South Australian taxpayers are on the hook for $1.9 million as a result of the former Labor government’s decision to award a lucrative government-backed loan guarantee for Australian Fashion Labels Pty Ltd to buy and refurbish a new $17.5 million city headquarters – only for the company to ultimately go into administration and likely liquidation.
In 2015, Australian Fashion Labels Pty Ltd (AFL) had been the only company in three years to benefit from Labor’s failed $50 million so-called jobs creation scheme – the Unlocking Capital for Jobs Program – which its own commissioned independent audit derided as ‘complex and unwieldy’ with low appeal and limited impact.
Treasurer Rob Lucas said taxpayers were yet again forced to pay for Labor’s gross financial mismanagement, waste and incompetence.
“Here we have yet another example of the former Labor government picking winners while the hardworking taxpayers of South Australia lose out,” said Mr Lucas.
“Former Treasurer Tom Koutsantonis’ so-called jobs creation program has once again been exposed as an abject failure that created few, if any, jobs and – once again – taxpayers will have to pick up the bill.
“The fact that only one company in three years benefitted from the scheme and, even then, was provided an initial $3.5 million government-backed loan for its new multi-million dollar headquarters that was outside the program scope, shows how flawed the whole program was from the outset.
“The situation reinforces the utter incompetence of Labor in properly managing public money and its failure to effectively stimulate the local economy and grow jobs.”
In June 2018, Treasurer Lucas announced the Government was scrapping the failed jobs program.
“While Labor was obsessed with ‘picking winners’ and glitzy media stunts over substance, The Marshall Liberal Government has pursued a strong economic reform agenda that significantly lowers the overall cost of doing business in SA – from massive payroll and land tax relief (including abolishing payroll tax for all small businesses) to huge reductions in ESL and water bills. This approach benefits entire industries and tens of thousands of businesses – and households – not just a select chosen few.”
“Our priority has been to create the necessary environment for positive jobs and economic growth. The government accepts that our small and medium sized businesses must be nationally and internationally competitive and, for this to occur, then the costs of doing business in South Australia have to be nationally and internationally competitive.”
“Supporting these reform initiatives is a radical new approach to providing industry support with much less emphasis being placed on politicians and public servants ‘picking winners’ for the receipt of taxpayer funded grants and loans.”
Last month, AFL was placed into voluntary administration and owes a combined $12 million to creditors and staff, according to administrators. It has subsequently ceased trading, all staff have been made redundant and its administrators have said publicly that the company is likely to soon be liquidated.