Paul Starick | South Australia shaken by jobs challenges and Premier Peter Malinauskas must be at top of his game

Challenges are shaking the state and Premier Peter Malinauskas is facing testing times, Paul Starick writes.

South Australia’s foundations are being shaken by global and natural forces, with tempestuous times ahead.

In a tumultuous past fortnight, bedrocks of the state economy, employing thousands of people, have been plunged into doubt.

Santos, the state’s biggest company by far, is the target of an almost $30bn takeover bid by an Abu Dhabi raider, casting great uncertainty over the future of its Adelaide head office.

The $368bn nuclear-powered submarine project centred on Adelaide is under threat from a 30-day United States review assessing its alignment with President Donald Trump’s America First agenda.

Despite some heartening rain, the drought continues to ravage the state’s farms – SA primary industries generate $17.1bn annually.

Premier Peter Malinauskas and Santos chief executive officer Kevin Gallagher at the new Moomba CCS (carbon capture and storage) plant in January. Picture: Brenton Edwards

State debt was forecast to soar to $48.495bn in the state budget unveiled on June 5, after which the influential S & P Global Ratings warned big new spending ahead of next March’s state election could trigger a credit rating downgrade.

The purse strings will continue to be tested by the Whyalla steelworks and mine, as the budget set aside $384m in state and federal funds for a potential six-month extension of the state-induced administration.

The Malinauskas government might have repeatedly ruled out an ownership stake in Whyalla’s steelworks but a $2.4bn state/federal rescue package leaves both on the hook until a new owner is found.

Premier Peter Malinauskas and Prime Minister Anthony Albanese visiting the Whyalla steelworks on February 20. Picture: NewsWire / Tim Joy

Public sector unions are restless. The SA Salaried Medical Officers Association on Thursday rejected a 10 per cent pay rise over three years and recommitted to walking off the job on Wednesday.

These are extraordinary and foundational challenges, of varying degrees of concern, to the state economy and, most particularly, the potential for today’s aspirational young South Australians to find well-paid, challenging jobs.

The risk of Santos’s head office leaving Adelaide should not be dismissed lightly. A foreign takeover, as my colleague Giuseppe Tauriello observed on Wednesday, would significantly diminish the last corporate heavyweight left standing in South Australia.

Santos dwarfs other SA companies for jobs, investment, sponsorship and general corporate clout. It is four times the size of the state’s second biggest firm, Argo Investments, and more than eight times the size of third-ranking Codan.

Business success matters in a state where the population is overwhelmingly concentrated in the capital, and most jobs are underpinned by state and federal government spending of some form.

SA Premier Peter Malinauskas has been thrown some unknown curveballs, according to Paul Starick. Picture: Supplied

Santos and partner Beach Energy in January officially opened a nation-leading Moomba carbon storage project, billed as kickstarting a $600bn industry and hailed by Premier Peter Malinauskas as a “historic day for our state”.

Mr Malinauskas responded to the Santos takeover bid by declaring his government’s “priority at all times is to ensure that South Australian jobs remain in South Australia, and to maintain Santos’ headquarters in Adelaide”.

This will be a test of his government’s mettle and resolve, along with its legislative levers that include ministerial approval for a change in controlling interest of a petroleum resources licence holder, like Santos.

Opposition leader Vincent Tarzia, revealing a housing policy ahead of his budget reply speech. Picture: Dean Martin

Opposition Leader Vincent Tarzia, in his Tuesday budget reply speech, predictably painted a bleak picture of a state ravaged by debt, skyrocketing costs, unaffordable homes and a floundering health care system.

Nine months out from the next state election, he vowed to deliver a “debt management plan” to ensure this was at “a sustainable level”.

Mr Tarzia declared the state was “at a crossroads”. He was right, although the future is always uncertain.

Mr Malinauskas has a strong story to tell on economic confidence, a historically low jobless rate and the state’s standing in the nation. But he will be justifiably wary of overconfidence ahead of the state election, even if his opponents are at a historically low ebb in their standing.

The state is facing some serious challenges and the Premier will need to be at the top of his game.

Originally published as Paul Starick | South Australia shaken by jobs challenges and Premier Peter Malinauskas must be at top of his game