Stephen Mullighan has a couple of major tactical advantages when it comes to crafting a state budget.
State budgets are a bit like NAPLAN for politicians in that, like our children, they are judged against their peers.
The three-years-young Labor government of Peter Malinauskas and Mullighan finds itself being compared with the aged Andrews-Allen and Palaszczuk-Miles administrations in Victoria and Queensland. Against that backdrop, it’s hard not to look like an economic genius.
A couple of bouquets devoid of cynicism: Mullighan has remained true to his promise of not introducing new taxes or increasing existing ones beyond CPI. This is now three budgets in a row to have honoured that promise. It is a point worth making, given the ambivalence of other state Labor governments to the impact of tax changes on those businesses who keep the economy afloat.
The fact SA’s economy is not completely moribund, unlike the rest of the country, says something about the pro-business environment this right-wing Labor government is trying to create.
There are warning signs, too. Much of the growth in SA’s economy is coming thanks to public expenditure. And much of that public expenditure is being fuelled by borrowings that will push state debt up from $28bn to $44bn within just a few years.
The last thing SA needs is to start drifting down the high debt path epitomised by Victoria where merely paying off the interest on debt will soon be an annual $10bn proposition.
The other advantage Mullighan has is that people have suddenly realised SA was a hugely undervalued place to live and work. Until Covid, houses were still being given away there by national standards. The surge in property values, coupled with increased investment in SA and migration towards the state, suggests that the penny has dropped that the place was seriously and stupidly cheap.
As the penny dropped, the dollars rolled in for Mullighan, with SA’s very belated property boom making a surplus look less like a crowning achievement than an unavoidable outcome.
It’s a good outcome all the same, and worth remembering that there’s a couple of other Labor governments kicking around that would probably have found a way of spending it all.
The biggest challenge on the horizon is health. Health spending now accounts for one-third of the state budget and has attracted $7bn more in spending than ever before over the past three years.
Labor is still a long way from meeting its 2022 election promise to fix ramping, despite creating hundreds of new ambulance positions. New hospital beds cannot come on quickly enough, and not enough doctors and GPs have been hired to plug the system.
With the nation’s oldest population by age profile, and one of the lowest rates of population growth, it’s hard to see how the ever-spiralling cost of health can be sustained in SA.
How the Treasurer deals with that while retaining his commitment to low taxation will be his biggest challenge yet.
ALP ‘up to decade late’ on renewables target: Triguboff
Billionaire real estate developer Harry Triguboff has forecast that Labor will be five to 10 years late in hitting its 82 per cent renewables target.
Post the pandemic, how’s your Covid?
The pandemic has faded, but let’s not forget about Covid.