Ministerial Statement

State Budget

The Hon. R.I. LUCAS (Treasurer) (14:51): I seek leave to make a ministerial statement on the subject of the 2017-18 budget result to be a significant deficit.

Leave granted.

The Hon. R.I. LUCAS: At the time of the 2017-18 Mid-Year Budget Review in December 2017, the former Labor government claimed razor thin budget surpluses of $12 million and $14 million for 2017-18 and 2018-19 and modest surpluses for 2019-20 and 2020-21. Analysis now conducted by Treasury shows that these claimed budget surpluses assumed massive budget cuts of $247.7 million in 2018-19, building to $715 million in 2021-22. The most significant component of these budget cuts related to cuts to the health budget, ranging from $141.3 million in 2018-19 up to $445.5 million in 2021-22.

I seek leave to have incorporated into Hansard, without my reading it, a purely statistical table, which is a Treasury analysis of previous government savings commencing from 2018-19.

Leave granted.

Previous Government Savings Commencing from 2018-19 ($'000)

Note: Agency allocations are pre Machinery of Government changes following the March 2018 Election

(1) Primarily relates to 1% Efficiency Dividend on Employee Expenses and 1% Efficiency Dividend on Net Cost of Services.

(2) Includes SACE and Registration Boards

(2) Includes SACE and Registration Boards

(2) Includes SACE and Registration Boards

The Hon. R.I. LUCAS: Budget figures for 2017-18 now show that the former Labor government's last budget was in very significant deficit rather than the claimed budget surplus. There were significant budget blowouts in a number of departments, but especially Health, Child Protection and TAFE SA. An example of the former Labor government's inability to manage the health budget is demonstrated by considering the financial performance of the Central Adelaide Local Health Network over the last five years.

As of 30 April 2018, it was estimated that the 2017-18 budget, under former minister Mr Malinauskas, would be overspent by $255 million. I seek leave to have incorporated into Hansard, without my reading it, a purely statistical table, which is an analysis of the Central Adelaide Local Health Network variance to budget over the last five years.

Leave granted.

Central Adelaide Local Health Network—Variance to Budget

The Hon. R.I. LUCAS: The table which has now been incorporated into Hansard shows that, over the previous four years, the Central Adelaide Local Health Network budget was overspent by between, at the lowest level, $57.6 million and up to $145.8 million per year. As I said earlier, in the most recent year 2017-18, under the former minister Mr Malinauskas, the estimated budget overspend was $255 million in that year alone. Treasury analysis of the Labor government's management of the Health budget shows that budgeted savings targets were rarely if ever achieved.

In 2017-18, even with the reversal of savings of almost $200 million, SA Health will not achieve any of the remaining $70 million in savings required of it. Even with this record of non-performance, the former Labor government was estimating budget surpluses over the forward estimates period on the assumption that they would deliver budget cuts to Health of up to $445.5 million per year. It is clear that the former Labor government was aware that its record demonstrated it could never achieve these claimed level of savings, yet it continued to use them to artificially prop up future predicted surpluses.

The true position of an underlying structural deficit was being masked by the one-off proceeds of privatisation proceeds such as the privatisation of the Motor Accident Commission. Now that those one-off privatisation proceeds have been spent and wasted, the true nature of the financial mess left by the Labor government is starkly revealed.

The Marshall Liberal government's first budget will be designed to tackle the former Labor government's waste and financial mismanagement and will replace funding for Labor government priorities with funding for new priorities to create jobs, lower costs and deliver better services.