Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (12:11): Yesterday, I outlined the shameful list of companies and enterprises in South Australia that have either collapsed, downsized or, for other economic reasons, shed multiple jobs in South Australia over the last 14 or 15 years. Quite clearly, the list during 2015 and 2016 and up to the beginning of this year was impressively and dangerously long. It was impressive to the extent that it was a sobering reminder to the people of South Australia of the financially perilous situation South Australia is in, in particular our larger and smaller business enterprises in the state.
Far from the government's promises that they will be providing for an extra 100,000 jobs in South Australia, which is now echoing into obscurity, we are in fact now at a very concerning high level of unemployment in this state. The number of people currently unemployed has reached 60,300 and a further 85,900 people are underemployed, and that is just from the government's records. Assuming those numbers are accurate, it is still a very concerning situation because, as we know, unemployment usually brings with it very severe financial impositions on the unemployed person and, quite often, his or her family.
The seasonally adjusted unemployment rate in this state is 6.9 per cent as at May, the highest in the nation. The trend at 7.1 per cent in May is the highest in the nation for 30 consecutive months, and youth unemployment (15 to 24 year olds) as at May is 17.2 per cent, the highest in the nation. These are figures that should have penetrated the minds of members of cabinet when they made the decisions they announced in this year's budget, which they claim is a jobs budget but which vaporises into nothing when we look behind what has actually occurred in South Australia.
The one thing we agree on is that jobs are a critical issue for South Australia. Clearly, the mechanisms and models that have been applied by this government to achieve that have comprehensively failed. Their promises have evaporated, and they clearly are on the wrong track in providing ultimate financial security for South Australians through employment. It is not enough for the government to just keep adding on to the employment of their own or trying to control enterprise by cherrypicking businesses to which they might grant some financial support by way of either investment attraction or a lifeline of grant money.
It is not enough simply to rape and pillage the businesses and enterprises and people who are trying to make money for the state and provide for themselves and not be a burden on the financial purse of taxpayers. It is bad enough that they continue to overload these people with debt and then, in some rather sick way, offer some token grants back. That model simply has not worked. They have picked the wrong winners, so to speak.
They have utterly failed in addressing jobs. Unemployment is disgustingly high and there is no reprieve. There is no new measure that the government has offered to put forward. I look forward to the opportunity next year, if we have the privilege of getting into government, to outline with the Leader of the Opposition a reform agenda from the opposition and to be able to provide it for the people of South Australia.
Another concerning matter is the level of insolvency in South Australia. This is important to take into account when we consider the vulnerability of those people if a bank tax or other taxation measures are introduced because, unsurprisingly, the banking industry is going to identify the negatives of such a levy on banks in South Australia, and only in South Australia, because obviously that will make us uncompetitive. Not only is it a deterrent for investment here but it will affect the jobs of people who are currently employed in the banking industry. Let's just leave that aside for the moment because a fair comment would be that they have some vested interest in this space.
Let's just look at the people who are going to be carrying the load of lending from financial institutions and who will be vulnerable to this. One needs to take into account, again from the government's own records released in October 2016, the South Australian insolvency statistics. This comes from the Australian Securities and Investments Commission on information provided by the state instrumentalities here.
The sobering statistic for South Australia is that in 1999-2000 there were 387 insolvency applications in the state. A majority of those were by creditor or court wind-ups; that is, they were imposed on the business, they could not pay their debts, or the court had directed that they were not to continue to trade but were to be wound up. It has to be acknowledged that a smaller number were under voluntary administration. People do not usually voluntarily place their businesses in administration unless they are in a financial pickle; nevertheless, you get the picture.
