Stephen Mullighan warns of budget pressures after $854m Liberal spending spree

The state’s new Treasurer has warned of budget pressures after the former Liberal government went on an “extraordinary” $854m spending spree in its final weeks in power.

The former Liberal government went on an $854m spending spree in its final weeks in power and has put the planned budget surplus next financial year at risk, the state’s new Treasurer has claimed.

In his first days in charge of South Australia’s books, Stephen Mullighan is scrambling to find out what was spent on in the Liberals’ final 10 weeks in power.

“I am surprised and shocked to learn that between the release of the mid-year budget review in December and the issuing of the writs on February 19, (the Liberals) spent an additional $854m,” Mr Mullighan said.

“That’s an extraordinary level of spending to take outside of a formal budget process.”

The new treasurer accepted that about $200m had been spent on health measures to combat the Omicron outbreak.

“But a lot of the other spending, we are still working through with Treasury to find out what the justification is for some of it,” Mr Mullighan said.

New SA Premier Peter Malinauskas and Treasurer Stephen Mullighan. Picture: Michael Marschall

“Some of it was for election commitments that the government made but did not include in the mid-year budget review.”

Mr Mullighan said the new Labor government was “more than happy to honour” some of the investments, such as an expansion to the Adelaide Botanic High School, establishing plant-protein manufacturing hubs and various business grants.

“But that still leaves hundreds of millions of dollars that we’re still working through to see what the status of that is,” Mr Mullighan said.

“Just the sheer quantity of that spending, even over a four-year period, puts a surplus next (financial) year at risk.”

Former Treasurer Rob Lucas, who retired at the election, revealed Treasury’s final advice on the state’s budget position last Monday.

It showed the planned operating budget for 2022-23 had actually increased by $37m to $139m.

Former Treasurer Rob Lucas released a budget update before retiring. Picture: NCA NewsWire / Brenton Edwards

According to the update, that surplus would grow to $709m in 2023-24 and $537m in 2024-25.

On March 14, Mr Lucas revealed his government had spent $698m “funded by either budget decisions taken before caretaker began or using existing departmental resources”. Mr Lucas’s statement at the time said it was “exactly the same” budget treatment adopted by previous Labor governments.

“For example, during caretaker period at the last election, the Labor government announced major funding commitments to SAAB, Raytheon and ProTom, based on decisions taken before caretaker period,” the statement said.

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