The 2024-25 Mid-Year Budget Review maintains forecast surpluses for the next four years, boosts infrastructure spending and provides additional funding to key areas of health, housing and child protection.
After delivering a second state budget surplus for the 2023/24 financial year of $413 million, the MYBR estimates a $201 million operating surplus in 2024-25, with forecast surpluses continuing across the forwards.
These surpluses follow the budget’s return to surplus in 2022-23, the first budget of the Malinauskas Labor Government, after three consecutive deficits under the previous government.
State taxation revenue estimates have been revised up by $204 million in 2024 25 and by a further $329 million over the three years to 2027 28, mainly due to improved conveyance duty revenues from higher residential property prices and transactions, as well as the continuing strength of the economy.
Net debt is expected to rise to $46 billion by the end of the forward estimates, largely due to bringing forward expenditure on the Torrens to Darlington tunnels project, following the appointment of the successful consortium in August and the purchase of three tunnel-boring machines.
Forecast expenditure on the project over the forward estimates is now $8.64bn, up from $7bn forecast at the time of the budget. This does not change the overall cost of the project, which remains within budget of $15.4bn.
Importantly, the Government’s debt position remains affordable within the size of the overall budget, with the key debt metric, the net debt to revenue ratio, projected to be 25 percentage points lower than what the former Liberal Government forecast it to be this financial year.
While net debt is higher than forecast, interest expenses are around $54 million per annum on average lower than estimated in the 2024 25 Budget, due to lower than projected interest rates.
The MYBR provides additional funding to a range of key initiatives;
- $672.5 million over four years to meet stronger than budgeted growth in activity in the public health system
- $365.6 million for critical water and wastewater infrastructure to support housing growth in South Australia, funded in part by residential developers as announced in the Housing Roadmap
- $135 million to meet higher than forecast costs of South Australia’s participation in the ³Ô¹ÏÍøÕ¾ Redress Scheme for Survivors of Institutional Child Sexual Abuse
- $129.1 million in 2024-25 to support the number of children and young people in care.
- $60.0 million for the Defence Technologies Academy at Lot Fourteen that will provide digital training, education and research capabilities critical to the defence industry, funded in partnership with the Commonwealth Government
- $36.4 million over four years from 2024-25 (and a further $21.6 million over 2028-29 and 2029-30) to support the extension of the ³Ô¹ÏÍøÕ¾ Partnership Agreement on Family, Domestic and Sexual Violence Responses
- $30 million over two years from 2024 25 to deliver a dual lane roundabout at the Curtis Road and Heaslip Road intersection with associated road upgrades to also improve safety and reduce congestion, funded in partnership with the Commonwealth Government
- $27.2 million over three years from 2024 25, funded in partnership with the Commonwealth Government and AGL Australia, to construct a fleet of 16 community batteries to deliver cost of living relief to approximately 10 500 low income households through an annual bill saving off the default market offer with AGL Australia
- $19.8 million over four years from 2024 25 to implement and administer electoral reforms to prohibit the giving and receiving of electoral donations and gifts to registered political parties, members of Parliament and candidates
As put by Stephen Mullighan
The Mid-Year Budget Review continues the Government’s commitment to budget surpluses, giving capacity to invest in major infrastructure projects and to improve services for the community.
The announcement of the consortium to deliver the North-South Corridor tunnels in August has brought forward expenditure on the project with the addition of the extra tunnel boring machine, but importantly the project remains within budget.
The state budget’s cost of living measures in energy are continued for residents in low-income households with the community battery scheme, providing low-cost electricity for over 10,000 households in partnership with the Commonwealth Government and AGL.
Whilst debt across the forward estimates increases, forecast interest payments on debt have reduced, due to forecast lower interest rates than assumed in the 2024-25 Budget.
