SA government won't spend big until big ticket projects are finished, as mid-year surplus reported
Don't expect much in the way of big-ticket items promised ahead of South Australia's 2026 state election.
There's just not the money for it, unless there is a real change of tune on debt.
The government has essentially tied its hands on spending until the early 2030s by backing in the $15.4 billion Torrens to Darlington tunnels project and the $3.2 billion new Women's and Children's Hospital.
The money being spent on those two projects is the main reason SA's debt is heading towards $46 billion in four years and Treasurer Stephen Mullighan warned it won't start coming down until they are complete.
The Torrens to Darlington tunnels project is one of the big infrastructure spends by the state government.(Supplied)
"We've accepted that we're going to build these two projects and the additional expense and debt that that comes with," he said.
"But we're not going to have projects of that sort of size and quantum that we're going to be able to afford until we get past these two projects and we've got more budget capacity."
The opposition supports the projects too, so it won't have much wriggle room to campaign on.
The government, of course, still has other major projects on the books it needs to fund, notably its hydrogen power plant.
The state government still needs to fund its $593 million hydrogen power plant.(Supplied: SA Government)
It's sticking to its $593 million price tag for the "world first" plant and believes it will still have it up and running in the early part of 2026, but hasn't nailed down the design — and until it does the actual cost remains elusive.
The treasurer is also being kept busy finding more and more money for the health network.
The Mid-Year Budget Review revealed an extra $672 million is going towards plugging a hole in the health budget. That's in addition to the $1.6 billion cost blowout this financial year announced at the state budget in June.
"The budget for health in the current financial year is some $1.6 billion greater than what it was forecast to be three years ago," the treasurer said.
"But that reflects decisions over three budgets where we have increased funding in each and every budget beyond what had previously been forecast to try and reflect the increased traffic coming into our emergency departments, the number of people presenting to hospital, the increasing cost — more complex nature of providing health care," he said.
The state government is investing in the future Women's and Children's Hospital, but ongoing health costs have ballooned too.(Supplied: SA Government)
The government has been able to send more money to health, in part, because its revenues have grown.
Last financial year, the state recorded a $413 million operating surplus — $107 million more than what had been projected, thanks mainly to property taxes as the housing market continued to surge.
Labor is now forecasting higher surpluses over the next four years, totalling around $533 million.
It is not, however, prepared to further lower the tax burden on South Australians.
"I would argue that one of the reasons why we've got such strong economic performance is because we are the lowest cost place in the country to do business," Mr Mullighan said.
"We have the lowest taxing regime on the mainland of Australia by an average of 32 per cent.
"We've abolished stamp duty for first home buyers, on the basis that they're buying a newly constructed home or their building their first home to add to the overall housing stock."
The opposition said the budget review is a "slap in the face" for many South Australians amid cost-of-living pressures and a housing crisis.
Heidi Girolamo says it's concerning that South Australia does not have stamp duty concessions for existing homes.(ABC News: Lincoln Rothall)
"Much of that revenue is coming from South Australian families … whether that be through stamp duty or businesses with payroll tax," opposition cost of living spokesperson Heidi Girolamo said.
"We're really concerned that we're one of the only states where there is no stamp duty concessions for existing homes.
"It is very difficult to get a new home here in South Australia, the wait times are very extensive, and many families are really struggling to get into the housing market."
As for the two major projects that are dragging the state further into debt — the hospital and the tunnels — they are legacies of the Liberal Marshall government, so the opposition knows there's little it can do to differentiate itself from Labor when it comes to the debt path that we're on.
The man who wants Treasurer Stephen Mullighan's job, shadow treasurer Sam Telfer, narrowed his pitch to voters on who you can trust managing these major builds.
"South Australians have little to no confidence in this Labor government that they're going to be able to stick to their budgets and deliver these projects to the levels that they've promised," Mr Telfer said.
If it wasn't already clear, the 2026 vote will be fought on health, housing, cost of living — and who's right when it comes to managing taxpayers money.
