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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-07-31 Daily Xml
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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

AGENCY (PRE-MOG) EXISTING EFFICIENCY DIVIDENDS $'000 (1)
2018-19 2019-20 2020-21 2021-22
Attorney-General 2,371 4,999 7,836 10,756
Child Protection 1,220 1,250 1,281 1,313
Communities and Social Inclusion 5,869 9,226 11,614 13,736
Correctional Services 2,116 4,457 7,104 10,139
Courts Administration Authority 509 1,050 1,649 2,273
Defence SA 153 311 477 604
Education and Child Development (2) 7,512 13,970 23,549 31,900
Electoral Commission of SA - - - -
Emergency Services 551 1,129 1,727 2,171
Environment, Water and Natural Resources 2,191 4,664 7,469 10,241
Environment Protection Authority 228 465 739 1,017
Green Industries SA - 19 43 72
Health and Ageing 114,479 214,457 314,473 405,175
Housing SA 863 1,685 2,427 3,187
Lotteries Commission of SA - - - -
Planning, Transport and Infrastructure 4,153 10,145 16,322 23,598
Police 8,056 16,250 18,820 20,490
Premier and Cabinet 2,056 4,310 6,228 8,414
Primary and Industries and Resources 1,864 3,796 5,875 8,022
Renewal SA - - - -
SA Water - - - -
State Development 11,042 23,980 37,905 35,327
Tourism 577 1,165 1,871 2,696
Treasury and Finance 847 1,637 2,709 3,782
Total Savings 166,657 318,965 470,119 594,913

(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

AGENCY (PRE-MOG) 2017-18 MYBR EFFICIENCY MEASURES $'000
2018-19 2019-20 2020-21 2021-22
Attorney-General 5,806 8,908 9,041 9,177
Child Protection 1,574 2,415 2,452 2,488
Communities and Social Inclusion 2,337 3,558 3,567 3,577
Correctional Services 1,504 2,309 2,343 2,379
Courts Administration Authority 1,585 2,433 2,470 2,507
Defence SA 120 184 187 190
Education and Child Development (2) 4,393 6,742 6,843 6,945
Electoral Commission of SA 81 124 126 128
Emergency Services - - - -
Environment, Water and Natural Resources 3,158 4,846 4,918 4,993
Environment Protection Authority 855 1,312 1,332 1,352
Green Industries SA 73 113 114 115
Health and Ageing 26,789 39,153 39,741 40,337
Housing SA 2,254 3,459 3,511 3,563
Lotteries Commission of SA 19 29 30 30
Planning, Transport and Infrastructure 7,407 11,365 11,536 11,709
Police 2,620 4,019 4,079 4,141
Premier and Cabinet 5,854 8,981 9,117 9,251
Primary and Industries and Resources 1,598 2,451 2,488 2,525
Renewal SA 488 748 760 770
SA Water 3,739 5,737 - -
State Development 7,121 10,927 11,091 11,258
Tourism 138 212 215 219
Treasury and Finance 1,548 2,375 2,411 2,447
Total Savings 81,061 122,399 118,371 120,100

(2) Includes SACE and Registration Boards

AGENCY (PRE-MOG) TOTAL EXISTING SAVINGS $'000
2018-19 2019-20 2020-21 2021-22
Attorney-General 8,177 13,907 16,878 19,933
Child Protection 2,794 3,665 3,733 3,802
Communities and Social Inclusion 8,206 12,784 15,181 17,313
Correctional Services 3,620 6,766 9,448 12,518
Courts Administration Authority 2,094 3,483 4,119 4,780
Defence SA 273 495 664 794
Education and Child Development (2) 11,905 20,712 30,392 38,845
Electoral Commission of SA 81 124 126 128
Emergency Services 551 1,129 1,727 2,171
Environment, Water and Natural Resources 5,349 9,510 12,387 15,233
Environment Protection Authority 1,083 1,777 2,071 2,369
Green Industries SA 73 132 158 187
Health and Ageing 141,268 253,610 354,214 445,512
Housing SA 3,117 5,143 5,937 6,750
Lotteries Commission of SA 19 29 30 30
Planning, Transport and Infrastructure 11,560 21,510 27,858 35,307
Police 10,676 20,270 22,899 24,631
Premier and Cabinet 7,910 13,291 15,345 17,665
Primary and Industries and Resources 3,462 6,247 8,364 10,548
Renewal SA 488 748 760 770
SA Water 3,739 5,737 - -
State Development 18,163 34,908 48,997 46,585
Tourism 715 1,377 2,086 2,915
Treasury and Finance 2,395 4,012 5,120 6,229
Total Savings 247,719 441,364 588,491 715,014

(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

2017-18(EOY projected at 30 April 2018) 2016-17(June PPR) 2015-16(June PPR) 2014-15(June PPR) 2013-14(June PPR)
'000s '000s '000s '000s '000s
Variance to Budget Revenue excl Approp Expenditure -30,839-224,301 -12,240-74,462 21,935-167,715 26,862-117,801 23,812-81,451
Net Over Spend -255,140 -86,702 -145,780 -90,939 -57,639


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.

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