Bannon's 'bail-out budget'
By Liam Mitchell
ADELAIDE — The South Australian budget, brought down by Premier John Bannon on August 27, has been described as the "bail-out budget". Massive amounts of money will be poured into failed government enterprises, funded by large increases in taxation and government charges.
The budget allocated a further $850 million to the State Bank, in addition to the $2.3 billion committed to the bank since February 1991.
The problems with the State Bank arose from its loans to speculators and investors before the major economic slump, and from blow-outs in its own investments.
This is the fourth time the Bannon government has had to provide money to keep the bank afloat. The bank's performance and problems have been the focus of a royal commission, which has just finished taking evidence and will bring down its report this month.
Also in the budget was a $350 million bail-out of the State Government Insurance Commission.
Other spending includes an increase in executive salaries of about 20%, $40 million for the construction of the doomed Multi-Function Polis and an increase of $16 million (or 5.8%) on funding for the police.
Spending will be financed by increased taxation on commodities such as petrol, (up 3.4 cents per litre) and tobacco, as well as massive hikes in stamp duties and debit taxes, all ultimately to be paid by ordinary people.
The TAFE sector has been allocated an extra $33 million, but students' fees will increase for the second year in a row, to up to $390 per year. The government claims, however, that most students will pay only $200 per year in fees.
The budget forecast a drop of 1.6% in real terms in funding for the public service. The Public Service Association has warned of the planned retrenchment of up to 1100 people over the 1992-93 financial year, as part of the government's "efficiency" drive. This will take the number of job cuts in the public service to 5500 since June 1990.
In introducing the budget, Bannon predicted an increase of fewer than 2000 jobs over the financial year. With 16,000 young people leaving school at the end of the year, this can only add to the almost 90,000 people already unemployed in the state.