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Tom's "turbo-charge" for the SA economy: new cash for jobs

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Onetime Treasurer Jack Snelling’s maiden budget infamously opened with a spiel enthusing that in years to come South Australia would be a state “transformed” by the riches of Olympic Dam.

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Five years on, and the most striking transformation is that of Labor’s Budget Day rhetoric.

“There’s no one measure that’s going to change South Australia forever,” current money-man Tom Koutsantonis earnestly surmised in his podium briefing to media.

“Not the subs, not Olympic Dam, not the Nuclear Royal Commission.”

Koutsantonis’s political enemies long ago dubbed him “Turbo Tom”, in response to his political mea culpa after fessing up to a string of lead-footed traffic offences. It’s a nickname he despises, which is probably why it’s stuck.

So it was an odd gambit for both he and Premier Jay Weatherill to enthuse that this budget was going to “turbo charge” the economy.

There are indicators to support such a pitch – a $258 million surplus (falling by $4 million in 2016-17 but increasing thereafter) and net debt-to-revenue ratio of 35 per cent is a handy political foundation, even if it is built on a bedrock of asset sales and increased taxes and levies.

In this instance, Koutsantonis – undeniably a canny political operator – has ensured that his headline revenue measures are aimed at soft targets, such as gambling agencies and new waste levies, the spirit of which was endorsed by Liberal leader Steven Marshall a decade ago in another capacity. This tenuous point has allowed the Treasurer to rather cheekily claim that he “agrees with Steven Marshall” about the need to increase the rates on solid waste.

“It’s a sea of black as far as the eye can see,” Koutsantonis beams, but there’s no doubting the turbulent economic waters ahead, highlighted by an unemployment tsunami.

“What’s the use of having budget surpluses with an unacceptably high level of unemployment?” he conceded, as he spruiked his headline “jobs” measure – a $109 million Jobs Accelerator Grant scheme, with the Government offering cash to small businesses who hire additional staff over the next two years.

Businesses with an annual payroll between $600,000 and $5 million will be eligible for $10,000 for each additional employee, uncapped, while startups and smaller businesses with smaller payrolls can apply for $4000.

The Government hopes the measure – which mimics an similar initiative in NSW – will see 14,000 new jobs created, but even then employment is not forecast to grow by more than 1 per cent per year across the forward estimates period.

“This isn’t about me trying to initiate a new program – we’ve seen what’s worked elsewhere, we’ve copied it and added a South Australian flavour to it,” the Treasurer said.

He said it was aimed at the state’s “engine room”, admitting “lately it’s been sputtering a little bit”.

“There are two choices – cut taxes further or partner directly with SA entrepreneurs [and] I think both strategies work together hand in hand,” he said.

“This is a direct injection of cash into business.”

He defended the absence of further hardship compensation over spiralling Cost of Living, which he recently insinuated could be a budget feature.

Instead, he argued rather tenuously, “high unemployment is bad for everyone”.

“By attacking unemployment, everyone is assisted.”

The Government’s sales pitch, articulated today by Premier Jay Weatherill, is that this is a budget for “an uncertain world”, predicated on a surplus war-chest to insulate against budget shocks and sustained spending to stimulate the economy.

It may be disingenuous that both point to the recent turmoil of Brexit and the federal election as symptomatic of the uncertainty to which the budget responds, given the economic statement was long since signed and sealed before either event transpired.

Tenuous, too, was Weatherill’s insistence that the document underlines “SA’s reputation as the best place to do business anywhere in the nation”, a dubious claim given only one of the top 50 ASX-listed companies calls the state home.

But Koutsantonis’s budget is pitched at catching smaller fish.

It “hones in”, he said in one of the day’s more colourful mixed metaphors, “like a laser beam at the very coalface of job creation”.

“The jobs plan targets 90 per cent of SA businesses… every time they hire someone we’re standing right alongside them.

“This will give confidence to business, confidence that they can invest here knowing that the state is living within its means.”

Those means, though, are bolstered by the MAC selloff, as well as measures such as the “commercialisation” of land titles services, and the ever-present aspiration of wage restraint, with public sector growth to be capped at 1.5 per cent a year for the next three years.

So South Australians should appreciate the surplus because, in the forthright rhetoric of George W. Bush: “It’s your money; you paid for it.”

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