The South Australian Labor government has delivered a budget that returns the state to surplus while spending $500 million on a school infrastructure stimulus, $527 million to plug a health funding gap and providing $10,000 payments to employers for hiring new staff.
The budget commits to a three-year $250m upgrade of state’s 139 public schools and sets aside $250m in low rate loans to non-government schools for new science, technology, engineering and maths facilities.
In advance of the release of the budget Mr Koutsantonis hinted at the schools announcement, describing it as “God’s workâ€.
While the key job creation measure will introduce $10,000 payments for small to medium sized businesses to employ new staff, the economic outlook for employment growth remains grim — rising from 0.5 per cent this year to 1 per cent from 2017 onwards.
The budget forecasts a return to surplus for the first time since the global financial crisis, recording $258 million surplus this financial year, increasing to $466 million in 2019-20 on the back of an unexpected windfall of more than $400 million from the sale of the Motor Accident Commission.
Mr Koutsantonis said the surpluses had been built as a buffer against the “serious headwinds†South Australia would face over the coming two years as a result of the impacts of Brexit, federal political instability and uncertainty in financial markets from low commodity prices and a fluctuating Australian dollar.
“It’s a sea of black as far as the eye can see,†Mr Koutsantonis said.
“I need as much headroom as possible to make sure I can intervene in the economy when necessary.â€
The budget notes pressure on state government revenue, with falling royalties, payroll tax, conveyance duty and gambling taxes.
Net debt will increase over the forward estimates from $4.1 billion this year to $6.6 billion in 2018 as a result of $2.8 billion in financial obligations for the new Royal Adelaide Hospital.
In explaining the spending decisions, Mr Koutsantonis said there was “no one measure that is going to change South Australia forever … there are lots of jigsaw pieces to this puzzleâ€.
Infrastructure spending is a major focus of the state budget, setting aside more than $1.5 billion in each year of the forward estimates.
The state currently has the highest unemployment rate in the country at 6.9 per cent.
To promote job creation, the government looked towards incentives introduced by NSW Premier Mike Baird, committing to providing a $10,000 grant for every new fulltime position created in businesses liable for payroll tax, at a cost to taxpayers of $109 million over three years.
While the budget set aside $526.8 million over four years to plug the health funding shortfall from the federal government, there was still a “significant holeâ€, Mr Koutsantonis said.
“The ongoing nature of the Commonwealth-state health funding partnership is something I hope the new government grapples with as one of its first priorities,†he said.