State Budget 2018: Treasurer to reveal deficit of almost $400m for past financial year

A BOTTOM-LINE blowout of almost $400 million will be revealed in today’s State Budget, as Treasurer Rob Lucas warns tough decisions are needed to put South Australia’s finances back in the black.

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• Upgrade plans for South Rd
• Permanent screens for Southern Expressway
• A Port Wakefield overpass promised

A BOTTOM-LINE blowout of almost $400 million will be revealed in today’s State Budget, as Treasurer Rob Lucas warns tough decisions are needed to put South Australia’s finances back in the black.

In a move that will deepen the legacy war raging between the new State Government and its Labor predecessor, The Advertiser can reveal Mr Lucas will report a $397 million deficit in the 2017-18 financial year, which covers the state election lead-up and its immediate aftermath.

Labor’s final Budget update in December last year predicted a slender $12 million surplus would be delivered in 2017-18.

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However, Mr Lucas said departmental reports penned before the election had issued secret warnings to Labor that the Budget was spinning out of control.

The claim will be furiously rejected by Labor, which has said in the lead-up to Tuesday’s Budget that it left the new Government with a balanced set of books and a growing economy. It is understood about $70 million in extra health funding, as well as further blowouts in child protection and TAFE, contributed to the large deficit for 2017-18.

Treasurer Rob Lucas will hand down the State Budget on Tuesday — his first in 17 years. Picture: AAP / Dean Martin

It can also be confirmed that Mr Lucas will project surpluses across all four years of the forward estimates, and expects to have the Budget $48 million in the black by July next year.

That surplus is expected to continue growing, before reaching $211 million in 2022.

Mr Lucas has also declared the end of a “salami slice” approach to achieving public sector savings, and ordered new spending be offset by identifying specific programs to cut.

“(We) are not going to be relying solely on the salami- slicing approach, which has been for agencies to keep every program they have got and just take a little bit off the top,” he said.

“We are going back to first principles. You have to look at your budgets and projects and programs. If we are going to put in new priorities, then some of the wasteful expenditure is going to have to go. But, also, some of the existing programs can’t be continued.

“That’s the simple fact of managing a Budget, you have to make some difficult decisions.”

Mr Lucas said health would not face the full level of cuts assumed in Labor’s final Budget.

“In health, we have had to forgive a significant chunk of their savings task, which we just think was unsustainable,” he said. “There’s still a very significant savings task they’ve got. We will be outlining some of the strategies that will have to be addressed.”

Mr Lucas said he would spend $576 million more on infrastructure in the new Government’s first Budget than Labor did in its last. Picture: Cathy Davis

Mr Lucas said a departmental report produced for former treasurer Tom Koutsantonis in January warned of a $194 million “deterioration” that put the Budget “clearly in deficit”.

“Clearly, the former government knew,” Mr Lucas said.

“Labor knows, when it claims to have left the Budget in surplus, that there were these monthly monitoring reports being produced.”

Labor achieved two confirmed surpluses in 2016 and 2017, in part due to privatisations.

Opposition treasury spokesman Stephen Mullighan said the Government had “been gifted an extra $272 million in unexpected GST” from the Federal Budget, and had no excuse for cuts.

“We’re seeing more and more revenue coming into the State Budget,” he said.

“If anything, since the Mid Year Budget Review (in December before the election), the only thing that’s happened to the state’s finances is that they have become much stronger.

“Rob Lucas is a Treasurer who has never had it so good.”

Mr Lucas said he would spend $576 million more on infrastructure in the new Government’s first Budget than Labor did in its last, rejecting Opposition claims of a construction slowdown.

What we know so far

■ $100 million high school for Whyalla.

■ $177 million funding to upgrade South Rd from Regency Rd to Pym St, $220 million to electrify the Gawler line and $160 million to duplicate the Joy Baluch Bridge in Port Augusta, all from the Federal Government.

■ A $88.5 million Port Wakefield overpass and road duplication process, with 80 per cent to be funded by the Federal Government.

■ $60 million towards building an Aboriginal art gallery at the old Royal Adelaide Hospital site.

■ $5.5 million to complete the remaining business cases for the North-South corridor.

■ $15 million to install throw screens on the Southern Expressway.

■ $18.5 million for park n’ rides at Paradise and Golden Grove.

■ Funding 48 civilians to fill non-operational police roles, freeing up frontline officers.

■ $14.5 million for the independent Commissioner Against Corruption to hold public maladministration and misconduct hearings.

■ An $11.9 million domestic violence package.

■ A $2.9 million upgrade to the Waterfall Gully walking trail.

■ $10 million to turn Glenthorne farm into a national park.

■ $10 million to establish a specialised statewide Borderline Personality Disorder service.

■ $12 million in compensation payments to TAFE students, families of Oakden residents and people affected by health bungles.

■ A $10 million grant towards a $24 million sports facilities fund, replacing a $10 million Labor program

■ $14 million to fast-track a feasibility process into a power interconnector with NSW.

■ $44.5 million a year to introduce payroll tax exemptions for businesses with payrolls of up to $1.5 million, lifting the tax-exempt threshold from $600,000.

■ $360 million over four years to return the Emergency Services Levy remissions.

■ $45 million to cut elective surgery waiting times.

■ A $397 million deficit.

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