2017-18 South Australian Budget Wrap

Treasurer Tom Koutsantonis has revealed his fourth budget, the last before the 2018 state election. Voters have been wooed with community grants, infrastructure spending, apartment affordability measures and some extra payroll tax relief for business.
Whilst the big banks –  today's headline story  - and foreign investors (neither of whom vote) have come out the biggest and very sore losers.
In the following budget wrap we outline it all; winners, losers and the key numbers.

The Winners

Small business and budding apprentices
  • Payments under the Jobs Accelerator Grants program have been boosted by as much as $5,000 for businesses that hire apprentices or trainees.
Commencement Date: Scheme start date 1 July 2016
  • Payroll tax has been lowered to a flat rate of 2.5 per cent for those with payrolls under $1 million, and phased-in relief extended to more businesses with wage bills between $1.2 and $1.5 million. Payroll in excess of $1.5 million are not eligible for relief.
Refer below table.

Commencement Date: 1 July 2017

Businesses looking to grow
  • A $200 million Future Jobs Fund will be made available to businesses in the form of $50 million in grants and $70 million in low interest loans to business for job creation. $60 million for industry attraction and $20 million in other measures.
  • Sectors of focus include defence, mining, renewable energy, food and wine, tourism, health and biomedicine and information technology.
Commencement Date: For grants and loans expressions of Interest are now open

Off-the-plan apartment buyers
  • Stamp duty concessions of $15,500 for off-the-plan apartments will be extended for a further 12 months (30 June 2018) but will be retargeted so that it no longer applies to foreign purchasers.
Commencement Date: 22 June 2017
  • A new $10,000 pre-construction grant will be introduced for contracts entered into between 22 June 2017 and 30 September 2017 for off-the-plan apartments in buildings yet to be built.
Commencement Date: 22 June 2017
  • A five year land tax exemption will apply to eligible apartments bought off-the-plan where the contract is entered into between 22 June 2017 and 30 June 2018.
Commencement Date: Midnight 30 June 2017

Commercial property buyers
  • Further cuts to non-residential property stamp duty, with $75 million of stamp duty relief from July 1, 2017 with stamp duty fully abolished for commercial property buyers from July 1, 2018.
Commencement Date: This measure is already in place

Contractors and construction firms
  • A record $2.2 billion spend on infrastructure across the economy in hospitals, transport infrastructure and on two new super-schools built under public-private partnerships from reception to Year 12 in the Adelaide suburbs.
  • Commencement Date: Various timeframes with some money for the projects contingent on the Federal Government.

The Losers

The big four banks - ANZ, CBA, NAB and Westpac - plus Macquarie, and their shareholders
  • The banks will have to pay a quarterly levy of 0.015 per cent on bonds and deposits over $250,000 — but not on mortgages and ordinary household deposits.
  • It is expected the measure will raise about $370 million over the next four years.
Foreign buyers of residential property
  • A 4% conveyance duty surcharge on purchases of residential property by foreign buyers and temporary residents will be introduced from 1 January 2018. This surcharge will be in addition to any other conveyance duty payable on the transfer of residential property. Will not apply to commercial transactions and brings us into line (albeit different rates) with other states including; NSW, WA, Vic and QLD.
Commencement Date: 1 January 2018

Key Figures 

  • The South Australian Government is forecasting a surplus of $72 million in 2017-18, this figure is below the previous forecast surplus of $382 million that was projected six months ago in the mid-year Budget update.
  • The forecast surplus in 2018-19 is estimated to be $132 million, and then $193 million in 2019-20.
  • Gross State Product is estimated to grow by 2.25 per cent in  2016-17 and then remain at 2.25 per cent in 2017-18.
  • Projections are for GSP to also be at 2.25 per cent annual growth for the following two years also.
  • Net debt is estimated to be $6.07 billion in 2017-18 and rise to $6.73 billion in 2018-19, and $6.8 billion in 2019-20.  The net debt to revenue ratio is forecast to be at 31.7 per cent in 2017-18, rising to 34.9 per cent in 2018-19.
As always please remember the operation of these measures is subject to the Bill coming into force as an Act.
A link to the Full Budget Papers can be accessed here.