Speakers: South Australian Premier Peter Malinauskas; Cedar Woods Properties Chief Operating Officer Patrick Archer; Business Council of Australia Chief Executive Bran Black
Topics: Regulation Rumble, stamp duty, retail trading hours
E&OE
Peter Malinauskas, South Australian Premier: Well, good afternoon, everybody. Thanks for joining us here in Glenside. It’s great to be here as part of the Cedar Woods development. I’m very pleased this afternoon to be joined by Bran Black, who’s the CEO of the Business Council of Australia.
It’s always good to have you in South Australia, Bran, and we appreciate the report that you’ve released today, which we’ll speak to in a moment.
I’m very glad to be also here with Patrick Archer from Cedar Woods. Cedar Woods have been responsible under Mark’s stewardship is another for developing this program in South Australia, and this is a big site. More people are calling this side in Glenside home, and that’s a really important development for the state.
Cedar Woods is a good example of a developer getting onto the job of building more homes in South Australia for our people. And this is an urgent requirement that is in desperate need and we’re very grateful every time we see a developer just getting on the task and making it happen.
One of the reasons why developers can make it happen in South Australia is because we have, according to the Business Council of Australia, the best regulatory regime in the country, best regulatory regime, best tax regime, best planning regime that allows economic activity to occur, which is in everybody’s interest. This State Government, from the outset, has had a very deliberate policy to make sure that we work collaboratively with business at every opportunity to ensure the reforms are occurring that unlock economic opportunity.
The amount of opportunity before the state of South Australia at the moment is effectively unprecedented. For most of us in our lifetimes we’ve never seen an economic moment quite like this one for our state and its people. But the only way we translate an opportunity into a reality is to make sure that we have the policy and the business conditions in place to allow the private sector to invest.
And consistently we hear from business and industry that the private sector is looking for a lower, more user-friendly regulatory set of requirements, a low tax regime and speed of decision making, and those things we have in South Australia in such a way that has now got us in a position where we’re ranked number one in the country, as the best place to be doing business.
We’re ahead of the eastern states, we’re ahead of the smaller territories, we are the best place in the country to do business, according to the Business Council of Australia. Now we appreciate that this is not a status or a position, that they award lightly. There’s a very strict criteria, there’s a range of considerations that are taken into account and South Australia is not perfect in all of them, but we are the best when you actually look at it across a range of metrics, and that’s something that we should collectively take a bit of pride in but zero complacency.
This is a competitive marketplace, not just in Australia, but globally. If you want to attract capital to invest, you’ve got to maintain the momentum. You’ve got to recognise that competition is relentless and continue to strive to do better. And we certainly see the next state election as yet another opportunity to take to the community a set of policies to continue the momentum that we see in this state.
The reason why these conditions matter is because it’s not just about growth for business, it’s actually about the living standards for people. Where business is able to invest and get a return and do that in a timely way that’s actually good for living standards, because it allows business to employ more people, even ideally, employ more people with higher wages, that is on the basis of greater productivity, rather than just diminishing the return on investment.
So this is our aspiration as a state, particularly now, at this moment in time where we see a long term pipeline of work coming our state’s way. The other point of emphasis I’d make is this, as a state government, we have sought to reduce taxes where we can, and the most strident example, of course, is in the property taxes sector, we have abolished stamp duty for all new builds of first home buyers in this state, because we see that as being an incentive to actually get more supply online.
But it’s not just that. It’s our record investment in trunk water infrastructure, which is largely out of sight, out of mind, but critical to unlock new development. It’s also making sure that we’re investing in strategic infill. It’s also about making sure that we’re leaning in on providing developers like Cedar Woods the opportunity to service their needs in the market. It’s also about making sure that we’re moving the urban growth boundary where we can with record land leases.
None of these things on their own solve the problem, but together, it adds up to a planning regime and a suite of policy settings that allow us to unlock housing growth, which we’ve now got the fastest rate of in the country, and that matters because it’s our Government’s contention that people will go to where they can find a home, and homes will go where we’ve got the best planning regime in the country, which we’ve now got in South Australia. So this is really important for our state’s economic agenda, and we’re very grateful that the Business Council of Australia has awarded us this status.
South Australia, over decades, became familiar with being an economic laggard, well, not anymore. Those days are over. We repeatedly, in a range of metrics, are number one in the country, and to receive this endorsement from the Business Council of Australia doesn’t mean we should be resting on our laurels, it means we should keep our foot on the accelerator to create more opportunities for future generations of South Australians.
On that note, I want to hand over to Bran for his report. I just want to thank the Business Council, not just for this report, but for their source of policy advocacy. There are a number of policies that the BCA have advocated for that this Government looks to.
