Mid Year Budget Review reveals cost of Adelaide 500 blows out to nearly $35m this year

The cost to bring back the Adelaide 500 has blown out by nearly $14m – but the state government has blamed the Liberals for the extra millions.

The return of the Adelaide 500 has cost the state government just less than $35m this year, after nearly $14m in extra costs were revealed in the Mid-Year Budget Review.

Treasurer Stephen Mullighan said the state’s financial situation was overall stronger now than when he handed down the Labor government’s first budget in June.

The government had initially budgeted $21m for the return of the Supercars race, which was held between December 1-4 and attended by 258,000.

The budget review (MYBR), handed down by Mr Mullighan on Friday, showed an extra $13.9m was required to support the return of the race, bringing the total cost to $34.9m.

Shane van Gisbergen celebrates at the VALO Adelaide 500. Picture: Mark Horsburgh

He said the event was a “raging success” and blamed the blowout on the previous government.

“I think this is testament to the short-sightedness and vandalism Steven Marshall and the former Liberal government undertook when they flogged off the Adelaide 500 assets in an effort to thwart this government,” he said.

“Much of this expenditure was having to rebuild the track infrastructure, to purchase new track infrastructure.”

But opposition treasury spokesman Matt Cowdrey rejected the criticism.

“Peter Malinauskas knew what was required to stage the Adelaide 500, but he clearly doesn’t have a grasp on economic management if he missed the mark in his budget by nearly $14m,” he said.

“Labor’s been quick to try and shift the blame, but cost blowouts have become the hallmark of the Malinauskas government — including an outrageous $5.5bn hike in the cost of the North-South Corridor project.”

The simpler explanation is you just can't manage money. We're starting to lose track of the cost blowouts you've delivered in just nine months.

— SA Liberal Media (@SALibMedia) December 15, 2022

Mr Mullighan said the economic benefit that past Adelaide 500 events had brought to the state was in the range of $40m-$45m, but this year’s economic analysis would not be available until early next year.

The race blowout was part of an extra $52.9m in government spending on tourism and events, including $15m over three years to secure additional business events and conventions, and $12.2m extra spent on the Major Events Fund.

Other new funding included the government’s recently-announced $51.6m flood assistance package, $103.9m over four years to commission and operate a 270-bed expansion of Yatala prison, $125m for upgrades on key freight routes and $84.5m on health initiatives.

Supercuts: The best mullets of the Adelaide 500

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The overall forecast budget deficit for 2021-22 reduced from $1.7bn to $829m — an improvement of $904m.

Mr Mullighan said the reduction was a result of funding that was allocated but not spent, as well as improved revenue.

The MYBR then forecast a surplus of $206m in 2022-23, which will increase across the span of the forward estimates.

“We’re striving very hard to get the budget back into surplus, it’s always been important to me to try and forecast surpluses in the hundreds of millions to give capacity to buffer the state against future shocks, whether they be economic or expenditure shocks,” he said.

The state’s GST grant revenue has increased up by $419m this year, and by another $1.7bn over the years to 2025-26.

Expectations for stamp duty revenue have been lifted by $111m this financial year, but Mr Mullighan said treasury was expecting house prices to remain steady over the coming months.

He said increased project costs of the $3.2bn Women’s and Children’s Hospital and Torrens to Darlington project — this week revised up from $9.9bn to $15.4bn — were expected to fall beyond the forward estimates years.

However, he said the expenditure meant the government needed to be very careful when choosing which projects would be funded in the future.