Stronger revenues from the property market and a buoyant economy have helped the South Australian government deliver a better-than-expected budget surplus.
Treasurer Stephen Mullighan said the 2023/24 surplus of $413 million was $107 million higher than projected in the budget in June, setting the scene for further surpluses in the next four years.
Delivering the Midyear Budget Review on Tuesday, Mr Mullighan said the state’s strong economic position will support a boost in infrastructure spending and provide more funding for health, housing and child protection.
The budget update forecasts a $201 million operating surplus for this 2024/25 financial year, with projections for more across the forward estimates.
Treasurer Stephen Mullighan believes South Australia is in a strong economic position. (Matt Turner/AAP PHOTOS)
Mr Mullighan said achieving budget surpluses was important as the state embarks on a large infrastructure program, led by the North-South Corridor tunnels and the new Women’s and Children’s Hospital projects.
Net debt is expected to rise to $46 billion by the end of the forward estimates, largely due to the bringing forward of spending for the tunnels.
State tax revenue estimates have been revised up by $204 million for 2024/25 and by a further $329 million over the three years to 2027/28, mainly due to improved conveyance duty revenues from higher residential property prices and transactions, as well as continuing strength in the economy.
While net debt is worse than forecast, interest expenses are about $54 million per annum on average lower than estimated in the June budget, due to lower-than-projected interest rates.
“Importantly, the government’s debt position remains affordable within the size of the overall budget, with the key debt metric, the net debt to revenue ratio, projected to be 25 percentage points lower than what the former Liberal government forecast it to be this financial year,” Mr Mullighan said.
South Australia’s budget surplus has been revised upwards since June. (Michael Errey/AAP PHOTOS)
The budget update also provided additional funding for key initiatives including $672.5 million over four years to meet growing demand in the public health system.
“We continue to combat larger than expected numbers of elderly South Australians stranded in hospital beds who should be in aged care places,” Mr Mullighan said.
“That continues to drive up costs while we go through the process of negotiating a better health funding agreement with the Commonwealth.”
There is also $365.6 million for critical water and wastewater infrastructure to support housing growth.
Another $135 million has been earmarked to help meet the higher-than-forecast costs of SA’s participation in the National Redress Scheme for Survivors of Institutional Child Sexual Abuse.
There’s also an extra $129.1 million in 2024/25 to support children and young people in care.