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Budget 2020: The key measures

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Here’s our easy-to-digest summary of the key measures in today’s State Budget – from big-spending infrastructure projects and pandemic-induced stimulus measures, to some stings in Treasurer Rob Lucas’s financial fine-print.

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Key measures and data:

Economic growth forecasts

The State Government is predicting the economy will shrink by 0.75 per cent in 2020-21 before bouncing back strongly to grow by a healthy 4.25 per cent in 2021-22.

Treasurer Rob Lucas said this year’s contraction was forecast to be about half of the national forecast of -1.5 per cent thanks to the state’s handling of the COVID-19 pandemic, which limited the worst of the lockdowns to a 10-week period from late March to early June.

“We believe we’ve handled COVID better than other places and eased restrictions quicker,” he said.

“National figures have also had to absorb the impact of Victoria’s second wave lockdown.”

Ambitious Gross State Product forecasts of 3 per cent per year have also been made four 2022-23 and 2023-24 in line with national predictions.

Employment growth in South Australia is expected to stagnate in 20-21 after shrinking by 0.6 per cent last financial year. It is expected to grow by 2 per cent in 2021-22 in line with the bold growth prediction before settling back to 1.5 per cent in 2022-23 and 23-24 .

The public service is expected to grow by 113 FTEs between June 30 this year and the middle of 2024, increasing the state’s employee costs from $8.75 billion in 2019-20 to $9.36 billion in 2023-24.

He said cutting public service jobs and raising taxes would have been “a recipe for recession”.

A second round of $10,000 cash grants for small business, an extension of payroll tax relief and funding for public sector apprentices and training positions are among a fresh ‘adrenalin hit’ to keep SA businesses afloat.

Economic stimulus, debt and deficit

The State Government says it is injecting $4 billion into the SA economic recovery and will leverage another $1 billion in commonwealth, councils and business funding to inject $5 billion into the local economy.

Rob Lucas said the Reserve Bank of Australia had done all it could to tweak monetary policy.

“The heavy lifting now needs to be done by governments in terms of fiscal policy,” he said.

“Governments cannot be concerned about debts and deficits… if we are going to respond to a global pandemic then that is what we have to do and that is what this budget is seeking to do.”

Among the continued boosts for business include the introduction of an extra six months’ payroll tax waiver for businesses with grouped annual wages under $4 million.

In addition to the existing nine-month waiver, this means eligible businesses won’t have to pay any payroll tax for 15 months – or until July next year. That is expected to assist around 2400 business groups and save them up to $210,000 over 15 months.

The government is also introducing a 12-month payroll tax exemption for wages paid to new apprentices and trainees who begin a relevant contract of training with an employer from today to June 30 next year.

It will also provide $32.9 million of additional funding for 750 new traineeships and apprenticeships in government agencies and funded projects, and delivering a huge boost to the Economic and Business Growth Fund, to attract further job-creating investment into the state.

An extra $220 million over four years has been allocated to the Economic and Business Growth Fund, to attract further job-creating investment into South Australia and encourage growth of new and existing industries.

“By doubling our economic stimulus to an unprecedented $4 billion, we are providing businesses with extended financial relief and direct, targeted support, through tax cuts and deferrals, up-front cash payments and access to a range of grants and funding programs,” Lucas said.

“This will ease their cash-flow burden at a time when they need it most, giving them the confidence to invest and create more jobs.

Lucas said previously announced land tax cuts were also lowering the cost of doing business in South Australia.

“If a small state like SA is to create jobs and grow our economy then the cost of doing business in the state has to be nationally and internationally competitive,” he said.

However, coupled with a predicted $3.8 billion hit to SA’s GST revenue from 2019-20 to 2022-23, the additional stimulus spending will blow out state debt.

Budget papers show public sector net debt will blow out from $17.45 billion in 2019-20 to $33.17 billion in 2023-24. This financial year is predicted to be the most damaging to the state’s debt position with public sector debt blowing out by more than $5.5 billion in 2020-21.

Completing the North-South corridor

The $8.9 billion plan to complete the North-South corridor from Tonsley to the River Torrens has been unveiled by the South Australian Government as the jewel in today’s State Budget.

The 10.5km project will include two tunnels with construction in two stages from 2023 to 2030.

The project includes:

The decision to build the northern tunnel will spare landmarks previously under threat including Thebarton Theatre, Queen of Angels Church, Hindmarsh Cemetery and the Hoffman Brick Kiln.

