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Speaker 1: Well, the state budget handed down Stephen Mulligan's third budget

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Speaker 1: of State Treasurer. Let's have a chat about that with

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Speaker 1: doctor Susan Stone, Credit Union SA economists share at Unissa Susan, good.

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Speaker 2: Morning, Good morning, Matthew.

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Speaker 1: How did you see? Well, let's start off, I was

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Speaker 1: just talking before the break with the debt forty four

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Speaker 1: billion dollars and in the in the past we have

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Speaker 1: sold things off to bring debt down and there's not

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Speaker 1: a lot left to sell in South Australia.

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Speaker 2: No, No, there has been some and this is really

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Speaker 2: reflecting a very ambitious spending plan that the government has

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Speaker 2: in terms of big projects, infrastructure spending and the like.

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Speaker 1: All right, yeah, that's where it's going. Yeah that indeed,

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Speaker 1: So how are we ever going to repay it?

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Speaker 2: Well, the idea is that the this type I'm sure

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Speaker 2: you've heard this before. There's you know, debt that's productive debt,

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Speaker 2: and there's debt that's just paying the bill. Hopefully, what

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Speaker 2: they're what they're betting on is this is productive debt.

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Speaker 2: So this is debt that they're incourring to improve roadways,

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Speaker 2: to improve hospitals, to improve job opportunities and things like this.

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Speaker 2: So that it grows the state. And the idea is

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Speaker 2: that because these are very big, very expensive projects, the

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Speaker 2: government has to go into a lot of debt at

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Speaker 2: this time and over the next few years, but hopefully

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Speaker 2: that will lead to more growth in the economy, healthier

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Speaker 2: people in the economy, more jobs in the economy, which

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Speaker 2: will all add to a growing income in the economy.

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Speaker 1: All right, the idea, But a faster road and a

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Speaker 1: publicly owned hospital in which the government pays the people

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Speaker 1: to work in it doesn't help reduce debt, does it.

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Speaker 2: Well no, and I get what.

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Speaker 1: You're saying, but you know, still the income has to

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Speaker 1: come in. And if it doesn't create more jobs, I mean,

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Speaker 1: putting more jobs in a in a hospital you build

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Speaker 1: doesn't doesn't reppe the debt somehow. So I don't know

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Speaker 1: where that's going to go.

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Speaker 2: Yeah, it's more to do with like the desalinization plant,

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Speaker 2: which would create jobs, private sector jobs. The construction to

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Speaker 2: do the hospital private sector jobs. But even even so,

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Speaker 2: if you even take the hospital, even though the government be

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Speaker 2: paying the people, the people that work in the hospital.

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Speaker 2: The idea is that if there's more and better healthcare

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Speaker 2: available across the board, South Australians will be healthier. Hopefully

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Speaker 2: they won't have to wait for services. They can receive

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Speaker 2: needed treatment or quickly have quicker recovery, get back to

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Speaker 2: work faster.

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Speaker 1: An elements crossed.

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Speaker 2: Isn't it It is if? I mean it has been

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Speaker 2: shown to work in the past, but it is. It

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Speaker 2: is a it is a bet, you know, it's not

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Speaker 2: a it's it's not an outrageous bet. It's not something

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Speaker 2: that hasn't been happened elsewhere and proven to be effective.

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Speaker 2: But we just need to make sure that it's done

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Speaker 2: properly and that we do see the benefits economically. As

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Speaker 2: you said the road, the idea of a faster road

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Speaker 2: is that you know, transport costs can be cut down,

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Speaker 2: that there won't be truck stop stuck in traffic, that

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Speaker 2: you know we can get deliveries more quickly, which will

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Speaker 2: help improve it. Again, this is all about improving efficiency

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Speaker 2: and making it easier to do business here in South Australia.

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Speaker 1: Yeah, well, look that has its place. There's no doubt

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Speaker 1: cost of living now, the government was talking up cost

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Speaker 1: of living and the budget would go down that path,

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Speaker 1: and yes it has, but I don't know, maybe it's

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Speaker 1: may I was expecting a grand statement of some sort,

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Speaker 1: some major cost of living relief package. There is money, there,

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Speaker 1: no doubt about that, to help people who need it

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Speaker 1: with their energy bills. Two hundred and forty odd bucks,

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Speaker 1: extended the senior cards, and tenants with concession cards, and

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Speaker 1: a few other bits and places here and there on

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Speaker 1: school phase, et cetera. But there is. I don't know,

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Speaker 1: I don't know why I was expecting more, but I was.

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Speaker 2: I know they're arguing that it's complementing what's already in

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Speaker 2: the in the in the federal budget, especially the income

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Speaker 2: tax cuts. But yes, it's it isn't it is. It

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Speaker 2: is very targeted, it is. It is. It is not

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Speaker 2: long term. It's like a month or three months, a

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Speaker 2: couple of months. They're they're really looking at families, uh,

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Speaker 2: with the with yeah, as you said, with the school

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Speaker 2: services fees and the and the vouchers and things like that,

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Speaker 2: trying to take the edge off without spending too much

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Speaker 2: money to make it inflationary. I think that's the kind

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Speaker 2: of line they're trying to walk. I know, from the

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Speaker 2: big from the business perspective, there was hope that there

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Speaker 2: would be direct help with energy bills instead of energy

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Speaker 2: saving grants. But for now, that's what we have and

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Speaker 2: that will help to a certain extent. So you know,

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Speaker 2: there will be aid here and there. But you're right,

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Speaker 2: it's not the big money that maybe some people were

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Speaker 2: hoping for.

