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Whyalla "doesn't need" federal cash, insists Morrison

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Local business analysts have described Scott Morrison’s maiden showpiece as Treasurer as an “election manifesto dressed up as a Budget”, as its author today rejected criticisms that there was nothing in the document for the struggling steel hub of Whyalla.

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Morrison argued there was no benefit in “splashing” cash at Arrium, which is the hands of administrators amid ongoing uncertainty about the company’s viability, despite criticisms by the State Government and others that Whyalla was crying out for a cash injection.

The State Government this week seconded $10 million for no-interest loans to Arrium suppliers caught up in the crisis.

But Morrison insists cash handouts for flailing businesses are counter-productive.

“What people in Whyalla and places like that don’t need is a Treasurer to get up at a Budget and splash a whole lot of money around and put up taxes to try and pay for it,” Morrison told FIVEaa, arguing putting $50 million towards a 1280km section of rail line between Tarcoola and West Kalgoorlie was the most practical thing his Government could have done for Arrium.

“That’s how this business is going to survive, clients with contracts,” he said.

SA Treasurer Tom Koutsantonis disagreed, calling the failure to address Arrium’s woes was a “glaring omission”.

“What SA needs most is a commitment from the Commonwealth before the federal election to co-invest with us in the Whyalla steelworks, to increase Arrium’s capacity to cut costs, win new work and continue operating over the long term,” he said.

Koutsantonis broadly responded to the budget with a metaphorical shrug of the shoulders, describing as “underwhelming” a lack of investment in mooted infrastructure projects such as Adelaide’s tram network, the electrification of the Gawler rail line, road projects in the far north and a major medical research facility.

“This budget offered no new infrastructure announcements or partnerships for SA and no reversal of cuts made to health and education,” he said in a statement.

“A partnership with the Commonwealth to build SAHMRI 2, extend the tram network and upgrade regional airports would have helped drive jobs and growth, but there were no commitments on those projects last night.”

The state’s Civil Contractors Federation agreed, slamming Morrison’s budget as “short sighted”, offering “no financial support to SA for infrastructure including major road projects, most of which are incomplete or stranded on the drawing boards”.

Chief executive Phil Sutherland highlighted the absence of new projects for SA, which has benefited in recent years from investments along South Rd, arguing the Commonwealth Government is “deluding itself” about the prospective jobs boon from the Future Submarines investment.

“The state and federal government are in for a rude shock if they think that the investment in submarines and surface warships is going to save the state’s economy in a hurry,” Sutherland said.

“It will be years before we see any serious employment in the naval ship build sector [and] when it comes they will be highly specialised engineering jobs. These will be jobs difficult to access without a high level of education and training.

“At best the naval ship build will deliver 4000-5000 jobs for SA [and] this includes the supply chain.”

He said immediate road funding investment was needed to provide a fiscal stimulus the state desperately needs.

“It is beyond belief that the Federal Government seriously thinks that naval shipbuilding is going to help the people from Alinta Energy, Arrium and General Motors, who are joining the ranks of the unemployed in droves as the Federal Budget was delivered,” Sutherland said.

The call for roads funding was echoed by the RAA, which also expressed disappointed in the lack of new local investment.

“It seems the eastern states have fared well, but SA is obviously not a priority for this Government,” said Penny Gale, RAA’s General Manager of Engagement and Innovation.

“We can take some comfort in the knowledge that the Government is still committed to the North-South Corridor upgrade [but] now we’ll be looking to the election to deliver major road funding commitments for SA roads, particularly the Augusta Highway and Sturt Highway.”

David Fechner, Adelaide tax director with audit and accounting firm BDO, said while Morrison’s “intention is an economic plan for jobs and growth, the rhetoric clearly points to an election manifesto that is dressed up as a Budget”.

“The Budget includes a proposal to reduce the corporate tax rate over the next 10 years, but in reality, this glide path from 30 per cent to 25 per cent is open to hijacking by political or economic expediency at any point on the descent,” he said.

But the State Opposition said SA had received “massive increases in federal funding” through the forward estimates, with Shadow Treasurer Rob Lucas arguing that “total federal payments [including GST and specific purpose payments] to SA next year will actually be $1137 million more than this year and by 2018-19 total payments will be $1756 million more than this year”.

“This means simply that the Weatherill Government will have $1152m more to spend over the next 3 years than it would have expected based on the figures outlined in the December [budget statement],” he said.

-with AAP

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