The state government says it has provisioned $1.96 billion over the next four years for the project, which will create up to 4000 jobs.

It says it will deliver 78km of free-flowing motorway from Gawler to Old Noarlunga, bypassing 21 sets of traffic lights and saving up to 24 minutes in travel time on the new section alone.

Current estimates put the project cost at $8.9 billion. The final cost estimate will be determined later next year after a detailed business case and final assurances by Infrastructure Australia and Infrastructure South Australia.

Treasurer Rob Lucas said an all-tunnel option would have cost about $12 billion.

He said the hybrid design will require about 390 properties to be acquired in comparison to almost 900 properties under an open-motorway option.

Aboriginal affairs

Closing the Gap

Spending on Aboriginal affairs will increase by $843,000 this financial year.

The bulk of the funding will go towards finalising a national Closing the Gap initiative to address Aboriginal and Torres Strait Islander disadvantage.

The initiative is based on four key reforms: formal partnerships and shared decision-making, building the community-controlled sector and transforming government organisations at a regional level.

Funding for that initiative will increase to $1 million next year.

An approximate $450,000 in additional funding will be given to the South Australian  Aboriginal Community Controlled Organisations Network (SACCON) each year for the next three years.

SACCON is a peak body ensuring the views of Aboriginal community-controlled organisations are represented during the Government’s implementation of the Closing the Gap initiative.

The Government aims to develop a new Aboriginal Affairs Action Plan for 2021-22, following the completion of the current plan, which ends this year.

Mining

The Government aims to “improve commercial relations” between mining companies and native title holders in the “highly prospective” Gawler Craton and Curnamona provinces, by providing $1.2 million over five years for Indigenous land use agreement negotiations.

Infrastructure in regional and remote Aboriginal communities

More than $9 million will be spent over the next two years to upgrade road, waste management and community infrastructure in remote and regional Aboriginal communities.

Arts

Recovery fund

Just over $10 million will be spent on a recovery fund for professional artists who are struggling to find work after the COVID-19 pandemic.

The fund will be used to provide mentorship programs, support the reopening of theatres and festivals and build partnerships between artists and arts organisations.

Grants of up to $20,000 for individuals and $100,000 for groups and organisations will be made available under the scheme.

Aboriginal Arts and Cultures Centre

The budget for the Marshall Government’s “jewel in the crown” for Lot Fourteen has increased to $200 million, with an additional $50 million allocated to the project.

The centre, which also has federal funding, will be built next to the Botanic Garden at the old Royal Adelaide Hospital site.

It is touted as “the gateway to the oldest living cultures in the world”, combining traditional storey-telling and modern technology to lure international and interstate tourists to the city.

Multi-institution storage facility

The Government announced in last year’s budget that it would spend $2.6 million over two years on a temporary upgrade to the SA Museum’s Aboriginal Cultural and Collection Storage facility at Netley.

This year’s budget allocates $86.5 million towards a new purpose-built facility to store all of the state’s collections under the custodianship of major cultural institutions, including the Museum, Art Gallery, State Library and History Trust.

The new facility will ensure collections are safeguarded and preserved by storing them under appropriate environmental and spatial conditions.

Up to 170 jobs will be created during construction.

Country theatre upgrades

The old Varcoe’s Foundry building next to the Sir Robert Helpmann Theatre in Mt Gambier will undergo an $800,000 renovation to turn it into a “thriving artist hub and flexible performance space”.

Renmark will receive an additional $1.5 million to complete the upgrade of the Chaffey Theatre, to ensure it meets fire safety and disability access standards.

Rebate scheme

The Government will spend $5.4 million over the next two years expanding the post-production, digital and visual effects rebate scheme to include video game development.

The scheme is managed by the South Australian Film Corporation.

Child protection

Spiralling number of kids in care

The number of children and young people entering care is projected to increase more than first-budgeted, forcing the Government to commit $124 million over the next four years to cover the growing costs.

Latest data from the Child Protection Department shows there were 4420 children and young people in care in August, up from 3988 children the month before.

The Government claims spending on child protection has increased by 8 per cent this year compared to 2019-20.

Cutting corporate costs

The Government will cut $4.5 million from the Department’s budget each year over the forward estimates, with those savings to come from removing 22 full-time corporate staff.

Placing kids in care

A “real time” child protection visibility system will be introduced this year to help authorities monitor placement availability.

The $670,000 system will measure capacity and occupancy levels, to match a child with a suitable placement once they enter state care.