Fast-forward to 2015-16, and the number is now 535 per year. Again, the overwhelming majority were by court or creditor wind-ups and, of those, only 69 were in voluntary administration. If one looks at this material—and it is an interesting read; I will just highlight one other matter—frequently, in the last 15 years (in the time of this government), it has been up over the 500 per year mark and several times we have had over 600 per year. In 2012-13, there were a staggering 744 insolvency appointments. Any other imposition of a tax or legislative control or compliance obligation in respect of businesses has to be carefully looked at by government. It is staggering to think that, within this umbrella, the Treasurer is coming in here to impose that statistic. Employment statistics from 2007 to 2016 have risen from 38,000 to 58,800 and now, as I have said, just over 60,000 people are unemployed in this state.
The question then arises: if the state bank tax is removed from this bill, if a majority of the House of Assembly is satisfied that it ought to be removed, where will there be an impact and will it adversely affect the delivery of services that are provided for in the budget? Obviously, it is a multibillion dollar budget but, if the House of Assembly were persuaded, there is one very important figure which members ought to take some comfort from which frankly is available to cover this loss of revenue. It is always on the minds of members who vote on these matters, 'If we do remove this from the budget, will it adversely impact the level of services?' That of course is the government mantra all the time: 'If you do this, which nurse are we going to dismiss or which school are we going to close?'
Let me reassure the house that, if members look at the budget, they will see that in this 2017-18 year the Treasurer has included $580.4 million for contingencies. Last year, this figure was $135.2 million and it is around that figure every year. It is there for obvious reasons. Sometimes, we have some disaster, for example, and there is an extra cost that was not provided for in the budget. Even though each portfolio does have some contingency money, this is over and above all other contingency provisions. This is a contingency the Treasurer has put in there and it is just for this year.
Of course, I would say—and I think I would be right—that this is because it is an election year and, of course, the government wants to have a little reserve tank to apply towards promises for an election. It is not unique: that does happen. I make the point that, regarding the $370 million that the Treasurer has told us he will receive from the bank tax over four years, that loss of revenue that is anticipated could be absorbed in this year's extra contingency money alone. If it did not need to be done and you did need some extra money and the government still wanted to use some of that to throw away with their election promises, clearly that contingency could be absorbed there without one loss of service or personnel that is currently in this budget.
There are a number of other areas that I do not think are worthy of expenditure. In fact, I think it is an utter disgrace that they are spending $4 million on pre-election advertising to tell us what a great job they are doing. Disgracefully, it directly contradicts their own codes of conduct and the guidelines that have been set out. Frankly, the Auditor-General, if he has not already, should have a good look at that. Having mucked up the power system, having raped people of money, they are then making announcements, I hear, that they are not just going to have advertising and more pamphlets and more social media, but they are going to actually pay people to go out and doorknock, for goodness sake. It is about a million dollars.
he candidates are too lazy, the member for Davenport suggests to me. I make this point. This is taxpayers' money, and this is money that is being applied, the government say, within their guidelines, to educate the public. What rubbish, what utter rubbish! There are other aspects of the budget that can easily be reallocated in circumstances where the loss of $370 million over four years would be a consequence of voting down this clause to cover this bank tax.
They do not even need to do that: they could absorb it into the $580.4 million for contingencies this year. Even if they were to allow all the bank tax to be absorbed in that equation, there would still be something close to $200 million in extra contingency money. It can be done. It needs the will of the government to do it, and clearly, if they are not prepared to do it, it needs this parliament to actually do it for them.
At the moment, in the absence of there being any relief from this part of the bill, the clouds are gathering for the perfect storm: higher unemployment, higher taxes, higher social distress. If there is one aspect of the imposition of the tax in this bill that really irks me and causes me concern, it is the impact it will have on many women in South Australia. The vulnerability of women in particular and, in fairness, a number of young people—men and women—comes because although the government claims that clause 13 will provide some protection to ensure that the tax will not be passed on directly to the customers, we know that even on the government's admission, and the Treasurer says, 'the levy will not apply to mortgage or ordinary household deposits, rather to bank bonds and deposits over $250,000'.
