SA State Budget to fall $1.9 billion into deficit, as debt explodes to a record of about $30b, Treasurer Rob Lucas to tell Parliament
A staggering deficit and mountain of debt will likely force plans for projects like a new city stadium to the backburner, Rob Lucas says.
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South Australia’s State Budget black hole is forecast to hit a massive $1.9 billion this year as debt soars toward a $30 billion, but the State Government says it won’t abandon signature infrastructure promises or ongoing economic stimulus.
With the usual comprehensive reveal of the state financial position delayed until November due to the upheaval caused by coronavirus, Treasurer Rob Lucas will today update State Parliament on the state of the books.
He told The Advertiser the deficit to be recorded at June 30 this year would be a staggering $1.9 billion, with estimates of about the same figure again next year. State debt, which was already forecast to head beyond $20 billion amid big spends on roads and schools, will now reach about $30 billion within four years as taxes tank and health and stimulus spending surges.
And that is all before the Government factors in the multibillion-dollar bills coming down the pipeline from further South Rd upgrades and building a new Women’s and Children’s hospital in the city.
However, Mr Lucas said the idea of a covered second city stadium would likely have to be put on the backburner.
It was put forward at the opening of Parliament this year as part of the Government’s new agenda for SA.
Mr Lucas said that the Government had been shaken by a global pandemic outside of its control, and was doing what was needed in tough times.
“The inevitable consequences of COVID-19 have been big increases in debt and deficit, as all governments are confronting around the world,” the said.
“That’s been done to save as many lives as we can, and protecting jobs and businesses.”
Mr Lucas said the total Budget hit of stimulus measures had stretched to about double to $1 billion first announced.
That was due to some Government taxes and charges being waived, and other funding moved around, creating a larger shortfall this Budget year. Mr Lucas said about $850 million in GST revenue had been lost this year alone, with a more than $1 billion shortfall possible next year. That is due to lower consumer spending around the country on retail and other goods.
The State Government was only last year predicting surpluses of $94 million this year, and $105 million in 2021.
Mr Lucas has pointed to recent public sector pay deals as measures that have reduced structural spending.
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However, Mr Lucas said major Government election promises would be delivered.
“We have locked in the infrastructure program, and the two key (South Rd and WCH) projects,” he said. “To the extent that we can keep the Women’s and Children’s down from the industry sector guesstimates that are quite extraordinarily high to a more reasonable level, there will be an argument around that.
“The prospect of an inner-city sports stadium are not going to be deliverable in the short or medium term.”
Opposition treasury spokesman Stephen Mullighan said the Budget and economy in SA were weak even before the crisis hit.