In a grim omen for the federal coalition, South Australian voters threw out the four-year-old Liberal government of Premier Steven Marshall on March 19. Election-eve surveys had given the Labor opposition a two-party lead of 8% and they were close to the mark.
Within hours of counting, seemingly secure Liberal holds on prosperous middle-income electorates had dissolved with swings of as much as 13%. Marshall barely retained his seat in the leafy eastern suburbs and his deputy was defeated by a Labor-leaning independent.
Under Premier Peter Malinauskas, Labor is predicted to hold 28 seats in the 47-member parliament, against 14 for the Liberals. Compared to the 2018 election, the swing to Labor was 7.7%; the Liberals recorded a 3.4% swing against and the Greens recorded a positive 2.9% swing.
Analysts are explaining the rout, in particular, to the Liberals’ refusal to support public health. The prevalence of “ramping”, with emergency cases having to be treated in ambulances as they wait outside overstretched hospitals, had become a scandal.
Labor heavily outbid the Liberals, pledging 300 extra hospital beds, 350 new paramedics and ambulance officers, 300 extra nurses and 100 more doctors.
Voters demand better
Voters were also fed up with the penny-pinching, which meant services remained second-rate while economic opportunities were let slip.
The Liberals’ priorities were best summed up by their election campaign attacks on Labor for its supposedly spendthrift election pledges, costed at $3.1 billion over four years. The Liberals’ promises, billed as “prudent”, were predicted to cost just $288 million, with $123 million pledged for hospital upgrades.
Malinauskas had stressed during the campaign that SA has the country’s highest unemployment rate, including the worst youth unemployment.
Labor’s economic centrepiece was a $593 million hydrogen plant and power station to be built near Whyalla on Eyre Peninsula. Powered by solar and wind energy, it will displace gas-powered peak electricity generation, aid the shift to “green” steelmaking at the Whyalla steel plant and allow for hydrogen liquefaction and export.
Green energy development is uncontroversial in SA, which has no coal mines or coal-fired power and, hence, no coal lobby.
The Liberals’ objection to the Whyalla scheme was that it will be government funded and owned, and that businesses will only receive a limited piece of the pie. Liberal Deputy Premier and energy minister Dan van Holst Pellekaan told the Australian Financial Review on March 3 that no government should use taxpayer funds for such projects.
There are legitimate questions about Labor’s plans for raising the cash to pay for its promises. The government projects “operating savings” of $713 million from cuts to executive staff and imposing an “efficiency dividend” of 1.7% on various departments.
While health, education, police and child protection will be exempt from the austerity, the cuts spell heavier workloads for public servants and a further attrition of many services.
In welcome news, the new government will cancel the Liberals’ $662 million Riverbank Arena planned for Adelaide’s iconic but increasingly built-over parklands. Other financing is planned to come from a marginal increase in state debt.
Most controversial is Labor’s plan to rely on $1.5 billion, claimed as being available from un-allotted reserves of government cash. In the final days of the election campaign, Liberal MPs denied there is such a sum. Whatever the case, Labor treasury spokesperson Stephen Mullighan has insisted that there will be “no new taxes” or tax increases.
SA needs to take advantage of its potential for sustainable, renewables-based development, and the government should lead the way. Even if unused public capital turns out not to be substantial, and if the squeeze is not put on the state’s wealthy, SA is well able to borrow. The state’s public debt has been modest (about 8% of gross state product), and it has an AA+ international credit rating, meaning it can borrow at a very low interest.
The test for Labor
Achieving sustainable development will require competent long-term planning, imagination and boldness.
Will the new Labor government be up to the job? Notwithstanding the Whyalla project, the signs are not good. Labor has been in government for all but 13 of the past 57 years and, while big business would prefer the Liberals, Labor is not a threat. Its leading force is the right-wing Shop, Distributive and Allied Employees Association, of which Malinauskas was a former state secretary.
SA Labor is not radical, but the new government is promising to undo the privatisation of Adelaide’s bus, train and tram operations. Sold off by Liberal governments, they are widely seen as underperforming.
Past Labor governments privatised public assets and services. Labor gutted the once extensive and admired public housing system. Today, more than 17,000 people are on public housing waiting lists. Labor’s pledge differed little from that of the Liberals: it has promised to build just 400 new dwellings over four years, and upgrade 350 that are empty.
It plans to maintain existing environment measures, with some modest improvements. World Heritage status will be sought for the Great Australian Bight and a whale nursery protection area will be explored. Labor opposes the federal government’s moves to construct a national nuclear waste dump on farmland near Kimba on Eyre Peninsula, recognising Traditional Owners’ strong opposition.
Labor supports more out-of-school-hours care and universal pre-school from age three will be in place by 2026. Five new trade schools will be built.
Despite a truism of economics that putting money and effort into social welfare and public amenities pays dividends in raised productivity and, ultimately, higher government revenues overall, Labor’s projections are cautious incrementalism at best.