We see them as being a source of advice. We don’t always agree on everything, but we do see them as being a pragmatic and thoughtful contributor to the public policy debate in this country, and we thank them for that. And on that note, I’ll hand over to Bran to say a few words before hearing from Patrick. And then, of course, I’m more than happy to answer any questions.
Bran Black, Chief Executive: Well, thank you, Premier, and thanks to Cedar Woods for having us, and thank you South Australia, it’s great to be here. It’s a delight to have the opportunity to confirm that for the third straight year, South Australia is the best state in the country in which to do business. That’s the hat trick. So well done, Premier.
What I thought that I’d do is just touch briefly on why we do this ranking, how we do it, and then why South Australia has done so very well. So, in terms of the why, the answer is actually pretty simple. Australia has a productivity problem. This decade has seen the lowest productivity growth in the last six decades, and indeed, in the last year, we’ve seen productivity nationally increase by only point one of a per cent. That’s against the long run average for productivity growth of 1.2 per cent.
Now figures are figures, but why they’re important is that productivity ultimately drives real wages and that improves living standards, just as the Premier said and we get productivity by delivering business investment. A lot of people think that business investment is something that just the Federal Government needs to focus on, but it’s a point that the states can really drive as well. The states have really, real, tangible levers that they can pull, and that’s what we look to measure in our Regulation Rumble report.
So we look at two key areas. We look firstly at cost and regulation settings, and then we also look at planning. On the cost and regulation side, we consider metrics like payroll tax, we look at stamp duties and land taxes, we consider retail trading hours, we consider duties on insurance premiums, business licensing and so forth. And on the planning side, we consider efficiency, consistency, certainty and transparency, and what we see is that South Australia wins on both of those metrics.
What makes South Australia so good on the cost and regulation side, it’s got an extremely competitive approach to payroll tax, an extremely competitive approach to business regulation, and also with respect to stamp duty and land tax as well.
And on the planning side, its planning system is second to none, and in those four areas, it ranks either first or in the top three in each one of those areas. And that’s really very impressive indeed. What that means in really, real terms, if you’re doing well in terms of cost and regulation, then that means that at the end of the day, people have more money in their back pockets after they’ve paid for their rent or their mortgage or their groceries. So it makes a tangible difference to people week on week.
In terms of planning, if you’ve got good settings, then you’re getting more homes out of the grounds, faster, more like this just behind me today, which is so impressive. So when these settings are effective, you’re getting results that people benefit from on a day-to-day basis, and that’s why we do these metrics at the end of the day. We want to encourage these types of results that ultimately mean Australians have the opportunity to succeed.
A word at the other end of the spectrum, we’ve seen that once again, Victoria has come in the bottom spot. We’re really pleased to see that Victoria moved forward one point in terms of its position with respect to planning. It’s made some important improvements there, and that’s pleasing, but it’s got a long way to go in terms of its costs and regulatory settings, particularly in terms of stamp duty, in terms of business licensing, and also in terms of payroll tax.
And so we urge all states to remain competitive, to consider that these rankings are something that they should inspire to move forward on, not just for the sake of getting the Business Council’s tick, but because, at the end of the day, this is ultimately how we drive living standards and improvements for all Australians.
Patrick Archer, Cedar Woods’ Chief Operating Officer: Thanks everyone. Cedar Woods is a national listed property developer, so we see the things that Bran’s talking about and we’ve been in South Australia, Adelaide since 2018 and we’ve always felt well in Adelaide, we’ve always felt that things are easy to get done here and efficient to get things done. And as a result of that, we’ve added another project to our list of projects, and we now have three master plan community projects in Adelaide, and looking forward to launching the newest one early next year at Glenside.
We’ve seen a lot of activity in a short space of time, and we’re really proud of what the team has achieved here. We’ve done some terrific stuff here at Glenside and in Port Adelaide, and we’re looking forward to keeping our legacy going with some even better buildings coming in future. Thank you.
Journalist: Is anything in the Business Council submission giving you second thought to shop trading hours and loosening restrictions there?
Premier Malinauskas: Well, we took to the last election a policy to loosen shop trading hour restrictions on Sunday mornings, and we’ve achieved that. That was a step in the right direction, as far as the Business Council of Australia was concerned. But naturally, they would like to see more, and I respect their position.
We’ve always had the viewers just about getting a balance right. I think what’s top of mind for us is the maintenance of a highly competitive supermarket sector in our state. We’re fortunate that, you know, in South Australia, around about 25 to 28 per cent of all of our sales are not to the duopoly, they go to the independent supermarket sector. And that’s really important we hear from local manufacturers, food manufacturers, who get their start, getting a line on the independent shelves before maybe one day graduating to a Woolies at Coles.
So we’re just trying to use those regulations in a way that we see benefiting business as much as anything else. But naturally, you know, we understand the advocacy of the BCA, and like I said, we agree on almost everything, but not absolutely everything, and that’s a position we respect.
