- South Australia State Budget 2018-19
The new South Australian government handed down its first State budget on 4 September 2018. In his budget speech, Treasurer Rob Lucas emphasised that this budget focuses on the government’s “comprehensive reform agenda based on new priorities, projects and programmes”.
Overall, the State government’s aim is to secure South Australia’s future, which should benefit both individuals and the business community. Further, in this budget, the government delivers on State taxes changes that were promised during the recent State election.
Headline items from the budget include:
- An estimated deficit of $397 million for 2017-18;
- A $48 million budgeted surplus by the end of 2018-19;
- Estimated State debt of almost $13 billion for 2017-18, growing to the budgeted $17 billion by 2021-22;
- $11.3 billion for new roads and key infrastructure projects; and
- $1.2 billion for health initiatives.
State taxes changes
The budget delivers the following State taxes changes:
1. Payroll tax relief
Small businesses with a payroll of up to $1.5 million in taxable wages will be exempt from payroll tax from 1 January 2019.
Phased payroll tax relief will also be available for employers with a payroll of between $1.5 million to $1.7 million. Specifically, these employers will pay a tax rate that increases proportionately from zero per cent at $1.5 million in taxable wages to 4.95 per cent at $1.7 million in taxable wages.
All other employers will not be affected by any payroll tax changes.
In the meantime, the government will also continue the small business payroll tax rate measure introduced by the prior government until 31 December 2018. This measure provides small business with taxable wages between $600,000 and $1 million with a payroll tax rate of 2.5%, phasing up to the general rate of 4.95% for taxable wages above $1.5 million.
2. Land tax relief
The tax-free threshold will increase from $369,000 to $450,000 from 1 July 2020. In addition, a new 2.9 per cent marginal tax rate will be introduced (to replace the current 3.7 per cent rate) for landholdings between the current top threshold of $1.2 million to the new $5 million threshold.