That is on people who have money, but what about people who do not have money—the people who borrow money? They borrow money because they need a fridge to put food in for their children or to buy a car or to be able to service a credit card to ensure that they have essential amenities, or they borrow money through a personal loan—probably to pay their power bill these days—or, if they are in the category of owning some interest in a dwelling, obviously there are costs that go with that.
I say to the parliament that quite often we have a situation in South Australia where single-parent households are left carrying the financial burden of providing for families, and overwhelmingly these are women. Some of them have security of income from employment, and obviously they have a considerable extra role in making provision for their children; others rely on social security benefit or extended family support. So it is simply laughable that the Treasurer should tell the public that the clause will sufficiently protect those South Australians from the increased fees and charges to pay for the tax.
The most financially disadvantaged in society will be indirectly handed the bill for this levy through the higher interest rates for those loans I have just referred to and the lower interest rates for any deposits they may have. It is a double-whammy. I will have more to say about banks shortly but the reality is that they are in business, they have shareholders to account to and the interests of the client are not the highest priority. That is the reality. That is why, of course, the government is trying to use this sort of social warfare on a group the public might perceive to be unsympathetic to its customers.
The truth is that the most vulnerable are people who are reliant on those financial institutions, not to look after their investments—because they do not have any—but, in fact, to have personal loans and to have short and long-term security of borrowings, which is absolutely critical, especially if they are going through a period of divorce or the death of the family breadwinner in a family. This is why it is so unconscionable that the government should leave them exposed. I am deeply concerned that women, and those most financially disadvantaged in particular, will be adversely affected by the Treasurer's attack on these lending institutions because let's be sure about one thing: the banks will not be paying it from their bottom line; that is abundantly clear.
I should say at this point that women already face a disparity of income compared with their male counterparts in the workplace. They have far less superannuation reserves and, unless they are at a qualifying event of age, they also cannot access those funds or reserves to care for themselves and their family commitments over their lifetime. Support of this tax is a whack on women, and this parliament ought to be aware of that, consider it and ask in all conscience whether they can agree for it to be continued in the absence of any security against it being handed on to the consumer.
The federal tax has been raised because essentially this is a piggyback tax on a federal bank tax that was announced in their budget in April or May this year. I mentioned the bills that have passed through the federal parliament to deal with that, namely, the Major Bank Levy Bill 2017 and the Treasury Laws Amendment (Major Bank Levy) Bill 2017. What I want to mention is that the federal parliament, unlike our parliament, actually goes through quite an extensive committee scrutiny of every bill that comes before it, and this is no exception.
In June this year, the Senate Economics Legislation Committee, in investigating and assessing those two bills, provided a report. It is dated June 2017 for those who wish to view it. The South Australian representative in the Senate on this federal bank tax was Senator Nick Xenophon. I will not go through the other representatives, but it is a committee of six and the chair is Senator Jane Hume from Victoria.
In their report, they obviously provide an overview of the bills, how they conduct the inquiry, the background to it, etc. They even have to look at things such as the human rights implications and other considerations. Their general view on the measure is on page 9. The proposed introduction of the major bank levy drew mixed responses from a variety of stakeholders. Opposition to the levy was voiced from a number of different perspectives—the way the levy is framed as being misguided and that it is likely to reduce productivity while encouraging an increase in financial market risk.
There was discussion about it being abandoned because of its adverse effect in respect of investment. The Financial Sector Union supported a fairer, more progressive tax system in their submissions and pointed out that, unsurprisingly, the five banks affected by the levy, the same banks as in South Australia, also objected. There were a number of aspects of the report on the competition concerns and the regulatory oversight. They do a bit of an assessment in respect of the revenue estimates, and again the Australian Bankers' Association raised a number of points as to the $6.2 billion over the four years that the government's estimates raised.
We do not need to go into any of those, but the negative impact in relation to Australia and its competitiveness was clearly and comprehensively assessed. Then, at page 23, there were some additional comments from the Labor senators. In their comments in support of the bill, they said:
This state of the budget and the need for this measure in relation to budget repair means that Labor will not stand in the Government's way.
