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Karma: 517 |  | SOUTH Australian Treasurer Kevin Foley plunged the
« Thread Started on Jun 6, 2008, 3:23am » | |
SOUTH Australian Treasurer Kevin Foley plunged the state heavily into debt today, delivering a high-risk budget that will electrify Adelaide's ramshackle commuter rail system and fund a $1.4 billion desalination plant.
The $12.1 billion budget reinforces the trend by state Labor governments to crank up spending on long-overlooked infrastructure, but carries risk for the state's bottom line at a time of growing international and domestic economic uncertainty.
The centrepiece of Mr Foley's seventh budget is a $2 billion plan to electrify Adelaide's diesel rail passenger network, and at the same time extend from the city to Port Adelaide its reborn tram system.
Public anger over the outmoded and overcrowded suburban train service, coupled with teething problems for the new trams, has become a first-order political problem for Mike Rann's Government, which has also faced criticism that it was too slow to respond to South Australia's deepening water crisis.
The 2008-09 state budget commits $1.4 billion over the next four years to electrify sections of the metropolitan rail systems, extend tram services and to buy a fleet of new passenger buses. The program will roll out over the next decade.
Under the plan - the surprise packet of an otherwise heavily leaked effort by Mr Foley - the rail corridor south from Adelaide to Noarlunga will be the first to be electrified, with work commencing in 2008-09.
That will be followed by electrification of the Outer Harbor line in the city's northwest.
Simultaneously, the tram line from the city will be extended north to the Adelaide Entertainment Centre.
Once the upgraded Outer Harbor rail line is connected to the tram network, light rail spurs will run to the fast-growing West Lakes area, beachside Semaphore and Port Adelaide.
Fifty new electric trains, 58 diesel trains refurbished to run on electric power, 15 combined train-trams to run on the light rail network, 20 additional buses and extra trams would be bought to provide what Mr Foley called a coast-to-coast electric train and tram service for Adelaide, from Glenelg to Port Adelaide.
The big-spending budget also found room for a new $4000 grant to first-home buyers, which will be paid on top of the existing $7000 subsidy from the commonwealth.
Mr Foley said the state home bonus was worth four times the amount of existing stamp duty concessions to first-home buyers. It would be payable on home purchases up to $450,000.
The infrastructure spend will be financed mainly from borrowings, increasing net state debt from $82 million this financial year to $610 million in 2008-09, topping out at nearly $2 billion for 2011-12.
Mr Foley said the burden could be supported by strong budget operating surpluses, even though South Australia's economic growth and growth in employment was expected to fall below the national average.
The budget's net operating balance would increase from $160 million in 2008-09, to $424 million by 2011-12.
Defending the borrowing program as prudent and responsible, the Treasurer said the Government was implementing its program action now for the future by investing in infrastructure.
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