Premier Jay Weatherill Treasurer Minister for State Development Minister for the Public Sector Minister for

the Arts
Wednesday, 22 January, 2014

Budget update shows urgent response needed to Holden closure
Following the release of Our Jobs Plan yesterday, Premier Jay Weatherill has today updated the State’s Budget position. The figures show a significant deterioration in the State’s GST receipts as was foreshadowed in the Commonwealth’s MYEFO on December 17. The update also shows the impact of Holden’s announcement of its closure in 2017 on both the State’s revenue and predicted employment levels. The update incorporates the Government’s spending on policy measures since the MYBR, including the $60m committed to Our Jobs Plan. Mr Weatherill said the impact on the State’s revenue streams as a result of the announcement Holden will close in 2017 is already apparent. “Yesterday we launched Our Jobs Plan in response to Holden’s closure,” Mr Weatherill said. “This Budget update clearly demonstrates the urgency needed in response to Holden’s closure. “We need to start this response now, both to make the further changes necessary to transform our economy and to maintain confidence. “I again ask the Federal Government to properly consider Our Jobs Plan and support South Australia’s businesses, workers and their families.” The Budget update shows: • A $303m deterioration in GST receipts from the Commonwealth • A $68.1m write down in payroll tax revenues largely due to softer employment conditions • The revenue loss directly attributable to Holden’s closure and its impact on economic conditions is $14.2m in 2016-17 and continuing thereafter • Employment impacts of the Holden announcement expected to be 1500 jobs in 2016 and 4600 in 2017 • Lower than expected economic forecasts including reductions in Gross State Product and employment of 0.25 per cent in 2015-16 and 2016-17 • The effect of decisions made since the Mid-Year Budget review • No capacity for additional expenditure without breaching fiscal targets

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Mr Weatherill said the $376m revenue write down was mainly due to a fall in Commonwealth revenue and Holden’s decision to close its Elizabeth plant. “It is also very clear there is very little room for big spending initiatives,” he said. “The Opposition has already committed about $900m in new spending across the forward estimates before the commencement of the formal campaign. “That is a massive commitment which will need to be offset with significant savings. “Steven Marshall needs to come clean on what cuts he is going to make to provide for that expenditure.”