The state government has handed down its budget and while for business, there is some relief, for others, the government has delivered increases in state charges and cuts to services. Whilst the political game now begins on who’s to blame, below are some of the key items announced:
Key Economic Points
- Budget deficit of $911 million for 2013-14 financial year
- Planned budget surplus by 2015-16
- State debt to rise to $9.8 billion by 2015-16
- Health budget to be cut by $322 million
- Certain Infrastructure projects to be deferred
- Funding for hospital upgrades to be redirected
- Effective Privatisation of Third Party Compulsory Insurance scheme, allowing private operators to offer these products from 2016
Temporary Payroll Tax Concessions to Remain
The state government has committed to retaining its temporary payroll tax cuts for small business. Under the proposal, a concessional rate of 2.5% applies for taxable payroll between $600,000 and $1,000,000, saving up to $9,800 per annum. This measure will apply to approximately 2,200 business in SA.
Stamp Duty Concession on Eligible Corporate Restructures and Seniors who Downsize
Although there has been an ex-gratia scheme in place to provide stamp duty relief for eligible corporate restructures, the government will now amend the legislation to include the relief.
Furthermore, those over 60 who downsize their home will be eligible for an $8,500 stamp duty concession on property purchased with a value less than $400,000.
Emergency Services Levy Set To Rise
The rebate currently applying to Emergency Services Levy, (ESL) on residential property is to be removed from 1 July, resulting in an average increase of $150 per annum. The rebate will also be removed on the ESL charged on motor vehicles and motor bikes, resulting in a increase on average of $8 per annum. Pensioner and concession card holders will be exempt from the increases.
However, for those pensioners and self funded retirees, the government will remove the concessions on council rates.
Rural Spending
The government, keen to keep its promise to independent members who helped them retain government have announced funding for several regional projects including:
- Loxton Research Centre Redevelopment
- River Murray ferries replacement
- Mt Gambier prison extension
- Pt Lincoln Heath Service Redevelopment
- Pt Augusta sterile fruit fly facility
- Innamincka Airstrip upgrade
They will put forward $70 million over four years to establish a Jobs Accelerator Fund to support job creation in regional areas and will increase the funding available to the Regional Development Fund and Regional Development Australia to $15 million per annum and $3 million per annum respectively.
Royalties to Rise
The government has committed to providing a five year deferral on royalties for those who undertake unconventional gas and oil exploration.
However, those who have sand or gravel quarries will have their royalties increased from 35% to 55%
WorkCover
The government is currently working on draft legislation for a new scheme to replace the current WorkCover scheme. They aim to reduce the average premium rate to 1.5 per cent from 2 per cent. They anticipate that the new scheme will be operational by 1 July 2015.