SA Economy

[[Shuz]]

Is this a joke?

Cost and regulations?
Planning and land use system?
Planning transparency?
Planning consistency?

Ahahaha, what planet are these buffoons on!?

Electricity prices are out of control.

Housing and rent prices are out of control.

Developers seem to be in charge of the planning system, not councils or government. What they want, they get. Dodgy deals, suboptimal outcomes and maximum profits.

BCA needs a reality check.

[abc]

the list seems to be upside down to reality

[Will]

the list seems to be upside down to reality

You honestly think the Victoria of Dan Andrews and Jacinta Allan is a better place to do business?

[abc]

the list seems to be upside down to reality

You honestly think the Victoria of Dan Andrews and Jacinta Allan is a better place to do business?

Melbourne thrives in spite of what the premier does

[mattblack]

the list seems to be upside down to reality

You honestly think the Victoria of Dan Andrews and Jacinta Allan is a better place to do business?

Melbourne thrives in spite of what the premier does

I think your perception is different to reality;

Many Victorians are probably blissfully unaware of the dangerous credit rating high wire act that the Allan Government is performing at the moment.

Many will know that the state is deeply in debt with a $26 million a day interest bill and net debt on a path from $156 billion next year to $188 billion by 2028 but the rating on that debt is another story again.

Already Victoria’s AAA debt rating from 2020 has been downgraded two notches to AA, a reduction that has the effect of raising the interest rates actually paid on government borrowings and making the debt less sustainable.

On the government’s side, the hope is that interest rates are on the way down naturally and if the economy keeps growing along with the tax base and the investment in infrastructure starts to pay off as projects such as the Metro tunnel are finally finished, the debt rating worries will slowly recede.

If things go the other way, with infrastructure projects such as the Suburban Rail Loop first stage busting through their revised budgets and the state budget does not return to surplus as planned, then the chances of the debt rating deteriorating further to AA- or worse will increase greatly.

Rating agencies have clearly said Victoria is on notice
Indeed, the ratings agencies have been very clear about what needs to happen to avoid a negative debt rating but while there have been some signs of government action to increase some taxes and go slow on some projects such as the airport railway, there have been no major changes to the Budget trajectory.

Treasurer Tim Pallas has forecast an operating surplus of $1.5 billion by 2025-26 but any changes to that forecast could prove fatal to Victoria’s debt rating and see taxpayers hit with higher interest on the state’s mammoth debt.

S&P Global Ratings analyst Anthony Walker has clearly said that despite already having the lowest rating of any Australian state, Victoria could face another downgrade to AA- if state debt reached 240% of operating revenues, or if interest payments reached 10% of those revenues.

“We expect Victoria’s gross debt as a proportion of revenues to soar past 200% of operating revenues,” Mr Walker recently said.

“This is the highest among the Australian states and stems from successive operating deficits and its large capex since the pandemic hit in late fiscal 2020.”

“Debt to operating revenues has almost tripled since this time. Victoria’s serviceability costs are also rising.”

Victoria’s net debt is projected to hit $135.5 billion this year, compared to just $94.8 billion in NSW, which recently opened a new and well used Metro line.

Mr Walker said Victoria’s prolonged Covid lockdowns are largely to blame for the debt hangover, with other states around the world having recovered their budget health already.

“They (Victoria) just wanted to get the health outcomes correct. Well, that came at a massive fiscal shock, and they’re still trying to recover from that.”

Looking at the history of large capital works programs is not encouraging, with large budget blowouts the rule rather than the exception so the determination to start building the SRL which is currently budgeted at $30 billion to $34.5 billion is by itself a significant risk to the credit rating.

A lower rating would have serious repercussions too, with a AA- rating set to increase borrowing costs by between 0.1% and 0.5% at a time when the overall debt level will keep expanding strongly.

Some of the more recent infrastructure blowouts include the Metro Rail Tunnel which added $837 million to reach $13.48 billion, the West Gate Tunnel Project which is three years late and $4 billion over budget and the North East Link which has blown out by more than $10 billion to $26.1 billion.

Full article here

https://smallcaps.com.au/victoria-loomi ... structure/

[abc]

You honestly think the Victoria of Dan Andrews and Jacinta Allan is a better place to do business?

Melbourne thrives in spite of what the premier does

I think your perception is different to reality;

Many Victorians are probably blissfully unaware of the dangerous credit rating high wire act that the Allan Government is performing at the moment.

