Today’s Mid-Year Budget Review still delivers surpluses over the forward estimates, despite the abolition of the state bank tax. But while increased revenue from asset sales reduce net debt by $1.16 billion in 2017/18, it is still rising to $6.64b by 2020/21 and is only $48m lower than June’s budget estimate.
Schools and healthcare are the clear winners from today’s Mid-Year Budget Review with $1.2b in new initiatives across the forward estimates, while regional infrastructure also benefits.
“Through our engagement with country South Australia as part of our Regional Voice program, we welcome the duplication of the Joy Baluch Bridge at Port Augusta but recognise the State Government’s proposal still relies upon 80 per cent Federal funding,” Mr Penney said.
“Almost every Port Augusta business we have spoken to has raised concerns about the risks associated with the current bridge.”
The South Australian Business Chamber welcomes the reduction in net debt over forward estimates, however Mr Penney said it was still tipped to reach almost $6.7b by 2021.
“To protect South Australia against future economic shocks, we would have liked to have seen more work done to restore the state’s AAA credit rating,” he said.
“Despite the state’s significant asset sales, net debt is only forecast to decrease by $48m by 2020/21.”
Mr Penney said the South Australian Business Chamber was concerned about the increase of 1,784 full time equivalent staff in the public sector, despite the government promising to impose $370m in efficiencies in backroom operations.
“South Australia already has the nation’s largest public sector per capita and over the past year the Government has injected almost 1,800 extra staff,” he said.
“In recent budgets the Government has announced public sector efficiencies that have failed to materialise. We need to see a public sector which is structured to deliver nation-leading outcomes at least cost.”
The South Australian Business Chamber has always supported the leasing arrangement for temporary generators to see the state through the next two summers, but opposed the immediate purchase of the generators given the dynamic and ongoing changes in the energy generation market.
“While the reliability the state-owned generators provide to the grid is important, there was never a need to spend $227m now to buy generators which were still able to be leased for two more years with an option to buy, or perhaps contract a third party to provide the same level of service to maintain reliability.
“However, if the State Government does not permanently install the temporary generators with the associated infrastructure, the value of any potential re-sale should not be significantly reduced”.
