A decision not to introduce new taxes and a commitment to cap any increase in charges at 2% for 2022-23 from the new South Australian government will be a welcome relief for the business community, as the State continues its transition to a post-pandemic economic reality.
Premier Peter Malinauskas and SA Treasurer Stephen Mullighan delivered their first budget since winning the March state election, describing it as an ambitious plan for the future designed to deliver rising surpluses from 2022-23 through to 2025-26.
Big ticket spending commitments included $2.4 billion to the state’s healthcare sector, targeted at fixing the ambulance ramping crisis, $593 million for the green Hydrogen Jobs Plan and a $100 million Economic Recovery Fund to shape SA’s COVID recovery.
Importantly for business, the budget contained no new taxes, while any increases in charges will be kept in line with inflation.
Pitcher Partners Adelaide Principal Stephen Nisbet said the Budget came at a delicate point in time in terms of the state’s rebound from COVID and demonstrated a pragmatic and sensible approach.
“The key economic requirement of this Labor government was to come in and effectively balance the books and carry a Budget to the black,” Mr Nisbet said.
“The first Budgets when COVID first hit were a huge shock to the business and consumer community – there was low consumer confidence and low inflation, and that meant low amounts of GST dollars coming into the South Australian economy.
“Because the picture for the last 12 months has been better than what was predicted in that catastrophic phase, that’s meant that the government has been able to tout an improved Budget surplus.”
Pitcher Partners Adelaide Tax Director Chris Birchall said the Budget assuaged fears of many in the business community that a new Labor government would impose a range of new taxes or charges.
“In the past, we have had experience with Labor governments being high taxing and high spending,” he said.
“The two have been known to go hand-in-hand but we haven’t had that happen in this Budget.”
A further boost to business was the State Government’s commitment to a $100 million Economic Recovery Fund, however, little detail was revealed as to how the fund will operate and how grants would be allocated.
South Australia’s renewable energy sector was one of the clear winners from the budget, according to Mr Nisbet, through a $593 million investment in green hydrogen designed to be a major catalyst for the State to hit its 100 per cent renewable energy target by 2030.
The Hydrogen Jobs Plan comprises an electrolyser facility and power station to be built near Whyalla, both which will be among the world’s largest.
Mr Nisbet said overall, the 2022-23 budget reflected the Labor government’s ability to deliver on its election promises, with infrastructure spending particularly in line with its commitments.
The Malinauskas government scrapped its predecessor’s $600 million Riverbank Arena proposal, while the completion of tunnel construction for the North South Corridor was pushed out until 2031.
“The delay to the North South Corridor assists in managing the forward estimates and budget surplus,” Mr Nisbet said.
“And the wrapping up of the Marshall government’s Riverbank Arena project was one that was heavily campaigned on, on the basis that Labor believed it was a waste of time and money.”
Mr Nisbet said the Malinauskas government also delivered on its promise to address ambulance ramping and upgrade South Australian hospitals.