Mr PEDERICK (Hammond) (12:01): I am not the lead speaker, as obviously this bill has already been introduced into the house. I rise to speak to the excellent budget measures that the Marshall Liberal government has put in place in regard to our first budget. I think it is a balanced budget. We are making sure that we fund our 300 or so specific election promises. Notwithstanding that, there is a little bit of pain along the way. However, the pain could have been a lot worse if it were not for the excellent financial management of our team, including the Treasurer, the Hon. Rob Lucas from another place, trying to sort out the wood from the trees.
I say 'the wood from the trees' because, when you have the previous treasurer, the member for West Torrens, stating that we are going to have a $12 million surplus that turns into a $397 million deficit in real terms, that is a sign of some of the issues that we have had to deal with coming into the first year of our first term in responsible government. I hope there are many more terms to come, because it is a far better view from this side of the chamber.
As the member for MacKillop indicated, and proven by different studies done over decades, when Liberal parties come to power at any level, whether state or federal, they have to fix up the total financial mess that previous Labor governments leave their state or country in. It is easily found. You can see the spend of Labor governments, and then there is the financial management done on the conservative side of the house to make sure that things are pulled into line.
I am sure it is a tactic by the Labor Party to make it look like money grows on trees. They spray money out to the masses like confetti and the masses get used to having money thrown at them. But the only money that governments have is money that is raised from tax. Governments do not have their own money: it is all taxpayers' money and it should be managed appropriately. It should be managed in a fair and financially astute way.
We only have to look at what happens with different builds, whether it is the public sector versus the private sector. If we look at the build of the new RAH, the $2.4 billion new Royal Adelaide Hospital under the previous Labor government, we will be paying for that over the next 30 years at $1 million a day, and that is without the staff in it. It is just outrageous. When we look at what Calvary have done with their expansion—sure, it is a smaller expansion; it is probably close to around half the beds in the new RAH—it was done for about $400 million or so.
So we have to wonder why, when there is a public dollar to be spent, it appears to just be abused. It does not just appear to be abused: it literally gets abused. The issue for us is that we always need to put the fire out, so to speak. We have to bring that solid financial management because we understand that money literally does not grow on trees. That is why we also have brought down a budget that is sensible, has an excellent financial framework and is about growing our state and growing our jobs.
Instead of just throwing money at people like confetti, we are making sure that we put the right tax framework in place so that we can give an incentive to thousands of companies, thousands of people who are small business owners who may only have one worker working for them. In my case, when I was managing and running the farm as my own business, I would employ two people at seeding time and then one at harvest. That is how it worked for me. We had a great working relationship but it was very much a small operation.
That is why we are putting in measures to support more jobs, lower costs and better services, which we are implementing for South Australians. Payroll tax is one of the issues that we are addressing, taking the exemption up to $1.5 million before a business has to start paying payroll tax and then there is a graduated index up to $1.7 million. That is excellent news for small to medium businesses now in South Australia because, instead of a few hundred thousand dollars, which was the limit before—I think it was about $600,000—it gives people some relief.
Obviously people get paid different amounts, and I am not being too judgemental about that. You could perhaps have up to 25 people working for you under the new regime. That will put real money into people so that they can run their businesses, whether they are farms, small takeaway-food operations, people running coffee shops—there seems to be a lot of money made from selling coffee these days—small delicatessens, chicken shops, or light industry. There are a lot of small, light industry businesses that employ fewer than 25 people.
I want to talk about one of the success stories that will benefit from this payroll tax relief and that is Bowhill Engineering, which is doing a lot of the bridgework on the South Road works and the overpasses. It is fantastic work. I inspected it other day with the Minister for Primary Industries and Regional Development, Mr Whetstone, the member for Chaffey. In a little town with not a very big population in my electorate on the river—a beautiful spot to work—they hire pretty well all local people. I know they have people working there who are in close proximity to Bowhill. Some come out from the Murray Bridge region and around Karoonda. I know that one young lad from Lameroo is working there and doing a trade there.
It is just fantastic to see this employment opportunity so that people can work close to home and work with a company that has done such fantastic work for many years here in South Australia. One of the projects they have done is the walking bridge near the Festival Theatre. It is not the one across the Torrens recently but the far smaller one years ago. Also, we saw in recent years the clipper ship City of Adelaide brought over from Scotland. Bowhill Engineering was one of the engineering companies, along with a swag of others, who contributed by building the framework to hold the ship stable on the barge to bring it all those thousands of kilometres to Australia.
