Mind the gap – Labor’s $118 million train and tram secret shortfall

Wednesday 17 August, 2022

The Malinauskas Labor Government has been caught out trying to hide the true cost of killing off the contract with Keolis Downer after it was revealed savings made by keeping the train and tram operator on board are still in their budget.

After being questioned in a parliamentary Budget and Finance Committee, Treasury officials revealed savings totalling $118 million from outsourcing rail and train operations to Keolis Downer haven’t been removed from the current budget.

Up to $50 million is hard baked into this year’s budget and across the forward estimates, meaning Labor must find up to $50 million worth of cuts to the Department of Transport over the next four years and $68 million in the years after that.

The savings needed over the next four years equate to 500 South Australian jobs on an average salary of $100,000 per annum.

It was also disclosed during the Committee hearing the State Budget won’t be adjusted until final arrangements for the transfer to government ownership are worked out.

Now Transport Minister Tom Koutsantonis previously declared the Keolis Downer agreement “will not deliver any savings for South Australians”.

Leader of the Opposition David Speirs slammed Labor as irresponsible for hiding its $118 million budget blackhole.

“One of Peter Malinauskas’ key election commitments was to return trains and trams into public hands as soon as possible and that there were not any savings to be made, so it’s astounding Labor hasn’t accounted for this in their budget,” Mr Speirs said.

“Outsourcing these services would save South Australians $118 million dollars over the 12-year contract term – but there’s no word on how this massive savings gap will be filled.

“Almost $50 million of these savings are in the current budget and forward estimates – so this simply can’t be ignored and that could mean hundreds of jobs on the line.”

Shadow Minister for Infrastructure and Transport, Vincent Tarzia, said huge budget blowouts could also be on the cards.

“Peter Malinauskas needs to be transparent with South Australians and reveal how much ripping up the contract with Keolis Downer is going to cost,” Mr Tarzia said.

“And be honest with South Australians about your budget black hole.

“Instead, what we’re seeing are false savings sneakily injected into his budget to make it look better than what it is.

“This is far from the smooth transition Peter Malinauskas promised South Australians.”