Unions have called it thoughtful and responsible, but the business community is disappointed in South Australia’s big spending budget that focused on housing, health, and hip-pocket relief.
The Labor government still expects to return the state’s finance to surplus in the next financial year despite allocating $474 million for housing assistance, an extra $2.3 billion to health, and $471 million for cost-of-living support.
The housing package will provide for 3600 builds over the next five years and allows the government to abolish stamp duty on new homes for first-time buyers.
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Cost-of-living cash includes $254 million for energy rebates to 420,000 households along with $44 million over five years to index government concessions in line with inflation.
Extra health spending includes $1.3 billion over five years to cater for extra demand on the public hospital system and $567 million to cover the ongoing cost of the COVID-19 pandemic.
SA Unions secretary Dale Beasley welcomed the government’s thoughtful spending.
“South Australians face compounding challenges from the pandemic and flooding to stagnant wages, housing unavailability, and skyrocketing living costs,” Beasley said.
But the Australian Industry Group said the budget lacked the imagination needed as businesses struggled with skill shortages, rising input costs, interest rate rises, and inflation.
“In a tight fiscal environment, it is essential this government ensures its policies and programs encourage productivity, business competitiveness, and growth, which are key to our state’s success, creating economic prosperity for all,” the group’s SA head Jodie van Deventer said.
“The budget only goes part of the way to addressing this.”
The Australian Medical Association said it was pleased the government had recognized the coronavirus pandemic would continue to affect health workers and impact system capacity.
“I thank the state government for listening when doctors, colleagues, and patients have described the challenges we face in providing and accessing health care,” association state president John Williams said.
The budget revealed a $249 million deficit for 2022-2023, in sharp contrast to the $233 million surplus forecast last year.
The deterioration was blamed on higher health costs, lower GST grant revenue, and the $100 million cost of assisting people affected by the River Murray floods.
Treasurer Stephen Mullighan said the state’s finances would be back in the black to the tune of $250 million in 2023-2024, with the surplus rising to $639 million by 2026-2027, although net debt was set to jump from $26 billion to $37.6 billion over the forward estimates.
The treasurer said the budget had been framed at a time when the state’s economy had never been stronger, with low unemployment, growing exports, and a booming tourism sector.
“Yet we are not without our challenges,” he told parliament.
The budget left the government in a strong position to respond to further unexpected events and capitalize on emerging economic opportunities to further diversify and strengthen the economy, Mullighan said.
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