Reform job has only just started
LAST week the Treasurer handed down the State Budget which contained some welcome news for business.
However, unfortunately it lacked the scale of reform that would translate to the aggressive job creation strategy needed in the context of the state’s alarming unemployment data.
The Treasurer did deliver some welcome tax reduction by phasing out stamp duty on the sale of commercial and industrial properties and abolishing duties on non-real property such as licences, goodwill and intellectual property.
We hope that, as stamp duty on the purchase of such properties is fully abolished on July 1, 2018, this positive initiative does not inadvertently act as handbrake on economic activity as transactions are deferred to take advantage of the reform.
The 12 month extension on the rebate of payroll tax for small business is also welcome. We need to work with Government to seek a more permanent reform for this large section of our SME economy that we look to for the creation of new jobs.
Without that payroll tax relief, too many of our small employer members tell us that the threshold represents a real barrier to employing that next worker, apprentice or trainee.
In the area of infrastructure spending, much of it comprises ongoing work. While the Government has committed $1.3 billion per year - that represents a much smaller commitment than we’ve seen over the previous five years.
The absence of that infrastructure in the Budget takes out a supporting plank in our economic recovery.
Greater reinvestment in tourism and in a strategy to attract more international students recognises that these are areas that can deliver much needed economic multipliers and jobs in a relatively short time frame.
There is also $15 million over the next two years for an Investment Attraction Agency and Fund which is to attract new head offices of international firms and facilitate the start-up of new industries.
Clearly we support these strategies.
So this Budget will create hundreds, maybe many hundreds, of jobs. But we need thousands of jobs. In May alone we lost 8800 jobs.
There are many things in the Budget that are very welcome but the scale of the impact, while positive, will not, of itself, drive the levels of economic growth and job creation that we need.
The work of State Tax reform and public sector spending control therefore cannot be finished.
We look forward to working with the Government in determining the next steps needed to address the challenges we all share as South Australians. NIGEL McBRIDE IS CHIEF EXECUTIVE OF BUSINESS SA