Premier Jay Weatherill has pitched a return to budget surplus by 2015-16 in the Mid Year Budget Review (MYBR), released today.
The surplus promise comes despite reduced economic growth rates and employment forecasts, and a worsening of the expected deficit for the current financial year.
The 2013-14 deficit is expected to be $44 million worse at $955 million.
The final result for the last year (2012-13) was one of the few improved results.
“The MYBR shows a much stronger starting position for the budget than was estimated at the time of the 2013-14 budget,” Weatherill said.
“The final outcome for 2012-13 was a net operating deficit of $948 million, which was an improvement of more than $350 million on the estimated result.
“This has led to a stronger and improved budget position right across the forward estimates.
“The Mid-Year Budget Review shows that our net debt is less than what the budget had projected over the forward estimates.
“General government-sector net debt is estimated to be $6.6 billion in 2013-14, which is $310 million lower than was forecast in the 2013-14 state budget.”
The MYBR, however, shows a deterioration in the net operating balance (deficit) since the 2013-14 state budget.
Despite the deterioration, the Premier is confident of the surplus prediction.
“We are confident of meeting these fiscal targets because the government has a track record of achieving savings,” Weatherill said.
“Since the 2008-09 MYBR, savings delivered up to and including 2012-13 will result in a $5.4 billion reduction in net debt by 2016-17, compared to what it would have been.
“This is well on the way to the $7.8 billion target by the end of 2016-17.”
Forecast tax and GST revenues have again decreased – by $213 million across the forward estimates.
The earlier-than-expected release of the MYBR is expected to place pressure on Opposition Leader Steven Marshall to release his policies ahead of the March state election.
“Steven Marshall now has nowhere to hide,” Weatherill told reporters.
“I want a proper debate about election commitments in full knowledge of the budget position.”
The surplus forecast is based on improved revenue from state taxes and the Goods and Services Tax (GST) in the current year, expenditure changes and cancelled projects.
“The state’s finances have stabilised,” he said.
While taxation revenue estimates for this year have improved, revenue estimates for future years have been downgraded.
Employment and growth forecasts also remain subdued.
State economic growth has been revised down from 2.5 per cent to 2.25 per cent for 2013-14.
Employment growth has been revised down from 1 per cent to 0.25 per cent.
Savings estimates have been revised, with 452 jobs planned to be axed in Health now remaining on the books.
The MYBR shows an extra 1067 public servants on the payroll compared to the June state budget.
The budget estimated 79,484 full-time equivalent servants next year; that’s been upgraded to 81,473.
Expenditure of $197 million over three years for rail investment has been returned to the budget after the Federal Government cancelled its funding of the Gawler electrification and Tonsley line works.
