Mid-Year Budget Review turbo-charges state’s strong ongoing economic and jobs recovery
The MYBR, released today, shows that although the 2021-22 net operating deficit is now higher than expected at the time of the last State Budget ($1.6 billion instead of $1.4 billion) – mainly due to the state’s expanded COVID response – the State is on track to deliver projected modest surpluses across the forward estimates.
Non-financial public sector net debt is lower across the forward estimates.
The Final Budget Outcome for 2020-21 represented a $1.2 billion improvement on the $1.8 billion deficit estimated at the time of the Budget, with a net operating deficit of $563 million.
This is as a result of a combination of higher than expected revenue (eg GST collections, stamp duties) and lower than expected expenditure, for example, in some cases matching grants to councils for local infrastructure programs will be provided in 2021-22 due to re-timing of projects.
Treasurer Rob Lucas said South Australia had the fastest growing economy in the nation, with more people employed full-time now than ever before, and the Mid-Year Budget Review shows the state’s ongoing COVID-19 recovery is well on-track.
“The Mid-Year Budget Review reaffirms our commitment to driving the state’s strong economic and jobs growth, growing our global reputation as one of the safest and best places in the world to live, work and raise a family,” said Mr Lucas.
“We are delivering a record pipeline of job-creating infrastructure, committing more than $4.2 billion in economic stimulus, which includes an additional $132 million for COVID-19 business support grants to assist thousands of SA businesses impacted by restrictions.
“The MYBR shows SA’s economic growth is expected to remain strong in 2021-22 with forecast growth of 2.5 per cent, after which time it’s expected to resume its long-run trajectory, signalling the full recovery from the pandemic shock. And in another positive sign, employment growth for 2021-22 has been revised up from 2 to 2.5 per cent, compared with the forecast at the time of the State Budget.”
New budget initiatives in the MYBR include:
- COVID-19 response – $235.5 million to support SA’s COVID-ready plan, which continues to provide important testing, tracing, and quarantine functions. The plan has created new support services to help manage the majority of COVID cases in the community and has also increased bed capacity in our public hospitals to prepare to treat the small percentage of cases that may need an acute health response. There are an additional 714 FTEs at 30 June 2022 to ensure COVID-ready capacity across the state’s health system.
- Child Protection – $83.8 million over four years to support children and young people in care to keep them safe from abuse and neglect. In addition, $19.1 million over four years is provided to increase carer payments for general foster and kinship carers by $50 per fortnight from 1 January 2022. The MYBR also allocates $13.4 million over four years to improve and expand the Child and Family Support System through additional early intervention support.
- Electric Vehicle Support – A new $22.7 million electric vehicle package, includes $3,000 subsidies and three-year registration exemption for eligible new battery electric and hydrogen fuel cell vehicles. Together with the new $12.3 million EV smart charging subsidy scheme and $18.3 million Election Vehicle Action Plan, it brings the total package supporting the take up of zero and low-emission vehicles to $53.3 million.
- Housing Construction Stimulus Package – Creating a massive pipeline of work for SA’s critical local housing construction industry and its trades to transition when the ‘heat of HomeBuilder’ eases around the second half of next year. Includes around $48 million of new initiatives that are expected to result in an extra 960 new dwelling commencements over the next 5 years, including expansion of HomeStart’s shared equity product and its Starter Loan scheme and providing additional support for affordable housing.
- Greening Adelaide – $10 million over two years to support programs under the Greening Adelaide’s Heart initiative that will focus on greening and cooling Adelaide’s CBD.
Mr Lucas said the Marshall Government has also supported further initiatives through the Jobs and Economic Growth Fund, including $17.7 million for a small business growth strategy. A further $53.2 million has been allocated towards improving digital government services to make accessing government services easier and more efficient.
“Hardworking small and medium-sized businesses underpin South Australia’s economy and we will continue to do all we can to support them by lowering costs, cutting red-tape and making it easier for them to interact with government services,” said Mr Lucas.
“Through sound fiscal management and our pro-business, pro-jobs agenda that encourages private sector investment, we are sending a clear signal to the rest of the world that South Australia is well and truly open for business.”
The Mid-Year Budget Review also reports higher-than-expected conveyance duty revenue (of $292 million over four years) due to continued strength in residential property transactions and prices, payroll tax revenue ($179 million over four years) mainly due to stronger than expected 2020-21 actual collections which largely flow through to future years, and GST revenue ($129 million over four years).