Labor would fund $3.1bn election spending spree with public service cuts and debt hikes – but Libs claim ‘rookie error’

Labor would axe 50 senior public servants, slash travel budgets and put the state in more debt to pay for its promises, but the Treasurer says he can see 1.1 billion problems.

Labor would raise debt, cut spending on non-frontline public services and decrease budget surpluses to fund $3.118bn in election spending.

Public sector spending would be slashed under a Labor government by more than $670m over four years by a 1.7 per cent “efficiency dividend” but health, education, police, child protection, TAFE, courts and emergency services would be quarantined.

But Treasurer Rob Lucas says businesses and households would have to pay for a rookie Labor costings error of at least $1.1bn with a massive increase in taxes and other revenue – or more debt.

Releasing the costings on Thursday, Labor Treasury spokesman Stephen Mullighan committed to $979m of new operating initiatives and $2.14bn of capital spending, including $1.145bn on health.

SA Labor leader Peter Malinauskas with treasury spokesman Stephen Mullighan as they unveil Labor’s election costings. Picture: Michael Marschall

“What we will be doing is increasing debt over the (four-year) forward estimates, so that we can build the health infrastructure and the education infrastructure over the next four years,” Mr Mullighan said.

Labor would raid $1.5bn of $2bn in capital spending reserves – an amount contested by Mr Lucas – that had not been committed in the state budget. It also would bring forward all the $662m allocated for the Riverbank Arena.

This would increase by $243m state debt that already has been forecast to balloon to $33bn in 2024-25.

Mr Mullighan said cuts under the efficiency dividend would likely be made to public sector travel – by cutting back on interstate and overseas meetings – along with consolidating office space and reducing spending on consultants and contractors.

Executive numbers would be cut by 50 staff paid an average $200,000 – generating an estimated saving of $41.5m over four years.

Opposition leader Peter Malinauskas has finally revealed his party’s costings – two days out from the election. Picture: Keryn Stevens

Budget surpluses forecast from 2022-23 would be slashed by $258m over four years.

Labor’s $1.145bn health spending is headlined by commitments to open 300 hospital beds and employ 350 ambulance officers, 300 nurses and 100 doctors.

Labor leader Peter Malinauskas said the costings had been independently assessed by Charterpoint, a Canberra-based independent audit and accounting firm.

But Mr Lucas, who will retire after Saturday’s election, branded the Labor costing documents unbelievable and nonsensical as he tore them up outside the State Administration Centre.

Mr Lucas said Treasury advice showed there was between $300m and $350m in contingency funds, from which Labor planned to draw up to $2bn.

“Frankly, if you want to believe those numbers that are included in that particular document then I’m happy to sell you the winning numbers for a Powerball ticket tonight,” Mr Lucas said.

“They are frankly unbelievable. They make no sense at all. They’re full of rookie errors from a rookie potential treasurer and a rookie potential government.”

Mr Lucas accused Mr Mullighan and Mr Malinauskas of misunderstanding parliamentary answers by Treasury chief David Reynolds about the June budget, particularly the size of contingency funds and a technical distinction between those for transport projects and other initiatives.

Latest Treasury advice provided just before the mid-February caretaker period showed a maximum $350m in non-transport related contingency funds, Mr Lucas said.

“So if you want to find money to spend on a $600m to $1.2bn hydrogen plant, or if you want to find money to spend on a billion dollars worth of hospital projects, you’re not going to find it out of $300 or $350 million dollars,” Mr Lucas said.

“They’ve made assumptions that there’s a lazy couple of billion dollars sitting behind the Treasury sofa that they can spend without any impact on the budget.

“The reality is that’s not the case. They’ll be adding significantly to the debt levels as well.”

Mr Lucas also accused Labor of failing to commit up to $580m needed to fund a pledge for free preschool for three-year-olds but Mr Mullighan said the election commitment had been to hold a royal commission to plan the scheme.

Originally published as Labor would fund $3.1bn election spending spree with public service cuts and debt hikes – but Libs claim ‘rookie error’