor Government top $4 billion.
“It really just shows the problem – every household in SA has to live within their budget, except Tom Koutsantonis and Jay Weatherill, who blow the budget each year,” he said.
He said a surplus, or marginal deficit, might buoy flagging confidence – and potentially the Government’s approval ratings – but warns: “When the tide goes out you see who’s swimming naked, and that’s the situation for SA.”
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