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Thursday, 30 October 2003
Page: 17397

Senator BUCKLAND (6:59 PM) —I rise tonight to make some remarks on what I believe is good news related to the economic performance of the South Australia government. The recently released Standard and Poor's report on ratings has given South Australia an AA+ credit rating, which puts it in the top quartile of ratings on 180 rated non-US regional governments in the developed world. Significantly, it should be noted that South Australia is the only government in that quartile rated at AA+ that has a positive outlook. When you take into account that, when assigning credit ratings to governments, Standard and Poor's assesses credit quality both in an absolute sense and on a comparative basis against rated international peers, it shows they believe that within the next few years, if current trends are maintained, South Australia is likely to join the elite group of governments rated at AAA. This will bring South Australia to the same credit rating as all other Labor states and the ACT.

The report is particularly complimentary about the government's fiscal strategy. It highlights the achievement of balanced budgets as a vital component in helping create a prosperous economic future. The report also highlights a balance sheet that compares favourably with some more highly rated peers. It says:

South Australia's general government net debt burden is extremely low by international standards and is likely to remain so. South Australia's debt burden is closer to the median observed for `AAA' rated local and regional governments than the observed `AA+' median.

The South Australian government's strong financial discipline and improving financial performance is recognised not only by Standard and Poor's but also by Moody's, which recently upgraded the state's rating from Aa2 to Aa1 on their performance scale. Four key measures were taken into account by Standard and Poor's to support the AA+ credit rating: an extremely strong balance sheet, improving state finances, a demonstrated commitment to fiscal discipline and a growing economy.

The Rann Labor government's efforts in getting this level of financial achievement become more significant when you take into account that South Australia has a population of just 1.5 million people and accounts for about seven per cent of Australia's economic output. Seventy-five per cent of those 1.5 million people live in the capital city of Adelaide but, despite this disproportionate dispersement of the population, the government is not city-centric in its thinking. Unlike previous state governments, the Rann government is making an exceptional effort to address the past inequities which have existed for non-metropolitan communities. As a non-metropolitan, regional dweller, I have suffered for many years under various governments from this city-centric attitude. The South Australia government has put a very real and vigorous effort into lifting the value of and the ability for regional development in many different ways. There are initiatives in fish breeding and fish growing, in general aquaculture, in tourism and in the marketing of the agricultural crops. It is unnecessary, I think, to mention our wonderful wines and what they contribute to the national and international palate.

Central to what has been achieved to date has been the determined effort of the South Australian Treasurer, the Hon. Kevin Foley, who is committed to achieving zero net borrowings as a primary target and to not borrowing to pay public service wages and other recurrent expenses—something that has been experienced in the past. Whilst adopting this strategy, the government is realistic enough to know that there may be investment projects of sufficient merit to justify moving away from the objective on a temporary basis for the very real purpose of investment projects of sufficient merit, and that should be noted.

To be able to do this, the government has to be confident that it has a stable industrial relations environment. This has been achieved, with South Australia having the lowest number of industrial disputes, the lowest-cost manufacturing industry base, the lowest-cost finance and insurance industry base and equal-lowest general direct labour costs. It is because of that that we have seen the expansion of the Holden work force by an additional shift, the export of additional vehicles from the Holden plant and the general increase in activity within the motor industry which is so important to South Australia. We have also seen a significant increase in exploration for the mineral wealth contained within the South Australian borders.

I will finish by offering my congratulations to the Rann Labor government, with particular recognition to the Treasurer, Kevin Foley, for their excellent job. The findings of Standard and Poor's showed that `strong and steady growth and efficient labour markets have resulted in an unemployment rate which is low by international standards'. The report is very complimentary about the government's fiscal strategy, highlighting the achievement of balanced budgets as a critical component of helping create a prosperous economic future for South Australia.