Whilst the Labor senators supported the bill, they said, 'It is not a blank cheque.' They supported recommendations set out in the main body of the report; however, the need for their inclusion demonstrated, in their view, their criticism of the Treasury's botched policy process. This is starting to sound familiar, isn't it? But this is the Labor Party of the federal parliament in respect of the application of the need for this tax.
Also on page 23, the recording of the impact on consumers is also very important. Remember that these are the additional comments from the Labor senators:
The Regulatory Impact Statement released with the legislation stated what the Treasurer could not––that consumers, non-equity funding sources, shareholders and employees could bear the brunt of this levy.
They accepted completely that it was that group of people who were going to be bearing the brunt and that the federal Treasurer, in their view, was not able to or perhaps declined to make that statement. They went on to say:
This was further underlined in the testimonies given by the banks at the hearing, where they all said that the bank tax won't simply be 'absorbed'.
So we have in black and white an acknowledgement of the evidence of the banks that they are not picking up the tab for this. They went on to say:
Treasury further underscored this point through their answers to questions on notice that were put to them prior to the hearing. The costing, Treasury says, takes into account 'some pass-through of the levy to customers, as evidenced by previous behaviour by the banks'.
So everyone, including the Labor senators, were quite clear in the recording of what is crystal clear evidence that it is the people who are going to pay, and in South Australia now, with the advent of this bill, with this measure, the people of South Australia are going to pay it plus the federal one.
The senators go on to talk about the Treasury officials taking some time to admit other aspects in respect of the bank levy being passed on to consumers and some other particular points, but the most critical point here is that the comprehensive examination by the Economics Legislation Committee discloses to us what we all know, what we all expect, and confirms that the banks will not be paying for this; the people will be.
It is interesting that, the committee having undertaken its oversight, ultimately Mr Xenophon supported the passage of this legislation through the Senate. He supported the government in getting the legislation through the Senate. I was surprised to say the least that, very shortly after the budget bill in South Australia was brought down on about 22 June, Mr Darley, representing the Nick Xenophon party—I forget, what is it actually called now?
SA Best, sorry—would come out to say no. He might have been offered a much earlier briefing than us but, nevertheless, he came out and said no. We on this side of the house did as we always do; that is, we said to the government, 'We will have a look at the detail of it, we will meet with the Treasury officials, and we will ask questions about its application and the like before we make a decision, and our party room will give it some thought.' Our leader was under the heat at the time to come out and make a decision one way or another. We had a couple of throwaway lines from the Treasurer in the budget speech, we had his press releases, which you can hardly rely on, and we had a Budget Measures Bill that had not even been presented.
We on this side of the house do the responsible thing: we called for the Treasury officials to provide us with a briefing, and I think within seven or eight days that meeting was arranged. I can tell the house, actually, that we met on 29 June 2017, in the following week. Mr Chris Russell, representing the Treasurer's office, convened the meeting with Mr Stuart Hocking, the Deputy Under Treasurer, Mr Greg Raymond, I think, and several others who were obviously involved in the preparation of the necessary follow-up material for this.
That is what we did. We said we would do that, we did it, and we had that meeting. Our shadow treasurer and myself were present and some others. We were able to go through the bill and identify other matters, and I will refer to them shortly. Most importantly, in respect of this bank tax, I would have to say that it was abundantly clear at that briefing that Treasury had nothing to do with this tax; this is the brainchild of the Treasurer and/or the cabinet. I am not sure what the gestation period of this genius idea was, perhaps one day we will find out, but I simply say this: the level of desperation that the government currently finds itself in suggests to me that they were scrambling around to try to find anything that they possibly could to prop up the revenue stream on the budget.
