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2021-22-Budget-Statement.Pdf STATE BUDGET BUDGET STATE 2021-22 STATE BUDGET 2021-22 BUDGET PAPER 3 BUDGET PAPER | Budget Statement Budget Statement BUDGET PAPER 3 STATE BUDGET 2021-22 BUDGET PAPER 1 : BUDGET OVERVIEW A summary publication capturing all highlights from the 2021-22 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 2021 STATEBUDGET.SA.GOV.AU Budget Paper 3 2021-22 Budget Statement Presented by the Honourable Rob Lucas MLC Treasurer of South Australia on the occasion of the Budget for 2021-22 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 Website: www.treasury.sa.gov.au www.statebudget.sa.gov.au Published 22 June 2021 ISSN 1440-8589 Contents Chapter 1: Budget context and overview Budget context 3 Budget overview 4 Attachment: Variations since the 2020-21 Budget 15 Chapter 2: Expenditure New initiatives 21 General government operating expenditure 25 General government investing expenditure 32 Chapter 3: Revenue Overview 35 General government sector revenue 36 Taxation 37 South Australia’s relative tax effort 44 Grant revenue 45 Sales of goods and services 51 Interest income 52 Dividend and income tax equivalent income 52 Other revenue 53 Annual fee and rate setting 54 Chapter 4: Managing the state’s assets and liabilities Overview 57 General government sector financial position 57 Non-financial public sector financial position 65 Debt management 66 Insurance arrangements 67 Chapter 5: Government businesses Overview 69 Financial arrangements and policy framework 70 Public non-financial corporations 71 Public financial corporations 79 Full-time equivalents 81 2021-22 Budget Statement 1 Chapter 6: Risk statement Overview 82 Revenue risks 82 Expenditure risks 88 Contingent liabilities 91 Chapter 7: South Australian economy Context 94 South Australia’s economic performance and outlook 94 Economic forecasts 98 Chapter 8: Regional South Australia Overview 99 Regional development programs 100 Regional economic conditions 102 South Australia’s regional economic drivers 105 2021-22 Budget — initiatives 113 Regional investing expenditure 115 Appendices Appendix A: Uniform presentation framework 120 Appendix B: General government and non-financial public sector financial statistics time series 139 Appendix C: Consolidated Account 158 Appendix D: South Australian state public sector organisations 166 Appendix E: Tax expenditure statement 168 Glossary of terms used in the budget statement 174 2 2021-22 Budget Statement Chapter 1: Budget context and overview Budget context The 2021-22 Budget continues the government’s commitment to supporting the state’s economic recovery from the COVID-19 pandemic and growing local jobs while investing in community infrastructure and core government services to ensure South Australia remains a great place to live and do business. The budget is now forecast to return to a modest surplus in 2022-23, one year earlier than estimated in last year’s budget. In the 2020-21 Budget, the government committed to a substantial stimulus package intended to support South Australian businesses, community organisations and households impacted by COVID-19 pandemic restrictions and to assist the state’s broader economic recovery. This timely and comprehensive package, together with the government’s proactive and careful management of the COVID-19 health response, has contributed to the South Australian economy performing more strongly than expected at the time of the 2020-21 Budget. The South Australian economy is now expected to grow by 2¼ per cent in 2020-21 compared to a contraction of ¾ per cent forecast in last year’s budget. While there are segments of the economy that will continue to face challenges during 2021-22 as a result of the current COVID-19 pandemic restrictions, overall the economy is expected to grow by a further 3½ per cent in 2021-22. The improved economic outlook has resulted in increases in Goods and Services Tax (GST) and state taxation revenues over the forward estimates. While the state’s GST revenue grants over the four years from 2020-21 to 2023-24 are expected to be $2.5 billion higher than estimated in the 2020-21 Budget, they are still lower than pre-COVID-19 expectations included in the 2019-20 Mid-Year Budget Review (MYBR) by $374 million in 2020-21, $364 million in 2021-22 and $198 million in 2022-23 reflecting South Australia’s revised share of the GST pool. The budget includes a range of measures that support local jobs and longer term economic growth. Additional funding is provided in this budget to continue to pursue targeted investments in projects that support the state’s economic growth. The Economic and Business Growth Fund