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Thursday, July 07, 2016

SA State Budget 2016: Treasurer Tom Koutsantonis delivers Budget aimed at creating jobs in South Australia

SA State Budget 2016: Treasurer Tom Koutsantonis delivers Budget aimed at creating jobs in South Australia State Political Editor Daniel Wills, The Advertiser July 7, 2016 3:00pm •ANALYSIS: Treasurer’s big jobs gamble •NORTH, SOUTH, EAST, WEST: What it means for your area •SNAPSHOT: A five-minute guide to the State Budget •PAY FREEZE: Public servant wage rises limited to 1.5% •SCHOOLS INITIATIVE: 139 schools to get science labs upgraded SOUTH Australian businesses which create new jobs will receive a direct taxpayer handout of up to $10,000 per worker, as part of a bold plan by Treasurer Tom Koutsantonis to turn around the state’s unemployment woes. Handing down his third State Budget, Mr Koutsantonis has today announced businesses would be given the grants if they employed new workers for a minimum of two years. “If you employ one worker, you get $10,000 after two years. If you employ five new workers you get $50,000 and so on,” he told Advertiser.com.au. “This Budget is all about jobs.” The “job accelerator grants” come on top of a $670 million tax reform last year which eliminated a suite of transactional business charges and began the phase out of commercial stamp duty. Under the new $109 million scheme, businesses with wage bills under $5 million will receive cash for each new full-time equivalent job they create. A $10,000 grant will be issued in two parts over two years for businesses liable for payroll tax on the second anniversary of creating a full-time job. Small businesses and start-ups that are not liable for payroll tax, which is predominantly those with a total employee wage bill under $600,000, will receive $4000 over two years under the scheme. Mr Koutsantonis said it would apply to job increases from this year to 2018. SA currently has the nation’s highest unemployment rate, is bracing for the closure of Holden in the northern suburbs and faces severe uncertainty at the Arrium steelworks in Whyalla. Mr Koutsantonis said job creation was “the cornerstone of this Budget” and he expected the payments scheme would support the equivalent of 14,000 new jobs. “We want to reward growing businesses in SA and help them grow faster,” he said. “We are backing SA businesses that want to expand and create more jobs.” Today’s Budget records the first surplus since the global financial crisis and includes substantial new spending on school infrastructure. The education spending includes money directed at ensuring schools create new classrooms specifically aimed at the encouraging students to study science, technology, engineering and mathematics (STEM). Mr Koutsantonis told Advertiser.com.au it was vital young South Australians were equipped to work on future projects such as the construction of 12 new French-designed submarines at Osborne. “What’s the point of foreign workers coming and taking these jobs if we win these contracts,” he said. “We would rather have South Australians take these jobs.” Treasurer Tom Koutsantonis with Premier Jay Weatherill as they prepared to hand down the 2016 State Budget. Picture: Roy VanDerVegt Premier Jay Weatherill said $1.5 billion of predicted planned surpluses over the next four years would give the state capacity to move quickly in uncertain times and stimulate the economy. However, the Budget forecasts are modest about future employment growth. Having recorded just half a per cent jobs growth in the past 12 months or 6000 jobs, only 0.75 per cent is expected in the next 12 months. About 12,000 jobs are projected to be created every year from 2018-2020. The state economy is predicted to grow at two per cent in the coming year, compared to a national growth rate of 2.5 per cent. SA is to be below the national growth rate every year until at least 2020. A huge $527 million in new health spending has also been announced, which the State Government insists is needed to cover cuts announced in the federal Coalition Budget of 2014. Another controversial measure is expected to be a 1.5 per cent cap on pay increases for the public sector. In addition to a huge windfall of about $2 billion from the sale of Motor Accident Commission assets, the Government is also planning to privatise transactional services currently provided by the Land Services Group. It also is considering offloading the loan book of HomeStart Finance. The northern suburbs are bracing for serious job losses when Holden closes its Elizabeth factory in 2017. Picture: Morne de Klerk/Getty Images The final result for the 2015-16 financial year just ended is expected to be a $258 million surplus. That is down almost $100 million from projections in December’s Mid-Year Budget review. General government debt peaks at $6.6 billion in 2018 as the new Royal Adelaide Hospital comes onto the books and remains stable until the end of the forward estimated in 2020. Small business receives a further boost with the continuation of payroll tax rebates for those with employee wage bills of under $1.2 million. Stamp duty exemptions for off the plan apartments, which can save buyers up to $15,000, have been extended for a year and beyond the CBD. Spending on infrastructure is forecast to remain at about $1.5 billion or higher in each of the next four years, a historically high level but below the $2.2 billion of the federal stimulus peak. The Government estimates that spending supports 5800 jobs per year. Funded projects include three major South Rd upgrades, $1.6 billion for water infrastructure, $588 million for housing and public transport including an East End tram and the O-Bahn. Schools will receive a $500 million boost. Half will be funnelled into the building of 139 science, technology, engineering and mathematics facilities in state primary and high schools. A further $250 million will be unlocked as a loan facility for non-government schools. The Government is able to borrow at cheaper rates than private schools and will pass on that saving to sites where upgrades and needed by giving them access to the SA Financing Authority. Mr Koutsantonis on Thursday afternoon told State Parliament that SA was faced with difficult choices after the financial crisis, which smashed revenues. He said the Government “steadied the ship” and “cut our own cloth” rather than “slash and burn” in an attempt to achieve rapid surplus. “Our Budget position is sound,” he said. “A surplus has been delivered, a surplus this financial year and more predicted each year across the forward estimates, an outcome our opponents said would never occur. “The Government has built these surpluses as a buffer against the headwinds that we know we face over the next 24 months, such as the impacts of Brexit, the instability we are witnessing that the Commonwealth level and the uncertainty in our financial markets with low commodity prices. “The closure of Holden’s Elizabeth factory is edging ever so closer, marking the end of decades of automotive manufacturing in this state and highlighting the importance of our transition.”

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