Weatherill's report is dead wrong

Media Release


09 October 2014

The latest taxpayer funded report Premier Jay Weatherill is using to blame everyone but himself for South Australia's economic woes is completely divorced from reality and riddled with errors.

The $90,000 report produced by the Australian Workplace Innovation and Social Research Centre makes numerous false assumptions and gets basic facts wrong.

For example, the report claims the Australian Government's additional infrastructure investment is $6.6 billion over the next 5 years when it's actually $16 billion compared to the 2013 Pre-election Economic and Fiscal Outlook.

The Australian Government's alleged cuts to health and education are also completely false with our investment in South Australia's hospitals and schools over the next four years increasing by 34% and 27% respectively.

What Mr Weatherill's report fails to reveal is the pain caused to South Australian households from this year's state budget including massive increases to the Emergency Services Levy and $1.3 billion in cuts to health, education and police.

This is in addition to Mr Weatherill's staggering admission yesterday that he supports both the carbon tax, which increased average power bills by $550 a year, and the jobs and investment destroying mining tax.

Attached is a brief analysis responding to the report's false claims and outlining the facts from the Australian Government's 2014/15 Budget papers.

Premier Weatherill needs to stop blaming everyone else for South Australia's woeful economic performance and take a long look in the mirror.

It's not the Australian Government's fault that:

  • Labor this year delivered the largest deficit in South Australia's history;
  • South Australia's debt is higher than during the State Bank disaster; and
  • the South Australian Government can't even deliver the most basic of services to the most vulnerable in our community.

The Australian Government is not interested in playing childish political games with taxpayers' money. We want to work with the State Government to build world class infrastructure, grow the economy and create thousands of new jobs for a stronger and more prosperous South Australia.

It's about time Premier Weatherill stopped representing the Labor Party and started acting like the leader of South Australia so we can work together to address the challenges facing our state.

Response to claims from WISeR report

Claim 1—Federal Budget impact on SA economy

The report claims that there are significant spending reductions at the federal level that will affect South Australia.1

Fact—Commonwealth funding to South Australia continues to increase over the forward estimates. Comparing the numbers contained in the 2013–14 Budget (Federal Labor's last Budget) to the numbers in the 2014–15 Budget (our first Budget), South Australia will receive an extra $1.5 billion over the same four year period (2013–14 to 2016–17) from the Commonwealth Government.

Claim 2—Road infrastructure spending in SA

The report criticises some of the Government's infrastructure funding because it “may mean
reduced funding is available for other roads.”2

Fact—As announced in the 2014–15 Budget, the Government is investing $2 billion into SA to fund major road projects. This is an additional $435 million in roads funding for South Australia, compared to the 2013 Pre-election Economic and Fiscal Outlook.

Claim 3—Road Infrastructure spending in Australia

The report notes that the Federal Budget includes $40 billion in spending over the five years,
2013–14 to 2018–19, but claims that only $6.6 billion is additional funding.3

Fact—This is completely wrong. The 2014–15 Budget includes an additional $16 billion in infrastructure spending over the five years 2013–14 to 2018–19, compared to the 2013 Pre-election Economic and Fiscal Outlook.

Claim 4—Asset Recycling initiative

The report claims that SA is disadvantaged by the Asset Recycling Initiative because it has fewer assets that can be sold compared to other jurisdictions.4

Fact—South Australia is investigating the sale of its Motor Accident Commission, which, according to media reports, could raise up to $1.5 billion that could be used to fund new infrastructure.  If SA does this in accordance with the terms of the National Partnership Agreement, it will be eligible for substantial incentive payments from the Commonwealth. The Premier of SA, along with his state and territory colleagues, signed up to the National Partnership Agreement establishing the Initiative in May 2014.

Claim 5—Health spending

The report claims that the 2014–15 Budget reduces Commonwealth Government funding to SA under the National Health Reform Agreement and health-related National Partnership agreements by $655 million.5

Fact—Hospitals funding initiatives put in place by the former government have been revealed to have unsustainable growth beyond previously published estimates. The Government will move to more realistic growth levels from 2017–18.

Nonetheless, public hospitals funding from the Commonwealth for SA will increase by $333 million, or 34%, from the level we saw in 2013–14 to the projected level in 2017–18.6 Year on year, public hospital funding to South Australia grows by 7 per cent, 8 per cent, 8 per cent and 6 per cent.7

Claim 6—Education spending

The report claims that federal budget funding reductions in education will have significant economic and employment impacts in South Australia.8

Fact—The report fails to recognise that between 2013–14 (last financial year) and 2017–18 (the last year of the forward estimates), Commonwealth base funding to schools in South Australia will increase by $275 million (an increase of 27 per cent from the level seen in

Claim 7—Needs-based school funding

The report states that ‘needs-based schools funding under the Gonski Better Schools Plan has
been renounced and replaced with CPI indexing after 2017’.10

Fact—This is a blatant lie in the report. The Government—including the Minister for Education who himself hails from South Australia—has said we are committed to maintaining needs-based school funding, including beyond 2017. The Government is ensuring that Commonwealth schools expenditure is sustainable into the future whilst preserving the additional funding provided from 2014 to 2017.

