Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 1 Contents 68 futurebuilding Volume 3 Number 1
Between a rock and a hard place
With a soaring Australian dollar hammering
manufacturing, and tumbling commodity prices
denting mining pro ts, South Australia saw its triple-A
credit rating downgraded earlier this year.
The move was not unexpected. Premier Jay
Weatherill has been unabashed in his support of
putting continued expenditure ahead of the state's
The fact remains, however, that South Australia's
capital investment future looks bleak without a
sustained period of reform.
Runaway expenses, dwindling tax receipts and
the requirement to invest in infrastructure continue
to exacerbate the pressure on the state's bottom line.
Weatherill has argued that the government must
push ahead with key projects, including $109 billion
of resource, defence, health and transport projects
in the pipeline, saying that scaling back capital
spending in line with sagging revenues would only
risk bottlenecks in the future and shift the burden
Weatherill, who took over from Mike Rann as
Premier in October 2011, says forfeiting the triple-A
rating was a straightforward decision.
'We did that deliberately,' Weatherill says during
a recent interview.
'We needed to maintain capital spending and
ensure job creation. That was our emphasis. It was
about the long-term economic viability of the state.'
While the state remains committed to pushing
ahead with a number of large projects, including
the revitalisation of Adelaide Oval, the New Royal
Adelaide Hospital and the duplication of the Southern
Expressway, scal pressures continue to loom large.
The most recent state budget saw deferrals on a
number of infrastructure projects, the state's ability
to invest in major infrastructure moving forward will
require a mixture of luck and prudent judgement.
Weatherill says the challenge is striking the right
balance -- one that preserves capital projects and job
creation without seeming too much of a spendthrift.
'It was a matter of nancial prudence,' Weatherill
says. 'We wanted to respond to the economic
conditions responsibly, while keeping the future
economic development of the state on track.'
Working with the private sector
As European debt woes and an economic
slowdown in China and the United States undermine
business and consumer con dence in Australia, the
South Australian Government has shown a strong
appetite to share risk with the private sector to secure
investment, analysts say.
'The current government is much more open-
minded to a variety of ways of unlocking private
sector investment than past administrations,' says
Adelaide-based Rob DiMonte, Managing Partner for
Deloitte Touche Tohmatsu in South Australia.
In the non-mining sector, perhaps the best
example has been the $2 billion New Royal Adelaide
Hospital -- one of Australia's largest health public
private partnerships (PPPs) and the largest PPP in the
A constrained scal position and a slump in
revenues have seen South Australia forfeit its
triple-A credit rating, and substantial reform is
needed if the state is to claw back control of its
budget, writes Jeff Hutton.
impression of The New
Royal Adelaide Hospital
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