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Cost of mega road, hospital projects keeps rising under Labor, but is it their fault? | Paul Starick

A $3bn hospital. A $15bn road project. The cost of SA’s huge projects just keeps soaring, Paul Starick writes, but is it Labor’s fault?

The new Women’s and Children’s Hospital

The cost of electing Labor keeps on rising and the final bill to taxpayers from substantial promises to fix the health system is yet to arrive.

The most expensive building in the state’s history, the new Women’s and Children’s Hospital, is forecast to cost $3bn to $3.2bn – at least $600m more than the $2.4bn Royal Adelaide Hospital.

The new WCH was originally planned to cost $1.9bn but a review found this had blown out to $2.8bn.

A new artist impression of the proposed Women's and Children's Hospital for Adelaide. Picture: SA Government
A new artist impression of the proposed Women's and Children's Hospital for Adelaide. Picture: SA Government

The 10.5km North-South road corridor between the River Torrens and Darlington, which was costed at $9.9bn just before the March 19 state election, is now likely hit up to $15bn, depending on the project options chosen. A decision on the road corridor is likely the next major item on Premier Peter Malinauskas’s to-do list, given he checked off the WCH site on Tuesday.

The end of August was set as the scheduled target for finishing an Infrastructure and Transport Department review into the North-South corridor project, commissioned by the Labor government shortly after winning the March state election.

However, senior government sources in late August said the review was expected to be completed soon but then discussed and assessed at cabinet level.

Whatever the outcome, it beggars belief that the project will cost below $10bn.

Transport Minister Tom Koutsantonis repeatedly has accused the Liberals of leaving a substandard design with insufficient exit points. Upgrading these will add to the cost, even before the affect of rising inflation, interest rates and construction costs.

Just after the Ides of March, Labor’s election costings and health-focused election platform was overwhelmingly embraced by voters. The ALP won 27 lower house seats, the Liberals 16 and independents four. Labor won the two-party preferred vote 54.7-45.3 per cent.

Undoubtedly, voters backed Labor’s health agenda. Of $3.118bn in election spending announced on March 17, $1.145bn was in health – headlined by commitments to open 300 hospital beds and employ 350 ambulance officers, 300 nurses and 100 doctors.

Both major parties were committed to building a new Women’s and Children’s Hospital, co-located with the RAH. The new WCH, controversially located on the historic Thebarton Police Barracks site, is clearly the biggest single health spending item to be announced in the Malinauskas government’s first term.

An artist impression of the new Women's and Children's Hospital (left) next to the Royal Adelaide Hospital (right). Picture: SA Government.
An artist impression of the new Women's and Children's Hospital (left) next to the Royal Adelaide Hospital (right). Picture: SA Government.

But the cost and associated debt is outside the state budget’s forward estimates, given the 394-bed hospital will not be finished until 2030-31.

This will be too long to wait to deliver benefit for Labor’s central promise – to fix the ambulance ramping crisis.

Liberal health spokeswoman Ashton Hurn, recognising this, zeroed in during a well-crafted parliamentary speech on Tuesday afternoon. She pointed out ramping was worse than ever and showing no signs of slowing down.

“They (Labor) know very well how to run a scare campaign, but they seem incapable of delivering for the people of South Australia and we will keep holding them to account,” Ms Hurn thundered.

Rising inflation, interest rates and costs are, of course, driving the increased bill to deliver Labor’s election commitments.

For Treasurer Stephen Mullighan it is, as David Brent says in a 2007 episode of The Office, “out of my hands … and even if it were in my hands, my hands are tied”.

Stock markets have plunged in reaction to increasing predictions of a United States recession, one that is likely to wash into Australia. This will put further pressure on government revenue, debt and expenditure – the latter as governments deliver welfare and relief for a recession’s victims.

The proposed new Women’s and Children’s Hospital, seen looking towards the CBD. Picture: SA Government.
The proposed new Women’s and Children’s Hospital, seen looking towards the CBD. Picture: SA Government.

South Australian Productivity Commission chairman Adrian Tembel has argued SA is “at a delicate state” in terms of debt and “starting to get on the edge”. He is urging bipartisan discussion about a sustainable debt level, to ensure SA is adequately protected for future generations.

“Can we afford to spend another billion dollars a year on interest with all the pressure on healthcare and schools in six or seven years’ time, if there was another Covid or there’s a huge cyber-attack, or a war in Taiwan? Could we afford that? Maybe, but you’d start to feel a bit wobbly. Our interest would go up and that’s before we even talk about the repayment of that debt,” Mr Tembel told the Creating Synergy podcast.

Voters handed Labor a clear mandate in March, demanding money be spent to fix the health system. Questions remain about the cost and efficacy. Crucially, many economic and systemic factors affecting the outcome are quite beyond the government’s control.

Paul Starick
Paul StarickEditor at large

Paul Starick is The Advertiser's editor at large, with more than 30 years' experience in Adelaide, Canberra and New York. Paul has a focus on politics and an intense personal interest in sport, particularly footy and cricket.

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Original URL: https://www.adelaidenow.com.au/news/opinion/cost-of-mega-road-hospital-projects-keeps-rising-under-labor-but-is-it-their-fault-paul-starick/news-story/5567a8c22e7396f05b0ac487d463a754