On a quiet evening in the Snelling household, Mrs Snelling gathered the children together to explain how times were changing.
“Kids, the bad news is that Dad’s lost his job and money will be tight,” she starts. “The good news is we can live on the credit card for another year or two or three because he’s sure to get a job and be able pay it all back. And the really good news? You’re getting an electric train set for Christmas.”
South Australian Treasurer Jack Snelling’s budget for 2012-13 mirrors much of the lacklustre budget delivered a year ago. The difference is that the revenue outlook is worse than expected, increasing forecast debt levels and deferral of any major project that can be pushed out beyond the four-year framework of the financial estimates.
Everyone in the state is worse off.
What’s up? Water prices (up 25%), electricity prices, some 2000 state fees and charges and a second consecutive jump in car rego and licence fees. You name it, it’s gone up.
And the state owes plenty. In 2010 SA owed $1.58 billion, rising to $3.33 billion in 2011 and now up further to $4.28 billion — rising to $8.7 billion in 2016. We owed nothing in 2007. The interest bill will be around $2.3 million every day next financial year, up from $1 million this year.
Last year’s budget was based on a turnaround in the global and local economies. Whoops. The estimates for the years beyond 2013-14 are based on the same hope.
“Cyclical factors have contributed to the fall in revenues and it is anticipated that taxation and GST revenues will improve over the forward estimates as domestic and international economic conditions improve, mining activity expands, the employment outlook becomes more positive and household confidence grows,” the budget papers say.
It’s over to you guys in Spain, Greece, the US and the London boardroom of BHP.
And the poker machine players seem to have lost their nerve, with revenue falling from an expected $312 million to a paltry $296 million due to “lower gaming machine expenditure in hotels and clubs”.
There’s a slight bump in GST revenue but less than Treasury expected a year ago. The state banks $4.24 billion, rising again to $4.5 billion in 2012-13, $4.64 in 2013-14 and $5.1 billion in $2014-15. It’s an annual growth rate in GST revenue of around 5%; the gift that keeps on giving.
For many businesses and residents, the horizon is far off. The government has pushed a rail electrification project out to somewhere beyond the Games of the XXXII Olympiad. The long-awaited QEH Stage Three update, written in estimates of pounds, shillings and pence, will be deferred until Lassie comes home. Payroll tax concessions for apprentices, stamp duty exemptions on a range of transactions — all announced in the last couple of years but have been deferred until Greater Western Sydney goes top.
Thank heavens for the mining boom? Well, not really. It seems that expectations of $202 million in royalties this year fell short by $20 million. The Olympic Dam project can’t come soon enough.
If there’s a winner anywhere it’s public servants who’ve clocked up more than 15 years’ service — they’ll get extra leave entitlements.
Yes, minister.
*This article was originally published at InDaily
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