Many will know that the state is deeply in debt with a $26 million a day interest bill and net debt on a path from $156 billion next year to $188 billion by 2028 but the rating on that debt is another story again.

Already Victoria’s AAA debt rating from 2020 has been downgraded two notches to AA, a reduction that has the effect of raising the interest rates actually paid on government borrowings and making the debt less sustainable.

On the government’s side, the hope is that interest rates are on the way down naturally and if the economy keeps growing along with the tax base and the investment in infrastructure starts to pay off as projects such as the Metro tunnel are finally finished, the debt rating worries will slowly recede.

If things go the other way, with infrastructure projects such as the Suburban Rail Loop first stage busting through their revised budgets and the state budget does not return to surplus as planned, then the chances of the debt rating deteriorating further to AA- or worse will increase greatly.

Rating agencies have clearly said Victoria is on notice
Indeed, the ratings agencies have been very clear about what needs to happen to avoid a negative debt rating but while there have been some signs of government action to increase some taxes and go slow on some projects such as the airport railway, there have been no major changes to the Budget trajectory.

Treasurer Tim Pallas has forecast an operating surplus of $1.5 billion by 2025-26 but any changes to that forecast could prove fatal to Victoria’s debt rating and see taxpayers hit with higher interest on the state’s mammoth debt.

S&P Global Ratings analyst Anthony Walker has clearly said that despite already having the lowest rating of any Australian state, Victoria could face another downgrade to AA- if state debt reached 240% of operating revenues, or if interest payments reached 10% of those revenues.

“We expect Victoria’s gross debt as a proportion of revenues to soar past 200% of operating revenues,” Mr Walker recently said.

“This is the highest among the Australian states and stems from successive operating deficits and its large capex since the pandemic hit in late fiscal 2020.”

“Debt to operating revenues has almost tripled since this time. Victoria’s serviceability costs are also rising.”

Victoria’s net debt is projected to hit $135.5 billion this year, compared to just $94.8 billion in NSW, which recently opened a new and well used Metro line.

Mr Walker said Victoria’s prolonged Covid lockdowns are largely to blame for the debt hangover, with other states around the world having recovered their budget health already.

“They (Victoria) just wanted to get the health outcomes correct. Well, that came at a massive fiscal shock, and they’re still trying to recover from that.”

Looking at the history of large capital works programs is not encouraging, with large budget blowouts the rule rather than the exception so the determination to start building the SRL which is currently budgeted at $30 billion to $34.5 billion is by itself a significant risk to the credit rating.

A lower rating would have serious repercussions too, with a AA- rating set to increase borrowing costs by between 0.1% and 0.5% at a time when the overall debt level will keep expanding strongly.

Some of the more recent infrastructure blowouts include the Metro Rail Tunnel which added $837 million to reach $13.48 billion, the West Gate Tunnel Project which is three years late and $4 billion over budget and the North East Link which has blown out by more than $10 billion to $26.1 billion.

Full article here

https://smallcaps.com.au/victoria-loomi ... structure/

^
all of this has absolutely nothing to do with "doing business in Victoria"

the private sector drives the economy in Victoria

this is South Australian thinking that you have that the government = the economy because that's the kind of state SA is... its a public service/welfare state

[rev]

Victoria is a half a trillion dollar+ economy.
They're debt is as big as our state economy, to put it into perspective.

These reports should be looked at for what they are, a few steps in the right direction to changing the perception & image of South Australia. Which imho is one of our states biggest problems.

[mattblack]

More good news for the welfare state

South Australian wine exports to China hit new milestone

Exports have boomed in the seven months since Chinese tariffs on Australian wine were removed, with South Australian exports

South Australian exporters sold $558 million of wine to China in the year to October 2024, with nearly all exports occurring in the second months since punitive tariffs were lifted.

Exports from SA to all markets exceeded $1.7 billion in the period, up 38 per cent from the previous year, per Australian Bureau of Statistics data.

South Australian exports represented two-thirds of the total $2.5 billion of wine exported by Australian producers.

Trade and Investment Minister Joe Szakacs said the export bounce back since tariffs lifted earlier this year had been “very pleasing”.

“Anticipating the lifting of tariffs, it was important to strike while the iron was hot, and that’s why we invested heavily into our re-engagement package, supporting our exporters to get back into the market as soon as possible,” he said.

“We’re seeing dividends of that, and in just seven months since tariffs were lifted our producers have sold more than half a billion dollars of wine to China.