The City

Memorial Drive redevelopment

One of the biggest announcements in this year’s budget is a $44 million stage-two redevelopment of the Memorial Drive Tennis Centre.

The Government says the project, to be complete by the end of next year, will transform the centre into “a state-of-the-art arena for sporting, arts and entertainment events”.

It will feature four new grandstands to increase seating capacity to 6000, event and function spaces, elite training and recovery facilities, digital infrastructure and improved access to Adelaide Oval.

Treasurer Rob Lucas said a business case was already complete.

“Its prime purposes will obviously be for tennis, but also for events such as concerts and artistic events, and festivals are potentially going to be utilising that particular space,” he said.

Hindmarsh Stadium upgrade

After scrapping plans for a second city sports and entertainment stadium earlier in the year following the COVID-19 pandemic, the Government has announced it will spend $45 million upgrading Hindmarsh Soccer Stadium to a “contemporary elite sport standard”.

It states the project should be complete by the end of 2022 or the start of 2023, in time for the FIFA Women’s World Cup, should South Australia be successful in hosting games.

The upgrades include a new shade covering over the eastern grandstand, new lighting, upgraded change rooms and toilets, a replacement pitch and improved disability access, media, broadcast and corporate and catering facilities.

An additional $8 million will also be spent on technology upgrades, including two new “super screens”.

“It’s designed to improve the facilities so at the end of the day, we’re going to be in a much better position to bid for national and international sporting events,” Lucas said.

Festival Plaza upgrade

An ongoing upgrade of the Festival Plaza will be boosted by $31.2 million cash splash over four years, with the new funding to go towards the installation of escalators, a new lift in the Dunstan Playhouse, additional paving and slab strengthening to support the Adelaide Festival Centre.

The plaza redevelopment will see 16,500 square-metres of public space redeveloped in the areas surrounding the Adelaide Festival Centre, Adelaide Railway Station Adelaide Casino, Parliament House and Old Parliament House and Station Road.

The new funding brings the total Festival Plaza spend to $214 million.

Aquatic Centre?

A notable absence in this year’s budget was funding for a redeveloped Adelaide Aquatic Centre, to replace the 50-year-old facility in North Adelaide.

The Adelaide City Council asked the state and federal government to contribute to the estimated $45-55 million cost, warning the project might not go ahead if it did not receive support.

It comes after the Adelaide Football Club withdrew its bid to redevelop the swimming facility into a community pool and training centre.

An artist’s impression of the Memorial Drive upgrade.

Courts

Staffing

The Government will recoup $500,000 by not replacing a currently-vacant District Court Master and associated staff.

But it will appoint an additional Deputy Coroner and three full-time support staff at the Coroner’s Court, to assist in reducing a backlog of cases.

Court upgrades

More than $11.5 million will be spent renovating the façade of the historic Sir Samuel Way Building on Victoria Square, which recently underwent a $31 million internal upgrade.

An additional $546,000 will be spent on a new lift and ramps, automatic doors and toilet facilities at the Supreme Court building to improve accessibility for people with disability.

The Supreme Court building will also receive a $1.4 million upgrade of its judicial offices, with that cost to be partially offset by a $585,000 redirection of operating and administration funding.

The upgrade will be complete int the coming months ahead of the commencement of the Court of Appeal on January 1.

Education

School infrastructure

Public schools and preschools are set to benefit from $1.3 billion in infrastructure upgrades over the next four years.

Treasurer Rob Lucas said the Government would provide grants of between $20,000 and $100,000 to schools, and grants of $30,000 to preschools, to undertake priority maintenance works of their choosing.

He said the money had to be spent over the next school year.

“That will be spent on local painters, local carpenters, local tilers, local landscapers and the like, right across the board in terms of essential maintenance that might need to be required at that local school,” he said.

“That’s money that won’t have to go through a central procurement process through the Department.

“It’s been localised to the extent that local communities and local leaders will make those decisions and can make those decisions quickly.”

The Government has also brought forward $66.9 million worth of already-approved capital works at schools into the next two years.

New high school

The former Investigator College at Goolwa will be transformed into a new public high school, with the Government set to spend $3.9 million this year and $6.1 million next year on the site.

The school will fit approximately 400 students from years 7 to 12 from the beginning of 2022.

TAFE 

After threatening to favour private vocational training providers over TAFE, the Government has increased spending on the public service by $54.2 million this year.

It says the funding is in response to lower forecasts for external revenue growth and delays identifying efficiency measures.

