The State Budget will maintain an operating surplus across the forward estimates, the 2025-26 Mid-Year Budget Review confirms – a fantastic achievement for the state with the lowest taxation regime of all mainland states.

Budget papers confirm that in terms of tax revenue per capita, South Australia remains the third-lowest jurisdiction nationally based on state and territory budget reporting, and the lowest-taxing state on the mainland.

The Malinauskas Labor Government’s fiscal discipline across its four-year term ensures there is capacity to respond nimbly and assertively in the face of unforeseen public policy challenges, as we have seen in 2025 with Whyalla, the algal bloom, drought, Nyrstar and Bedford.

The MYBR responds to those challenges that have arisen since the 2025-26 Budget, with funding to underpin the state’s decisive response to the algal bloom event, support important sectors of the economy and provide additional investment in the key portfolios of health and child protection.

The MYBR also provides for South Australia’s whole-of-government response to the Royal Commission into Domestic, Family and Sexual Violence.

Despite the need to respond to these key issues, the State Budget will remain in surplus across the next four years, with minimal change to net debt forecasts and the net debt to revenue ratio at 30 June 2029 unchanged compared to budget estimates.

In total, the 2025-26 MYBR provides $964 million over four years for new initiatives.

Funding includes provision for:

• $162.5 million over five years to deliver a comprehensive package of measures in response to the algal bloom event, funded in partnership with the Commonwealth Government
• $674 million over ten years to respond to the recommendations of the Royal Commission into Domestic, Family and Sexual Violence
• $92.5 million in 2025-26 to support Nyrstar’s plans to put its smelter operations on a sustainable footing, funded in partnership with the Commonwealth Government
• $225 million over two years to support the delivery of health services
• $150 million over two years to support the cost of children and young people in out of home care
• $38.6 million in 2025-26 to support the transition of the Bedford group to new ownership, funded in partnership with the Commonwealth Government.

Conveyance duty revenue has been revised up by $63 million in 2025-26 and by a further $199 million over the three years to 2028-29 reflecting higher than expected growth in residential property prices.

A pleasing upward revision to South Australia’s population share in the Commonwealth’s 2024-25 Final Budget Outcome has seen GST grant revenue estimates revised up by $25 million in 2025-26 and by a further $300 million over the three years to 2028-29.

South Australia’s short-term economic forecasts have been revised upwards reflecting current strong economic conditions, particularly for employment and domestic spending.

Labour market conditions in South Australia continue to be strong, with a record number of people employed. Employment rose by 1.4 per cent in 2024-25 and is forecast to grow by 2½ per cent in 2025-26.

State Final Demand (SFD) rose by 3 per cent in 2024-25, above expectations in the Budget – this equalled Western Australia and outpaced national growth of 2.1 per cent.

Quotes

Attributable to Tom Koutsantonis

The Malinauskas Labor Government has been committed to maintaining fiscal discipline while retaining capacity to act decisively when policy needs arise.

This has been particularly evident in recent months, with responses to drought, the algal bloom, Nyrstar, Bedford and a holistic response to the Royal Commission into Domestic, Family and Sexual Violence balanced against a strong economic outlook, with budget surpluses forecast over the forward estimates.

This gives us capacity to manage debt while remaining nimble to make appropriate spending decisions.

As a Labor Treasurer, I’m particularly proud that we are now seeing a period of record employment in South Australia across successive ABS surveys. SA’s unemployment rate has only had a 3 in front of it 14 times since monthly records began 47 years ago, and each time has occurred under this Government. In the latest survey, our state had the second lowest unemployment rate in the nation.

This is reflected in the MYBR with full-year employment growth of 1.4 per cent in 2024-25 and a forecast 2½ per cent growth in 2025-26.

Our State Final Demand grew above Budget expectations, by 3 per cent – the equal of Western Australia and outpacing national growth.

Budget papers show South Australia is a relatively low-taxing jurisdiction – the lowest-taxing mainland state.

It’s little wonder that in recent weeks, BankSA’s State Monitor found consumer confidence in South Australia had reached its highest level in four years, while the Business Council of Australia has now ranked South Australia as the best place to do business in the nation for three years in a row.