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More billions promised for North-South Corridor, but two federal elections away


The Federal Government has again declined to fund the North-South Corridor in the budget’s forward estimates, undermining Premier Steven Marshall’s infrastructure pitch for a second year in a row.

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However, the SA Treasurer Rob Lucas argues funding for the project had to be placed beyond the forward estimates – the four-year budgeting period – because the former Labor Government failed to produce business cases for the project.

Earlier this week, Marshall and Lucas were spruiking a combined $5.4 billion “on the table” from state and federal governments for the final 10.5 kilometre stretch of the North-South Corridor roads project, described as the largest infrastructure project in the state’s history.

In last night’s budget, federal Treasurer Josh Frydenberg announced $1.5 billion in new funding for the project.

However, only about one per cent of that figure – $15 million – is allocated in the final year of the forward estimates, in 2022-23.

The balance of the new money is promised for an undefined year beyond the forward estimates – two federal elections away.

It is a repeat of last year’s budget-eve pitch, in which the Federal Government promised $1.2 billion for the project but pushed the vast majority of the spend beyond the forward estimates.

A Marshall Government spokesperson said there was now a total of “$126 million” in the forward estimates for the project as a result of the consecutive budgets.

SA Freight Council executive officer Evan Knapp said last night’s budget was disappointing, arguing that infrastructure funding for South Australia was on the path to “collapse”.

“None of the $2.7 billion for future North-South Corridor works has made it into the forward estimates,” said Knapp.

“Not the $1.2 billion promised last year, or the additional $1.5 billion promised in the past few weeks.

“Our transport infrastructure funding has collapsed from $738.2 million this financial year for SA to only $289.5 million in 2021/22.”

SA Labor has seized on the absence of the funds in the forward estimates, claiming the Liberal Party had misled South Australians.

“Last year, we were promised by the state Liberal Government and the federal Coalition Government $1.2 billion to fix (South Road),” he told reporters this morning.

“That funding never turned up.

“This year, we were promised a further $1.5 billion to fix this section of South Road and once again this funding hasn’t turned up.”

But Lucas said the funding had to be spent more than four years into the future because the former Labor Government had failed to produce business cases for the project.

“Because of the incompetence of the former Labor Government not doing business cases, we’re not going to be able to … start either building tunnels or underpasses or overpasses on that until around about 2022,” he said.

“Even if you give me and (SA Infrastructure Minister) Stephen Knoll $1 billion today, we can’t start building the tunnels and overpasses at the moment because the former state Labor government hadn’t done the business cases.

“There no point in having the money … if you can’t spend it.”

Meanwhile, Lucas said South Australia would be hit with more than $500 million in cuts to expected GST revenue in the next financial year.

He said that while he would deliver a surplus in his next state budget, due in June, the revenue reduction would make producing a balanced budget in 2019-20 a “very significant challenge”.

He committed to maintaining health, education and infrastructure spending promises, but would now have to devise a response to the GST hit.

“Next year … will be a very significant challenge, because we’re looking at a $517 million cut in GST revenue for 2019-20,” he told a press conference this morning.

“That will be a big challenge so we will spend the next couple of months, leading up to the June budget, working out what our response will be.

“Our promises that we’ve made in relation to infrastructure spending will not be broken (and) our commitments for example in education and health will also not be broken.”

The South Australian Council of Social Service called on the Marshall Government to consider new revenue measures – such as taxes – to fill the funding gap.

SACOSS CEO Ross Womersley said: “We are deeply concerned about the implications of the GST cuts on the South Australian budget.”

“These cuts will make it increasingly difficult for the South Australian Government to deliver vital services to the South Australian community.

“These services are vital to all South Australians, but most particularly to vulnerable and disadvantaged people who rely on these services to survive.”

He suggested the Government consider changing aggregation arrangements on land tax to “close a loophole that allows landowners with multiple properties to organise their property ownership to minimise tax” and reversing or delaying an increase in the land tax-free threshold.

He said the changes would produce about $74 million per year for the State Government’s coffers.

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