SA’s 2020 Budget ‘drowning in red ink’ says Lucas
Today’s Budget will be “drowning in red ink” but that’s a mouth-watering proposition for workers, the Treasurer says.
SA News
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Today’s State Budget will include a $2.59bn deficit for this financial year, leaving South Australia’s finances “drowning in red ink”, according to Treasurer Rob Lucas.
Debt also will soar to a massive $33.2bn over the forward estimates in an unprecedented budget aimed at putting the state on a path to prosperity after the crippling impact of the coronavirus pandemic.
Mr Lucas has predicted a surplus of $406m in 2023-24.
“The budget is drowning in red ink,” Mr Lucas said. “From a Treasurer’s viewpoint, the numbers are eye-watering, but mouth-watering for workers and businesses because it is the mechanism in which we are going to save as many jobs and businesses as we can.”
The budget, which is the first of several to be handed down by state treasurers across the country over the next two weeks, has followed a path endorsed by the Reserve Bank of Australia and the Federal Government – using record-low interest rates as a means to build infrastructure and stimulate the economy.
“If we went down the path of battening down the hatches and minimising the spending, that would cause very significant damage to the economy and wouldn’t allow us to save as many jobs or businesses as we could or should,” Mr Lucas said.
“By pivoting the way that we have, there are very significant increases in debt and deficit.”
The budget will reveal a $1.49bn deficit for the previous 2019-20 financial year – down on the forecast $1.9bn.
Over the forward estimates, projected deficits are $2.59bn for the current 2020-21 financial year, $1.42bn for 2021-22 and $435m in 2022-23, before returning to surplus the following year. “It is a two-year stimulus package, and we are intent on doing whatever we need to spend to save as many jobs and businesses as we can,” Mr Lucas said.
Debt, however, would grow to $33.2bn by the end of the forward estimates. It is $3.2bn more than predicted by Mr Lucas in June and well up on the debt for the 2019-20 financial year that today will be revealed has reached $17.5bn.
Opposition Leader Peter Malinauskas yesterday warned the government against creating savings at the expense of the hip pockets of South Australians.
“The Marshall Liberal Government can offer relief by following the lead of other states and freezing fees and charges,” he said.
Premier Steven Marshall said the charges were already set earlier in the year.
“I think we will worry about what we do next year,” he said.
Mr Lucas said government departments would be expected to work on savings as outlined in previous budgets.
How the government will deal with the final stages of the North-South Corridor – SA’s largest-ever infrastructure project – is expected to be outlined today, ending more than a year of uncertainty for residents in the western suburbs.
On Sunday, Mr Marshall announced stimulus spending would be doubled to $4bn – with an additional $1bn expected to be leveraged from the Federal Government.
A “tradies” package would provide a $1bn pipeline of building and construction work, with a focus on maintenance and shovel-ready projects.
Speculation is rife that Hindmarsh Stadium, netball’s Priceline Stadium and tennis infrastructure at Memorial Drive are in the running for bucketloads of cash in the order of $30m-$50m each.
Mr Marshall said another round of $10,000 grants for small businesses, and $3000 grants for sole traders and partnerships would be part of the $4bn package.
TOURISM PITCHES SURVIVAL WISH LIST
The South Australian Tourism Commission needs at least $400m over the next four years to reboot the visitor economy, a major industry group has told Treasurer Rob Lucas.
The Tourism and Transport Forum – which lobbies on behalf of some the nation’s biggest players in tourism, transport and aviation – says the tourism sector alone is losing on average $453m a month in SA.
The forum’s chief executive, Margy Osmond said the local tourism industry remained on its knees “in the fight of our lives” as a result of the “double whammy of both the summer bushfires and the COVID-19 pandemic”.
“Our SA tourism, accommodation, transport and aviation sectors are resilient, and we can recover levels over the long term, but we will need continued support to get there,” she said.
In a State Budget wish list sent to Mr Lucas, the group has asked for – in addition to the $100m a year for the SATC – a raft of measures including:
AN extra $20m support package for Australia’s international carriers to help complete the trans-Tasman bubble;
A DEDICATED $10m aviation-restoration fund to restore routes and reboot flight frequencies and seat capacity on existing routes;
FAST-TRACKING of public transport and infrastructure projects, and;
INCREASED support for business events and conferences, including regional convention facilities, to secure high-yield events.
Mr Lucas said there would be general programs and more specialised incentives for the sector in today’s budget.
“We acknowledge the importance of tourism and hospitality sectors to the state’s economy,” he said.
“We are very strong supporters because this is a very important area of growth.”
Mr Lucas pointed to investments such as money for parks and the planned Aboriginal arts and culture centre at Lot Fourteen as examples of how the improving the visitor experience in SA.
Business SA chief executive Martin Haese has also called for more support for the sector.
“SA is the festival state, and our festivals and events need more support,” he said.
Mr Haese said Business SA wanted targeted support for businesses hit heavily by the pandemic particularly events, tourism and hospitality venues.
