State budget 2012/13

[Ben]

I quite like this commentry, sums it up in plain english.

Think of what we could buy with $2.3m in interest we are paying each and every single day. from no debt in 2007 to $8.7bn in 2016.

Loss of AAA credit rating. Not much good news, if any.

From in Daily:

Friday, 1 June 2012

It'll be OK later we hope

ON A quiet evening in the Snelling household, Mrs Snelling gathered the children together to explain how times were changing.

“Kids, the bad news is that Dad’s lost his job and money will be tight,” she starts.

“The good news is we can live on the credit card for another year or two or three because he’s sure to get a job and be able pay it all back.

“And the really good news? You’re getting an electric train set for Christmas.”

The Treasurer’s State Budget for 2012-13 mirrors much of the lacklustre Budget delivered a year ago.

The difference is that the revenue outlook is worse than expected, increasing forecast debt levels and deferral of any major project that can be pushed out beyond the four year framework of the financial estimates.

Everyone in the State is worse off.

What’s up?

Water prices (up 25 per cent), electricity prices, some 2000 state fees and charges and a second consecutive jump in car rego and licence fees.

You name it, it’s gone up.

How much do we owe?

Plenty.

In 2010 we owed $1.58 billion, rising to $3.33 billion in 2011 and now up further to $4.28 billion – rising to $8.7 billion in 2016. We owed nothing in 2007.

Our interest bill will be around $2.3 million every day next financial year, up from $1 million this year.

Can we pay it off?

Fingers crossed. Last year’s Budget was based on a turnaround in the global and local economies. Whoops.

The estimates for the years beyond 2013-14 are based on the same hope.

“Cyclical factors have contributed to the fall in revenues and it is anticipated that taxation and GST revenues will improve over the forward estimates as domestic and international economic conditions improve, mining activity expands, the employment outlook becomes more positive and household confidence grows,” the Budget papers say.

It’s over to you guys in Spain, Greece, the US and the London boardroom of BHP.

How’s our GST revenue going?

A slight bump this year with less than Treasury expected a year ago, but still we bank $4.24 billion, rising again to $4.5 billion in 2012-13, $4.64 in 2013-14 and $5.1 billion in $2014-15.

It’s annual growth rate in GST revenue of around five per cent; the gift that keeps on giving.

Are we all pulling our weight?

No.

The poker machine players seem to have lost their nerve with revenue falling from an expected $312 million to a paltry $296 million, due to “lower gaming machine expenditure in hotels and clubs”.

Folks, it’s time to get out there and load up those dollar coins.

What’s on the horizon?

Not much.

In fact we can’t see the horizon it’s so far away.

They’ve pushed the rail electrification out to somewhere beyond the Games of the XXXII Olympiad.

The long-awaited QEH Stage Three update, written in estimates of pounds, shillings and pence, will be deferred until Lassie comes home.

The West Lakes tram line … where? Trams to Outer Harbour? Later … maybe.

Payroll tax concessions for apprentices, stamp duty exemptions on a range of transactions – all announced in the last couple of years, have been deferred until Greater Western Sydney goes top.

Thank heavens for the mining boom!

Well, not really.

It seems that our expectations of $202 million in royalties this year fell short by $20 million.

Is that Olympic Dam I can see on the horizon? God, I hope so.

Surely, you can’t be serious?

We’ve shelved the rail electrification, but are stuck with a contract with French manufacturer Bombardier to buy 66 three-carriage electric trains.

If we put them all on the only electric line we’ll have – Seaford – the trains will run every few minutes.

Is there a winner – anywhere?

Sir Humphrey Appleby.

Public servants who’ve clocked up more than 15 years’ service will get extra leave entitlements.

Yes, Minister.

[Wayno]

this in one direction

In 2010 we owed $1.58 billion, rising to $3.33 billion in 2011 and now up further to $4.28 billion – rising to $8.7 billion in 2016. We owed nothing in 2007.

Our interest bill will be around $2.3 million every day next financial year, up from $1 million this year.

then this is the other

They’ve pushed the rail electrification out to somewhere beyond the Games of the XXXII Olympiad.

The long-awaited QEH Stage Three update, written in estimates of pounds, shillings and pence, will be deferred until Lassie comes home.

The West Lakes tram line … where? Trams to Outer Harbour? Later … maybe.

So what's he saying? don't spend money? or spend more? This journalist has certainly achieved broad appeal. Maybe that's his aim. Funny no mention of AO. He should be ashamed.

Debt is not evil. 1000s of SA folk have mortgages and pay significant levels of interest every year. Surely that's not a bad thing?

Anyway it doesn't matter because of this ==> http://www.adelaidenow.com.au/nasa-pred ... 6379590310

[Will]

this in one direction

In 2010 we owed $1.58 billion, rising to $3.33 billion in 2011 and now up further to $4.28 billion – rising to $8.7 billion in 2016. We owed nothing in 2007.