Claim 8—Higher education

The report estimates that, on average, student loans will increase by between $30,000 and
$200,000 due to the Government's higher education reforms.11

Fact—There is no evidence to say this is the case. Universities have already ruled out exorbitant fee rises. Our reforms are based around making the higher education system sustainable and competitive.

In fact, the Labor South Australian Higher Education Minister Gail Gago has welcomed a key component of our reforms. In the Financial Review on 16 June Ms Gago said:

“The extension of funding of ­sub-bachelor program's to TAFE SA and other registered higher education providers provides an opportunity for TAFE SA to access Commonwealth funding for its diploma and advanced diploma courses on an equal footing with universities…The recognition and funding of these sub- bachelor programs delivered by TAFE SA is welcome.”12

Claim 9—Vocational Education funding

The report states that ‘Federal Budget measures affecting [VET funding] take place in a context where South Australia is experiencing stubbornly high unemployment and the prospect of significant adjustment pressures arising from the closure of the automotive industry over the next few years’.13

Fact—This is just misleading and unsubstantiated. For example, just taking into account the National Skills and Workforce Development Specific Purpose Payment (funding associated with the National Agreement for Skills and Workforce Development), the Commonwealth will provide South Australia with around $416 million over the next four years (including $102.4 million in this year alone) towards increasing the skill levels of South Australian (and this is only part of the assistance we currently provide to South Australia to assist in increasing the skill levels of all Australians).14

Further, the report does not take into account that the South Australian Government has made their own cuts to vocational education and training.

For example, The Adelaide Advertiser reported just last month that:

“TAFE jobs are set to be slashed by almost a third over the next four years as part of a cost-cutting drive, raising fears a training shortfall will hit just as the automotive sector shuts down. A leaked parliamentary briefing note prepared for Employment, Higher Education and Skills Minister Gail Gago shows TAFE's full-time job cap will fall by 814 by 2017–18. The Government announced cuts to TAFE in the June Budget, revealing almost 300 jobs would go over 12 months. The briefin g note shows  TAFE's  curr ent  full-time equivalent cap of 2609 jobs will fall to 1795 in 2017–18 as the Governm ent's a nnual spend on the sector  drops by $94 million to $251 million. The cuts will coincide with the expected closure of Holden's Eli z abeth pl ant i n 2017 and the loss of tho usands of related jobs in the broader automotive component manufacturing sector.”15

Claim 10—Indigenous Affairs funding

The report raises concern about funding reductions in Indigenous affairs of more than
$500 million over five years, as well as concerns that small organisations may not be able to compete for funds under the new PM&C Indigenous Advancement Strategy.16

Fact—The Government has allocated $8.5 billion over the next four years for Indigenous Affairs through the PM&C portfolio alone. This includes $4.8 billion for the new Indigenous Advancement Strategy. The modest savings of $239 million over four years from PM&C programmes are being achieved simply by getting rid of some of the waste, duplication and red tape without an adverse impact on the ground.

In addition, overall funding levels for Indigenous health will grow over the next four years. From 2014–15 to 2017–18, the Government will invest $3.1 billion in Indigenous specific health programmes and activities—an increase of over $500 million compared to 2009–10 to 2012–13. This doesn't include funding provided to Medicare and the Pharmaceuticals Benefits Scheme.

1 Page 2 of the report in question

2 Page iv of the report in question

3 Page 6 of the report in question

4 Page 6 of the report in question

5 Page 10 of the report in question.

6 Calculated based off 2014-15 Budget Paper Number 3, pp11-12

7 Calculated based off 2014-15 Budget Paper Number 3, pp11-12

8 Page 10 of the report in question

9 Calculated based off 2014-15 Budget Paper Number 3, p36

10 Page 51 of the report in question

11 Page 68 of the report in question

12 Gail Gago, South Australian Higher Education Minister, Quoted in: SA Labor to back Coalition on funding, Tim
Dodd, AFR, 16 June 2014

13 Page 60 of the report in question

14 Calculated based off 2014-15 Budget Paper Number 3, p44

15 Who’ll retrain the car workers, Daniel Wills, The Advertiser, p3, 3 September 2014

16 Page 26 of the report in question