The 2019-20 State Budget was tabled in Parliament in June 2019. This Report provides our observations on the State’s public finances based on our review of the Budget, in particular:
- an overview of key matters, trends and risks currently relevant to the State’s public finances
- an analysis of the State’s financial performance, including the estimated results for 2018-19 and the Budget and forward estimates
- a review of the State’s financial position, including analysis of major assets and liabilities.
Key overall observations are:
- Significant increases in the State’s net debt to fund the general government sector’s investing program increase the risk the SA Government will have less capacity and flexibility for expenditure on services
- The 2019-20 Budget expands the State’s capital program to $9.7 billion and effective planning and management of major capital projects will be needed to mitigate risks to the Budget from increased capital outlays
- The SA Government has implemented savings initiatives and targeted revenue increases to meet the challenge of significant write-downs in GST revenue and conveyance duties
- The SA Government has taken steps to address budget overruns in Health but faces ongoing challenges in meeting its cumulative Health and Wellbeing savings task of $1.173 billion over the four years of the Budget
- The operating surplus projected in the 2018-19 estimated result is mainly due to the carry forward of Commonwealth capital grants offset by a once-off $602 million grant payment to the South Australian Housing Trust
- Robust budget management is required to achieve the fiscal target of consistent operating surpluses
- South Australian Water Corporation is projected to provide 76% of total budgeted dividend and income tax equivalent income by 2022-23.