The South Australian budget will take a big hit this year from the coronavirus pandemic but the full extent of the damage is yet to be determined, Premier Steven Marshall says.
The premier says SA is facing a big deficit but how high that goes will depend on GST returns from the federal government.
“It’s going to be a pretty devastating budget for us this year,” Mr Marshall said on Monday.
“There’s going to be a very large deficit but that’s mainly made up of us leaning in to help those people that are most in need in South Australia.
“Big concession payments for people in South Australia, grants for small business, and bringing forward projects that are going to stimulate economic activity and, most importantly, jobs.”
The state government previously flagged a big cut to GST returns in March this year when it conceded for the first time that its finances would finish in the red over the next two years.
Treasurer Rob Lucas said then that the final report of the independent Commonwealth Grants Commission included a $166 million cut to GST returns this financial year and a $689 million cut next year.
At the mid-year financial review in December, the Treasurer had unveiled a healthy surplus for 2018/19 of $289 million, almost three times the $101 million forecast in the budget in June.
But he also tipped the surplus for 2019/20 to dip to $91 million, down from $94 million projected in June, and the result for 2020/21 to fall from the original forecast of $105 million to just $68 million.
Those numbers are now nothing like what will be delivered later this year.
Mr Marshall said the government was working on what the final figures might look like but also ruled out imposing new taxes, charges or a special levy to cover the COVID-19 spending.
“We’ve made it clear we’re not interested in putting in new fees, taxes and charges,” he said.
The premier also defended last week’s confirmation that a range of existing fees and charges would increase by 1.9 per cent.
Mr Marshall said the increase had been kept to a “bare minimum”
But Opposition Leader Peter Malinauskas said the government should have followed the lead of WA and Victoria in freezing all fees and charges until July next year.
“The last thing South Australians businesses and families need right now is higher taxes,” Mr Malinauskas said.