Journalist: Do you think you do have the balance right in terms of shop trading hours?
Premier Malinauskas: I do, yeah, I do. You know, shops are open every single day of the year, now every single night of the year, with the exception of public holidays. And it’s just public holidays in metro Adelaide, where we see a good opportunity for the independent sector to be able to get a bit more of the market share, which is important to them, which is, in turn important to local food manufacturers, in our view.
Journalist: Just on the property tax…payroll tax…thinking about businesses, particularly large businesses, paying less tax…what would be your response to that?
Premier Malinauskas: We just want to get the balance right where. So according to this report, and according to others that have been released similar to it, we’ve got the lowest payroll taxing regime in the country. I’ve said before, long before I was in Parliament, in a way that sort of got a bit of attention at the time.
You know, philosophically, payroll taxes is the tax that sits least comfortably with me. I just don’t like where it sits ideologically, which is why I’m proud of the fact that we’ve got the lowest payroll tax regime in the country. I appreciate that if you’re a smaller business, you’d rather see big business taxed more, and big business would probably like to be taxed even less at the expense of smaller businesses, we’re just trying to get the balance right.
We’ve got to maintain a structure that incentivises people. We don’t want to diminish an incentive to employ more people, and that’s something we’re just going to continue to monitor as we try and get the settings right.
Journalist: You mentioned that South Australia is the best, but still not perfect. Where do you see that there’s some room to improve?
Premier Malinauskas: Well, I think the moment that a state government, or any government anywhere in the world claims perfection in terms of business settings is the moment they’ve become complacent and we don’t see it that way. You have to have an MO of continuous improvement.
I can see I can without going into specifics, because I want to save my bullets for policy announcements. But you know, we have seen examples where there have been regulation that is either unnecessary or too burdensome for a business to jump over. And wherever we see those types of regulation, we see an opportunity to do something about it, and it’s that mentality, that approach, that has led to us having this report.
So while we welcome being number one, we’re in no ways complacent, because it’s a competitive market. If you want to attract capital from over the seas, you’ve got to be able to beat your international competitors, let alone our domestic ones, and that’s just an ongoing mentality we seek to have in government.
Journalist: Bran, you mentioned a couple of times stamp duty, mainly in reference to some of the other states. The State Opposition here in SA has proposed removing stamp duty altogether over a period of time. What are your thoughts on that?
Bran: Look, we favour the abolition of stamp duty, but we appreciate also that states have to have revenue sources, and that’s why our advocacy with respect to stamp duty has always been around replacing stamp duty incrementally with a broad-based land tax. We think that that’s the best approach and the most economically sensible approach
Journalist: The Government and the Premier behind you would argue that stamp duty, if you removed it, would increase house prices. Do you agree with them?
Bran: Well, what we would say is that consistently, we’ve had the position that it is the most economically sensible long-term ambition, but I would stress that it is a difficult transition. And so what we’ve consistently argued in that respect as well is that if states are to undertake that type of transition, it would be useful to have some type of federal assistance in that regard as well.
Journalist: What would happen if one state did it and no one else did it? Would it prompt a surge of demand in that one state? Does it have to be a national rollout? How do you see the stamp duties debate playing out in that sense?
Bran: Well, I think it’s difficult to contemplate a hypothetical in that regard. But what I would stress is that, from our perspective, if you are to try and encourage states to go down this path, you really do need to account for those, especially the early years, where there would be challenges with respect to state revenue and that’s why initiatives like my view the National Productivity Fund, which we saw that Jim Chalmers announced last year, which was a very useful initiative that mirrors the competition payments of the late 90s and the early 2000s what they did was incentivise states to undertake some really hard to reach reforms back then, a $5 billion investment yielded about $65 billion in today’s money each and every year in terms of economic growth.
What we would say is that that’s the type of approach that we can build on with the existing good work of having a National Productivity Fund, hopefully to help states undertake some of these harder to reach reforms today.
Journalist: Premier can I just get you on the algal bloom Senate inquiry, which is handing down it’s report this afternoon. Greens and Liberal MPs on that committee so obviously, it’ll be some critical findings.
I guess, just broadly, is there anything you regret from the Government’s response that you could have done differently?
Premier Malinauskas: Oh, look, you know, no one really predicted the algal bloom. We’re dealing with an unprecedented ecological event that humans can’t control beyond addressing climate change. I mean, that’s just the truth of it, and anyone that says that they can is just making things up.
If there was a silver bullet solution here, it would have been deployed a long time ago. So what we’re seeking to do is invest in the science to make sure that the public health advice is accurate, to make sure that we understand the biological underpinnings that inform this event, to make sure we’re investing in the support for businesses that are feeling the impact of it, which is what we have spent over $100 million investing in.
