The Treasurer mid year budget review in December predicted a $91 million surplus for the current financial year – but his Treasury CEO David Reynolds today told a parliamentary committee the economic shutdown prompted by the COVID-19 pandemic was likely to have taken as much as $500 million off the bottom line by the end of June.
That’s on top of a change in the Commonwealth Grants Commission’s distribution formula that will see SA’s GST receipts fall by $478 million in 2020-21, and national writedowns costing the state an additional $169 million in the same year.
Asked how much worse off SA’s budget would be over the forward estimates without factoring in the coronavirus impact, Reynolds said: “Somewhere in the vicinity of $1.8 billion.”
However, he added “the actual result for this year will be smaller again as a result of COVID-19 and reduced economic activity”.
“To date there’s no estimate of how big that might be.”
He did, however, say it was expected to total around 30 per cent less GST revenue per month, which he said would mean around $170 million a month.
“We presume that will be for the months April to June that we’ll lose 30 per cent,” he said.
Reynolds said departmental spending had also blown out, particularly in SA Health – which accounted for $220 million of a $350 million total overspend since the mid year budget review.
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