Falling revenues and a failure to meet savings targets in a key government department have pushed out the expected South Australian budget deficit to $1.169 billion this financial year. So much so the government will even have to get rid of its spinners.

The Health portfolio’s required savings target has fallen short by $122 million, forcing the Treasurer to add the proposed savings back into his costs. The pain will be felt by other spending areas — including the government’s media and communications areas which will be cut by at least 50 staff, and recycling body Zero Waste, which will lose most of its government funding and be privatised.

The Mid-Year Budget Review, released today, shows net financial liabilities have pushed out to almost $18 billion for 2013-14, rising to $22 billion in 2015-16. Net financial liability — the total of net debt and unfunded superannuation liability — is the measure used by credit ratings agencies.

Total government revenues are expected to be at the lowest level as a percentage of gross state product in 30 years. Treasurer Jack Snelling told reporters in a lock-up this morning the government had taken the tough decision to impose a further $464 million worth of savings over the next four years.

“Commonwealth revenue is not keeping pace with our growing economy. If GST collections had kept up with the national economic growth, we would have an extra $1.9 billion in the South Australian economy over the next four years,” he said. “We don’t and combined with continued pressures on the health budget, some tough decisions have needed to be made across government to keep our finances sustainable.

“Since I became Treasurer I have introduced savings that will reduce debt by more than $1.1 billion by the end of the current forward estimates.” Snelling says he’s on track to record a surplus by the end of the forward estimates (2015-16) despite revenue write downs exceeding $3 billion in the last 18 months.

In a surprise move, Snelling has swung the axe into government spin doctors — the media and communications people spread throughout government departments and agencies. More than 50 communications jobs will go as the function is removed from departments and agencies into a centralised group within the Department of the Premier and Cabinet.

Zero Waste SA is another casualty — it will cease operations in 2015-16, saving $8 million per annum. The state’s commitment to the Murray-Darling Basin Authority is also being wound down — the 50% reduction in South Australia’s contribution to the authority will save $8 million per annum.

The previously announced measures of a car park tax will also raise additional funds. And speed cameras installed on the South Eastern Freeway between Crafers and the Tollgate aimed at heavy vehicles will be reset to catch all speeding vehicles — a measure expected to raise $5.7 million in the first year.

Government departments will be asked to add another 1% to their savings targets (or efficiency dividend), a measure that saves $29.6 million next financial year, rising to $84.6 million in 2015-16. The budget bottom line would have looked worse, were it not for the sale of Forestry SA assets and the SA Lotteries licence announced in recent months.

The review has slashed forecasts for state economic growth. GSP for 2012-13 has been cut from 2.75% to 1.75%, with a return to previously forecast levels in future years.

*This article was originally published at InDaily