South Australia Records Surplus, As Debt Soars to $46 Billion

The treasurer projects strong economic growth, but Opposition slams rising debt and health overruns.

Premier of South Australia Peter Malinauskas at a press conference during a visit to Cabra Dominican College in Adelaide, Australia, on May 20, 2022. Lisa Maree Williams/Getty Images

The South Australian government’s Mid-Year Budget Review (MYBR) showed a $201 million operating surplus in 2024-25, driven by strong economic conditions and rising property taxes, but state debt is set to soar to a record $46 billion as infrastructure spending accelerates.

Treasurer Stephen Mullighan stated that the surpluses reflect strong economic conditions and mark a consistent improvement since the Malinauskas government returned to surplus in 2022-23, following three consecutive deficits under the previous government.

State taxation revenue has been revised upwards by $204 million in 2024-25 and by $329 million over the following three years, largely due to increased conveyance duty revenues from higher residential property prices and transactions.

Despite the surplus, net debt is projected to rise to $46 billion by the end of the forward estimates, primarily due to the accelerated expenditure on the Torrens to Darlington tunnels project.

Mullighan reassured that, while debt levels are increasing, lower-than-expected interest rates have resulted in reduced interest payments on that debt.

“The announcement of the consortium to deliver the North-South Corridor tunnels in August has brought forward expenditure on the project with the addition of the extra tunnel boring machine, but importantly the project remains within budget,” Mullighan said.

Health, Housing, and Key Infrastructure Prioritised

The Mid-Year Budget Review allocates significant funding to critical sectors such as health, housing, and infrastructure.

The public health system will receive $672.5 million over four years to address higher-than-expected demand, while $365.6 million will fund water and wastewater infrastructure to support housing growth.

Part of this funding will be sourced from residential developers under the state’s Housing Roadmap.

Key social programs include $135 million to cover South Australia’s participation in the National Redress Scheme for Survivors of Institutional Child Sexual Abuse, and $129.1 million in 2024-25 to support the increasing number of children and young people in care.

Infrastructure projects will also see significant funding, with $30 million over two years allocated for a dual-lane roundabout at Curtis Road and Heaslip Road to improve safety and reduce congestion.

Additionally, $60 million will be invested in the Defence Technologies Academy at Lot Fourteen, aimed at delivering digital training and research capabilities critical to the defence industry, in partnership with the Commonwealth government.

The government asserts that investments in infrastructure, health, and housing will support South Australia’s growth, creating jobs and improving services.

Cost-of-Living and Energy Initiatives

The government continues to focus on alleviating the cost of living and energy pressures, with $27.2 million allocated over three years to build 16 community batteries in partnership with the Commonwealth government and AGL Australia.

These batteries are expected to deliver annual electricity bill savings for approximately 10,500 low-income households.

Further funding includes $36.4 million over four years (with an additional $21.6 million over 2028-29 and 2029-30) to extend the National Partnership Agreement on Family, Domestic and Sexual Violence Responses.

Electoral reforms will also receive $19.8 million over four years to prohibit donations and gifts to political parties, MPs, and candidates.

Opposition Slams Rising Debt and Health Overruns

The Liberal Opposition has strongly criticised the government’s Mid-Year Budget Review, calling it a sign of “fiscal mismanagement” and pointing to a $2 billion increase in net debt since the last State Budget.

Opposition Leader Vincent Tarzia demanded a comprehensive debt management plan, saying the government’s record $46 billion debt poses a risk to South Australia’s financial future.

“Today we saw more proof that the government is incapable of responsible fiscal management, which is why we are calling on the Treasurer to produce a debt management plan to address Labor’s record debt,” Tarzia said.

Shadow Treasurer Sam Telfer condemned the government’s handling of the health system, highlighting a $673 million operational blowout revealed in the Mid-Year Budget Review.

He blamed the government for worsening health outcomes, including record hospital ramping, long emergency department wait times, and a growing elective surgery backlog.

“Labor has had carriage of our health system for 18 of the last 22 years, yet still cannot anticipate demand. Outcomes have never been worse for South Australians,” Telfer said.

Shadow Minister for Cost-of-Living Heidi Girolamo criticised the government’s reliance on stamp duty revenue amid a housing crisis, stating that South Australia remains one of the few jurisdictions without stamp duty exemptions for first-home buyers purchasing existing homes.

“This government is hiding behind record stamp duty revenue in the middle of a housing crisis,” Girolamo said.

The Opposition has called for immediate stamp duty exemptions on existing homes for first-home buyers and pledged to raise the payroll tax threshold if elected in 2026.