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Speaker 1: How do you see it, Susan. Is it a budget

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Speaker 1: that is going to leave South Australia better off long term?

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Speaker 2: Well, we hope long term. You know, I do think

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Speaker 2: a lot of these investment projects are really good projects.

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Speaker 2: I really like the investment in early childhood education, the

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Speaker 2: additional skills, jobs, training and things like that I think

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Speaker 2: are very important going forward, you know, building more schools,

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Speaker 2: but and the idea of trying to get people into

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Speaker 2: brand new housing construction is all it's it's good in theory,

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Speaker 2: but I worry about the next year two because it's

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Speaker 2: going to take time to build those houses. We don't

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Speaker 2: have the people to build them right now. We don't

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Speaker 2: have the teachers to staff additional classrooms. Yeah, we're short

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Speaker 2: of personnel and skilled labor across the board. So even

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Speaker 2: though we've put these measures in place, you know, maybe

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Speaker 2: four or five years things will start to improve. But

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Speaker 2: I'm thinking the next few years it may still be

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Speaker 2: a bit of a struggle.

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Speaker 1: Housing's interesting because I think it was Russ Wellmersley from

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Speaker 1: Psychos who's made the point we're still you know, we're

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Speaker 1: just not building homes quickly enough. And he's right, isn't

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Speaker 1: the ultimately Okay? The government has made announcements Satan and

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Speaker 1: other places too where houses will be built, but just

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Speaker 1: not fast enough.

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Speaker 2: Yeah, I agree. I think these the problem is supply,

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Speaker 2: if not demand. And while you know, not having to

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Speaker 2: pay stamp duty is a huge benefit for first time

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Speaker 2: home buyers and they, I'm sure are very appreciative of that,

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Speaker 2: they still need to have a house to buy, and

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Speaker 2: construction is taking you know, where it maybe used to

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Speaker 2: be twelve months to build a house, it's now eighteen

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Speaker 2: twenty months to build a home. It's more expensive to

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Speaker 2: build that house, it's more expensive to buy to borrow

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Speaker 2: money to buy that house, and that that is not

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Speaker 2: going to help those types of bottlenecks. We really do

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Speaker 2: need to build to build houses, and while I think

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Speaker 2: it's a great idea to be building these new houses

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Speaker 2: out outside of Adelaide, I worry also about the underlying

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Speaker 2: infrastructure needs that have to go along with those housing

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Speaker 2: not just the pipelines, the roads and things like that,

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Speaker 2: but also especially for the social housing. There's going to

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Speaker 2: need to be some public transport options for people who

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Speaker 2: don't own a car or don't have access to a

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Speaker 2: private car. And I didn't see anything in the budget

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Speaker 2: for those types of support mechanisms.

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Speaker 1: All right, you say the government doesn't want to be

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Speaker 1: inflation real add to inflation pressures by spreading out cost

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Speaker 1: of living to people who might just go out and

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Speaker 1: spend the money. It doesn't forty four billion of debt

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Speaker 1: lead to inflation. Doesn't that help pushing you know, all

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Speaker 1: that spending by the government. That's a heck of a

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Speaker 1: lot of spending in four years. We're basically talking about

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Speaker 1: doubling the debt in South Australia.

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Speaker 2: Yeah, it is. It is a lot of spending. In

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Speaker 2: your right, it does, it could, it could. It's it's

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Speaker 2: not just inflation that's the concern. It's the it's the competition.

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Speaker 2: As they said, there's a there's a shortage of people.

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Speaker 2: Let's even if you just talk about labor, these big

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Speaker 2: government projects are going to attract labor away from other

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Speaker 2: endeavors in the South Australian economy. And if we have

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Speaker 2: a limited amount of labor and government you know, has

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Speaker 2: to bid up the price so the wages. It's great

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Speaker 2: for the people who get the jobs, but it's going

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Speaker 2: to leave other businesses to have to compete for those

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Speaker 2: same people to have to pay more, and that could

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Speaker 2: add to inflationary pressures. The hope is that these spending

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Speaker 2: items start to come online once inflation has reached its

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Speaker 2: target levels, so the pressure won't be as much. There'll

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Speaker 2: be a slight increase in unemployment we're expecting, so there

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Speaker 2: may be they'll take some pressure off the job market.

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Speaker 2: But in the end, if it's enough, we don't know.

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Speaker 2: We'll have to wait and see until these projects start

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Speaker 2: to be put in place.

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Speaker 1: And the money on health is probably my final point.

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Speaker 1: I mean, we're still spending a lot of money on health,

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Speaker 1: as we have for River in a day, and we

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Speaker 1: have spent billions and billions on health in South Australia

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Speaker 1: state government level over the last twenty years, particularly including

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Speaker 1: with one new hospital another to come billions of dollars

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Speaker 1: and it feels like we're running, you know, on the

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Speaker 1: same spot on a treadmill. We're getting nowhere with health.

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Speaker 2: Yeah, it is a big problem. And if it's any constellation,

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Speaker 2: it's not just South Australia this, there's a problem being

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Speaker 2: faced across actually across the world. Across the world, the

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Speaker 2: delivery of health services is just getting more expensive, just

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Speaker 2: full stop. The equipment is more expensive, the training that's

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Speaker 2: needed is more expensive. And for South Australia with our

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Speaker 2: aging population, it's a particularly pivotal issue that I don't

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Speaker 2: think is going to go away anytime soon.

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Speaker 1: All right, it's going to be with us for a while,

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Speaker 1: all right. I appreciate your insights, Susan.

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Speaker 2: Thank you, thank yous for having me

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Speaker 1: Doctor Susan Stone, Chair of Economics, UNISA,