2012 State Budget - Record Debt, Record Deficit, BIG problems
Labor's State Budget has delivered record debt, record deficit and a credit rating downgrade for South Australians.
It means the Labor Government is borrowing funds to pay wages and balance the books, and it means today’s children will be paying off Labor’s debt until well into retirement.
Three years ago Labor forecast a $304 million surplus in the 2012-13 financial year, today Jack Snelling announced a $1.2 billion turn around in that projection, plunging the Budget $867 million into deficit – the biggest in South Australia’s history.
State debt, currently an astounding $8.4 billion, is projected to rise throughout the period of the forward estimates. Far exceeding the levels seen in the wake of the State Bank disaster, South Australian debt will reach $13 billion by 2015-16 – the biggest in South Australia’s history.
The unsustainable Budget position has been reflected in Standard & Poors downgrade of South Australia’s credit rating within hours of Jack Snelling’s speech, and national media outlets, including the Australian Financial Review (headline pictured below) were quick to admonish Labor’s mismanagement.
Early estimations suggested the credit downgrade would add $22 million per year to the State’s interest bill but that was premised on a $9 billion debt, not the record $13 billion debt announced this afternoon for all government sectors.
Other key measures include –
- State taxes to grow at double the rate of inflation in each of the projected years from 2012-13
- Total State Liabilities to reach $28 billion in 2015-16, far exceeding the total State Budget
- The axing of a further 1000 public service jobs over the next three years, in addition to the 4150 announced in the previous two budgets
- A 1% efficiency dividend across Government, commencing in 2013-14
- Nearly half a billion dollars in deferred transport and health expenditure, including the postponement of the upgrades to the Queen Elizabeth Hospital and Modbury Hospital Inpatient Unit
- The proposed tram extension to the Western Suburbs has vanished from the Budget Statements with no suggestion of when it may commence
- Key living costs and charges such as vehicle registration and third party insurance premiums to rise
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