Twin tunnels to complete the North-South Corridor and upgrades of sport stadiums are at the centre of the SA budget, with the state government almost doubling debt and delivering a series of record deficits as it grapples with the economic ripples of the COVID-19 pandemic.
- South Australia’s debt will almost double, with a deficit of $2.6 billion this year
- State Treasurer Rob Lucas labelled it “a budget like no other”
- Final plans for Adelaide’s North-South Corridor are a centrepiece of the budget
Net government debt will rise to $33.2 billion over the forward estimates, with a larger than expected deficit of $2.6 billion forecast for this year, $1.42 billion in 2021-22 and $435 million in 2022-23.
The budget is forecast to return to a $406 million surplus in 2023-24.
Treasurer Rob Lucas said the COVID-19 pandemic was “the greatest challenge of our time” and the government had taken advantage of record-low interest rates to borrow more, and in turn, support the economy.
“We want to provide a jolt for two years of stimulus to the economy to jump start it.”
Tunnels to spare homes and heritage
The budget’s centrepiece is the North-South Corridor, estimated to cost $8.9 billion and be completed by 2030.
$1.96 billion has been allocated to the project by the State and Federal governments over the next four years, but the source of that funding was not outlined in the budget papers.
Mr Lucas said the money has been designated out of the Treasury contingency fund and had been announced in the interests of transparency.
He said now the design for the North-South Corridor had been chosen, he was in a position to negotiate with the federal government to bring further funding forward.
He said “dozens” of plans had been considered, with the project to be completed in two stages including a 4.3km southern tunnel ending just south of the Glenelg tram line, and a 2km tunnel starting near Sir Donald Bradman Drive and ending just south of West Thebarton Road, sparing nearby heritage buildings.
The remaining sections will be completed using a combination of lowered and surface motorways.
Mr Lucas said the government’s chosen option was the most cost-effective solution, with the alternative complete tunnel proposal costed at $12 billion.
Utilities will be relocated from mid next year, with compulsory land acquisition starting from early 2021.
It is estimated about 390 properties will need to be acquired for the project.
Tennis and soccer expansion plans
The Treasurer said Hindmarsh Stadium will be upgraded to an “elite level” by the end of 2022 or start of 2023 – in time for the possible hosting of Women’s World Cup matches.
The facility will receive a shade on the eastern grandstand, new lighting and a replacement pitch at a cost of $45 million.
The Memorial Drive tennis facility, which was upgraded two years ago with a roof, will undergo further upgrades.
The facility will receive $44 million to boost grandstand capacity to 6,000 spectators and build new training and recovery facilities.
Specific plans to replace the axed Adelaide 500 street race were not outlined, but a $20 million grant program has been allocated over the next two years to attract new events.
$1b extra spent on health
The COVID-19 pandemic has blown out spending on the state’s health network by more than $1 billion.
Health spending last year was $410 million more than originally budgeted, and $676 million more than forecast will be spent this financial year.
Budget papers reveal that the purchase of facemasks for COVID-19 alone will cost $93.1 million this financial year.
Due to the overspend, the Health Department will no longer have to find $897 million in savings, which had been budgeted over the next four years.
The rollout of a new electronic ‘Sunrise’ patient record system to replace the failed EPAS system will itself cost $196.8m.
A business case for the new Women’s and Children’s Hospital has not yet been finalised, but extra cash has been allocated, raising it to $685 million with construction expected to commence next year.
The final cost of the new hospital isn’t known.
New support for businesses
In addition to the previously announced small business grants, some businesses will receive further payroll tax cuts.
Businesses with total wages below $4 million will have 15 months of payroll tax waived.
Those traders with wages above $4 million who also receive JobKeeper will receive a six-month waiver from January to June next year.
Any employer who takes on new apprentices or trainees between November this year and June next year will also be given a 12-moth payroll exemption on their wages.
The government aims to fund a further 750 traineeships and apprenticeships in government agencies through a $32 million trade and skills fund.
The Treasurer said the jobs would focus on areas of need, including aged and disability care, cyber security and housing construction with the hope employees would go to fill industry shortages.
Departments face different outlooks
Schools will receive grants capped at $100,000 to spend on immediate maintenance works in the next two years, but the Education Department will still have to find savings of $7.5 million annually.
Child Protection will receive an extra $30 million to fund more than 70 new staff, due to more children entering state care than previously expected.
However, they will also have to find annual savings of $4.5 million in the department.
Savings targets are in place for several other government departments including Correctional Services, the Premier’s Department and Primary Industries and Regions.
New fees and charges
The Treasurer has always said this budget would be about keeping money in South Australian’s pockets.
But the State Government will introduce a road user charge for electric vehicles, which will come into place next year.
Mr Lucas said that he was confident that “one or two other jurisdictions will add a road-user charge”.
The Victims of Crime levy will be increased by 50 per cent — but the additional money will not go to victims. Rather, it is expected to provide a buffer to falling revenues of more than $30 million in the next four years.
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