Tax windfall drives state budget surplus
Soaring payroll tax and stamp duty receipts have helped South Australia achieve its first budget surplus since pre-COVID, despite growing operating expenses threatening the state’s bottom line.
Treasurer Stephen Mullighan and Premier Peter Malinauskas at the 2023/24 State Budget lockup in June. Photo: Brett Hartwig/InDaily
The government recorded a net operating balance of $41 million for 2022/23, Premier Peter Malinauskas announced on Monday.
The state pulled in $255 million more tax since the June budget, thanks to a $100 million upward revision in payroll tax and stamp duty coming in $71 million higher than forecast.
It’s the first time the state has been in the black since 2018/19 during the previous Liberal government, before COVID-19 stimulus spending blew a hole in budgets across the country.
While an improvement on the $249 million deficit in 2022/23, the figure was still lower than the $250 million surplus predicted in June.
Malinauskas said the budget surplus had been delivered as a result of strict fiscal discipline and the strength of South Australia’s economy.
“On a whole suite of different metrics … we have consistently seen South Australia outperform the rest of the nation,” he said.
Recent Australian Bureau of Statistics figures show the state is the nation’s fastest growing economy at 3.8 per cent per year.
However, the state’s unemployment rate, which had been consistently below the national average, last month surged back into the middle of the pack at 3.9 per cent.
South Australia’s net debt to revenue came in at 96.1 per cent, four percentage points better than forecast and 24 percentage points better off than when Labor took office.
Treasurer Stephen Mullighan said the state’s improved fiscal position gave it the capacity to invest in its bold infrastructure agenda, including the new Women’s and Children’s hospital, the hydrogen jobs plan and the north-south corridor highway project.
But Opposition treasury spokesman Matt Cowdrey said a $460 million uptick in budget expenses was a worrying sign for the state’s economy.
“What we’ve seen, really, is a government that has been bailed out by significant increases in both state and federal taxation revenue,” he said.
The government had little to show for the increased spending, with ambulance ramping at all-time highs, Cowdrey said.
“We know that South Australian families are hurting, South Australian businesses are hurting,” he said.
“And the government essentially, in the numbers released today, have said that we have taken more proportionally in state and national taxation revenue and instead of finding a way to return some of that to you, we’ve decided to spend every last cent of that.”
– AAP