Our interest bill will be around $2.3 million every day next financial year, up from $1 million this year.

then this is the other

They’ve pushed the rail electrification out to somewhere beyond the Games of the XXXII Olympiad.

The long-awaited QEH Stage Three update, written in estimates of pounds, shillings and pence, will be deferred until Lassie comes home.

The West Lakes tram line … where? Trams to Outer Harbour? Later … maybe.

So what's he saying? don't spend money? or spend more? This journalist has certainly achieved broad appeal. Maybe that's his aim. Funny no mention of AO. He should be ashamed.

Debt is not evil. 1000s of SA folk have mortgages and pay significant levels of interest every year. Surely that's not a bad thing?

Anyway it doesn't matter because of this ==> http://www.adelaidenow.com.au/nasa-pred ... 6379590310

Tell me about it. Typical liberal-leaning right wing journalists.

I know it's completely off topic, but this reminds me of yesterday when I got into a heated arguement with a taxi driver when i commented that Alan Jones (who he was listening to) was an idiot, as he was having a whinge about the government allowing Gina Rinehart the ability to allow foreign workers, and the next minute later he was having a whinge about the lack of doctors in the bush....You can't have it both ways!

[Aidan]

I quite like this commentry, sums it up in plain english.

Except that it sums it up wrongly. Just because it's in plain english doesn't mean it's not misleading.

Think of what we could buy with $2.3m in interest we are paying each and every single day

Before doing so, please take a moment to question the figure! $2.3m per day is $840m per year, which would be an interest rate of well over 10%. IOW the author expects us to believe that we're paying subprime rates despite a credit rating of AA+.

Try halving it for a more realistic figure.

Now of course it may still look expensive to you - megabucks generally do. But in many cases the cost of not spending it woud also be high. Inadequate infrastructure is a much bigger impediment to business than government debt is, and is also a waste of time to people. And if we wait until the mining boom is in full swing before spending the money, we'll probably find the price will be significantly higher because the private sector are willing to pay the workers more (just like in WA).

Even the commentry's analogy is ill considered. SA still works. It's more like dad's a tradesman and business is a bit thin on the ground at the moment, but we know that's just a temporary thing.

[rhino]

Ben, you're not taking that InDaily tripe seriously are you?

[Ben]

Yes. I'm not happy with our state government. I'm not happy with our debt vs new infrastructure and i'm not happy with the piecemeal upgrades to our infrastructure.

[rhino]

Well, you have every right to not be happy with the way things are going, but, if you read the comments above by Wayno and Aidan, surely you cannot take that article seriously? If InDaily are prepared to publish such erroneous ramblings, it shows a lack of integrity on their behalf, as if they'll publish anything to make the Govt look bad, whether it's really bad or not. Looks like they have an agenda that they will go to any lengths to achieve. Can't condone that, I'm afraid.

[[Shuz]]

Not happy with this year's State Budget either - purely on the basis of our unsustainable debt levels.

A state debt of $8.7b by 2015/2016 is just simply unacceptable; theoretically it's higher, now that it's been discovered that Adelaide Oval has been listed as an investment, not an expense, which should make it $9.2b. To top it off, that's state debt before taking into account unfunded WorkCover liabilities.

Is Jack Snelling really that naive to believe that economic conditions will improve in 3 years time? No-one can predict what will happen tomorrow, let alone in three years time. He doesn't even manage his own household finances - his missus does all the work. How can we, South Australians, trust the man to look after our finances when he doesn't even manage his own!

The instability of the GFC that first rocked us back in 2008 is still having its effects today - 4 years later! I remember Labor trumpeting its horns back then, telling us that all will be good in 2012/2013 - and that we'd have a $300m surplus, or so. How things change! We don't have a $300m surplus, we now have a $850m something defecit. That's a turnaround of $1b! Pardon me, I could forgive an accounting error of maybe $50m in the Treasury books, but $1b!? Utter incompetence.

Labor just simply can't manage money whatsoever. State Labor in the late 80s and early 90s led us to the State Bank disaster, and consequently, nearly a decade of stagnated economic growth. The Liberals then had to sell state infrastructure to pay it off. The $9.2b we will have in 2015 will be larger than the State Bank debt. Assuming that the Liberal Party take power at the 2014 election, there is hardly any infrastructure left for them to sell. Well, actually, maybe the desalination plant. But that will mean increased water prices and so on.

Federal Labor under Kevin Rudd took us from a $30b surplus in 2007, to Julia Gillard's $300b deficit and growing! It seems much more likely that the much-touted $1.5b surplus 'promise' won't even be kept, because of the current economic conditions. I could have told her that at the start of the year!

And no, I'm not a Liberal fanboy, either. Whilst they are fiscally conservative, they're a bit too conservative. Good old Johnny H had a $30b surplus lying around, when that could have provided for necessary infrastructure. Had the Feds funded the duplication of the Southern Expressway then, they'd still be sitting on a nice $29.5b surplus. And no debt to us.

