South Australia is a small state

Although South Australia is a large state by size, it is a small state by population, with around 2 million people, most in the Adelaide area and no projection for significant growth over the next ten years. It also has the highest population of older people, with increasing needs in areas such as health.

Regeneration of the economy is an important short term and longer term goal. The governments goal is to "control costs and make the right long term investments". The government is working on tourism, mining, war machine building, and education as sources of growth. Manufacturing is under severe pressure as the local economy becomes more uncompetitive as a base for manufacturing. Much of the infrastructure is a bit delapidated.

The economy was shell shocked with the collapse of the State Bank in the early 1990s and the state only recently got their Triple A credit rating back. They are now making some limited big ticket investments. The limited tax base makes it difficult to make the large investments that the state needs. State debt is set to rise by 70 per cent this financial year and continue to increase dramatically through 2010.

Many of the big ticket investment projects, primarily in transportation have blown out in cost, sometimes by 100 percent. Health spending is out of control.

Outside experts predict that spending will have to be reined in and the question was not whether, but where and when the axe would fall.

One example of the delapidated infrastructure is the train system which is old and in need of significant investment. The rolling stock and especially the ticketing system is third world in standard. When I asked one of the conductors about it, she quickly quipped that we are a small state and we can't afford it.

The road network needs a significant upgrade, but at a huge price. One of the underpasses proposed for a major arterial has jumped in price by over three times.

South Australia lags the other states in water saving investments like rainwater tanks, water saving taps, grey water recycling. In the last six months, only 17 rainwater tank grants have been approved. In Queensland investments in similar water saving devices would earn more than twice the rebate.

It is not all doom and gloom, but it is a challenge. Part of the attraction of Adelaide is the scale. This just makes it more of a challenge to make some of the investments required going forward.