14 August 2017
On 22 June 2017, the South Australian State Budget was handed down from Parliament, with a focus on infrastructure improvements, health expenditure and job creation.
The most controversial measure was the introduction of a bank tax. We will need to wait to see if this eventuates and in what format and how any changes will impact on the delivery of other budget measures.
This quick guide will run through some of the areas of the budget which will most likely impact your business and family.
The Economics:
A budget surplus of $72 million is forecast for 2017-18 rising to $662 million by 2020-21.
The economy is predicted to grow by 2.25% for the next 4 years which is lower than the national forecast of 2.75% for 2017-18 and 3% for the next 3 years. Actual economic growth for 2015-16 was 1.9%.
The Handouts:
Business
The good news here is that payroll tax cuts for small business have effectively been permanently extended.
The payroll tax on annual payrolls between $600,000 and $1 million has been lowered to 2.5%. The maximum rate of 4.95% has increased from an annual payroll of $1.2 million to $1.5 million.
However the tax-free threshold has remained at $600,000 which is the lowest in the nation making us less competitive.
Employment
A Future Jobs Fund is being established with grants and low interest loans available. This fund will aim to drive jobs in industries such as ship building, defence, renewable energy, tourism, food and wine, health and biomedical research and IT and advanced manufacturing. Be quick if you wish to apply as applications for grants and loans must be lodged by 29 September 2017.
Previously eligible businesses with new employees could receive a grant up to $10,000 for every new apprentice and trainee. This budget adds $5,000 to this grant taking the total to $15,000 for new apprentices and trainees hired.
Infrastructure
Funds have been ear marked for:
- New schools at Munno Para & Aldinga
- Increased train services, further electrification and new park ’n ride services
- Extra hospital funding for Women’s hospital, Queens Elizabeth Hospital and Lyell McEwin hospital
- Construction of a hydrogen plant
- Improved women’s sporting facilities
- Improved netball stadium
How the Hand outs are paid for:
Cost of Living Increases
Most fees including speeding fines, public transport tickets, driver licence renewals, compulsory third party premiums and water bills are up by 2.2 to 3%.
Taxes or Levies
The major bank levy on liabilities that caught us all by surprise is hoped to earn $370 million.
Another $49 million is projected to be raised by charging extra fees on foreigners buying residential property.
In conclusion:
The State Government may struggle to deliver on the handouts if the banks and business are successful in their opposition to the bank tax. They argue that the levy will be passed onto South Australians and drive up the costs of operating in South Australia.
One question on all our minds that was not addressed in the budget is what measures are being taken to help both households and business with the escalating cost of energy.
