South Australia’s budget will slide back into deficit this financial year, with Treasurer Rob Lucas blaming the return to red on the poor financial management of the former Labor government.
The new Liberal Government, elected in March, has pushed the next state budget from June to September so it has time to examine the books.
Mr Lucas told the ABC it would be “impossible” for the state’s finances to remain balanced, despite former treasurer Tom Koutsantonis predicting a slim $12 million surplus in the Mid-Year Budget Review in December.
“It will be impossible for the 2017-18 budget to be in surplus given the problems that we’re uncovering, and in particular … the health issues, the hospital issues, those sorts of budget pressures,” Mr Lucas said.
“I’m trying to go through the state budget at the moment and let me assure you that for the budget for September, he’s left a very big mess that’s going to have to be cleaned up.
“By June 30 there’s no doubting, given the extent of the problems we’re uncovering, that there will be no surplus left to us by the Labor government.”
The revelation of the state of the South Australia’s finances comes as Mr Lucas accuses the former Labor government of using a $2.7 million taxpayer-funded account as a pork-barrelling slush fund in the lead up to the March state election.
He said Mr Koutsantonis had deployed the ministerial “contingency fund” for projects in key marginal seats and the electorate of former minister Geoff Brock.
Mr Koutsantonis said the contingency fund was poorly named, but was designed to be used to fund projects outside of the budget process that were advocated for by community groups and Members of Parliament.
“It was used on programs like, for example, a school crossing; it was for matching funding with councils to install footpaths; it could be used to upgrade halls and community centres,” Mr Koutsantonis said.
The fund was deployed for funding for two Greek Orthodox churches, including one in Liberal leader Steven Marshall’s seat of Dunstan.
“Both of those were in Liberal electorates and both of those I was lobbied very hard for by Mr Marshall, who is now Premier, and Mr Gardner, who is now the education minister — you should speak to them about why they thought it was such an emergency,” he said.
Labor’s Peter Malinauskas, Tom Koutsantonis and Chris Picton in 2016 when the budget returned to surplus. (Twitter: Tom Koutsantonis)
The return to surplus in 2016-17 was underwritten by the sale of more than $2 billion worth of Motor Accident Commission assets and the $1.6 million privatisation of the Lands Titles Office, as well as an increase in revenue from sources including unexpected payments for health services accessed by interstate patients and school fees paid by international students.
But the short-lived surplus was revised down in last year’s budget, with debt across the government sector and corporations like SA Water expected to climb, and continued cost pressures in the health and child protection portfolios.
It followed the former Labor government’s failure to get its $370 million bank tax over the line, with opposition from the Liberal Party and crossbenchers stopping the controversial legislation from passing through Parliament.
Last month, the Commonwealth Grants Commission revealed South Australia would receive a windfall $467 million increase in GST revenue, but that money is not expected to flow until the 2018-19 financial year.