“We’ll continue to work closely with the Albanese Government and Ministers Farrell and Wong, who have worked tirelessly to stabilise China-Australia relations and provide tangible outcomes for the country’s wine and barley producers.”

For Wirra Wirra CEO Matthew Deller, the removal of tariffs “opened up China as a valuable additional market in our export diversification strategy”.

“It’s an opportunity to re-establish relationships and introduce McLaren Vale’s premium wines to a dynamic and growing audience,” Deller said.

“Chinese consumers are increasingly drawn to authenticity, quality, and sustainability – qualities at the heart of South Australian wine.

“The collaboration between industry and government has been instrumental in ensuring we can seize this opportunity and continue building sustainable growth across global markets.”

https://www.indailysa.com.au/news/busin ... -milestone

[Bobski]

SA government won't spend big until big ticket projects are finished, as mid-year surplus reported

Don't expect much in the way of big-ticket items promised ahead of South Australia's 2026 state election.

There's just not the money for it, unless there is a real change of tune on debt.

The government has essentially tied its hands on spending until the early 2030s by backing in the $15.4 billion Torrens to Darlington tunnels project and the $3.2 billion new Women's and Children's Hospital.

The money being spent on those two projects is the main reason SA's debt is heading towards $46 billion in four years and Treasurer Stephen Mullighan warned it won't start coming down until they are complete.

The Torrens to Darlington tunnels project is one of the big infrastructure spends by the state government.(Supplied)

"We've accepted that we're going to build these two projects and the additional expense and debt that that comes with," he said.

"But we're not going to have projects of that sort of size and quantum that we're going to be able to afford until we get past these two projects and we've got more budget capacity."

The opposition supports the projects too, so it won't have much wriggle room to campaign on.

The government, of course, still has other major projects on the books it needs to fund, notably its hydrogen power plant.

The state government still needs to fund its $593 million hydrogen power plant.(Supplied: SA Government)

It's sticking to its $593 million price tag for the "world first" plant and believes it will still have it up and running in the early part of 2026, but hasn't nailed down the design — and until it does the actual cost remains elusive.

The treasurer is also being kept busy finding more and more money for the health network.

The Mid-Year Budget Review revealed an extra $672 million is going towards plugging a hole in the health budget. That's in addition to the $1.6 billion cost blowout this financial year announced at the state budget in June.

"The budget for health in the current financial year is some $1.6 billion greater than what it was forecast to be three years ago," the treasurer said.

"But that reflects decisions over three budgets where we have increased funding in each and every budget beyond what had previously been forecast to try and reflect the increased traffic coming into our emergency departments, the number of people presenting to hospital, the increasing cost — more complex nature of providing health care," he said.

The state government is investing in the future Women's and Children's Hospital, but ongoing health costs have ballooned too.(Supplied: SA Government)

The government has been able to send more money to health, in part, because its revenues have grown.

Last financial year, the state recorded a $413 million operating surplus — $107 million more than what had been projected, thanks mainly to property taxes as the housing market continued to surge.

Labor is now forecasting higher surpluses over the next four years, totalling around $533 million.

It is not, however, prepared to further lower the tax burden on South Australians.

"I would argue that one of the reasons why we've got such strong economic performance is because we are the lowest cost place in the country to do business," Mr Mullighan said.

"We have the lowest taxing regime on the mainland of Australia by an average of 32 per cent.

"We've abolished stamp duty for first home buyers, on the basis that they're buying a newly constructed home or their building their first home to add to the overall housing stock."

The opposition said the budget review is a "slap in the face" for many South Australians amid cost-of-living pressures and a housing crisis.

Heidi Girolamo says it's concerning that South Australia does not have stamp duty concessions for existing homes.(ABC News: Lincoln Rothall)

"Much of that revenue is coming from South Australian families … whether that be through stamp duty or businesses with payroll tax," opposition cost of living spokesperson Heidi Girolamo said.

"We're really concerned that we're one of the only states where there is no stamp duty concessions for existing homes.

"It is very difficult to get a new home here in South Australia, the wait times are very extensive, and many families are really struggling to get into the housing market."

As for the two major projects that are dragging the state further into debt — the hospital and the tunnels — they are legacies of the Liberal Marshall government, so the opposition knows there's little it can do to differentiate itself from Labor when it comes to the debt path that we're on.

The man who wants Treasurer Stephen Mullighan's job, shadow treasurer Sam Telfer, narrowed his pitch to voters on who you can trust managing these major builds.

"South Australians have little to no confidence in this Labor government that they're going to be able to stick to their budgets and deliver these projects to the levels that they've promised," Mr Telfer said.

