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2018-19 Budget Paper 3: Budget Statement

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2018-19 Budget Paper 3: Budget Statement BUDGET PAPER 3 BUDGET PAPER Budget Statement BUDGET PAPER 3 | Budget Statement BUDGET PAPER 1: BUDGET OVERVIEW A summary publication capturing all highlights from the 2018–19 Budget. BUDGET PAPER 2: BUDGET SPEECH A copy of the Treasurer’s speech, delivered to Parliament. BUDGET PAPER 3: BUDGET STATEMENT A financial report presenting the state government’s current and estimated future economic performance, fiscal strategy, budget priorities, expenditure, revenue, assets, liabilities, risks and government business. BUDGET PAPER 4: AGENCY STATEMENTS | VOLUMES 1, 2, 3, 4 Various financial reports presenting the state government’s current and estimated revenue, expenses and performance by agency. BUDGET PAPER 5: BUDGET MEASURES STATEMENT A financial report detailing the state government’s expenditure, savings and revenue initiatives. ACKNOWLEDGEMENTS Content from this publication may be reproduced with appropriate acknowledgement, as permitted under the Copyright Act 1968. ©Government of South Australia 2018 Budget Paper 3 2018–19 Budget Statement Presented by The Honourable Rob Lucas MLC Treasurer of South Australia on the Occasion of the Budget for 2018–19 General enquiries regarding budget papers should be directed to: The Chief Executive Department of Treasury and Finance State Administration Centre 200 Victoria Square Adelaide SA 5000 Copies may be obtained from: SERVICE SA Government Legislation Outlet Ground Floor EDS Centre 108 North Terrace Adelaide SA 5000 Website: www.treasury.sa.gov.au www.statebudget.sa.gov.au Published 4 September 2018 ISSN 1440-8589 Contents Chapter 1: Budget context and overview Budget context ...................................................................................................................................3 Budget overview ................................................................................................................................5 Attachment: Variations since the 2017–18 Budget and the 2017–18 MYBR ............................... 16 Chapter 2: Expenditure New initiatives ..................................................................................................................................24 General government operating expenditure ................................................................................... 30 General government investing expenditure .................................................................................... 37 Chapter 3: Revenue Overview ..........................................................................................................................................41 General government sector revenue...............................................................................................42 Taxation ...........................................................................................................................................43 South Australia’s relative tax effort ..................................................................................................50 Grant revenue ..................................................................................................................................51 Sales of goods and services ...........................................................................................................56 Interest income ................................................................................................................................57 Dividend and income tax equivalent income ................................................................................... 58 Other revenue ..................................................................................................................................59 Annual fee and rate setting .............................................................................................................60 Developments in Commonwealth–state relations ........................................................................... 61 Chapter 4: Managing the state’s assets and liabilities Overview ..........................................................................................................................................65 General government sector financial position ................................................................................. 65 Non-financial public sector financial position .................................................................................. 74 Debt management ...........................................................................................................................76 Chapter 5: Government businesses Overview ..........................................................................................................................................79 Financial arrangements and policy framework ............................................................................... 80 Public non-financial corporations — operating performance .......................................................... 82 Net debt ...........................................................................................................................................87 Public financial corporations............................................................................................................90 Full-time equivalents .......................................................................................................................92 2018–19 Budget Statement 1 Chapter 6: Risk statement Overview ..........................................................................................................................................93 Revenue risks ..................................................................................................................................93 Expenditure risks .............................................................................................................................99 Contingent liabilities ......................................................................................................................102 Chapter 7: South Australian economy Overview ........................................................................................................................................105 South Australia’s recent economic performance ..........................................................................105 Economic outlook ..........................................................................................................................110 Chapter 8: Regional South Australia Overview ........................................................................................................................................11 1 Regional economic conditions ......................................................................................................114 South Australia’s regional economic drivers .................................................................................117 2018–19 Budget — Initiatives .......................................................................................................121 Regional investing expenditure .....................................................................................................123 Appendices Appendix A: Uniform presentation framework .............................................................................127 Appendix B: General government and non-financial public sector financial statistics time series ................................................................................................147 Appendix C: Consolidated Account .............................................................................................159 Appendix D: South Australian state public sector organisations .................................................167 Appendix E: Tax expenditure statement ......................................................................................171 Glossary of terms used in the budget statement ..........................................................................179 2 2018–19 Budget Statement Chapter 1: Budget context and overview Budget context The 2018–19 Budget is based on three clear principles — cleaning up the financial mess left by the former government, keeping all the government’s election promises and building a foundation for the future. The 2018–19 Budget delivers on the government’s election commitments, including creating more jobs in the state, lowering costs for households and businesses and delivering better services for South Australians. Funding has been provided, where required, to implement all of the government’s election commitments. The government has also funded a number of election commitments by reprioritising existing agency resources to deliver on government priorities. This has meant that some of the former government’s priorities, programs or projects have had to be cut. The 2018–19 Budget delivers operating surpluses in all years from 2018–19, ensuring election commitments have been funded in a sustainable manner. Upward revisions to taxation and GST revenues since the Mid-Year Budget Review (MYBR) of $1.1 billion over the period 2018–19 to 2020–21 have largely offset the cost of the government’s election commitments. However, significant savings targets over the forward estimates left by the former government’s MYBR still have to be delivered. An operating deficit is expected for 2017–18 reflecting the unsustainable budget position left by the former government.
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