The Opposition is calling on the Malinauskas Labor Government to release a comprehensive debt management plan, outlining how it intends to navigate South Australia out of an eye-watering $46 billion in net debt forecast over the forward estimates.
In December, it was revealed that the Labor Government added an additional $1.8 billion in net debt over the forward estimates in just six months from the State Budget. The cost of servicing debt now sits at $3.9 million per day, compared to $1.4 million when the Liberals left office.
Surprisingly, Peter Malinauskas is yet to show concern over state debt, which is perplexing given comments made by him as Opposition Leader during the previous government.
Prior to coming to office, Mr Malinauskas heavily criticised the former government’s level of debt – stating in 2021:
“If we are consciously going to burden future generations with unprecedented debt, then the least they are owed is a plan to pay that debt back while also inheriting a better society.”
South Australians are now wondering, where is the plan to pay back the debt?
The Opposition is also questioning what Premier Malinauskas believes the true state of the South Australian economy is, given past statements where he outlined circumstances deemed appropriate to increase debt. During the 2019-20 State Budget debate, Mr Malinauskas stated:
“Put simply, South Australian Labor believes that when times are good, growth in public debt should be restrained, while in economic headwinds, expansionary fiscal policy is a powerful tool to stimulate the economy and keep people in work. However, the use of debt should be subject to monitoring and long-term planning.”
The quotes beg the question, was the Premier wrong then? Or is he wrong about the state of the economy now?
The shocking flip is that in 2024 the Premier is assuring South Australians that the economy is performing well, yet he is presenting an undigestible debt-to-revenue ratio without revealing a plan to bring debt back under control.
Leader of the Opposition, Vincent Tarzia said this is yet another example of the Malinauskas Labor Government’s inability to manage the state’s finances effectively.
“While many South Australians will be looking for New Years resolutions to kick start 2025, the State Government will continue its familiar approach - racking up more debt to fund its vanity projects while leaving future generations to foot the bill for years to come,” Mr Tarzia said.
“Peter Malinauskas is on the record saying that the raising debt was emblematic of a government without a long-term plan. I urge the Premier to take a long, hard look in the mirror now.”
Shadow Minister for Finance, Heidi Girolamo added, “Not only is the growing size of debt alarming but the cost of interest on debt is becoming an increasingly larger expense too. This means that the Government has less ability to react to the needs of South Australians and a reduced capacity to deliver services.”
“Has Labor learnt nothing from the economic disaster that was the State Bank collapse?
"This debt bomb is already costing South Australians just to service, let alone pay back, and we have no confidence that the Labor Government has even recognised the problem.
“What we’re seeing is the same old Labor - when they run out of money, we know they will inevitably come for yours.”
South Australia is now in the unenviable position of trailing only the state of Victoria in net debt per capita over the forward projections to 2027-28.
“What South Australia needs is a government that they can trust with their hard-earned income – yet Labor continues to prove it's not up to the task,” Ms Girolamo concluded.
Source: Liberal Party SA analysis, ABS 2024, Population projections, Vic, SA, NSW, Qld, Tas, WA, Department of Treasury and Finance 2024 (various).
