SA Budget update to show $289m surplus for 2018-19, big increase on predictions made in June
Treasurer Rob Lucas will post a beefier than expected State Budget surplus, but says staying in the black hinges on the ability to make savings and strike “reasonable” union pay deals.
SA News
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Treasurer Rob Lucas will post a bigger-than-expected State Budget surplus of $289 million in an update of SA’s finances due on Monday, but says the Government must hold the line on savings and union pay deals to remain in the black.
The Mid Year Budget Review will continue to show expected surpluses across the next four years, as well as confirm that state debt continues to head towards record levels of more than $20 billion.
The $289 million surplus is for the financial year which ended in June this year. Six months ago, it was predicted to be $101 million.
The result is in part due to several “once-off” windfalls including big bequests to the Art Gallery of SA, the end of a legal standoff over the construction of the new Royal Adelaide Hospital and the timing of grants for the SA Health and Medical Research Institute’s new proton therapy unit.
This year’s Budget included a host of “bad medicine” announcements that included higher fees and charges, as well as plans to pull in an extra $40 million a year from land tax aggregation changes that became highly controversial.
All were aimed at offsetting a more than half a billion dollar collapse in GST revenue.
Mr Lucas told The Advertiser that further reductions in SA’s expected GST take would feature in the update being finalised in Cabinet on Monday, leaving no room for complacency in the drive for future balance.
“We will bring down modest surpluses for the forward estimates period,” he said.
“We’re proud to say that the first one has been delivered, but we will have to keep battling on over the next few. The GST figures are going to show ... a further writedown, sadly.”
Mr Lucas said that, despite the Government’s first surplus being larger than expected, this was “not a sign of ongoing spare capacity in the system”.
“There’s a significant number of once-off items that have ballooned it out,” he said.
“They don’t exist for the forward estimates. There’s ongoing need for settlements on reasonable enterprise agreements. That’s key for balanced budgets going forward.”
Teachers are considering whether to endorse a new pay deal that allows for 2.35 per cent increases annually for the next five years. An interim deal with police in October allowed for 2.5 per cent rises, and flexibility.
Nurses want a 3.5 per cent pay rise, as well as a $50,000 bonus for senior staff who help train juniors and an iron-clad guarantee of no forced sackings.
Mr Lucas said he hoped the police and teacher offers would help “set the tone” for other negotiations to come.
Mr Lucas said the MYBR would include the impact of the final land tax package which the Government negotiated through the Upper House, and the Opposition has estimated to be about $150 million over three years.
State debt for the financial year ending June has come in higher than expected at just under $13.1 billion. It is understood SA’s future debt will swell beyond the $21.3 billion predicted in June, in part due to a massive new housing plan and infrastructure programs.
The former Labor state government recorded a healthy $443 million surplus in 2017 ahead of the election, aided by major asset sales.
The Budget was plunged into a $313 million deficit in 2018, in part due to decisions around the timing of payments taken by the incoming Liberal government.