The government has sold just about everything else. They stripped out and raped the Motor Accident Commission and there is not much left to sell except the Lands Titles Office services, which is another matter. Having got to the bottom of the barrel, what we are left with in South Australia is a bit of water infrastructure, the desal plant sitting down there chugging away, and some Housing Trust stock. We do not own much else, sadly, so we are getting to the bottom of the barrel of something that is packageable to sell.
I must say that, of the few times the Treasurer has been in charge of selling something, he has usually botched that anyway. We had Gillman, when he was in charge of Renewal SA, and I cannot think of one reason that he and his department stayed responsible for the sale of the State Administration Centre. What a fiasco that has been. They have attempted to settle on the sale of that property five or six times under his watch. He did not hand it over to any other responsible minister; he kept it within his own responsibility. With his track record, I would not have given him a dozen eggs to sell. Nevertheless, he kept it in his portfolio and it has been a disaster.
We are still waiting to see whether Mr Kevin Foley, as chair of Funds SA, is going to pick up the mess and buy it. The government buying from the government seems a bit odd to me, but we will see what the Auditor-General says about that in due course. In the meantime, a desperate government has made this decision. Therefore, the briefing provided by the representatives from Treasury I would have to say was as good as you could expect it to be in circumstances where they were thrown this.
It was pretty clear that they were only really able to tell us that the four major banks and Macquarie would have a liability to pay. The detail of their obligation to pay was yet to be worked out. They had not even had discussions about the detail at that stage with the commonwealth Treasury officials who were going to be implementing it after the passage of their legislation. They are all in the dark, sitting there like possums in a spotlight at this point. They were able to at least tell us another political decision of the government and that was the first payment, under the quarterly payment in arrears of whatever this tax or levy is going to be, would be in March 2018—how convenient—after the next election.
The shadow treasurer asked, quite reasonably, why this is not starting in January. Obviously, you get the bill through, and why would this not be starting in January? Quite obviously, they are not interested in progressing any kind of imposition before the next state election that would alert the public to the tsunami of liability that is heading their way.
They were able to discuss some minor aspects in respect of its application in relation to GST and the like—as to what their expectation was—but a lot of this was qualified by further consultations to be had with the commonwealth. There are even simple questions such as whether a South Australian business that is operating in the banking liability phase will have to fill out one quarterly return for the federal tax and then another separate return for the added on state tax, or can they use the same form. These sorts of things have not in any way really been finalised.
I totally accept that the Treasury officials in South Australia, if they are burdened with the responsibility of imposing and applying this, will do everything they can to try to consult with the big five, as such, to minimise the trauma of the paperwork, but that gives no comfort to us that they are going to be able to in any way protect the consumers from what ultimately will be ripped out of their pockets. On 30 June 2017, Tom Richardson described a representation of the tax:
…the Weatherill Government's bank levy is cynical, desperate, ad hoc and slapdash economics.
…a budget measure rooted in class warfare and business vandalism.
He has obviously written the commentary in respect of the politics surrounding it, but on 30 June he had written that, in his view, it should not be blocked. I want to make a comment on that. Whilst he respects the convention of allowing budgets to be passed, because, as he says, it is in the interests of good government to ensure that there is the reliability of that, the expectation that the public has is that the government of the day will set the terms and conditions about how the money will be spent—they announce it to the parliament—and that, by and large, the elected government of the day has the expectation that that will be covered.
He suggests that there should be no cherrypicking of that, and that the bank levy, therefore, should be allowed to progress. I have quite a regard for Mr Richardson because he has obviously had a long history of following politics and some of the economic matters that surround government activity, but it ought to be very clear to him that there are times when it is just unconscionable that the opposition allows things to go through the parliament.
There is plenty we do not agree with and there is plenty that we think should be done in a better way, but where there is something that is going to be so damaging to the public—or, in some other cases, has never been disclosed to the public by the government—we do have a duty to protect the people of South Australia against that. We did so on the biosecurity levy, we did so on the car park tax (which we opposed when we went to the election) and we do so on this one, because we are not going to allow the Treasurer's mischief—in his desperation to get money he never disclosed this tax to the people of South Australia—to prevail. It would not protect them in quarantining them against payment. We are simply not going to allow the government to progress the budget measures with this in it with our blessing. That is not going to happen. We will fight against this, and it will be opposed for those reasons.
