South Australian state government debt per person revealed

South Australians will shoulder one of the nation’s highest state debts per person, new figures reveal, with only one state coming in higher on the list.

South Australians will shoulder the nation’s second-highest state debt level of more than $19,000 per person – narrowly behind Victoria – as borrowings soar to fund the North-South road corridor tunnels and new Women’s and Children’s Hospital.

Exclusive analysis prepared by EY economists shows SA’s total net debt per capita of$19,014.43 in 2026/27 is the second-highest of all states – debt-laden Victoria’s is $19,978.20.

The per capita measure shows the equivalent amount of government debt owed by every person in the state.

SA’s net debt is at high levels by another key measure, as a percentage of gross state product, and at 16.59 per cent in 2026/27 also is the second-highest state behind Victoria, at 24.59 per cent.

EY, a professional services firm, says this measure is “an indicator of a government’s ability to service its debt and the higher the indicators, the higher the burden from servicing the debt”.

SA’s net debt per capita in the past financial year, 2022/23, was the highest of all states at $14,019.52 – even greater than Victoria’s $12,885.94 – but Victoria’s levels surge beyond SA’s from the current financial year.

Treasurer Stephen Mullighan said SA was mid-ranking among states on the two key debt measures used by ratings agencies but Opposition treasury spokesman Matt Cowdrey warned state debt was exploding under Labor, even before the new road and hospital were on the books.

In the June state budget, debt was forecast to balloon by more than $11bn to $37.56bn by the end of 2026-27, on the back of the $15.4bn Torrens to Darlington motorway and $3.2bn new Women’s and Children’s Hospital.

Premier Peter Malinauskas and Treasurer Stephen Mullighan on June 15 with the state budget papers, on North Tce, Adelaide. Picture: NCA NewsWire / Emma Brasier.

But Mr Mullighan said a “step change” in payroll and land tax revenues because of rising employment and property values had increased the state budget’s strength to take on extra debt.

He said the new WCH, to be finished by 2030-31, and the motorway, to be completed by 2031, were once-in-a-generation projects, which required extraordinary investment that would limit future spending.

“The reason why we felt comfortable signing ourselves up to these projects, and taking on additional debt, is because the state’s economy, but also in particular the state’s budget, has grown strongly enough, particularly in the last two years, to give us the confidence we’re going to have the capacity to service that high level of debt,” he said.

“ … The other thing that we are acutely aware of within government is that the higher cost of servicing this debt constrains the government’s operating position going forward and also the higher level of capital spending constrains our options in terms of new capital projects.”

Mr Mullighan argued debt-per-capita rankings were “not directly relevant” when assessing governments’ capacity to take on and service borrowings, saying ratings agencies considered revenue and net debt comparisons.

High borrowings can cause a “vicious circle of growing debt”, an EY report into Australian governments’ finances warns, pointing out their debt is low compared to other advanced countries but growing rapidly.

“Governments will either need to divert spending away from other public services, increase taxes, sell assets or further increase debt as a result of higher borrowing today,” the report says.

The EY report urges crimping spending, policies to drive private sector productivity and tax reform, including potentially raising the GST and reshaping the personal and company tax system.

Opposition treasury spokesman Matt Cowdrey at a press conference at Fulham Gardens Shopping Centre. Picture: Morgan Sette

Mr Cowdrey accused Mr Mullighan of an inability to manage taxpayer money, arguing this had resulted in a $1bn blowout in June’s state budget.

“With economic headwinds ahead, South Australians should be very worried about Labor’s buy-now-and-pay-later approach,” he said.