South Australia to lose over $1 billion in GST revenue, but government insists it won't affect infrastructure commitments
The Rann Government will lose more than $1 billion in GST revenue due to the global economic downturn, but insists this will not affect its infrastructure commitments.
Treasurer Kevin Foley was forced to reassess the State’s finances after the Rudd Government announced a $115 billion tax revenue shortfall, which included $10 billion in GST receipts.
According to Foley, South Australia will lost a further $880 million over the next four years, adding to the $846 million forecast in December last year.
“It means that since the State Budget, delivered less than a year ago, we have had to revise our share of GST revenue downward by $1.55 billion over the forward estimates,” Foley says.
“That is a huge hit for an economy the size of ours to sustain.”
Although labelling it a “staggering collapse” in GST revenue, Foley says investment in public transport, hospitals and schools will go ahead, thanks in part to the $42 billion stimulus package unveiled by the Federal Government.
He says committing to infrastructure projects will result in long-term economic growth as well as job security.
But Foley has warned the forthcoming Budget will be severely affected by the loss in GST revenue, saying it will impact heavily on the State’s bottom line.
“I will say now that it will be a very tight Budget and there should be no expectation of big new spending initiatives because the money just isn’t there,” he says.