- South Australia State Budget 2017-18
With a strong focus on “putting South Australians first” and building on the foundations of the previous budget, Treasurer Tom Koutsantonis MP delivered South Australia’s 2017-18 State budget on 22 June 2017.
The State government has handed down a budget largely benefitting individuals seeking employment and businesses looking to expand.
Headline items from the budget include:
- a $239 million surplus in 2016-17;
- a forecasted surplus of $72 million in 2017-18;
- estimated growth of 2.25 per cent in 2016-17;
- a $9.5 billion total infrastructure spend over the next four years and;
- a $1.1 billion investment in health, including health infrastructure.
With the next State election due in early 2018, the Labor government has provided substantial funding towards initiatives and investments that should be viewed favourably by South Australians.
Major announcements made include:
Infrastructure and Transport
- A $1.9 billion investment for road projects along the North-South Corridor
- $673.9 million funding for key transport infrastructure projects State-wide, including $415 million to upgrade South Road and $242.5 million for the Gawler electrification project
- $174.3 million to upgrade the Oaklands Crossing to separate rail and road traffic
- $100 million for the duplication of Main South Road
- An estimated 22,800 new jobs through the infrastructure projects announced
- A $200 million allocation to the Future Jobs Fund to counter unemployment rates
- $109 million for the Job Accelerator Grant Scheme to create up to 14,000 full-time equivalent positions
- A $550 million energy plan to take charge of the State’s energy future and deliver high-level clean power for South Australians
- A $528 million allocation for the Adelaide Women’s Hospital (projected to be completed in 2024), which will be co-located with the Royal Adelaide Hospital
- A $250.6 million allocation to construct a new clinical building at the Queen Elizabeth Hospital
- $195 million for additional resources to provide world class health services given Commonwealth funding cuts
- $52.5 million to expand the Lyell McEwin Hospital emergency department
- A $44 million investment for a second South Australian Health and Medical Research Institute building to be used for cancer research and treatment, focusing on complex children’s cancer
- A $250 million program to redevelop the State-wide delivery of science, technology, engineering and mathematics (STEM)
- $100 million of the construction of the Adelaide Botanic High School which will specialise in science, technology, engineering, and mathematics
- A new Northern Adelaide school to support the Munno Para region, accommodating 1500 students, to be constructed under a public, private partnership (“PPP”) arrangement
- A new Southern Adelaide School to support the Sellicks Beach / Aldinga region of Southern Adelaide, accommodating 1500 students, which will also be constructed under a PPP arrangement
State taxes changes
The budget delivers the following State taxes changes
1. Payroll tax cut
The payroll tax cut for small business will be extended and retained permanently. Specifically, a small business payroll tax rate of 2.5% will apply to businesses with payrolls between $600,000 and $1 million, phasing up to the general rate of 4.95% for payrolls above $1.5 million. An estimated 1300 employers will benefit compared with the assistance provided under the temporary rebate scheme.
2. Major bank levy
The significant spending in this budget has been partially funded by a new state-based “major bank” levy equal to 0.015% of South Australia’s share of liabilities subject to the Federal major bank levy at the end of each quarter. This new levy will apply from 1 July 2017 and will have a direct impact on the big four banks – ANZ, CBA, NAB, Westpac, as well as Macquarie Bank and is estimated to raise $370 million over the next four years.
3. Conveyance duty
A conveyance duty tax has been announced, providing a 4% surcharge on foreign buyers of residential property from 1 January 2018. This follows the introduction of a conveyance duty surcharge by other major States in recent years. The South Australian surcharge will be lower than the Victorian rate of 7% and the new rate of 8% that will apply in NSW from 1 July 2017, but higher than the 3% that applies in Queensland.
4. Off-the-plan stamp duty concessions
The off-the-plan stamp duty concession has been extended to 30 June 2018. This allows eligible applicants to benefit from stamp duty savings of up to $15,500. However, from 1 July 2017, this concession will not be available to foreign purchasers.
Further, where an off-the-plan apartment sale purchase contract has been entered into between 22 June 2017 and 30 September 2017, and construction of the apartment has not started, a $10,000 pre-construction grant will be available for eligible off-the-plan purchases. The aim of this announcement is to assist developers with achieving sales targets which allow them to proceed with construction.
In addition, where a contract has been entered into between 22 June 2017 and 30 June 2018 for the purchase an off-the-plan apartment, the purchaser will be entitled to a five-year land tax exemption.
5. New apprentice and trainee grants
The grant for hiring a new apprentice or trainee has been increased by up to $5,000, which when combined with the existing grant, brings the total benefit to up to $15,000.