If it wasn't already clear, the 2026 vote will be fought on health, housing, cost of living — and who's right when it comes to managing taxpayers money.

Source

[abc]

Treasury projects capital cities to grow twice as fast as the rest in the coming decade
By chief digital political correspondent Jacob Greber
Topic:Government and Politics

In short:
Australia's eastern seaboard capital cities will grow at nearly twice the pace of their surrounding regions, Treasury says.

The department expects Australia's population to exceed 41.2 million people in 40 years' time, up from today's 27.3 million.

What's next?
Treasury expects net overseas migration will moderate from the peak reached in 2022-23.

Adelaide is forecast to shift from 1.5 million to 1.6 million, as ongoing net overseas migration is "largely offset" by migration of South Australians to other states.

https://www.abc.net.au/news/2024-12-20/ ... /104750974

I guess net zero for South Australia refers to population growth

[rev]

The man who wants Treasurer Stephen Mullighan's job, shadow treasurer Sam Telfer, narrowed his pitch to voters on who you can trust managing these major builds.

"South Australians have little to no confidence in this Labor government that they're going to be able to stick to their budgets and deliver these projects to the levels that they've promised," Mr Telfer said.

If it wasn't already clear, the 2026 vote will be fought on health, housing, cost of living — and who's right when it comes to managing taxpayers money.

Source
[/quote]

Liberals will still be a circus come 2026.

[mattblack]

SA economy still bubling along in comparison to the rest of the country;

South Australia’s economy has maintained its position as second best in the country, according to the latest CommSec State of the States report.

SA now shares second spot with Queensland, with WA remaining at the top of the leader board for a second time.

It follows South Australia’s economy coming first in the nation for three reports in a row from January last year.

Among the eight indicators assessed by CommSec, South Australia leads the nation on real economic growth, up 8.4 percent on the decade average.

Our State came second in the country on Unemployment and Dwelling Starts.

We were also ranked second for Construction work done, which was up by 15.4 percent on the decade average, reflecting the ongoing strength of our residential construction sector.

Full report here

https://www.commbank.com.au/articles/ne ... nuary.html

[mattblack]

News from our wine industry after all tariffs lifted;

South Australia leads nation in wine export value

South Australia continues to lead Australia in exporting high-value wine, according to the 2024 Wine Australia Export Report.

In 2024, the volume share of red and rosé wine increased from 54 per cent to 60 per cent, according the Wine Australia report.

Last year, 16.7 per cent of total exports originated from South Australia but they contributed $1.3 billion to Australia’s total export value of $2.55 billion, a 70 per cent year-on-year increase.

Wine Australia Market Insights Manager, Peter Bailey said the growth is largely driven by exports to China after tariffs imposed on Australian bottled wine were removed in March.

“If you’re looking at total exports to China, 85 per cent of the growth has come from South Australia,” he said.

The growth has also impacted the share of red wine exports with most shipments to China being Cabernet or Shiraz blends, also marking significant year-on-year increases.

Exports peaked in October 2020 at approximately $900 million, compared to $712 million in 2024.

Bailey said while overall the performance is positive, it is difficult to determine if these numbers will recover.

“Because we’ve been out of the market so long, a lot of this increase would be restocking into the market,” he said.

“We do know that Chinese wine consumption overall is much lower than it was before the tariffs were imposed.

“Overall imports into China are now a third of what they were five years ago… but it’s important to note that imports outside of Australia into China were falling prior to the imposition of the tariffs, while Australian wine exports were still growing against that trend.”

A decline in wine consumption is not unique to China.

On a global scale, total exports declined by 13 per cent in value to $1.64 billion, largely driven by a large increase in shipments to Hong Kong in 2023 in anticipation of the removal of the tariffs.

Hong Kong recorded a $125 million value loss in 2024, while the United Kingdom recorded a $9 million value loss and the United States dropped $38 million to $325 million total value.

Bailey said declines in established wine markets were linked to various conditions.

“We’re still adjusting to an oversupply, particularly for red wine, and also grappling with a long-term decline in global wine consumption and what’s driving health and wellness concerns, as well as cost of living pressures,” he said.

“On top of that, shipping delays and increased shipping costs due to regional conflicts are also making it harder for wine exporters to get their products into some of those markets.

“That’s not just impacting Australian exports, but also other wine exporting countries too.”

[rev]

Posting this here rather then the Whyalla thread to not side track that thread, as I think it has wider economic implications for the state..

