State Budget 2017-18: Review of Weatherill Government’s five budgets

JAY Weatherill has presided over five state budgets he became Premier in October 2011, by three different treasurers: Jack Snelling, Mr Weatherill and Tom Koutsantonis. Weexamine how they delivered.

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• State Budget 2017: Comprehensive coverage
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• State Budget 2017: Five-minute guide

FIVE State Budgets have been handed down since Jay Weatherill became Premier in October 2011, by three different treasurers: Jack Snelling, Mr Weatherill and Tom Koutsantonis.

The Advertiser examines them all in detail on ahead of today’s 2017-18 State Budget.

2012-13

Theme:

The first State Budget under Jay Weatherill’s leadership, 2012-13 saw the Government opt for a reset and move away from Mike Rann’s bash and crash approach.

Mr Snelling was confronted by a huge revenue write down in his second Budget as Treasurer, but relied on a predicted Olympic Dam expansion and submarines to pull the state out of the mire.

In his speech, Mr Snelling said SA would be a very different place in a few years.

“The expanded Olympic Dam mine — the largest open pit mine in the world — will be operating, along with dozens of others, exporting copper, gold and uranium to a region hungry for our resources,” he said.

Big parts of the Government’s huge infrastructure spend were deferred, and the write downs saw the projected surplus move out to 2015-16, three years later than Mr Snelling had projected.

FULL COVERAGE FROM 3PM THURSDAY — MAIN WRAP, ANALYSIS, FIVE-MINUTE GUIDE

Reality:

The Government billed the Budget as building “Strong Foundations” but the $30 billion mining project it relied so heavily on came crashing down, creating a world of political and economic hurt.

The failure of BHP’s 4km long, 5km wide and 1km deep Olympic Dam to eventuate blew up Mr Snelling’s revenue projections.

The mine was predicted to add $60 billion to the economy over 40 years and boost gross state product by 6 per cent within a decade.

By relying so much on the mine and the 10,000 jobs it would have created, Mr Snelling found his political fortunes inextricably linked to it, with Mr Weatherill taking over as Treasurer by the next Budget.

Key statistics: The deficit ballooned out to $867 million from $263 million, with the projected return to surplus pushed back to 2015-16.

South Australia’s unemployment rate sat at 5 per cent, seasonally adjusted.

Treasurer Tom Koutsantonis flanked by Premier Jay Weatherill, and his predecessor and current Health Minister Jack Snelling.

2013-14

Theme:

Mr Weatherill’s first Budget as Treasurer came just nine months before an election where Labor was staring down the barrel of defeat.

The new Treasurer’s economic blueprint aimed to carefully steer SA on a path to prosperity.

The Budget stuck firm with the delayed infrastructure spending program and opted not to sell off “remaining significant government assets” — billed as a traditional Labor budget in the face of significant national economic challenges.

Reality:

Much of Mr Weatherill’s no frills first Budget worked as intended, but the announced closure of Holden’s Elizabeth plant put further pressure on the Government to grow the economy.

Key statistics: Deficit grew again to $911 million, with a return to surplus in 2015-16 still on track as projected in the previous year’s Budget.

The unemployment rate had risen to 5.9 per cent.

2014-15

Theme:

Buoyant after the Labor Party grasped victory from the jaws of electoral defeat, new Treasurer Tom Koutsantonis went on the attack.

He positioned his Budget as shaped by “brutal” Federal Government cuts he said totalled $898 million over four years and the citizens of South Australia simply couldn’t be “quarantined” from.

“In fact there is no state in the Commonwealth that could absorb these brutal cuts without reparatory measures or asset sales,” Mr Koutsantonis said in his Budget speech.

Mr Koutsantonis unveiled a series of response measures to cover the funding reductions, and fiercely vowed to go to war with the Commonwealth.

“Our Premier and this Labor Government will fight these cuts — the Commonwealth Liberal

Government has completely overstepped the mark and their cuts will have long term detrimental

impacts on our state,” he said.

Reality:

The Senate fought back and blocked much of the Commonwealth’s Budget measures but most of Mr Koustantonis’ recovery measures remained.

Most notable were moves to reduce health spending by more than $300 million, privatising the lucrative Motor Accident Commission and removing the Emergency Service Levy remissions.

The removal of the remissions, to achieve a Budget saving of $323 million, saw homeowners’ bills increase by 168.8 per cent.

Key statistics: The deficit improved to $479 million, with a return to surplus ($409 million) projected to be achieved by next Budget.

Unemployment had soared to 6.8 per cent pre-Budget, a .5 per cent rise on the previous month.

2015-16

Theme:

The first of Mr Koutsantonis’ two consecutive jobs budgets. The Treasurer took the knife to share duty, abolished stamp duty on non-real property transfers and offered a small payroll tax rebate as he looked to turbocharge the economy.

The four-year program to provide $670 million in tax reductions were all geared to create jobs — which Mr Koutsantonis stressed was the “centrepiece” of the Government’s reform.

Mr Koutsantonis pinned much of the blame on the Federal Government, but said uncertainty over the Future Submarines project and the looming closure of the automotive industry necessitated decisive action.

“It is about recognising that as a nation the next wave of productivity will not come from Federal reform but will be driven by improved productivity coming from state-based reform,” Mr Koutsantonis said.

Reality:

The Budget returned to surplus and Mr Koutsantonis argues his tax reform measures were vital action in the face of significant challenges, but the state was still in need of another “jobs budget” the following year.

Key statistics: The Budget returned to a surplus of $43 million but the financial result was $400 million worse than predicted.

Unemployment sat at 7.6 per cent by the Budget, necessitating Mr Koutsantonis’ jobs focus.

2016-17

Theme:

Mr Koutsantonis went straight back to his tax cuts and jobs growth mantra in his third Budget.

He said “unprecedented” $500 million school upgrades, large infrastructure spend and small business friendly reforms would set the state up for a “transforming, modern economy”.

Mr Koutsantonis told Parliament jobs were at the heart of the Budget and stressed an extended payroll tax rebate and a $109 million Jobs Accelerator Grant would incentivise businesses to bolster employment.

“We are pulling every lever available to government to create new jobs. Because every extra job that’s created in South Australia is another family that is better off, another family that can afford to provide more for their children and build a more prosperous state,” Mr Koutsantonis said.

Reality:

South Australia still sits atop the national unemployment table with a jobless rate of 6.9 per cent.

Mr Koutsantonis is adamant his Budget measures are working — pointing to employment growth outstripping the rate forecast in the Budget papers — but admits further measures are needed to complement the “green shoots” in the state’s economy.

South Australians can expect a third straight Budget with a heavy jobs focus.

Key statistics: The Budget surplus sat at $254 million, with projections for it to rise slightly over the next four years.

Unemployment sat at 6.9 per cent prior to the Budget, the same rate it sits at on the eve of Mr Koutsantonis’ fifth economic blueprint.

FULL COVERAGE FROM 3PM THURSDAY — MAIN WRAP, ANALYSIS, FIVE-MINUTE GUIDE