Treasurer Rob Lucas says wildly unpredictable revenue forecasts, huge health effort make this Budget different to any he’s seen

This year’s SA budget will be the most challenging in decades, the Treasurer says, as his staff tries to grapple with wildly changing forecasts and expensive stimulus spending.

Treasurer Rob Lucas expects this years state budget to be the most complex in decades. Picture: Matt Loxton

Treasurer Rob Lucas says the upcoming SA budget is the most unique and challenging one he’s witnessed in a nearly 40-year career in politics, as the State Government battles with wildly fluctuating revenue forecasts and formulates new stimulus plans.

Both federal and state governments are now entering the closing stages of budget preparation, with the former to deliver its document on October 6 and the latter November 10.

It comes amid early signs of recovery in regions that have reopened after COVID shutdowns, but as the Reserve Bank urges state leaders to do more stimulus heavy lifting.

In an interview with The Advertiser, Mr Lucas said he would continue to focus on new infrastructure and lowering the cost of doing business as “levers” for new economic growth and said that the standard budget processes had been totally overhauled due to the pandemic.

He also confirmed that Energy and Mining Minister Dan van Holst Pellekaan has been elevated to the powerful budget subcommittee of cabinet, replacing former transport minister Stephan Knoll who resigned amid the country members travel expenses scandal.

That committee also includes Premier Steven Marshall, Attorney-General Vickie Chapman and ministers John Gardner and David Speirs.

Government sources say a new treasurer to replace Mr Lucas after he retires at the next election is likely to come from within that group.

“It’s completely different this time around as to any budget I’ve ever been either involved with or observed,” Mr Lucas said. “We’ve had to do it in stages. You have got a rough idea of how much you are spending, and how much you propose to spend on the expenditure side, but the revenue side is very uncertain.

“We’re obviously putting aside the important issues of whether we are balancing a budget or reigning in overall debt level to the greater good, which is trying to generate as much activity as we can.”

Mr Lucas said the normal process of budget discussions with departments was being held in March “just as COVID was breaking”, and they received interim cash to tide them over during the emergency as health was given freedom to do whatever was needed. Mr Lucas said the economic disruption was playing havoc with predictions about how much GST, payroll, stamp duty and other taxes would bring in over the coming years. “How do you know? You just have to do your best estimates,” he said.

Already, Mr Lucas has forecast a $2bn deficit, and debt headed toward $30bn. The federal budget will provide new GST updates to be fed into the state figures.