But much of Tom Koutsantonis’s largesse is predicated on new revenue measures deftly aimed at two targets unlikely to elicit great sympathy among the broader electorate, banks and foreign property investors – the latter despite the Treasurer’s previous scathing critique of exactly the same measure being applied in other states.
From July 1 the state will apply an SA-based Major Bank Levy – a double whammy modelled on, and imposed on top of, the Commonwealth Government’s own levy of the same name.
The Levy will be charged quarterly at a rate of 0.015 per cent on SA’s share of liabilities subject to the Commonwealth impost, which will be determined based on SA’s “share of the national economy”.
Koutsantonis called the measure – expected to generate $370 million over four years – “a fair and reasonable approach to ensuring the sector contributes its fair share”.
“I don’t relish going to war with anyone,” he said of the likely backlash from the financial sector.
“[But] there are 180 institutions that take deposits in SA – we’re taxing five of them.
“Banks are continually closing branches, charging us to take our own money out… these are organisations making super-profits.
“This is 0.3 per cent of their profits.”
Koutsantonis pitched the impost at the big end of town, saying: “We don’t want to tax mums and dads.”
“We want to tax a part of the economy that’s not paying its fair share of tax… this is about funding our jobs plan, this is about making sure that the most profitable parts of the economy pay their fair share.”
The budget contains $60 million to continue the work of the state’s Investment Attraction Agency – a measure ironically at odds with the Treasurer’s move to impose a new conveyance duty surcharge on foreign buyers of residential property.
“With the increased activity in the property market on the east coast starting to put pressure on our own property market, and four other states applying their own levies that could lead to housing affordability issues here, it makes sense to apply this measure on our homes,” he said.
The surcharge will apply from January 2018, applying to residential property purchases by foreign buyers and temporary residents – but will not be imposed commercial and industrial property.
The measure will reap an additional $50 million over the forward estimates, but the Treasurer’s sales pitch was directed at low to middle income earners, noting “a lot of [investment] activity has been pricing certain people out of buying their own home”.
“This sort of speculation is harmful to the SA economy,” he said.
But he denied a measure that would actively discourage a certain type of foreign investment would itself hurt the state economy, noting he’d “encourage people to buy businesses and commercial property” instead.
“We’re entitled to say that as a state and a country.
“I accept your point – it’s something I said we wouldn’t do,” he conceded about the policy U-turn.
“But I’ll be protecting local communities and people who want to buy homes where they live.
“We’re not prohibiting [foreign buyers]… we’re just saying because every other jurisdiction is applying this tax, we’ll be flooded.”
He denied the rhetorical flourish was designed to appeal to the same disenfranchised electoral constituency successfully mined by Pauline Hanson’s One Nation, insisting: “I’m not pitching it there at all.”
“I’m making sure that for people who grow up in our suburbs it’s affordable to live there… they can’t afford it [currently] because of all this foreign investment pricing them out of the market.”
Even with the new revenue measures, the Government is dipping into its projected surplus to bolster its spending measures in its last pre-election budget.
The surplus for the coming year is now forecast to be $72 million, steadily rising again to $462 million by 2020-21.
Having hit the road through the week to unveil a raft of spending commitments on health, the Treasurer’s focus on budget day was squarely on safeguarding jobs – including his own, with Labor going back to the polls in nine months’ time.
Koutsantonis said the spending plan was designed to weather the impending Holden blow, noting a projected improvement in jobs growth was forecast despite the fact “we’re losing our anchor tenant in the automotive industry”.
“What’s driving the big jobs growth in the eastern states is population growth, but we’re growing jobs with headwinds and a massive transition,” he said.
The Future Jobs Fund is the spending centrepiece of the budget’s employment focus, targeting key focal points of Labor’s so-called Economic Priorities, including shipbuilding and defence, renewable energy and mining, tourism, food and wine, health and biomedical research and IT and advanced manufacturing.
Businesses can apply for grants of between $100,000 and $5 million, but must contribute matching funds of at least the same amount.
The grants are contingent on “the achievement of agreed job-creation milestones”, and “failure to achieve such milestones will require repayment of the grant”.
Additional grants of up to $50,000 are available to help applicants develop a business case in support of applications to the Future Jobs Fund.
“As our traditional industries erode, the State Government is stepping forward to support industries that are growing jobs today and creating the jobs of tomorrow,” Koutsantonis said.
“We’re determined to back the growth sectors already competing successfully, build new industries, and create incentives to encourage businesses to invest.”
He insisted the budget was designed to ensure “South Australians are the ones who benefit from these surpluses”.
“This is how we spend your money,” he said.
“Budgets are a reflection of government values: who we are, who our leader is, what their priorities are, what their vision for SA is… [this is] all about making sure that work goes to South Australians.”
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