State Budget 2017-18: Surplus cut to fund Labor’s pre-poll cash splash

TREASURER Tom Koutsantonis is about to deliver his fourth state Budget with job creation and infrastructure spending to be key elements. Find out from 3pm at Advertiser.com.au how it affects you.

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TREASURER Tom Koutsantonis will slash his predicted surpluses in half in Thursday’s State Budget to allow major new infrastructure spending aimed at transforming SA’s economy and create jobs.

The Advertiser can reveal Mr Koutsantonis’ pre-election Budget will book a $239 million surplus for 2016-17, which shrinks to $72 million by the end of 2017-18.

Overall, the four-year forward estimates will include $859 million of surpluses, down from $1.6 billion predicted in December.

FULL BUDGET COVERAGE — COMPREHENSIVE WRAP | DANIEL WILLS ANALYSIS | FIVE-MINUTE GUIDE

Mr Koutsantonis said it was critical the state’s finances stayed in the black, but the time had arrived to “step up” and invest in infrastructure.

The spend will be targeted on five key growth areas – ship building and defence; renewable energy and mining; tourism and the visitor economy; health and advanced manufacturing.

In addition to $1.1 billion in health spending already pledged, he said a further “substantial investment in our suburbs” would be rolled out.

It is understood the Budget documents will also:

GIVE firsthome buyers up to $40,500 in assistance to buy off-the-plan apartments in the CBD and inner-city suburbs.

BOOST usage of the Outer Harbor, Gawler, Seaford and Belair train lines, for $22 million.

BUILD two new O-Bahn Park n Ride facilities at Klemzig and Tea Tree Plaza, at a cost of $15 million.

UPGRADE Priceline Stadium, the Mile End netball complex, costing $4.5 million.

It could also contain funding to shift all civil courts to another city building, freeing courtrooms in the Sir Samuel Way building for more criminal trials and help ease backlogs.

Treasurer Tom Koutsantonis and Premier Jay Weatherill ... the State Budget will be handed down today. Live coverage from 3pm at Advertiser.com.au

Mr Koutsantonis yesterday also expanded a jobs accelerator grant scheme for businesses that employ new trainees or apprentices.

It means businesses will receive either $9000 or $15,000 for hiring a new apprentice or trainee, at an extra cost of $8.1 million over three years.

He said he had restored the Budget to balance after revenue collapsed during the global financial crisis, and now had ammunition to deal with job threats around cars and steel.

“We’re doing what a lot of people have asked me to do, and I think it’s the right time to do it, we’re going to spend,” he said last night, adding: “The headwinds are here.”

“With Holden closing, now is the time to step up. More than at any other time, this state needs to really invest to make sure that we’ve got the ability to create now jobs.

“We’ll be dipping into the surpluses to do it. But I’m a very strong believer that we must maintain budget discipline, and surpluses across the estimates, and we do that.”

Despite significantly eating into huge planned surpluses, Labor’s budget strategy still leaves both major parties a large $859 million piggy bank for sweeteners during the nine-month campaign.

The Government is pocketing about $2.5 billion from selling assets held by the Motor Accident Commission, much of which was used to reduce public debt.

Mr Koutsantonis indicated the Government would now lift borrowings to fund infrastructure and take advantage of low rates.

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

“It’s given me capacity to borrow,” he said of the MAC sales. “Our money will be spent on productive infrastructure. We’re doubling down on those industries that have been growing.”

The Mid Year Budget review forecast total taxpayer debt to peak at $14 billion in 2019, after spiking due to the new Royal Adelaide Hospital.

The amount of debt held by state government departments is about $6.5 billion, and has reduced since the last election in 2014.

Mr Koutsantonis said negotiations with the Federal Government and preferred buyer for the Whyalla steelworks were “going very well”. He said taxpayers must invest in the city to avoid the loss of up to 3000 jobs, which would place a “horrific” welfare burden on taxpayers.

He said Holden’s closure on October 20 loomed as a major psychological blow, and the Government must step up to provide confidence in SA’s future. “This Budget has got to be about getting through the closure of Holden by showing that we have the means here, in SA to keep growing and create new jobs,” he said. “I think we are going to transition and absorb a lot of those jobs. We are going to create more jobs and get through this.”

Opposition Leader Steven Marshall said the Budget must deliver cost-of-living relief.

“Punishing prices for electricity, gas and water are strangling household budgets, killing economic investment and jobs growth in SA,” he said.

“SA household budget pressures will intensify in the wake of recent sharp increases to the price of electricity and gas.

“Without cuts in state government taxation, more people will be driven on to the dole.”

The Liberals have already promised to cut ESL bills and cap council rate rises.