SA budget to be ‘sense of fiscal responsibility’
Treasurer is unlikely to offer any 'goodies' as his budget tries to contain any potential of a 'debt spiral'
THE South Australian government is walking a budget tightrope as it grapples with the need to deliver cost of living relief while managing a bottom line saddled with growing debt.
Treasurer Tom Koutsantonis will deliver the budget on Thursday, marking his first since 2017 when state net debt stood at $6.1 billion.
It is now approaching $35 billion.
And the treasurer, who took the reins after Stephen Mullighan suddenly quit politics last year, has conceded that debt will grow further than the $48.7 billion that the December mid-year budget review predicted by mid-2039.
Flinders University public policy lecturer Josh Sunman said the theme of the budget was emphasising fiscal restraint.
“I think the government is acutely aware of the potential for a debt spiral to occur,” he said.
“They’ve brought in these big infrastructure projects and they really don’t have much capacity to do anything else, despite cost of living crises.”
Work is now under way on the $15.4 billion Torrens to Darlington tunnel project to complete Adelaide’s north-south corridor link, and the new Women’s and Children’s Hospital, which is costing an estimated $3.2 billion.
“The government is very clearly signalling it doesn’t really intend to offer much in the way of goodies (in the budget) and this is the perfect point in the cycle for that, they’ve just been re-elected with a thumping majority,” Sunman said.
The treasurer recently responded to calls for cost of living relief by declaring: “It would be lovely to give everyone free public transport and free car parking and a puppy.”
Premier Peter Malinauskas and his ministers were projecting a “genuine sense of fiscal responsibility,” Sunman said.
“They don’t want to be seen as Victoria and I think they’re going to work very hard to try to control the debt spiral, but there could be an unforeseen crisis which necessitates a different approach.”
The government has already been grappling with expensive unforeseen crises in recent years, including the rescue packages for the Whyalla steelworks and the Nyrstar smelter in Port Pirie, a strategic fuel reserve and the devastating algal bloom and drought.
Shadow treasurer Ben Hood said a debt recovery plan was a non-negotiable budget inclusion.
“We’re currently paying close to $5.3 million a day on interest alone, a figure that’s set to reach almost $8 million a day by 2029,” he said.
“Not only has Labor failed to manage the budget but it seems to be in complete denial about the severity of the situation.”
Koutsantonis said unless the Liberals were proposing cancellation of the tunnel project and the hospital, debt would increase.
“The state can afford to do so. Debt to revenue is sustainable and I think we need to deliver these projects for the long-term growth of our economy,” he said.
One Nation leader Cory Bernardi said SA was facing an intergenerational debt that was blowing out partly because of mismanaged infrastructure projects.
He said the CFMEU was a “lawless criminal cartel” that was “clearly riding roughshod over Premier Malinauskas”.
“This is why One Nation is proposing a debt ceiling bill, so that there is some actual accountability to the parliament and oversight of the extraordinary spending that’s going on,” he said.