The other person who was, I think, quite vocal in the lead-up to the estimates period was Mr Ross Womersley, who is the head of SACOSS, which is our representative group for the providers of welfare and support in South Australia. Again, I have quite a high regard for Mr Womersley and the service he gives to advise SACOSS and provide advocacy for the people who are most vulnerable in this state. What he is saying in his presentation is: if the bank levy does not progress, what else can there be to ensure that we do not have a cut in services or that there is not going to be some negative impact on the building of public infrastructure and the like for those most vulnerable in the community? That is a good question.
I simply answer it by saying, 'Please, Mr Womersley, when you make these statements, have a look at the budget and see, particularly in the election year, the cushion of money that is being kept aside in the contingency budget that can allow for this and can make provision for all of the services that the government are committed to, without affecting them one iota. When you see that, you will have some appreciation that the cutting out of a tax and the consequential revising down of the revenue can still be dealt with without having to impose another liability.' I would ask him in future to do just that.
Although the public may have a view that all banks are bastards, they are amateurs compared with the state government when it comes to ripping off people's money. I have been a customer of a bank for a long time. I have already disclosed my interests with the National Australia Bank. Fortunately, I have more of their money than they have of mine. I remind them of that, on occasion. They should be looking after me because if I die I have their money, and they need to be looking after me as a customer.
In any event, if it is clear that the consumers ultimately are going to pay for this, we need to at least be cognisant of the impact it will have on South Australians. Obviously, as I have said, investment and the like are at risk. Probably the most independent, if I can say that, and experienced person who has spoken on this matter is Mr Rob Chapman (no relation), formerly head of a bank in South Australia and now the chairman of the government's Investment Attraction agency, which I think it is called Investment Attraction South Australia now.
Mr Chapman has responsibility to receive and approve grants of money to encourage businesses to South Australia, etc. I am not criticising his role at all. I suggest that he would have to be one of the most qualified people in the banking field appointed by the government to provide them with advice and to undertake this task for them, yet he identified, within a few days after the budget, that he had not even been asked about it.
What consequence will this have on investment in South Australia? They did not even ask him, with his banking history, what will be the effect on the banks and whether we can rely on the fact that it will be paid by the shareholders and not the employees or the customers. They did not even ask him. There was a person sitting there with a reservoir of wisdom and experience in this field and he was not even asked. It is beyond belief. He, too, has raised the concern about the impact on South Australia when it is trying to compete in a federation where it is already at the bottom of the pile. That is concerning in itself.
The bank industry, the Australian Bankers' Association, obviously have had a lot to say. I am not going to dwell on what they have said in a lot of detail, but there are a couple of things of which I want some acknowledgement. One is the fact that the employees of the banks that operate in South Australia are numerous. I did have a record here of the number of employees from one of the major banks, which was several thousand. They make the point that the ultimate vulnerability of the cascading down of investors racing to other institutions, rather than to one where they are going to get hit with a tax, has a consequence on their employment.
From memory it was the Commonwealth Bank, but it may have been Westpac. They make the point that the number of vulnerable employees in their bank is three times the number of people who are going to lose their jobs at Holden. We have to try to get this in perspective and understand that there is a consequence as well. I do not want to see bank employees in South Australia, as a result of this ridiculous tax, lining up and being on the list of the disgraceful numbers of people who have lost their jobs over the last 15 years.
I do not want to see them there. I want those people to keep their jobs and keep providing for their families. Please remember that customers are at risk, but so are the people directly employed in those institutions in South Australia who will lose their jobs because any smart business in South Australia that has been operating through the local branch will open an account in Melbourne, Sydney or Brisbane. I seek leave to continue my remarks.