I am bloody fucking annoyed with the outcome. It will be the responsibility of Generation X, Y and Z for paying it off. This means increased taxes and fewer services. Where is the responsibility to future generations?

There needs to be much more accountability for financial expenditure in Government. Anyone with a financial delegation and budget should be instructed to live within their means and spend appropriately. If they can't, they should be fired, or at least reprimanded in some manner; reduced salary, reduced financial delegation, etc. At the moment, this is only limited to credit cards. If someone goes over their daily or monthly credit card allowance, they are stripped of the card for six months. The same goes for senior management, and executives.

[peas_and_corn]

The debt was just an excuse for state Liberal to sell assets. The real reason was a belief that services such as water and electricity shouldn't be run by the government (and in turn also held by the federal Liberal party regarding telecommunications).

[Waewick]

I really don't think either side of parliament can wipe their hands of any of this mess

Whilst Labor have been in power, the Liberals have been completely ineffectual and borderline irrelevant.

We are in a spot of bother and we need some decent polllies to step up to the plate and provide leadership

but that will never happen, not with the stupid party politics which put talent 2nd.

[cruel_world00]

Not happy with this year's State Budget either - purely on the basis of our unsustainable debt levels.

A state debt of $8.7b by 2015/2016 is just simply unacceptable; theoretically it's higher, now that it's been discovered that Adelaide Oval has been listed as an investment, not an expense, which should make it $9.2b. To top it off, that's state debt before taking into account unfunded WorkCover liabilities.

Is Jack Snelling really that naive to believe that economic conditions will improve in 3 years time? No-one can predict what will happen tomorrow, let alone in three years time. He doesn't even manage his own household finances - his missus does all the work. How can we, South Australians, trust the man to look after our finances when he doesn't even manage his own!

The instability of the GFC that first rocked us back in 2008 is still having its effects today - 4 years later! I remember Labor trumpeting its horns back then, telling us that all will be good in 2012/2013 - and that we'd have a $300m surplus, or so. How things change! We don't have a $300m surplus, we now have a $850m something defecit. That's a turnaround of $1b! Pardon me, I could forgive an accounting error of maybe $50m in the Treasury books, but $1b!? Utter incompetence.

Labor just simply can't manage money whatsoever. State Labor in the late 80s and early 90s led us to the State Bank disaster, and consequently, nearly a decade of stagnated economic growth. The Liberals then had to sell state infrastructure to pay it off. The $9.2b we will have in 2015 will be larger than the State Bank debt. Assuming that the Liberal Party take power at the 2014 election, there is hardly any infrastructure left for them to sell. Well, actually, maybe the desalination plant. But that will mean increased water prices and so on.

Federal Labor under Kevin Rudd took us from a $30b surplus in 2007, to Julia Gillard's $300b deficit and growing! It seems much more likely that the much-touted $1.5b surplus 'promise' won't even be kept, because of the current economic conditions. I could have told her that at the start of the year!

And no, I'm not a Liberal fanboy, either. Whilst they are fiscally conservative, they're a bit too conservative. Good old Johnny H had a $30b surplus lying around, when that could have provided for necessary infrastructure. Had the Feds funded the duplication of the Southern Expressway then, they'd still be sitting on a nice $29.5b surplus. And no debt to us.

I am bloody fucking annoyed with the outcome. It will be the responsibility of Generation X, Y and Z for paying it off. This means increased taxes and fewer services. Where is the responsibility to future generations?

There needs to be much more accountability for financial expenditure in Government. Anyone with a financial delegation and budget should be instructed to live within their means and spend appropriately. If they can't, they should be fired, or at least reprimanded in some manner; reduced salary, reduced financial delegation, etc. At the moment, this is only limited to credit cards. If someone goes over their daily or monthly credit card allowance, they are stripped of the card for six months. The same goes for senior management, and executives.

I can't work out if this a legit post or Shuz masquerading a post as satire.. it reads like a News Limited columnist.

The bit in bold is just the kind of sensationalised bullshit that Murdoch papers perpetuate.

I thought you better than that.

[Howie]

I'm not concerned with the treasurer's personal life, or whether he manages to balance the books at home or not. But by and large, I'd have to agree with what you've written there shuz. Not a good position for our government to be in at the moment, and given that there will be an economic slowdown in Europe, US, and more increasingly likely China as well. Governments both here and abroad would do best to be conservative as we enter the next global recession.

[Will]

Just out of curiosity what is the percentage of our national debt compared to GDP?

[[Shuz]]

National Debt (as of 2011) is 30.3% of GDP.
Australia's GDP stands at $1.57 trillion (2012).
National Debt: $475b.
That's a debt of around $21,590 for every man, woman and child in Australia.

[monotonehell]

National Debt (as of 2011) is 30.3% of GDP.
Australia's GDP stands at $1.57 trillion (2012).
National Debt: $475b.
That's a debt of around $21,590 for every man, woman and child in Australia.

That sounds good, isn't it?

Weren't the US & Germany were like 70-80% in the past few years? Or am I thinking of the wrong statistic?