has been renamed the Jobs and Economic Growth Fund and additional funding provided in recognition of the government’s commitment to, and focus on, supporting initiatives that create long-term sustainable jobs. There is now $200 million of available funding to continue to support jobs and economic development in the state. The government will also extend the payroll tax exemption for new apprentices and trainees for a further 12 months, provide further funding to support skills and training, as well as announcing a range of new transport, health, school and other community infrastructure projects. These measures build on the government’s $4 billion state stimulus package in the 2020-21 Budget and recognises that the stimulus package contained initiatives and infrastructure projects that are intended to be delivered over the next few years, supporting a broad range of industries and local jobs. The budget recognises the government’s commitment to the careful and comprehensive management of the COVID-19 pandemic providing additional resources to: • further support SA Health and SA Police to implement the state’s response measures to the COVID-19 pandemic • partner with the Commonwealth Government in the rollout of the COVID-19 vaccines across South Australia. The government will also continue to support South Australian businesses and community organisations impacted by COVID-19 restrictions. With the rollout of the vaccine, the Business and Jobs Support Fund and Community and Jobs Support Fund will be combined to form the COVID-19 Support Fund. This fund has a balance of $18.2 million available to respond to business and community needs as required. Significant additional funding has been provided for health and hospital services. A significant new investment is being made into mental health services to address pressures emerging in our system. Additional funding has also been provided to employ an additional 74 ambulance officers in recognition of the increase in demand for 2021-22 Budget Statement 3 Chapter 1: Budget context and overview ambulance services. Funding has also been provided to reduce elective surgery waiting lists post-COVID-19 and to continue the Meningococcal B immunisation program. The government is committed to improving early education outcomes for our children. To support this objective, the budget provides funding to design and commission trials of service models to increase the number of children from birth to age five accessing developmental health checks and at more regular intervals, in partnership with Children and Family Health Services (CaFHS) and non-government partners. This will increase identification of developmentally vulnerable children and enable early intervention and supports to reduce undiagnosed developmental delays in children entering the education system. Preparing children to be able to engage fully in their education is intended to provide both improved social and economic outcomes over the long-term. While the budget continues to invest in core government services and address the impact that the COVID-19 pandemic has had on the South Australian community, it does so responsibly. The budget is forecast to return to a modest surplus in 2022-23, one year earlier than forecast in the 2020-21 Budget, with debt maintained at sustainable levels. Budget estimates are framed on the basis of the current expected outlook for the economy as the vaccine roll-out continues. However, it is acknowledged that some greater than usual uncertainty remains to the global, national and state economic outlook. Non-financial public sector (NFPS) net debt levels are forecast to be $1.1 billion lower at 30 June 2021 than estimated in the 2020-21 Budget mainly reflecting the improved tax and GST grant forecasts. NFPS net debt is projected to increase over the forward estimates, rising to $33.6 billion in 2024-25. While net debt increases, South Australia’s NFPS net debt to revenue ratio is broadly in line with other similar or higher rated jurisdictions over the forward estimates. The 2021-22 Budget continues to support the government’s substantial infrastructure program. The four year NFPS investing program totals $17.9 billion over the period 2021-22 to 2024-25, compared to the 2020-21 Budget, which had a four year program totalling $16.7 billion over the period 2020-21 to 2023-24. Budget overview Since the 2020-21 Budget, GST grant revenue has been revised up by $926 million in 2020-21 and by $1.5 billion over the period 2021-22 to 2023-24. State taxation revenues have also been revised up by $257 million in 2020-21 and by $121 million over the period 2021-22 to 2023-24.
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