Whyalla steelworks headed for administration as SA parliament rushes through legislation
Sanjeev Gupta’s Whyalla steelworks will be plunged into administration as the state government launches an extraordinary bid to seize control of the crisis.

Paul Starick and Belinda Willis
less than 2 min read
February 19, 2025 - 12:09PM

Sanjeev Gupta’s Whyalla steelworks will be plunged into administration as the state government launches an extraordinary bid to seize control of the crisis.

Legislation has been rushed through parliament giving the state government support to act on its debts related to GFG Alliance, owner of the Whyalla Steelworks.

Standing orders were suspended for the legislation to now be passed in both the lower and upper house.

Premier Peter Malinauskas called upper house members to an extraordinary meeting in parliament on Wednesday morning.

MPs were not told the subject of the special meeting.

The meeting started at 10.30am, with upper house MPs, plus the Premier, Energy and Mining Minister Tom Koutsantonis, Attorney-General Kyam Maher and Steel Task Force chairman Bruce Carter.

Upper house members included Greens co-leaders Robert Simms and Tammy Franks, along with independent Frank Pangallo.

Outside the meeting, Mr Malinauskas declined to comment on its subject but said: “I’m very grateful to be working closely with the crossbench.”

MPs and Mr Carter declined to comment.

In parliament on Tuesday, Mr Malinauskas directly reminded directors of Whyalla steelworks owner GFG Alliance to ensure they are not breaching laws by failing to pay debts and trading while insolvent.

Asked in parliament whether the state government intended to force GFG Alliance into administration, Mr Malinauskas issued a blunt reminder to the firm’s directors about their corporate legal obligations as the steelworks’ owner.

GFG Alliance executive chairman Sanjeev Gupta on Monday said the Whyalla steelworks was turning over $13m-$14m per week, and he hoped the operation would be breaking even by mid-year, after being at “death’s door” in recent months.

Responding to Opposition questions about his message to GFG creditors, Mr Malinauskas branded the steelworks’ future “one of the more complex public policy challenges the state has seen in decades”.

https://www.adelaidenow.com.au/subscrib ... nt-2-SCORE

[rubberman]

Posting this here rather then the Whyalla thread to not side track that thread, as I think it has wider economic implications for the state..

Whyalla steelworks headed for administration as SA parliament rushes through legislation
Sanjeev Gupta’s Whyalla steelworks will be plunged into administration as the state government launches an extraordinary bid to seize control of the crisis.

Paul Starick and Belinda Willis
less than 2 min read
February 19, 2025 - 12:09PM

Sanjeev Gupta’s Whyalla steelworks will be plunged into administration as the state government launches an extraordinary bid to seize control of the crisis.

Legislation has been rushed through parliament giving the state government support to act on its debts related to GFG Alliance, owner of the Whyalla Steelworks.

Standing orders were suspended for the legislation to now be passed in both the lower and upper house.

Premier Peter Malinauskas called upper house members to an extraordinary meeting in parliament on Wednesday morning.

MPs were not told the subject of the special meeting.

The meeting started at 10.30am, with upper house MPs, plus the Premier, Energy and Mining Minister Tom Koutsantonis, Attorney-General Kyam Maher and Steel Task Force chairman Bruce Carter.

Upper house members included Greens co-leaders Robert Simms and Tammy Franks, along with independent Frank Pangallo.

Outside the meeting, Mr Malinauskas declined to comment on its subject but said: “I’m very grateful to be working closely with the crossbench.”

MPs and Mr Carter declined to comment.

In parliament on Tuesday, Mr Malinauskas directly reminded directors of Whyalla steelworks owner GFG Alliance to ensure they are not breaching laws by failing to pay debts and trading while insolvent.

Asked in parliament whether the state government intended to force GFG Alliance into administration, Mr Malinauskas issued a blunt reminder to the firm’s directors about their corporate legal obligations as the steelworks’ owner.

GFG Alliance executive chairman Sanjeev Gupta on Monday said the Whyalla steelworks was turning over $13m-$14m per week, and he hoped the operation would be breaking even by mid-year, after being at “death’s door” in recent months.

Responding to Opposition questions about his message to GFG creditors, Mr Malinauskas branded the steelworks’ future “one of the more complex public policy challenges the state has seen in decades”.

https://www.adelaidenow.com.au/subscrib ... nt-2-SCORE

With the amount of money needed by the SA Government for this, I don't forsee major infrastructure spending elsewhere for quite some time.