That is a prime example alongside many, many other companies throughout the state and the regions. Another business in my electorate is Miegel brothers, who make excellent trailers and do other light engineering work in Murray Bridge. They are well renowned for the quality of the products they make. They, too, are employing many local people. That will be a real benefit. Instead of the government spraying money out, we can have the economy built on the back of these companies which may decide to put on an extra worker—or maybe a couple more. Maybe they can put five more on and boost production and contribute to the economy both on a federal basis and a state basis. Not just that, it is pouring money back into local communities.
Other things we are doing are remedying deficiencies in the owner-driver exemption within the contractor provisions to ensure that the contract is either fully exempt because it falls within the relevant exemption or is taxable because it does not fall within the relevant exemption. With our budget measures, we are certainly continuing to allow deductions to be made to the value of motor vehicle allowances for business use, monitoring the changes made in the commonwealth government's income tax legislation.
I also want to note some issues around how we have managed stamp duty under these budget measures. We have facilitated the collection of data as part of the commonwealth government's initiatives on third-party reporting and the national register of foreign ownership of land titles. I note that the Taxation Administration Act 1996 is also amended to enable the commissioner to collect and disclose real property sales information to the commonwealth government.
One measure that I am really pleased to see is expanding the current stamp duty exemption for family farm transfers to include those involving companies. Some farming businesses are quite reasonably sized—medium to large businesses, not just small to medium-sized businesses—so farmers these days have to make sure they have a succession strategy in place. Some people think that farmers set up a succession strategy to try to get around paying tax or similar things by setting up companies or a company, or they may be involved in a trust. But, no, I can tell you that, as a fifth-generation farmer, it is a real thing to get succession management right, especially when it involves farmland.
It does not matter how many acres you own, some people—and they may be related to you—think you are a millionaire. The only time money is realised from a farm, the real money, is if you sell the property. Most farmers do not want to do that unless they are retiring, or there has been a death in the family, or something else happens. That is the nub of it. It can be not just a few hundred thousand dollars in some small properties but millions of dollars of value in land, especially with the need, as has been seen over many years—and it is an old saying in farming—to get big or get out. It has happened forever. It happened when we went from basically walking behind horses through to using 70, 100 to 600 horsepower tractors, or wherever we are going to land next using drone technology, and there is a bit of drone technology being used, especially in spray operations on some properties.
It is a real issue. The management of companies is also about succession planning and looking after the land for future generations, especially when a son or daughter gets married. It is a reality that maybe up to 50 per cent of the population do not survive their first marriage, so I believe that not enough people take succession planning seriously until it is nearly too late, and sometimes it is too late to make sure those right decisions are made. With regard to stamp duty exemption for family farms to include those involving companies, I think it is a fantastic measure being put in place.
In regard to the stamp duty exemption being provided on premiums paid in relation to multi-peril crop insurance policies entered into from 1 January this year, it was a policy we took and it is a policy we are implementing. People can protect those many hundreds and thousands of dollars, and in some cases some people have spent $1 million plus putting in a crop. You only have to see a tough and dry year like this, when, if you are lucky, you get a few millimetres of rain occasionally and you are getting through, but there is wide variance in South Australia, from some fairly handy crops through to very dry dusty paddocks. It is a tough situation for anyone to be in. Yes, multi-peril crop insurance is expensive on a per acre basis if you look at the total figure over, say, 4,000 acres, but if you have to make a claim you can get back a reasonable amount.
Other measures we are getting involved in include making South Australia a more attractive place in which to invest and do business. With regard to land tax, we are increasing the tax-free threshold, from $369,000 to $450,000, and introducing a new tax bracket of $1.2 million to $5 million and a marginal tax rate of 2.9 per cent on land tax from 1 July 2020. This is expected to benefit—and this is a huge number—over 50,000 land tax ownerships, including around 8,000 that will no longer have a land tax liability at all, so that is another great feature of our budget measures bill.
We are working with environment protection looking at recovering the costs of environmental management issues such as soil and groundwater contamination and odour facilities, with underground petroleum storage systems required to hold an environmental authorisation. This is a very serious business. If you talk to anyone who is in the service station game, they know only too well about liabilities in regard to old fuel tanks that have been underground for a long time. Sometimes it is better just to walk away and find a greenfield site or you just dig up the old tanks and completely replace them which is another option.
In regard to local government, apart from rate capping, which I think is an excellent policy to make sure we get our rates spent appropriately and our money managed a lot better at the local government level, we are going to abolish the royalties on extractive minerals for councils where the minerals are sourced from council borrow pits and used to build and maintain local roads from 1 July 2019. This is one issue that the Local Government Association at a state level has written to us about, to the Treasurer, thanking us for removing this cost impost on councils.
There is a whole range of things that we are handling, including liquor licensing fees and rural property. We are closing the office of the Commissioner for Kangaroo Island and we are getting on with the real job of delivering responsible government with these fine budget measures for the state of South Australia.