‘Budget is cooked’: debt pressure bites into spending
While the government focuses its budget on reining in the increasing debt burden of the state, it will partially freeze recruitment of public servants.
But the South Australian Opposition says the budget is “ready” and Labor has no plan to manage the state’s debt, which is estimated to approach $50 billion by 2039.
Finance Minister Tom Koutsantonis will present the first state budget on Thursday since the Malinauskas government’s landslide election victory in March.
Announced a partial freeze on non-frontline public sector recruitment for the next 12 months; this is estimated to cut 1,000 positions and save $120 million.
Mr Koutsantonis described this as “back office efficiency” that would not impact frontline areas such as teachers, police, doctors and nurses.
Flinders University public policy lecturer Josh Sunman told AAP the savings were significant, “but compared to the debt bill it’s a drop in the ocean.”
Shadow treasurer Ben Hood said the state needed “a targeted, attrition-based approach to curb back-end growth in the public sector”.
“Labour has no plans to manage debt,” he said.
“The budget has been prepared… and it’s time for the prime minister and the treasurer to sit down.”
He said interest on the debt was costing the state more than $5 million a day, or more than $1.9 billion a year, according to mid-year budget review figures from December.
“That works out to $61 in interest per second of the debt South Australians have to carry for this government,” he said.
Mr Sunman said the debt burden meant the government had limited budget capacity to respond to the cost of living crisis.
“Easing the cost of living actually means reducing fees like stamp duty and car registration, but with the debt situation that’s not something the government can really do,” he said.
“The government’s year-on-year fiscal management is pretty good, it stays within its means, but it needs to do more than that if it wants to solve the structural debt problem.”
Much of the rising debt can be attributed to the $15.4 billion Torrens to Darlington tunnel project, which aims to complete the city’s north-south corridor link, and the new Women’s and Children’s Hospital, costing an estimated $3.2 billion.
The health budget will also exceed $10 billion for the first time, as the government continues to increase services and staff to address the ongoing problem of overcrowding ambulances.
On Wednesday, Premier Peter Malinauskas re-announced the government’s commitment to expand eligibility for the Seniors Card to all South Australians over the age of 60, as well as Aboriginal South Australians aged 50 and over.
“Right now if you work 20 hours a week or more you don’t qualify, and that’s crazy because it means people over 60 are being denied living expenses (relief),” he said.
The policy will cost $8 million over four years and allow an estimated 80,000 more people to access free bus, train and tram travel, as well as discounts on fuel, food and cinema tickets.
The government will abolish stamp duty on home purchases of victims of domestic, familial and sexual violence.
They will also be able to benefit from the First Home Ownership Grant, even if they have already bought a home, under the scheme designed to help vulnerable women resettle into safe housing.
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