Extra millions for health in SA mid-year budget
The Malinauskas Government has delivered its second surplus and will spend an extra $672.5 million to keep up with additional demand on the public health system.
A $413 million surplus for the 2023/24 financial year was $107 million more than Treasurer Stephen Mullighan predicted it would be in June, with the state government attributing the rise to stronger property market revenues and a “more buoyant economy”.
Revenue of $450 million – $163 million more than expected – was offset by higher than expected expenditure of $342 million across critical services like health, police, child protection and road maintenance, the government said. The extra revenue was driven by higher revenue from regulatory fees, health unit fees, and other user charges.
The government also brought in $162 million more than expected from taxation revenue, which it said was primarily due to stamp duty on residential property transactions, property taxes and motor vehicle levies.
In the Mid-Year Budget Review, released today, the government announced an extra $672.5 million would be spent on the public health system.
The Treasurer said the extra spend was “reflecting the additional demands that we’ve had since June in our hospitals”.
“We continue to combat larger than expected numbers of elderly South Australians stranded in hospital beds who should be in aged care places,” he said.
“That continues to drive up costs while we go through the process of negotiating a better health funding agreement with the Commonwealth.”
You might like
Further, $1.7 billion of expenditure on the Torrens to Darlington megaproject has been brought into the forward estimates.
The Treasurer said this spending was already budgeted for, and that it was being brought forward due to a “revised construction methodology” of the T2D project – meaning construction will start sooner than expected.
As such, net debt is expected to rise to $46 billion by 2027/28, which is $2 billion more than was announced in June. Forecast expenditure on the project over the coming four years is now $8.4 billion, up from $7 billion forecast.
“I emphasise: no change in the overall project cost,” Mullighan said.
“It still remains comfortably within budget and this change of expenditure profile earlier on in the project’s life gives us even more confidence that we’ll be delivering this project on time.”
Other additional funding measures in the Mid-Year Budget Review are: $365.6 million for water and wastewater infrastructure to support new housing growth; $135 million to meet higher costs to compensate people who were abused in state care over recent decades; $129.1 million to address the rising cost of supporting those in the child protection system; the already-announced $60 million Defence Technologies Academy at Lot Fourteen to be tenanted by BAE Systems, and more.
Mullighan said the growing surpluses across the forward estimates gave the state government “the capacity to take on the additional expenditure and debt to build the new Women’s and Children’s Hospital and the South Road tunnels”.
“Importantly, our net to debt ratio remains comfortably within the range for us to accommodate that additional debt,” he said.
Stay informed, daily
“The budget is in a demonstrably stronger position. It’s in surplus, the lower level of debt and lower net to debt ratio than what had been forecasted by the previous government… gives us the confidence to take on the additional debt to build these two additional infrastructure projects.”
He stressed that the government was not in a position to consider any other “large-scale” projects until both the WCH and T2D were completed.
“We don’t have the capacity to be investing in other significant, large-scale projects until we get past the construction of these two projects,” he said.
Asked whether the government would consider reducing the tax burden on South Australians because of the higher-than-expected take of tax revenue, the Treasurer said the state was “the lowest-taxing jurisdiction on the mainland”.
“No one likes paying taxes, but we made a commitment at the last election that we weren’t going to introduce new taxes, and we’ve maintained that commitment,” he said.
“I’m not saying the job is done on taxes – there will always be demands from the community to reduce taxes – but we are comfortably the best place in the nation to do business.”
Shadow Treasurer Sam Telfer said the higher debt was a “bitter gift for South Australians”.
“This is just additional proof that the South Australian Labor Government is incapable of proper fiscal management,” Telfer said.
“The time is now for the Labor government to have a debt management plan in place.”
There was no news on the delay-plagued Aboriginal cultural centre Tarrkarri, which looks to have been kicked once again into the New Year.
“We’re not going to pursue the project unless we’ve got a funding partner with the Commonwealth or maybe even with private contributors to the project,” Mullighan said.
“Until we’ve got a positive response from them with a definitive offer of money on the table, we’re not going to announce that we’re proceeding with a project because it requires a level of expenditure that we don’t think we can justify going it alone on.
“We’re still interested in the project. The site’s still there.”
