Promises, Promises: What the Labor win means for South Australia
It’s easy to get caught up in the winners and losers after an election, so Dr Susan Stone has made a list of the Labor promises South Australians should keep an eye on.
Now that the Prime Minister has announced his cabinet, the Labor party can turn its attention to putting in place the many policy pronouncements they made during the campaign. So what does this mean for South Australia?
The Prime Minister has announced that the first order of business will be to implement a 20 percent reduction in HECS debt. This will come into effect 1 June 2025, prior to indexing.
The government has also pledged to raise the repayment threshold from $54,000 to $67,000, just above the median salary of $66,000 for a typical SA college graduate. This means that for someone with $45,000 in HECS debt on a salary of $66,000 will save over $10,500.
Sticking with education, the Albanese government intends to make free TAFE permanent.
This is good news for SA, which experienced a higher-than-average increase in enrolment due to the policy. Funding has been put in place for 100,000 Fee-Free TAFE places a year from 2027, of which 4000 will go to South Australia.
This should help fill the gap in many job shortfalls, including childcare, building trades and plumbing. However, more emphasis will need to be placed on outcomes as SA TAFE lags behind national averages in completion rates (42 per cent versus 47 per cent).
For many South Australians, the biggest concern, however, is housing.
You might like
According to the First Time Buyers Mortgage Insights report, there were over 125,200 first-time home buyers in Australia in 2024, a nearly 6 per cent increase over the previous year’s levels. And that number is expected to increase a further 6.5 per cent this year. This is larger compared with a 5.3 per cent projected growth rate for owner-occupiers more broadly.
South Australia is rated the strongest market for first-home buyer who now make almost 35 per cent of all owner-occupier loans in the state – the highest share on record.
When it comes to funding these purchases, South Australia has the smallest loan size gap between first-home buyers and the broader owner-occupier market at 18.7 per cent, compared to Queensland’s 25.6 per cent gap.
This gap is expected to shrink as buyers take advantage of various state and government programs.
The Labor Government has put in place a Help to Buy scheme which contributes equity of up to 40 per cent for eligible buyers. Income limits under the First Home Buyers Guarantee will be abolished, allowing any first-time homebuyer to purchase a property with just 5 per cent deposit and without having to pay Lenders Mortgage Insurance. Price caps on eligible properties will also be lifted.
This all translates to an increase in the number of eligible buyers in the South Australian market.
However, the problem in South Australia, indeed across Australia, is one of supply.
And while the Albanese government has promised to build 100,000 homes for first time home buyers in the next eight years, and an additional 55,000 affordable houses, the ability to reach that goal is highly questionable.
Stay informed, daily
Building this many homes will require a rate of construction of more than 19,000 additional homes a year, on top of the 240,000 annually needed to reach the government’s existing target of 1.2 million new homes. According to the ABS there were 182,481 homes completed in 2024, implying a shortfall of more than 57,000 houses off existing targets.
The Property Council estimates that the current housing gap in South Australia is over 32,000 homes. Last year just over 9500 homes were completed. Construction companies are under pressure due to lack of skilled labour, increasing costs and delays.
So, in addition to more demand for homes in South Australia, there are price pressures from the supply side as well. Indeed, a recent report shows Adelaide to be among the top 10 most unaffordable cities globally.
Generating the needed workers through free TAFE and other incentives to meet these goals is not going to happen overnight. This means that the likely outcomes of these policies, at least in the short run, is a continued increase in housing prices in South Australia.
Another area of importance to SA is the issues surrounding health care.
The Government has committed to investing $644 million into Medicare Urgent Care Clinics, which would see new clinics open in each state and territory during the 2025–26 financial year. South Australia will see new clinics in East Adelaide, Victor Harbor and Whyalla.
The government has also promised to invest $150 million, matched by Flinders University, to build the Flinders HealthCare Centre in Adelaide’s south. This facility is expected to provide more than 10,000 health-care appointments and graduate 1300 health-care professionals annually.
Other programs covering aged care, early childhood education, expanding GP training and bulk billing will also benefit South Australians.
However, the government has been short on programs which address long term structural problems such as energy, productivity and labour shortages.
In addition, raising student visa fees and making it more difficult for overseas student will hurt the South Australia’s economically important education sector.
We can only hope with the mandate given by their strong electoral victory, the government will enact the needed reforms to tackle these more entrenched challenges.
Dr Susan Stone is the Credit Union SA Chair of Economics at UniSA.
