Spend now, pay later budget hands an eye-watering bill to our kids

Drowning in cash yet whacking massive amounts of spending on the credit card – this week’s state budget transfers any pain to future generations, argues Matthew Abraham.

Jun 07, 2024, updated Jun 07, 2024
Treasurer Stephen Mullighan unveils the 2024/25 State Budget. Photo: Tony Lewis/InDaily.

Treasurer Stephen Mullighan unveils the 2024/25 State Budget. Photo: Tony Lewis/InDaily.

Bill Hayden’s drover’s dog followed him to the grave.

In February 1983, Hayden unhappily resigned as Labor’s federal Opposition Leader to make way for Bob Hawke, blindsiding an early-election move by Liberal Prime Minister Malcolm Fraser.

Still raw from his knifing, Hayden quipped “a drover’s dog could lead the Labor Party to victory, the way the country is”. It remains in the political lexicon to this day. Hawke won the drover’s dog election.

If a drover’s dog can win an election, Billy the Goose could have written the 2024-25 State Budget delivered on Thursday by Labor Treasurer Stephen Mullighan.

In fact, who needs a goose?

This budget could have been knocked up by telling your iPhone “Hey, Siri, I’ve got rivers of cold hard cash rolling in from GST revenue, Commonwealth grants and a property boom in Adelaide nobody can quite explain, am running debt up to $44.2 billion over four years and aren’t asking any public service departments to save a single dollar. Can you knock me up a budget please”.

That, in a nutshell is the budget delivered by Treasurer Mullighan who, to be absolutely fair, is no goose.

He is a measured yet savvy political operative, joined at the hip to Premier Peter Malinauskas since their days dreaming big over beverages at the University of Adelaide’s student bar.

But this budget is several galaxies away from the last seriously tough Labor Budget – Kevin Foley’s Rann-era budget that imposed a freeze on public service wage rises and momentarily saw state debt eliminated, for a week or two at least. The ensuing bunfight with cardigan-clad public servants was epic.

This isn’t a budget that’s picking a fight with anyone. It doesn’t need to.

You don’t need to read much beyond Page 3 of Budget Paper 3 to understand why.

“No new taxes, tax increases or agency savings are included in the 2024-25 Budget,” it boasts.

The pedal hits the metal with cold hard cash, and that debt number is an inescapable $44.2 billion.

The state public service workforce is heading toward six digits – the actual head count this year is 90,625 full-time equivalents projected to reach 98,541 in four years. Let’s round it up to 100,000 by 2028.

In a wages bill of $10.2 billion, projected to hit $11.5 billion by 2028, the government doesn’t expect a single dollar in departmental savings. It simply cops it sweet. Or taxpayers do.

Back to Page 3 of Budget Paper 3.

It reveals since the pre-Christmas mid-year budget review (MYBR), GST grant revenue has been “revised up by $162 million in 2023-24 and by $635 million over the period 2024-25 to 2026-27”.

“State taxation revenues have been revised up by $357 million in 2023-24 since the 2023-24 MYBR mainly reflecting higher payroll tax, conveyance duty and land tax revenue due to strong labour and property market conditions,” it continues.

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“Taxation revenues have been revised up by a further $1.1 billion over the period 2024-25 to 2026-27, mainly due to higher forecast collections from payroll tax, conveyance duty and land taxes.”

“As a result of the additional resources provided in the 2024-25 Budget for key services and the continued investment in infrastructure, NFPS net debt is projected to increase over the forward estimates, rising to $44.2 billion by 30 June 20-28.”

So, there it is in the Treasury boffin’s own words. This is a government rolling in cash and dunking us all in debt.

Treasurer Stephen Mullighan delivering the budget. Photo: Tony Lewis/InDaily.

The net debt is projected to jump from the estimated $28 billion this year to $44.2 billion in 2028 – that’s a breathtaking leap on top of an already breathtaking number.

The Treasurer says the “key debt metric” is the net debt to revenue number, now 97 per cent but rising remorselessly to 132 per cent by 2028.

It’s a moot point that this is the “key metric” for debt. The pedal hits the metal with cold hard cash, and that debt number is an inescapable $44.2 billion.

The Treasurer deserves congratulations for two budget measures. He’s doubled the sports voucher program from $100 to $200 a child, and expanded it to include music lessons. And he’s resisted the temptation to bring in a recreational fishing licence fee.

But when I put the possibly cruel Billy the Goose theory to him in his trademark slo-mo media conference, he didn’t bite.

“It certainly makes it a lot easier for a state government when you have strong revenue, I won’t dispute that,” he said.

Inside the Budget lock-up, Premier Peter Malinauskas made much of the government’s investment in his public pre-school for three-year-old plan, saying nobody comes up to him demanding he spend more money on littlies.

He said while it “doesn’t come up in the retail context” at his supermarket meet-and-greets, it is an investment in the future.

Yet those three-year-olds will also be the generation saddled with his big debt pile-on by the time they’re old enough to have kids of their own, won’t they? It might come up in the retail context by then.

Investing in the future can take many forms. Continually racking up debt with no plan to rein it in or pay it off isn’t one of them.

Even a drover’s dog can sniff that tree.

Matthew Abraham can be found on X as @kevcorduroy. It’s a long story.

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