This article was originally posted by InDaily on 24 June 2021.
Treasurer Rob Lucas delivered his final State Budget Tuesday and it contained little surprises, with most of the noteworthy measures released prior. Happily for South Australian businesses, it also contained almost no bad news.
A relief for many, no doubt, particularly by comparison with the recent Victorian State Budget. The SA Government has instead continued to spend up big, with a focus on infrastructure, health and education.
Lucas also announced extended payroll tax support for apprentices and trainees and a couple of marquee projects the government hopes will cement South Australia on the tourism and architectural maps. Of particular note is the $662 million Riverbank Arena and extra funds allocated to the Aboriginal Art and Cultures Centre, due to open in 2025.
The State’s economic performance was surprisingly good, with our share of GST revenue holding up despite the reduction in re-distribution and a surplus forecasted for FY23 - sooner than expected.
There wasn’t a lot in terms of taxation measures, but those included were essentially good news for business including an extension of land tax relief for those negatively impacted by aggregation measures, land tax reductions of 50 per cent for build-to-rent projects and the aforementioned payroll tax relief extension for apprentices and trainees.
The re-branded Jobs and Economic Growth Fund (formerly Economic and Business Growth) will have a capacity of $200 million over four years. Allocations announced on Tuesday included projects in the space and defence industries, support for a wine industry suffering from China’s tariffs and the commercialisation of seaweed.
For hospitality businesses, among the hardest hit by COVID restrictions, there was also good news in the form of liquor licence fee relief - halving the 2021-22 fees for eligible businesses.
TAFE SA has again received a boost to funding, which will hopefully result in further improvements to the quality of education outcomes for graduates and the businesses that employ them. The 2020 State Business Survey results showed a marked increase in business satisfaction with graduate skills over previous years - it would be great to see these budget investments translate into further increases in 2021 and beyond.
Significant funds have been allocated to support the citrus industry in the form of $34.5 million for fruit fly response and eradication - showing that the government has been suitably alarmed by recent outbreaks in the State.
All in all, we expect that a State Budget with no new taxes and continued stimulus spending should support business confidence to invest and employ.
David Fechner is a Corporate Finance Partner at BDO in Adelaide. The BDO 2021 SA State Business Survey will launch in mid-September - read the 2020 report here.