Academic journal article The Australian Journal of Politics and History

South Australia: July to December 2002

Academic journal article The Australian Journal of Politics and History

South Australia: July to December 2002

Article excerpt

The period July to December 2002 provided a fascinating snapshot of the most significant readjustment to the South Australian political landscape since the massive defeat of Labor in 1993 following the State Bank collapse. Still basking in the afterglow of its February election victory, the Rann government consolidated its political grip over South Australia while the vanquished Liberals struggled to readjust to the brave new world of opposition. This was despite the Government's having to contend with some important challenges in the second half of 2002.

Four specific issues dominated South Australian politics during the period under review: the handing down of the Rann Labor government's first budget; the shifting balance of power among the crucial Lower House independents (including the defection of one to the Rann ministry); a series of unwelcome developments surrounding the state's electricity industry; and continuing instability in Opposition ranks on the issue of leadership.

Labor's First Budget

A major test for any new government is the handing down of its initial budget. This test loomed particularly large for the Rann government. The Labor party campaigned on a promise of sound fiscal management and deliberately staked much of its political credibility on demonstrating that it possessed the requisite skills to successfully manage the South Australian economy. Achieving the latter would be no easy task. Presiding over a state with an acute dependence on a small range of niche export industries, relatively high unemployment, a low tax base, and a rapidly ageing population, the Rann government (like previous Liberal governments) faced an uphill battle in putting an optimistic spin on the state's economic prospects. Yet if it was to reassure the South Australian public of its credentials in the area of economic management, then its first budget had to be a winner.

Treasurer Kevin Foley delivered the state budget for 2002-03 on 11 July. In a speech peppered with references to the previous government's "fiscal mismanagement" and "waste", Foley asserted that due to "the shocking budget position we have inherited [...] we have had to make some very tough decisions". However, the Treasurer was careful to stress that every one of Labor's pre-election promises "have been funded in this budget". Juxtaposing Labor's ability to "deliver tangible benefits to the community" with the "extravagant spending" of former Liberal governments, Foley claimed that "The budget delivers what we understand the community expects from Government: it delivers schools not soccer stadiums, roads not rose gardens, productive infrastructure, not white elephants" (Budget Speech, 2002-03: 1).

In overall terms, the $8 billion budget delivered a "bottom line" cash surplus of $92 million for 2002-03 (this compared favourably with the relatively small cash surplus of $2 million contained in the 2001-02 budget) and embraced spending commitments of $904 million and cuts totalling $967 million over a four year timeframe (The Advertiser, 12 July 2002). On the expenditure side, almost hall of all government outlays were committed to the health and education sectors, the two portfolio areas on which Labor had placed most emphasis during its election campaign. As Foley observed following the release of the budget: "We are putting as much as our financial position will allow us into health and education" (The Advertiser, 12 July 2002). Salient expenditure commitments included (see Budget Paper 1: 8-9, and The Advertiser, 12 July 2002):

* $95 million over four years to support the public education system.

* $52 million over four years to boost public hospital capacity.

* $49 million over three years for the replacement of buses.

* $35 million over four years for disability services.

* $32 million over four years to reduce primary school class sizes.

* $28 million over four years to support an increase in the school leaving age. …

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