The Treasurer’s fears were realised with an independent Commonwealth Grants Commission report set to see SA receive $166 million less in GST revenue this year, with the shortfall growing to $689m next year.
Over the forward estimates, more than $2 billion will be written off the balance sheet, on top of previous writedowns – and Lucas warned the impact of coronavirus on top of summer’s bushfire catastrophe would see the state’s share continue to plummet.
“In fact, the latest GST estimates are actually about $4.5 billion lower than the original GST estimates included in the Liberal Government’s first budget in September 2018, just over 18 months ago,” he said in a statement.
“For a number of reasons, the Commonwealth Grants Commission has reduced our state’s relativity factor from 1.45 to 1.35 which is an almost unprecedented reduction in one year [and] given the impact of the bushfires and the coronavirus on the national economy it is highly likely that there will be even further cuts in the GST when the federal budget is released.”
He said the shortfall, coupled with the dire economic outlook, “will mean there will be no budget surplus this year or next year”.
It follows last week’s announcement of a $350 million state stimulus spend, with ratings agency Moody’s today noting such measures “will further challenge budgets in 2020 and drive debt burdens higher”.
“However, under our baseline scenario, the increased spending – focused on protecting jobs, replacing income, stimulating consumption and labour-intensive capital spending – is manageable,” Moody’s Investors Service vice-president John Manning said.
“Moody’s outlook for the rated Australian states and territories remains stable.”
It comes as State Parliament contemplates a way forward amid mass coronavirus shutdowns and the looming prospect of a broader ban on public gatherings.
InDaily can reveal that the SA Liberal Party has cancelled a March 28 ballot to determine its legislative Council ticket for the 2022 election, which would also have determined a candidate to fill the casual vacancy created by former Upper House president Andrew McLachlan’s shift to the Senate.
SA Liberal director Sascha Meldrum wrote to state council members last night “to advise you of changes in arrangements for the Legislative Council Electoral College and State Council meeting on Saturday March 28”.
“During this time of community concern, I would like to reassure you that we are closely monitoring protocols and updates from the Federal and State governments regarding COVID-19 [and] based on the latest government advice, State Council will not meet as an Electoral College on 28 March,” she wrote.
“I will advise you of alternative arrangements in the coming days [but] our priority is the health and wellbeing of our Liberal Party members, staff and volunteers.”
She thanked the delegates “for your understanding during these challenging times”.
Meldrum told InDaily “the process and timing” of the casual vacancy was now “a matter for the party’s Executive to determine”, with an emergency meeting to be held this week.
Riverland veterinarian and current state vice-president Nicola Centofanti remains widely expected to fill the vacant seat, but there is disquiet in the party about the process by which this can occur, with some pushing for state executive to simply appoint her as the party’s nominee.
However, other members have raised concerns about a perceived “lack of democratic process”, urging state executive to adopt a postal or electronic voting alternative.
SA Liberal insiders are expecting a further crackdown on mass gatherings when federal cabinet meets today, but in any case argued a state council meeting of up to 250 delegates would send the wrong message to the community.
The election of the remaining six nominees for the Upper House ticket could be deferred for 12 months, although it’s understood the party is considering holding another form of ballot.
“There’s a number of options to consider,” one source said, emphasising the need to preserve “fairness and equity for all 11 candidates involved”.
Two of those – Michelle Lensink and Dennis Hood – are incumbents, while Centofanti is followed by federal staffer Laura Curran, Yorke Peninsula councillor Tania Stock and accountant Heidi Girolamo among the frontrunners for the winnable fourth spot, along with fellow hopefuls Kathleen Bourne, Amy Grantham, Deepa Mathew, Tim Richardson and Glenn Bain.
But parliament itself is expecting major impositions on its operations in coming weeks – including the prospect of a total shutdown.
Speaker Vincent Tarzia told InDaily: “We are exploring a number of possible modifications to ensure the Parliament can function well in this environment [and] will be working with all parties in a prudent manner.”
A missive from House of Assembly clerk Rick Crump and Legislative Council clerk Chris Schwarz to all staff and occupants has declared all public and school tours and function bookings cancelled, with “non-access card holders” not permitted into the public galleries on sitting days to view proceedings.
“No future applications for demonstrations on the step of Parliament House will be approved and existing demonstrations over 500 (which will be subject to revision) will be contacted to advise that approval has been rescinded,” the letter states.
“All access card holders, including Members, are discouraged from bringing non-access card holding guests into the Parliamentary precinct who are visiting for non-Parliamentary purposes or for social purposes.
“We understand the above restrictions will cause inconvenience to some [but] these are unprecedented times and these restrictions have been deemed appropriate in order to reduce the risk to Parliament House occupants, employees and the general public.”
Upper House president Terry Stephens told InDaily: “We’re still considering how parliament will operate.”
“We’ve reduced access to the parliament by the public [who] won’t be able to come into the parliament… we’re really clamping down on who comes and goes, and we’re encouraging members of parliament not to have appointments in Parliament House if it’s at all possible.”
He said “from a Legislative Council perspective, I don’t think we’re as challenged as perhaps the House of Assembly will be [in] trying to keep 1.5 metres between people”.
“We have the capacity to do that, more so than the House of Assembly, but it’s certainly going to require cooperation from everybody,” he said.
“It would make sense to have limited people in the chamber in the House of Assembly.”
That could mean fewer MPs allowed into the chamber at any one time – which would require newfound diplomacy given the major parties’ recent standoff over pairing arrangements.
“They’ll need to come up with some sort of co-operation with those sorts of measures, but that’s yet to be determined,” Stephens said.
But he added: “If parliament has to close for a period of time, we need to make clear we’ve got to get things done that absolutely need to be done first and foremost.”
“I believe people will be working on that at the moment [and] I’m hoping things continue as they always have,” he said.
Leader of Government Business Stephan Knoll told InDaily: “As with all workplaces, we are working through how State Parliament will be able to operate safely and effectively next week when sitting resumes.”
“This isn’t an issue that’s unique to South Australia’s parliament and we are actively looking at our options and will work with the Opposition and crossbench,” he said.
The presiding members have received advice from Health Minister Stephen Wade, who told InDaily: “I understand the presiding members are looking at how parliamentary business can be conducted more safely in the context of COVID-19… I have made some suggestions and am arranging further input from SA Health.”
Wade’s office later provided a list of the minister’s “initial suggestions” for the running of parliament:
– Commitment to pairs for anyone feeling unwell- Urge social distancing throughout the building
– rearrange chamber seating to ensure that that each member is seated at least 1.5m from each other member
– allow Members’ seating to spill into the ground floor gallery
– to the extent that that is not possible, have a set number of standing pairs
– Ministers spaced during Question Time
– Suspend quorum requirements
– Allow walk-through voting with MPs entering via one door and exiting via another
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