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SA Budget 2016-17
7 July 2016
 
OVERVIEW

South Australian Treasurer Tom Koutsantonis delivered his third budget today, confirming a focus on health and education spending, and job creation. The 2016-17 Budget confirms a surplus of $258 million for 2015-16 and predicts a surplus of $254 million for 2016-17, with projected surpluses totalling $1.5 billion over the next four years.
 
Treasurer Koutsantonis said today’s Budget brings South Australia “back in the black” and demonstrates the State’s budget position is “sound”, while also providing a buffer against economic uncertainty and a clear plan for the transition to a “high-tech modern economy” following the end of local automotive manufacturing. The Treasurer also confirmed that almost 6,000 jobs have been created in South Australia over the past 12 months, while the Budget predicts employment growth of 0.75 per cent in 2016-17. The Treasurer also said the Government is “pulling every lever available to create new jobs” and considers the unemployment rate to be unacceptably high.
 
The centrepiece of this Budget is a $109 million Jobs Accelerator Grant scheme designed to provide incentives for small and medium-sized businesses to hire additional staff members. The Budget also features $50 million to extend Adelaide’s tramline and an investment of $250 million for building and upgrades to science, technology, engineering and mathematics (STEM) facilities in 139 public schools.
 
An increase to the State’s solid waste levy over the next four years features in the Budget, which is estimated to create $64 million in additional revenue. As previously announced by the Treasurer, the Budget also introduces a new 15 per cent “place of consumption” gambling tax on the net wagering revenue of all betting companies offering services in South Australia, which is expected to raise $9.2 million in annual revenue.

KEY PARAMETERS
  • Budget surplus of $254 million in 2016-17, reaching $466 million by 2019-20
  • Net debt of $6.2 billion in 2016-17, which includes $2.5 billion for the new Royal Adelaide Hospital that appears on the balance sheet for the first time this financial year
  • Economic growth of 2 per cent estimated for 2016-17, increasing slightly to 2.25 per cent in 2017-18
  • Employment growth of 0.75 per cent in 2016-17, increasing to 1 per cent in 2017-18
  • Total revenue of $18.2 billion in 2016-17, with expenditure totaling $18 billion.
FURTHER READING MAJOR EXPENDITURE

Treasury and Finance
 
Key initiatives include:
  • Approximately $10 million per year for a four-year extension to the small business payroll tax rebate until 2019-20
  • A one-year extension in the off-the-plan apartment stamp duty concession – which will be extended to cover the whole of South Australia – at a cost of $7.6 million
  • $3 million over four years to the South Australian Government Financing Authority to administer a new $50 million Venture Capital Fund to support innovation.
Premier and Cabinet
 
Key items in the 2016-17 Budget include:
  • $1 million per annum from 2016-17 for an engagement strategy with France to maximise opportunities presented by the Commonwealth’s selection of DCNS for the submarine contract
  • $160,000 in 2016-17 for Renew Adelaide to support entrepreneurs in establishing new businesses
  • $380,000 for electronic security upgrades at Government House
  • $3.6 million for community engagement on the Nuclear Fuel Cycle Royal Commission Final Report.
State Development
 
Expenditure for the portfolio totalling $684 million, including:
  • $35.2 million over three years for upgrades to Her Majesty’s Theatre
  • $15.7 million over four years for arts initiatives, including $700,000 for the Adelaide Festival of Arts, $3 million for Arts South Australia, and $4 million each year to drive economic activity and job opportunities in the arts
  • $50 million to upgrade infrastructure at the Whyalla steelworks, and $9.6 million for an interest-free loan scheme to support the town’s small businesses
  • $665,000 per annum for the South Australia China Engagement Strategy to promote SA in the Shandong province
  • An additional $29.8 million for innovation initiatives, including $10 million for an Early Commercialisation Fund, $7.5 million for the University of South Australia’s Future Industries Institute, and $4.7 million for an ultra-high speed broadband innovation network.
Planning, Transport and Infrastructure

The Planning, Transport and Infrastructure portfolios will receive $1.4 billion in 2016-17, including:
  • $50 million for a one-kilometre extension of Adelaide’s tramline along North Terrace
  • $7.3 million for upgrades to small streets and laneways linking the Adelaide Central Market to the Riverbank precinct
  • $24.8 million to modernise and simplify the State’s planning system and move planning documents and processes online
  • $48 million to upgrade and modernise 50 diesel railcars
  • An extra $20.4 million to support the Leigh Creek township following the closure of the Alinta coal mine
  • $12.2 million to fit-out a new office building in Port Adelaide to accommodate 500 public sector workers
  • A contribution of $9 million toward the $18 million Kangaroo Island Airport upgrade, jointly funded by the State and Commonwealth governments.
Health and Ageing
 
Expenditure for Health and Ageing totals $5.6 billion in 2016-17, including:
  • $527 million over four years in new health spending to cover reductions in Commonwealth funding
  • $3.1 million per year to compensate for Commonwealth changes to pathology and diagnostic imaging bulk-billing incentives
  • $10.7 per annum for Indigenous health programs
  • $2 million per year to ensure the ongoing operation of the 10-bed Community Mental Health Rehabilitation Service in Whyalla.
Environment, Water and Natural Resources
 
Over $260 million has been allocated to Environment, Water and Natural Resources initiatives in 2016-17:
  • $518,000 in 2016-17 for carbon neutral initiatives, increasing to $1 million per annum thereafter
  • $500,000 to complete a business case for the redevelopment of Cleland Wildlife Park.
Education and Child Development
 
The Budget has committed $3.2 billion for education in 2016-17, including:
  • $250 million to refurbish and redevelop 139 public primary and secondary schools to deliver improved STEM programs
  • $250 million for a low interest loan facility for non-government schools to construct and update learning facilities
  • $10.6 million to modernise the South Australian Certificate of Education (SACE) from paper-based to online assessment of examinations
  • $1 million in 2016–17 for a Response Unit to coordinate the response to recommendations from the Child Protection Systems Royal Commission.
Communities and Social Inclusion
 
The Communities and Social Inclusion portfolio will receive $1.2 billion in 2016-17, including:
  • An additional $50.2 million for the transition to the National Disability Insurance Scheme (NDIS).
Correctional Services and Police
 
The two portfolios will receive a combined $1.1 billion, including:
  • $56.1 million for an extra 198 prison beds, including 132 for Port Augusta prison, 26 for Mobilong, and an additional 40 at Mt Gambier
  • $16.1 million to recruit 313 additional police officers.
Primary Industries and Regions
 
Primary Industries and Regions will receive $263 million in this year’s Budget, including:
  • $1.5 million over two years to continue the North West Pastoral program to engage Indigenous employees in pastoral work
  • $452,000 for biosecurity measures in the horticultural industry.
About GRACosway
GRACosway is Australia's leading public affairs and corporate and financial communications counsel. Our integrated suite of services provides public policy, communications, regulatory, issues management, and media relations advice to a range of domestic and international clients across all industry sectors. From offices in Sydney, Melbourne, Brisbane, Adelaide, Canberra, and Perth (through GRA Everingham), GRACosway's clients benefit from the combined experience, expertise, and strategic perspective of our team in addressing complex and commercially sensitive projects. For more information head to gracosway.com.au
 
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