Evidence given to the Budget and Finance Committee has destroyed Treasurer Kevin Foley’s claim the global financial crisis was the reason for massive Budget cuts.
“Since before the Budget, Mr Foley has blamed the savage Budget cuts on the claim the GFC had ripped $1.4 billion in revenue out of the State Budget,” Shadow Minister for Finance Rob Lucas said today.
“For example, yesterday on ABC radio Mr Foley, in trying to explain Minister O’Brien’s claims that we were having to borrow to pay wages, continually referred to this $1.4 billion claim:
“When the Global Financial Crisis hit we were likely to lose well over $3.4 billion, that’s come back to about $1.4-$1.5 billion.”
“However, after refusing to answer questions about this claim for two months, the Government has been forced to provide an answer to the Legislative Council Budget and Finance Committee,” he said.
“Treasury has now advised the Committee that the average impact on the Budget for each of the next three years is $135 million, or less than 1 per cent of a $16 billion Budget.”
Mr Lucas said the following Treasury table shows that the $1.4 billion claim refers to the five years from 2008-2013 and that $949 million of the estimated GFC impact has already occurred over the past two Budgets (08/09 and 09/10).
Treasury estimate of impact of GFC ($m)
“It is now clear Mr Foley’s $1.4 billion GFC claim has been exposed as a fraud designed to conceal from South Australian voters the main reasons for the State Budget crisis and savage Budget cuts,” he said.
“The real reasons for our Budget problems are financial incompetence and incompetence of the Rann Government, and the waste of ‘rivers of gold’ from GST and property taxes collected during the last eight years.
“If Mr Foley wants us to believe the Budget cuts are due to the impact of the GFC, he has to explain why most other states have been able to balance their Budgets, and why he can’t.
“Is Mr Foley arguing the GFC only occurred in South Australia?”