And you know, I appreciate that there are others who enjoy making a contribution from the armchair, so to speak, but we’ve just got to focus on making sure the policy is informed by the science and the evidence, and that’s what we continue to do. And I don’t have any intention to depart from that, like I think, when you’re in a position of responsibility, whether it be during a pandemic or an ecological event like this, you’ve got to look at the science and the evidence to inform the judgments that you make.
But no one who has any understanding and appreciation of this event thinks that there’s anything that could have been done to have stopped the algal bloom.
Journalist: To respond quicker, though?
Premier Malinauskas: But to achieve what?
Journalist: To better support business?
Premier Malinauskas: But that’s, we’ve done all that, though, right? See, we’ve provided the biggest level of economic support for businesses that we’ve ever seen in the state’s history, arguably the country’s history, like this transcends what was provided during covid or flood events or bushfire events, and you only provide support to businesses when they start to feel the impacts of it, and that wasn’t happening in April or May or even June.
So we’re out there providing the support when the need arises, as we reasonably should. But a lot of people sort of talk about this as though you could have stopped the algal bloom if you had acted earlier, which, of course, is a complete nonsense and not backed up by any science or evidence or just basic understanding of the ecological event that has occurred here. So, you know, I appreciate there’ll be some that want to politicise the algal bloom, and that’s their prerogative. I’ve just got to focus on using the science and the research to inform a thoughtful policy response.
Journalist: So just to be clear given how devastating it has been, you stand by the response, and you don’t think that there’s anything that the Government could have done differently in anyway?
Premier Malinauskas: Well, you always seek to learn from these events. But you know, again, I ask people, you know, if anyone’s got any ideas about what could have been done to stop the algal bloom, I’m all ears. But you know, all the research, all the global inquiries that have been made, and all the international experts that we’ve engaged with make the point that there’s no man-made intervention that could be made in the oceans that can stop these events from occurring.
They occur because of underlying ecological conditions that have come together to create the circumstances that allowed the bloom to occur naturally. As a Government, we advocate for action on climate change because that has played a role here, but that’s obviously a global challenge that South Australia is already making a significant contribution towards.
But you know, with each and every one of these types of events, you learn from and you can respond to them, there’s a playbook in government, so to speak, for almost every single potential adverse event that you can think of, floods, fires, cyber attacks, earthquakes, you name it, there’s a plan for it. But there’s never been a harmful algal bloom like this in the history of the whole nation. It’s now occurred, and that presents opportunities to learn from it, which is something we’ve got to be committed to doing.
Journalist: Have you got any update on Karenina cell counts in the last week?
Premier Malinauskas: Yes. We continue to do that. I’m very cautious about it, though, because I don’t want to unnecessarily or inaccurately inflate expectations in the community but there are some very positive results coming from the Karenina cell counts.
We’ve seen weeks now of negligible or normal levels of — people have got to bear this in mind, and this has been lost, sometimes in much of the discourse on this that, our view is always present in our waters, it’s a natural part of the waters.
What’s been a problem here is that there has been a bloom in a particularly harmful type of algae. What we’ve seen, though, in the last couple of weeks are results where that’s all gone back down to normal levels of zero or negligible, and that’s very positive. Now we’re not out there trumpeting that too much, because we want to see that sustained before we can sort of get a sense that we’re facing the opportunity of a normal summer, but if those numbers continue, that’ll be very positive, and it’ll be incumbent upon all commentators to actually give coverage to this fact, because part of the challenge that we’re dealing with here on the algal bloom.
In fact, more recently, the biggest challenge we’ve been dealing with is the perception of it. People thinking that you can’t walk on the beach because of some potential health implications. You know, it’s just crazy.
We need people to be basing information or making decisions on the basis of fact, public health advice, rather than, you know, unhealthy degrees of ill-informed fear and that’s why just getting the information out is going to be important.
Journalist: Premier, can I just quickly ask you about the passing of Leon Byner, one of the biggest names on the radio in the state. What do you say about his legacy.
Premier Malinauskas: Yeah, I’m grateful you asked. The passing of Leon Byner is very sad news. Countless South Australians, over very long period of time, used Mr Byner’s voice as a source of information.
Indeed, they used the platform that Leon Byner provided to advocate their concerns on various issues that did result in changes for the community. Leon Byner always understood the power of the platform of which he was a custodian, to explain to people challenges and issues, but also invite them to share theirs and take it up with public officials like myself.
On more than one occasion, I appreciated the opportunity to hear feedback directly from listeners through Leon Byner’s program to inform public policy responses in a way that’s sort of a necessary part of the political discourse in a healthy, functioning liberal democracy. Leon’s voice was powerful. It was trusted by many, and he had an impact that was lasting in the state, and his loss today is right to be recognised.