The new Labor government in South Australia predicts a recovery of the national economy and a booming real estate market will help it deliver on key election promises in health and education, without raising debt, taxes or severely cutting the public sector.
Key points:
- State debt has risen to $ 1.73 million, but surpluses are expected from next year
- The government has not raised any taxes
- Instead, it has imposed efficiency targets on some government departments
Elected in March with the mandate to “fix the state’s growing crisis,” the government’s first budget is, unsurprisingly, all about health, with $ 2.4 billion in new health spending over the next five years.
Treasurer Stephen Mullighan stated that his first budget was delivered for “each of the election commitments we made.”
“We’re getting the budget back in surplus, improving our debt metrics and making sure we stay true to our commitment not to make new taxes or increases,” he said.
“We are providing an absolutely extraordinary investment in health … and we are maintaining a very large infrastructure program.”
The budget predicts that inflation in SA will grow by 4 to 5 percent next fiscal year. (ABC News: Che Chorley)
The government is running a worse-than-expected deficit of $ 1.27 billion this year, but has forecast better-than-expected surpluses over the next four years, starting at $ 233 million next year.
This is due in part to an unexpected $ 1.65 billion increase in government coffers thanks to the stamp duty of a booming real estate market and an increase in state GST revenue.
Despite this, the treasurer pointed to the growing share of WA’s GST, which he said cost $ 290 million in South Australia in a single year.
“It is imperative that we continue this task of negotiating with the federal government for a change in these distribution agreements,” he said.
“Because in a couple of years we will see our budget figures massively affected.”
Public debt will continue its record-breaking growth of $ 24.7 billion this year to $ 33.9 billion in 2025-26, but the treasurer said the rate was slower than it would have been under the previous Liberal government. .
The cost of living will continue to rise
The budget predicts that inflation in South Australia will rise by 4 to 5 per cent next year, which will increase the pressure on households.
The government has already announced a one-time doubling of cost-of-living concessions for almost 185,000 South Australians next year.
The government has also pledged a modest $ 177.5 million over four years to address housing accessibility, with a commitment to build 400 new public homes.
It will continue with the former government’s commitment to work with the HomeStart loan service to provide a 3% low-interest home loan scheme to first-time home buyers.
Homeless support services will see an additional $ 10 million above future estimates.
But the rising cost of living will also create budgetary pressures because the government will open wage negotiations with doctors, nurses, teachers and other civil servants next year.
South Australian Prime Minister Peter Malinauskas described his government’s first budget as the time when “politics is coming true”. (ABC News: Che Chorley)
The budget warns that these salaries represent 40% of general government spending and that wage increases should be modest.
But Mullighan said it was unrealistic to expect the government to limit wage increases to 1.5 percent each year when inflation rose to 5 percent.
“Unfortunately, we will recalibrate what we believe can be achieved by the government,” he said.
The treasurer will impose so-called “efficiency targets” on government departments that no longer reflect government “priorities,” such as the energy and mining department, prime minister and cabinet, commerce and SA Water.
The government will also save $ 15.5 million over three years by suspending an internship program for public sector employees.
Immediate relief for the state health system
The government has promised immediate relief for the state’s health system, with an additional 99 paramedics and ambulance workers promised this year.
At the end of its first term, the government aims to deliver 350 new paramedics and ambulance officers, 100 doctors and 300 nurses, as well as 326 additional hospital beds, 24 more than previously promised.
ABC reporters Leah MacLennan and Rory McLaren speak with Stephen Mullighan. (ABC News: Che Chorley)
SA Health has received a $ 400 million savings relief, as the agency is in charge of raising costs due to the pandemic, but funding for the response to COVID-19 of the state will drop from $ 448 million this year to $ 200 million next year.
The budget commits an additional $ 100 million for the planned construction of a new women’s and children’s hospital to fulfill the election promise of an additional 50 beds.
That brings the total project budget to $ 2.55 billion, but the treasurer warned that more explosions are likely to occur in that figure.
“I’m not very confident that even with the extra $ 100 million we’re investing in between $ 1.95 and $ 2.05 billion, it’ll be enough, because it doesn’t seem to make sense to somehow inoculate a project. construction pressures, “Mullighan said.
“I can’t tell you what this cost will be, but what I can tell you is that we are absolutely committed to this project.”
Cuts to solar energy and batteries, as hydrogen paves the way for renewables
The government’s key infrastructure commitment will cost it $ 593 million over the next four years to build a hydrogen facility in Whyalla.
The plant will use renewable energy to produce hydrogen for storage and export, and will convert some of it into electricity to power the grid.
But this new spending on renewable energy will be offset by cuts in battery and solar programs.
Labor will save $ 19 million over three years by eliminating the previous government’s domestic battery plan, $ 20 million by eliminating network-scale storage and $ 11.2 million by disrupting a subsidy for electric vehicle charging.
Mullighan denied that the cuts would affect the government’s environmental credibility.
“It’s worth noting that we’re investing more in renewable energy initiatives than we’re reducing,” Mullighan said.
The government will also save $ 1.1 billion by delaying the final section of the north-south corridor, and $ 662 million by removing the Liberal government’s Riverbank Arena.
Posted 3 hours, 3 hours ago, Thu, June 2, 2022 at 5:31 am, updated 1 hour, 1 hour ago, Thu, June 2, 2022 at 7:18 AM