Releasing the Government’s mid-year budget review at midday, Lucas identified an extra $38 million in payroll tax above forecast, plus $36.9 million in bequests to the Art Gallery, settlement proceeds from arbitration in relation to the Royal Adelaide Hospital, and the timing of grants to the SA Health and Medical Research Institute among factors for the 2018-19 surplus.
“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,” he said.
But the Government has also significantly lowered its expectations for economic growth, reducing forecast gross state product growth from 2.5 per cent to 1.75 per cent in the current 2019-20 financial year.
That’s far from the Marshall Government’s target of 3 per cent per annum GSP growth.
Lucas told reporters this afternoon that the lower forecast reflected the effect of the drought on the agriculture sector.
The Government is also forecasting a $91 million surplus in the current 2019-20 financial year, slightly down from the expected $94 million surplus.
That’s despite a GST revenue write down of $30 million this financial year.
Lucas said lower GST forecasts were the result of low consumer spending across the national economy.
“We wrote down expected GST over the forward estimates by $2.1 billion (in the 2018 budget) – we’ve written down GST estimates by another $148 million over the forward estimate period,” he said.
“We’ve also written down, again, conveyance duty revenues by another $157 million over the four years.
“So, two big-ticket items of reduced revenues flowing into the budget not by our choice.”
The Government’s land tax reforms, introduced at the last state budget as a revenue measure that would earn the state $40 million a year from 2020, will instead cost the budget $57.7 million in the first year, $57.1 million in the second year and $74.6 million in 2022-23, after a backlash from the property industry forced Lucas to a series of concessions on the policy.
The Mid-Year Budget Review forecasts a three per cent increase in government revenue from pokies, amounting to a $25 million net financial windfall from gambling reforms, including the controversial introduction of bank note acceptors – not just coin acceptors – on the machines.
That amount takes into account an extra $4 million over the next four years the Government intends to pay to the Gamblers’ Rehabilitation Fund.
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