“Merry Christmas, happy surplus”: Hospital windfall puts smile on Treasurer’s dial

December 16, 2016
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The ongoing stoush over the dormant new Royal Adelaide Hospital has almost single-handedly helped deliver Tom Koutsantonis a budget windfall $46 million higher than anticipated in July, with today’s Mid-Year Budget Review revising the 2016-17 surplus up to $300 million.

The Treasurer was full of festive ebullience at a morning media conference today to reveal his budget update, greeting gathered reporters with a refrain of “Merry Christmas, happy surplus!”

He also almost managed to channel Paul Keating’s (in)famous budget riposte when he observed that “across the forward estimates there are some very healthy numbers”.

But those numbers are predicated on some of the Government’s most troublesome selling points, with $43 million – and counting – returned from the ongoing standoff over the new hospital, which is saving Treasury a million dollars a day in repayments.

And a “better than expected” profit from the Motor Accident Commission in 2015-16 and cash from the commission’s insurance sell-off saw an additional $327 million dividend paid into government coffers this financial year.

“This is the first operating surplus the budget had recorded since 2009-10… it won’t be the last,” Koutsantonis enthused.

But the numbers did not have the Opposition convinced, with Liberal leader Steven Marshall pointing out that despite expected GST grants being revised up “due to an expected increase in SA’s share of the national pool”, the budget bottom line actually loses $84 million over the remaining three years of the forward estimates.

“The surplus that they’re providing this year can only be provided because they haven’t opened the new hospital, and there’s a further deterioration of $84 million despite an upgrade of GST revenue from the Commonwealth,” he told InDaily.

But after a week in which the Liberal Party kick-started preparations for its 2018 election campaign, opening preselection nominations across a raft of seats statewide, Koutsantonis was swift to paint the budget forecast as a platform for re-election, answering questions about whether he has some pre-poll surprises in store with a resolute “yes”.

He then launched into an impassioned election pitch, which could be read (and was, by some in the room) as a leadership pitch – were it not for the Treasurer’s resolute insistence that, in a phrase to could well become Labor’s campaign mantra: “I’ll stay with Jay.”

We’re not here to make up the time till the 2018 election so you can all coronate Mr Marshall, or whoever replaces him

“We plan to win,” Koutsantonis insisted.

“We’re not here to make up the time till the 2018 election so you can all coronate Mr Marshall, or whoever replaces him – we’re going to win, because Labor governments make a difference.”

A difference, he went on, “between good hospitals and bad hospitals, between infrastructure or no infrastructure” and a voice for those who “haven’t got a voice of their own”.

It was an unusually broad monologue for a mid-year budget statement, but underlines the fact that the coming year will see both parties escalate their claims to govern.

For Labor, though, ongoing spot fires will need to be extinguished first, with the government in mediation with the consortium responsible for the new hospital.

“It’s costing them a considerable penny,” Koutsantonis noted of the ongoing stalemate.

“But that’s to the benefit of the SA taxpayer… the state has not borrowed one cent for the building of this hospital.

What I’m thrilled to bits about is the taxpayer is protected

“[SA Health Partnership] are the ones with the holding costs, not the taxpayers [and] until they can certify this hospital as being safe and fit for purpose, and honour the contractual obligations they’ve signed, we’ll not accept it… we will make sure the taxpayer gets what we paid for.”

Asked if he was “thrilled to bits” about the controversy propping up his budget surplus, Koutsantonis said: “What I’m thrilled to bits about is we’ve got a contract that’s airtight.”

“What I’m thrilled to bits about is the taxpayer is protected,” he said.

Asked about ongoing litigation, he replied: “Bring it on.”

“We’ve engaged the best QCs in SA… the advice we’ve received is we’re on very, very solid ground [and] the Government will protect the taxpayers at all costs.”

He said he had “contingencies in place” for ongoing legal costs, but insisted: “I don’t think for a moment the proponents building the hospital are doing well financially.”

Asked if such rhetoric could hurt the state’s reputation for future public/private partnerships, he said the Government simply wants “what we ordered”.

After the MAC windfall, Koutsantonis was again forced to defend opening compulsory insurance provisions to private insurers, insisting that “no-one can tell me or convince me that a monopoly government institution can do it cheaper or better than the private sector”.

“I expect there would be dramatic savings for consumers once we have a competitive market,” he said, insisting the sell-off would prove to be “the opposite of the ETSA privatisation”.

But Marshall said the MYBR was “a typical Labor financial document, flogging off assets to prop up the bottom line while simultaneously punishing households and businesses”.

He lamented that after successive budgets with a “jobs” pitch there was “not one single jobs stimulus measure in the MYBR, despite 24 consecutive months of the highest trend unemployment in the nation”.

The concerted job creation plan that SA desperately needs is nowhere to be seen

“This is a massive missed opportunity to kickstart jobs creation in this state,” he said.

“The fact that the Weatherill Government is incapable of developing a successful job creation strategy whilst reaping a massive financial windfall from the privatisation of the Motor Accident Commission is testimony to its incompetence… the government has delivered SA the highest unemployment in the nation and the bleak prospect of the jobs market deteriorating even further next year.

“The concerted job creation plan that SA desperately needs is nowhere to be seen in today’s MYBR.”

But Koutsantonis insists the measures in his July budget are veering fruit, with demand for grants to small businesses to hire new workers exceeding expectations.

“We were laughed at, people said it won’t work – but we’re exceeding our estimates… 4000 jobs have received accelerator grants,” he said.

“That puts a lie to claims the Opposition are making that our economy is stagnating.”

Nonetheless, jobs forecasts remain flat, with the Treasurer reasoning: “I’m glad that the Treasury are always very conservative.”

“You all know me – I’m a conservative guy, I like there to be conservative numbers in place,” he said.

The Treasurer said “the real story of the budget is we’ve actually been able to control expenditure”, but that balancing act is predicated on in-built wage restraint, and it’s arguable last week’s pay deal with rail workers that will see them handed an extra 2.5 per cent a year – effectively over seven years – doesn’t bode well for keeping spending in check.

“First and foremost I’m a unionist,” said Koutsantonis.

“I believe in collective bargaining [and] those negotiations began before the last budget… I’m not going to change a negotiation halfway through.”

Asked if he expected other unions to now settle for less, he replied: “I’m sure they will.”

The budget windfalls are offset by new spending, most notably on implementing the Nyland Royal Commission recommendations, and the writing down of conveyance receipts and flat payroll tax collections.

But Koutsantonis argues he dudded himself out of revenues by providing power concessions and business tax cuts, arguing: “This creates jobs; this is about real investment in real jobs in the economy, and we’re seeing that in the results.”

“Our economy has grown,” he said, noting gross state product had the second highest growth rate in the nation.

“There’s talk of the commonwealth on Monday [in the Commonwealth’s budget update] being downgraded by the ratings agencies, so now is the time to make sure we have the ability to live within our own means – and we’re doing so.”

The Treasurer noted there was a need to invest in prisons and police, but the courts bottleneck appears set to remain, at least until next year’s budget.

He also revealed budgeted funds from the sale of the government’s State Administration complex remained in the forward estimates, despite the sale to Commercial and General falling through this week.

“There’s been strong interest in this building,” the Treasurer insisted.

“We’re good tenants… I think we’re going to get a good price for this building.”


Source : In Daily

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