The budget forecasts tip the South Australian economy to grow by 3.5 per cent in 2021-22 and then by 2.25 per cent each year across the forward estimates.
The deficit for 2020-21 is expected to be about $1.8b – down from $2.6b forecast last year – while total net debt is expected to rise from $22b to $33.6b by 2024-25.
Credit ratings agency Moody’s said the budget will allow South Australia to keep its AA1 credit rating and stable outlook forecast.
“South Australia’s revenue recovery has exceeded our initial expectations, reflecting its strong revenue ties to the Commonwealth, despite severe economic and revenue disruptions from pandemic and border closures,” said John Manning, Vice President of Moody’s Investors Service.
Business SA similarly welcomed the budget’s economic growth and revenue forecasts but was disappointed by the lack of COVID support measures in place for businesses.
The chamber of commerce had called for a funding scheme to protect small and medium businesses from future lockdowns and a “de-risk” fund for event organisers to insure them against COVID contingencies.
“The 2021/22 State Budget underwrites South Australia as an attractive and cost competitive place to do business, although not providing any real peace of mind for businesses should South Australia find itself in another COVID lockdown,” Business SA CEO Martin Haese said.
“Unfortunately, the Budget lacks tailored support programs for hard working business owners that have borne the brunt of seismic uncertainty over the last 15 months.”
Haese welcomed the extension of a payroll tax waiver for businesses who take on apprentices but called on the government to extent this to support an estimated 19,000 businesses who are unable to access the scheme.
The South Australian Property Council were more upbeat about the priorities of the budget, and welcomed the State Government’s spend on infrastructure and an $800,000 fund to reactivate the Adelaide CBD.
“The message coming out of this Budget is very clear – it’s about record infrastructure spending with a strong focus on health, education and economic recovery,” said Property Council SA Executive Director Daniel Gannon.
“This is evidenced by the $17.9B invested into infrastructure over the next four years, critically focused on health, education, sporting, cultural and recreational facilities.”
Among the infrastructure measures outlined in the budget are $202 million over three years to build a Sturt Highway bypass around the town of Truro and $180 million over four years to complete the next stage of the duplication of the Augusta Highway from Nantawarra and Lochiel.
A $60 million upgrade of the Heysen Tunnels on the South Eastern Freeway over two years has also been included under the shared funding model as has a $40 million project to upgrade Key Kangaroo Island road corridors over three years.
But the budget also revealed a $1 billion cost blowout for the north-south corridor, which will now cost $9.9 billion due to the addition of an extra lane and new safety features.
RAA Senior Manager of Safety and Infrastructure Charles Mountain said it was “logical to meet the modelling of the traffic volumes expected to use the tunnels, as it will future proof this massive infrastructure project”.
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