South Australia Treasurer sails into his political sunset

Retiring South Australian Treasurer Rob Lucas says he is finally optimistic about the economic future of his state.

SA State Treasurer Rob Lucas. Picture: Tom Huntley

It has only taken him 38 years and 227 days but, on the eve of his last state budget, retiring South Australian Treasurer Rob Lucas says he is finally optimistic about the economic future of his state.

The SA Liberal veteran will exit politics just shy of the 40-year mark at next year’s election and says SA is finally emerging from the ruins of the 1991 State Bank collapse and the death of the car industry with a rosy future.

While every Australian parliament has its Father of the House, 68-year-old Lucas is the granddaddy of them all, having been elected at the 1982 election when David Tonkin’s Liberal government was defeated by Labor’s John Bannon.

Having endured two long periods in opposition – the 11-year Bannon era and the 16-year Mike Rann-Jay Weatherill era – Lucas is confident the SA Liberals will win a rare second term in 2022 thanks to sound economic management and the successful handling of the pandemic.

Speaking to The Australian, Mr Lucas said Tuesday’s budget would include a hefty Covid-fuelled deficit but show SA on track to return to surplus.

In a cheeky shot at the Victorian government and its Treasurer, whom he nicknamed “Comrade Tim Pallas”, Mr Lucas said SA would reject the open-ended stimulus spending and tax hikes in this year’s Victorian budget. “The Victorian budget has ongoing annual deficits and huge tax increases,” he said. “We are saying that that’s the Labor way. We are not going down that path.

“We have a two-year time frame for stimulus worth $4bn this year and next year. We are going to have significant deficits this year and next year but we intend to get back to spending no more than we earn the year after that.”

Mr Lucas said the impact of the pandemic had forced a complete fiscal about-face. “If you told me when I first got into politics that we would have a Reserve Bank governor, a federal Treasury Secretary and every leading business group and economic commentator saying governments needed to borrow massively to get out of trouble, I would have laughed.”

SA’s ability to get itself out of financial trouble has been helped no end by a $926m windfall in GST payments in this year’s federal budget, up to $6.532bn from the $5.606bn originally allocated.

Mr Lucas said that rather than use the money for a pre-election spending spree he would use it to further reduce the state’s deficit.

He said the impact of Covid on the SA economy and business had been less acute than the greatest financial disaster of his political lifetime, the 1991 State Bank collapse which ripped $3.15bn from the local economy at the same time the 1980s recession was still biting and the car industry starting to collapse.

He said his government had helped business this past three years by reining in power prices through greater stability in the electricity system, scrapping payroll tax for every business with a payroll under $1.5m, and having what he called “a massive stink” with traditional Liberal supporters over land tax, which in the end reduced the top land tax rate from 3.7 per cent to 2.4 per cent.

“South Australia is in a good place,” he said.

“It is actually the first time in my career, the only time in my career, when I have felt genuinely optimistic about the state’s future.

“Things are good now. I can sail off into the political sunset more excited than I have ever been,” Mr Lucas said.