SA credits renewable investment with keeping power prices low
“It goes from being unsustainable to absolutely outrageous,” he said, adding that every other state and territory besides WA wanted a rethink of the way GST was carved up.
“This is clearly something that needs to be fixed,” Mr Mullighan said. “This is happening when Western Australia is having one of its greatest mining booms in its history.”
Mr Mullighan handed down his first state budget on Thursday after Peter Malinauskas won the March 19 election, putting the Liberal government led by Steven Marshall out of power after one term.
Return to surplus in 2022-23
SA has forecast a return to a small surplus of $233 million in 2022-23 after a big dive into the red in 2021-22.
Mr Mullighan has projected the deficit in 2021-22 worsening to $1.73 billion, compared with a deficit of $1.59 billion projected by former SA Liberal treasurer Rob Lucas, who retired at the March 19 state election.
The economic momentum that occurred after major federal government stimulus and ultra-low interest rates meant SA will still benefit from the existing GST via $887 million in combined extra GST grant revenues over the next four years.
There is also the benefit of a combined $980 million increase in state taxation receipts over the next four years, largely from a booming property market which lifted stamp duty collections.
The budget contained $2.4 billion in new health spending in line with pre-election promises; the government will hire 350 new paramedics and ambulance officers, 101 extra doctors and 300 nurses, and will expand the number of hospital and mental health beds by 326.
Heavy infrastructure spending totalling $18.6 billion is dominated by road projects including a comprehensive upgrade of the busy South Road in Adelaide.
That is now projected to be completed by 2031 under revamped plans. Marion Road, between Anzac Highway and Cross Road in the inner south-west of Adelaide, is also to be upgraded.
A centrepiece of the election campaign by Mr Malinauskas was the hefty increase in health spending to try to limit ambulance ramping.
The other major promise was to construct the taxpayer-funded hydrogen plant in the Whyalla precinct to create a hydrogen hub in the region where the Whyalla steelworks operates.
British billionaire Sanjeev Gupta, who became the owner of the Whyalla steelworks in 2017 and is still trying to refinance $6 billion of funding in his global GFG empire, has spare land next to the Whyalla plant.
Mr Malinauskas said the hydrogen plan was part of the strategy for SA to stay on the front foot in renewable energy.
He said on Thursday that embracing decarbonisation “represented an extraordinary economic opportunity”.
Mr Mullighan said low-cost power for hydrogen electrolysers was crucial for the hydrogen industry, and he expected the new hydrogen precinct would be a large export earner for the state in the future.
Cost of living relief
Mr Mullighan said his government will give relief to about 180,000 low-income households in SA with a $39 million program to double a cost of living concessions program in 2022-23.
Victoria announced a $250 payment to households to help with power bills if they logged on to an energy bills comparison website. Victoria is carrying the biggest debt load of any state or territory, with debt to balloon out to more than $167 billion within four years.
Western Australian Premier and Treasurer Mark McGowan on May 12 announced in his state budget a better-than-expected $5.7 billion surplus, and spent $445 million on voters in the form of a $400 credit for electricity bills to provide cost of living relief. A special deal sealed four years ago on GST by then-prime minister Scott Morrison was predicated on WA not experiencing another huge resources boom.
John Manning, vice-president of Moody’s Investor Services, said revenue increases in SA had exceeded expectations on the back of a broad-based national economic recovery and a “resilient state economy”.
Mr Manning said although debt-funded infrastructure spending would drive net debt higher through to 2026, the 2022-23 budget has delayed some large capital spending projects and introduced a near term focus on smaller projects to provide increased fiscal flexibility amid rising cost pressures, labour shortages and elevated supply chain disruption.
The Labor Party holds 27 seats in SA’s 47-seat lower house, with the Liberals on 16 and four seats held by independent MPs.
The Liberals chose David Speirs, who grew up in Scotland and shifted to SA when he was 17 with his family, as their new leader. Mr Marshall now sits on the backbench after narrowly winning his inner eastern Adelaide seat.