SA treasurer to reveal multimillion-dollar state budget deficit

Treasurer Stephen Mullighan will reveal an enormous reversal of state finances on Thursday as the budget slides into the red. See the details.

An almost $500m reversal of state finances into the red will be revealed in Thursday’s budget when Treasurer Stephen Mullighan hands down a deficit of $249m.

Rather than the $233m surplus for 2022-23 he trumpeted in his debut budget last June, Mr Mullighan will instead deliver a net operating deficit of $249m.

But the Treasurer will unveil a forecast return to surplus in 2023-24, although this is likely to be slimmer than the $487m figure predicted in last year’s budget and the $353m forecast in December’s mid-year budget review.

In an interview with The Advertiser, Mr Mullighan blamed the deficit on spending pressures including an extra $470m tipped into health to cover extra demand on emergency departments triggered by GP shortages and unexpectedly high continuing admissions of Covid patients.

But Opposition Leader David Speirs accused the Labor government of breaching its election promise to fix the ambulance ramping crisis, instead delivering record levels that meant vulnerable people were “not necessarily getting the healthcare they need”.

Premier Peter Malinauskas and Treasurer Stephen Mullighan speaking with SAAS paramedics Gary Fry and Quang Nguyen. Picture: NCA NewsWire / Naomi Jellicoe

Mr Mullighan listed other spending pressures, including an extra $42.3m for child protection and $104m for flood support, and claimed a $95m hit to GST funding – highlighting that was almost half the forecast surplus.

“We’re still aiming for a surplus next financial year, so it’s delayed the return to surplus by a year,” he said.

Mr Mullighan insisted he wanted to run surpluses, arguing this was particularly important as the economy softened because the government needed flexibility “for unforeseen demands on the budget”.

A souring economy was “a real risk” to future surpluses, because the comparatively buoyant employment and property markets had delivered stronger than forecast payroll tax and stamp duty revenues.

Opposition Leader David Speirs speaking during question time on June 13. NCA NewsWire / Naomi Jellicoe

Mr Mullighan repeated Labor’s pre-election promise of no new taxes, declaring his budget would focus on health, housing and “the most significant cost-of-living relief package that’s been deployed here in South Australia”.

Electricity cost relief revealed in May’s federal budget would be the most substantial component of this package, Mr Mullighan said, but he said there would be other measures.

Mr Speirs told parliament the budget must contain more funding for the public health system, including to relieve pressure on paramedics and emergency departments, plus address the critical shortage of health care workers.

“There’s a chance here for the Labor government to stand up and respond to these most pressing needs in our health care system, both in metropolitan Adelaide but, just as importantly, in regional South Australia. We are calling for it and we hope that this government responds to this call,” Mr Speirs said.