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SA State Budget 2017: Daniel Wills’ analysis of the Treasurer’s financial plan for South Australia

TOM Koutsantonis describes his Budget as “very sexy and wearing a red dress”. But in picking a fight with the banks, Labor risks getting slapped, writes State Political Editor Daniel Wills.

Tom Koutsantonis SA Budget Highlights

TREASURER Tom Koutsantonis loves a fight, and he’s picked a big one as Labor runs into the election and positions itself at the front line in a war between South Australia and the world.

The unlikely Treasurer’s first Budget in 2014 was penned just months after the last state election, and had then-prime minister Tony Abbott’s Federal Government as its central villain. After a shock cut to future health and education funding from Canberra, it was a five-volume declaration of war.

In the years that followed, as SA’s national standing waned and confidence dipped, they’ve taken every opportunity to blame outsiders for woes that range from blackouts to job losses.

This Budget continues the theme. A Government that wants to be seen as “standing up for SA” is beating up on perhaps the only people currently less popular than politicians – fat cat bankers.

They won’t take this quietly. After copping a new tax in the Federal Budget, the banks will be watching what happens in SA over the next few months as a test case for the rest of the nation.

If SA can get away with double-taxing them, there’s nothing to stop others from following.

And that all plays perfectly into Labor’s narrative. It wants a fight on these terms. It wants to be accused of raiding the big end of town to fund infrastructure. It also relishes the battle.

In reality, this tax is unlikely to be passed on to consumers. Even if legislation to stop the introduction of new SA-specific charges fails, the powers of competition should do the job.

Most likely, it will be paid for by the shareholders of the big banks as smaller profits diminish returns. Mostly, they are relatively wealthy and vote Liberal. Lots of those shareholders most affected actually live interstate, or hold the shares through super funds they seldom examine.

And further sweeteners sit in this budget for the suburbs that will decide the election. While far from headline-grabbing, the $120 million spend on community infrastructure including sports fields and playgrounds could have more impact in the places that count than any new freeway.

All politics is local, and the next election will be won or lost in the cul-de-sacs and side streets of Edwardstown and Prospect, not in the big stone building in the middle of North Tce.

Mr Koutsantonis has called this a “Labor Budget”. In a topsy-turvy world where the Coalition is accused of going “Labor-lite” and Mr Koutsantonis was called a Tory in a blue tie when he cut business taxes in 2015, this one returns to the traditional mantra of tax and spend.

There’s no running away from the fact that this rather healthy looking set of numbers is propped up by some extraordinary and unexpected cash injections. The Motor Accident Commission has tipped a staggering $2.8 billion into the Budget, and SA is now receiving $2 billion every year more than its population share in GST revenue as the rest of the country helps keep the lights on.

Nonetheless, the Budget is in the black despite huge new spending committed today and Mr Koutsantonis still has enough spare change kicking around to do some pretty serious extra spending during the election campaign over the next nine months. He has more than $800 million booked as surpluses over the forward estimates that can be funnelled into vote-buying as polling day arrives.

Mr Koutsantonis faced accusations today that this is a safe Budget, that lacks sex appeal. In the way that only he would respond, Mr Koutsantonis said: “One person’s sex appeal is another person’s boredom”. “I think it’s very sexy. I think it’s got a red dress on and is walking down the street.”

In many ways it is. It lifts taxes on faceless and unpopular big businesses rather than households, while promising better days ahead on the economy and refreshed infrastructure to everyone.

It gives Labor flexibility as political and economic circumstances change over the next few months.

But the difficulty for an ageing government may be with a public that feels it has heard much of this before and is hurting from cost of living rises and the worst job security in the nation.

It may still be that, for all today’s attempted seduction, Labor still ends up getting a slap.

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Original URL: https://www.adelaidenow.com.au/news/sa-state-budget-2017-daniel-wills-analysis-of-treasurers-financial-plan-for-south-australia/news-story/70fa35f1010ea7569f1cb0527c18003b