However, the budget papers state TAFE is “expected to pursue efficiency improvements as it aligns training services with the Government’s direction for the delivery of vocational education and training”.

The Government has cut 217 TAFE staff this year.

Fees and charges

Electric vehicle user charge

The Government is set to be the first in the nation to introduce a road user charge for electric vehicles from July 1, subject to the measure passing state parliament.

Rob Lucas said South Australia was speaking with other states over the cost and rollout of the electric vehicle charge.

He said it would not be a significant money-earner but would make more road user-ship equitable as more and more people purchase electric vehicles.

Lucas pointed out that drivers of standard-fuelled vehicles paid an excise which went towards road maintenance but, so far, electric vehicle owners did not make such a contribution.

If follows the announcement of an $18.3 million Electric Vehicle Plan over four years last week. The plan is intended to provide funding for charging infrastructure across the state.

Victims of Crime levy

For the first time in nine years, the Victims of Crime levy will increase – by 50 per cent or $30 – raising the cost of a range of fines.

With the balance of the fund above $150 million, Treasurer Rob Lucas said the measure was a “balancing item” in the budget.

Clamping and impounding

The Government will introduce upfront payment of clamping and impounding fees – an offender won’t be able to get their vehicle unless they pay the charge.

Mobile phone spy cameras

Fixed mobile phone “detection safety cameras” will be installed in high-risk metropolitan sites – with the high definition cameras targeting drivers illegally using a mobile phone.

Health

Public health facilities across South Australia have been allocated $1.7 billion as part of an infrastructure splurge for the next four years, including $685 million towards the new Women’s and Children’s Hospital and $50 million in additional spending on the Queen Elizabeth Hospital.

Meanwhile, half a billion dollars has been allocated towards health services for the next financial year with a further $600 million for the following three years.

In response to the coronavirus pandemic, additional personal protective equipment will get a boost of $93 million for the purchase of five million medical respirator masks and 40 million level three barrier protection surgical masks.

Across the forward four years, 200 full-time staff will be axed from the Department for Health and Wellbeing, a measure which is budgeted to  save $6.5 million per year.

The Budget allocates $15.1 million to support mental health initiatives for the 2020-21 financial year. Initiatives include increased alcohol and other drug service capacity, enhanced use of digital technology for maintaining delivery of services to consumers with a severe mental illness and initiatives for children and young people affected by social isolation and economic impacts of COVID-19.

Planned funding includes $3.5 million over four years to expand the adult safeguarding unit to those adults living with a disability who may be vulnerable to abuse.

Housing

As part of the Budget, Premier Steven Marshall announced a $75.6 million Housing Construction Stimulus Package which he said would be available from the end of 2021 to offer support for the housing construction industry as it transitioned from HomeBuilder grants.

A further $300,000 has been allocated for the following two years.

According to the budget papers, Renewal SA would consider projects that supported the development of increased affordable housing.

The government said it would also “consider other initiatives to support the market, including shared equity for new home construction and opportunities to promote community and affordability housing”.

The Government has committed $6.3 million over two years to address homelessness, including a $4 million grant to Aboriginal Community Housing Limited.

Public transport

Compared to the roads budget, there is little new spending on public transport services.

The Budget does include $7 million over two years to improve the public transport ticketing system – particularly the introduction of a “tap on” facility for debit and credit card payments.

The transition of the state’s public rail system to private management will cost $2.4 million in 2020-21.

The Government’s abandonment of its unpopular changes to bus routes will cost the budget $11 million in 2021, increasing to $13.5 million the next year.

Tourism

A $20 million Tourism Industry Development Fund grant program will be established. The funding is anticipated to stimulate private sector investment in regional accommodation and the development of tourism products and experiences.

To entice new events to the state, an extra $12 million over three years has been provided. This figure includes the new winter festival – Illuminate.

Welfare

A one-off $500 payment will be provided as a “cost of living concession” to support people in receipt of a JobSeeker payment.

Youth Justice

Upgraded detention facilities

The Kurlana Tapa youth detention centre in Cavan will undergo a $18.7 million upgrade following a recent consolidation of two campuses into one.

The upgrade includes a new 12-bed accommodation unit and eight-bed police custody unit, as well as new classroom space and visiting spaces.

Once completed, the upgrade will save the Government $651,000 in 2022-23, rising to $1.3 million in 2023-24 from joining the two campuses.

InDaily staff reporters: Andrew Spence, Stephanie Richards and Jessica Bassano

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