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Liberals question state of economy

Dec 24, 2014
Steven Marshall and Rob Lucas say the mid-year budget review is a horrible set of numbers. Photo: Nat Rogers/InDaily

Steven Marshall and Rob Lucas say the mid-year budget review is a horrible set of numbers. Photo: Nat Rogers/InDaily

The State Opposition says the mid-year budget review is bad news for the economy.

Treasurer Tom Koutsantonis yesterday released the review, which forecasts sluggish economic growth and lower than previously predicted growth in employment.

Shadow Treasurer Rob Lucas said the figures showed that South Australian families would continue to carry the burden of poor economic performance.

“Five months ago they were predicting a 1 per cent increase in employment in South Australia; he’s had to revise that down by 25 per cent to 0.75 per cent,” Lucas told ABC 891.

“(The) bottom line is South Australian families are continuing to be slugged, no relief for them, and there’s no prospect of improved economic growth and job creation growth as a result of both his budget and now the mid-year budget update.”

Koutsantonis’s review showed the net operating balance for this year would improve by almost $300 million, with all improvements in the mid-year reassessment put down to the expected return of funds from the Motor Accident Commission privatisation and the delay to the expected start of financial obligations associated with the new Royal Adelaide Hospital.

Despite dire warnings on the impact of federal Budget cuts on the state’s finances, the Treasurer was able to announce that the net operating deficit had been revised to $185 million, compared to $479 million in the 2014-15 state Budget.

He also predicted an improvement of $521 million in net debt in 2014-15, down from $4.51 billion in the 2014-15 Budget to $3.99 billion.

However, he has reduced the size of the forecast surpluses in the forward estimates. The MYBR shows a surplus of $265 million in 2015-16, increasing to $699 million in 2016-16 and $872 million in 2017-18. The June Budget put the surpluses at $406 in 2015-16, increasing to $776 million and $883 million in subsequent years.

Koutsantonis said there had been a “structural change” in the Budget, with the MYBR forecasting a real-term decline in Government expenditure of 5 per cent by 2017-18, compared to 2011-12.

However, Liberal leader Steven Marshall was less enthusiastic, saying Labor had produced a “horrible set of numbers” offset by a one-off payment from the soon-to-be privatised Motor Accident Commission.

The government pocketed $852 million from profits on surplus assets held by the MAC, about half of which contributes to this year’s bottom line.

“Our economy is a mess,” Marshall said.

“We need a government which is going to take responsibility for the situation.”

– with AAP

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