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SA Budget: Stretching promises and credibility

Jun 19, 2014
Treasurer Tom Koutsantonis will deliver his first budget today - and it's going to be ugly. Photo: Nat Rogers/InDaily

Treasurer Tom Koutsantonis will deliver his first budget today - and it's going to be ugly. Photo: Nat Rogers/InDaily

In a final round of stage-managed budget leaks and hints, the Weatherill Government has demonstrated the long-term weakness of its strategy of blaming the Abbott Government for all of its budget problems.

Premier Jay Weatherill and Treasurer Tom Koutsantonis have been promising to sheet home all of the budget pain to the Liberals in Canberra, but Labor’s last-minute flurry of media management reveals some astonishing flaws in this strategy.

InDaily will have full Budget coverage today from 3pm – and tomorrow we’ll have Tom Richardson’s incisive analysis, plus all the fall-out.

Firstly, it appears they will join Tony Abbott in breaking key election promises.

In particular, Koutsantonis has given The Australian the news that he’ll be doing some fancy rhetorical footwork on promised hospital upgrades.

The projects to face the axe include multi-million-dollar upgrades to the Queen Elizabeth Hospital, Modbury Hospital and Noarlunga Hospital, and a much-publicised election promise to provide a $100 million spruce-up to Flinders Medical Centre.

These are state Labor promises using state money.

The Government will attempt to argue that these aren’t broken promises – more like promises left temporarily unfulfilled – as there’s no point upgrading facilities if you can’t afford the running costs (which they will, of course, blame on Canberra).

Koutsantonis says “what is the use of building more capacity at a hospital through capital upgrades if you are going to have to make operational cuts and savings?”

The electorate, however, isn’t keen on the rhetorical gymnastics of politicians – if it quacks like a duck, it is a duck.

This is dangerous territory for Weatherill in particular, who carried his election promises around with him like a security blanket and has repeatedly pledged to keep them.

Secondly, Koutsantonis has told The Advertiser – which may have preferred the juicy health story – that his budget still models a return to surplus within two years.

Astonishingly, he’s predicting it will be $406 million in 2015-16 – more than double the size of the piddling surplus predicted in Government modelling in January, which had already shrunk considerably since the mid-year budget review just over a month before.

Since then and now, South Australia has been subjected to the alleged fiscal Armageddon of the federal budget, which state Labor says will rip $5.5 billion out of the health and education budgets over the coming years.

And yet, Koutsantonis believes he can deliver a much larger surplus than previously predicted?

In the unlikely case that the Treasurer can deliver on this bold promise, he will effectively prove the Federal Government’s central budget point: that the states have been living beyond their means and, with a bit of political will, they can get their budgets back in shape.

Adding fuel to this argument is Health Minister Jack Snelling, who is promising an unprecedented restructure of the state’s health system in response to the federal budget cuts. Some might say this is long overdue.

Given SA Health’s chronic inability to bring the health community along with it on projects such as the new RAH and the electronic patient records system, Snelling is facing an enormous and turbulent task.

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The community has been softened up with pre-budget sweeteners such as money for a second city high school and a pay freeze for the upper echelons of the public service.

The ugly federal budget still casts a long shadow, but that political cover won’t last forever for Weatherill and Koutsantonis.

The cuts to health and education in today’s budget will be deep.

Infrastructure projects will be delayed or scrapped.

There will be increases in fees and charges (Shadow Treasurer Rob Lucas has his eye on gambling taxes, among other areas, and he’s probably right to do so).

There will be other nasty, unexpected surprises that government-funded bodies and journalists will discover as they rummage around the dark corners of the budget papers in the coming days.

And all of this will be blamed by Koutsantonis on the federal budget.

This strategy may provide some political relief for state Labor in the short-term, but as time goes on and South Australians get their expanding household bills and expiation notices, and experience poorer service at hospitals, government service centres and schools, Labor will cop its share of the pain.

The stain of broken election promises will be hard to shift.

Meanwhile, South Australian businesses and families hoping for more affordable costs – either to provide for their loved ones, or build their enterprises – will be left disappointed.

Who will they blame?

Check back here from 3pm for InDaily’s full budget coverage.

 

 

 

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