SA budget finishes strongly in the black

SA Treasurer Rob Lucas has announced a budget surplus of $289m for the 2018/19 financial year.
SA Treasurer Rob Lucas has announced a budget surplus of $289m for the 2018/19 financial year.

The South Australian government has posted a healthy budget surplus for 2018/19 but has warned results for the next two years will be subdued compared to previous forecasts.

The state's book closed off $289 million in the black, almost three times the $101 million forecast in June.

But in the mid-year budget Review, Treasurer Rob Lucas has tipped the surplus for 2019/20 to dip to $91 million, down from $94 million forecast in June.

The result for 2020/21 will also fall from the original forecast of $105 million to just $68 million.

Mr Lucas said the changes were modest considering the $30 million write-down in GST returns during the current financial year and $148 million over four years.

"The mid-year budget review reaffirms our commitment to responsible financial management which delivers modest surpluses and a strong foundation for ongoing jobs and economic growth," Mr Lucas said.

"The Liberal government can be trusted to rein in spending to keep the state's finances firmly in the black."

The mid-year review also detailed more than $760 million in new or recently confirmed initiatives, including $189 million over three years to fund the government's land tax reforms.

It also includes $327 million to accelerate a number of road infrastructure projects in partnership with the federal government.

The treasurer said the bigger surpluses for 2018/19 was largely due to a number of one-off factors that could not be assumed to continue over the coming years.

These include $39 million in bequests to the Art Gallery of South Australia, settlement of issues related to the new Royal Adelaide Hospital and the timing of federal grants for the proton therapy unit.

The 2018/19 budget was also helped by higher royalties from petroleum production.

The mid-year review has forecast SA's economy to grow by just 1.75 per cent during the current financial year, down from the initial budget forecast of 2.5 per cent.

The fall has been attributed to a weaker agriculture sector and slower than expected growth in consumer spending.

Employment growth is expected to be one per cent, in line with the June budget forecast.

Australian Associated Press