Budget surplus a year earlier but debt soars beyond $33.6 billion

South Australia will be back in the black sooner than forecast but not before debt soars to fund major works in the state budget.

South Australia will be back in the black a year earlier than expected but debt will soar beyond $33.6bn, fuelled by construction of a new Women’s and Children’s Hospital, the state budget will reveal.

Delivering an election budget surprise, Treasurer Rob Lucas will forecast a slim surplus of $48m in 2022-23, followed by two more of $498m and $379m, respectively, in the next two financial years.

Mr Lucas ruled out tax increases or new imposts, beyond an already announced 1.9 per cent rise in fees and charges.

It comes in the face of Labor demands for a significant investment in fixing the health system.

But debt will jump to $33.623bn in 2024-25, more than the figure Mr Lucas last November branded “eye-watering” – of $33.171bn forecast then for the end of that budget’s four-year forward estimates.

Multibillion-dollar construction of South Rd tunnels and the new WCH – a hospital construction cost and timeline will be unveiled Tuesday – are behind the 2024-25 debt.

State Treasurer Rob Lucas outside his office preparing for the State Budget. Picture: Tom Huntley

“The reality is that we have to get back to a situation where we’re not spending more than we earn on an annual basis, even if we have a significantly increased debt, so that’s the significant change in terms of where we are,” said Mr Lucas, who will deliver his final budget today.

A $1.397bn deficit is forecast for 2021-22, which Mr Lucas declared showed “Covid had smashed three budgets” for a total $4.7bn shortfall in the three years since 2019-20.

Mr Lucas, whose coffers have been bolstered by a $1.14bn GST and stamp duty windfall, argued the early surplus forecast had been achieved by responsibly reining in public sector wage rises to affordable levels.

Seeking to shackle the opposition to land-tax hikes and other imposts in May’s Victorian budget, Mr Lucas argued that was “very much the Labor way in SA”.

“We’ve rejected that, so we’re saying clearly tomorrow that we’re not going to go down that Labor alternative – there’ll be no increases in stamp duty or land tax or payroll tax,” he said.

“We’re going to continue to try and retain SA as a competitive place to do business.”

A record $17.9bn will be pumped into infrastructure, including billions into the North-South Corridor project’s final 10.5km stage between the River Torrens and Darlington.

As revealed by the Sunday Mail, the $700m Riverbank arena announced by Premier Steven Marshall in March will be kickstarted by funds for planning and site works.

Opposition Labor Leader Peter Malinauskas is urging health investment Pic Roy VanDerVegt

Asked whether voters at next March’s state election would be concerned by a $33.623bn debt, Mr Lucas said this was sustainable if governments produced modest surpluses.

“The reason for the massive increase, the record $17.9bn public sector investment that we’ve got, is to save jobs and businesses,” he said.

“There are very few households and businesses with no mortgage or debt – you’ve got to have it at a level which is manageable.”

Opposition Leader Peter Malinauskas again targeted Mr Marshall, rather than Mr Lucas, declaring Tuesday’s budget was his “last significant chance to reverse his cuts within our health system” and fund measures to address ramping.

Labor has proposed more than 30 measures, including an immediate and ongoing boost to paramedic numbers.