Today the South Australian Government delivered its fourth State Budget. With an election just over nine months away, the Government has resisted the urge to significantly increase spending, instead announcing a range of modest new initiatives to complement the substantial infrastructure spend outlined in previous years, which includes the $15.4 billion Torrens to Darlington (T2D) motorway and the $3.2 billion relocation of the Women’s and Children’s Hospital – set to become Australia’s most expensive building.
2025 has already proven to be a challenging year for the Malinauskas Government, with high-profile projects such as the $593 million hydrogen production facility and jobs plan being sacrificed to fund the ongoing administration of the Whyalla Steelworks; at a cost of $650 million over the next six years. Although the Government’s audacious move to place the steelworks into administration was generally welcomed by industry and the public, it must now confront the tricky task of securing a buyer in a difficult geopolitical trade environment, particularly with US tariffs on steel.
Having seen key elements of its State Prosperity Project grind to a halt, partly due to factors abroad, the Government reframed its focus and narrative towards matters closer to home; housing affordability and skills development. South Australia’s population is expected to grow by more than 670,000 by 2050 – growth that will be critical to supplying the skilled workers needed to deliver Australia’s AUKUS nuclear powered submarines, Hunter Class frigates and to take advantage of the State’s mineral resources. This surge in population can only be accommodated with an equivalent surge in housing and in March the Government overturned decades of Labor planning policy aimed at containing urban sprawl to pursue uninhibited residential development. The Government’s Greater Adelaide Regional Plan (GARP) promises to unlock land for 315,000 new homes across Greater Adelaide. The Premier has unapologetically noted (amidst a cost-of-living crisis) that this will mean increased water bills as $27 billion is spent on new infrastructure over the next four years to service Adelaide’s sprawling city, along with schools, parklands, and rail and public transport networks.
The modest new expenditure in this year’s budget demonstrates the Malinauskas Government’s quiet confidence as it heads towards the 2026 Election. The Government’s political momentum has only increased since 2022, securing two additional seats through by-election wins at the Liberal Opposition’s expense. Adding to their troubles, over the same period the Opposition lost a further two members (one in each House) to the crossbench, reducing their House of Assembly representation to historic lows. In the absence of a compelling alternative vision for the State or meaningful political threat from the Opposition, the Government knows it will be held accountable for the expenditure outlined in the forward estimates and is setting itself up for the longer-term, with surpluses forecast in every year ahead.
Commitments over the forward estimates include:
Housing
- Home sweet home: An additional $552 million across the Playford Alive East ($270.1 million), Southwark ($104.7 million) and Onkaparinga Heights ($30.5 million) residential sites will support the construction of at least 2,935 homes.
- A hand up for renters: The Rent-To-Buy Affordable Housing Initiative will create a pathway for eligible long-term renters to buy one of 100 homes currently under construction by the South Australian Housing Trust. The program is due to be launched in the 2025-2026 financial year.
Education and Training
- Hands-on experience for primary school students: Nearly 50 South Australian primary schools will deliver vocational education programs in partnership with industry to expose students to trade careers and real-world problem solving, as part of the $19 million Career Education and Pathways Strategy.
- A new school campus for Adelaide’s northern suburbs: A $70 million investment will deliver a new school and preschool in Adelaide’s north, alongside $40 million in upgrades to school infrastructure across South Australia.
- Expansion of preschool loans to non-government providers: The State Government is expanding its $171 million universal three-year-old preschool loans scheme to include non-profit early childhood education providers and private schools. Low-interest loans between $500,000 and $10 million will be made available by the Government.
Infrastructure, Roads and Transport
- A major diversion: $125 million in State funding will complement $525 million from the Commonwealth Government to deliver the High Productivity Vehicle Network, reducing trucks on the South Eastern Freeway and diverting them from suburban arterial roads.
- Reducing traffic congestion: A $250 million project (jointly funded by the Commonwealth) will remove the Curtis Road level crossing in Munno Para to ease congestion and support growth in Adelaide’s northern suburbs.
- Improving safety: An $80 million investment will deliver overtaking lanes and safety improvements on Main South Road between Myponga and Yankalilla to reduce crashes and improve traffic flow.
- Discounted public transport for students: $10 public transport tickets will be introduced for school students, covering 28 days of travel.
- Modest increases in rego: Car registration fees in South Australia will rise by only 1.7% in 2025–26, which the Government claims will keep increases well below inflation to ease cost-of-living pressures.
- Tackling crime on public transport and at stations: A $9.6 million investment will enhance transport safety with new compliance teams, AI surveillance, and protective measures across the Adelaide Metro network.
Health and Wellbeing
- Mental health support: $117 million of new investment will be made in mental health services, bringing at least 130 new mental health beds into the system.
- Improving body image: The State Budget allocates $1.5 million over four years to expand Taryn Brumfitt’s Embrace Collective’s body image programs in schools and communities to combat body image distress and promote mental wellbeing.
- Reducing the burden on emergency departments: A $13.9 million investment will expand the Mental Health Co-Responder Program, which pairs clinicians with police, to improve crisis response and reduce emergency department presentations.
- Expansion of pharmacist services: South Australia’s fourth 24-hour pharmacy will open in Hallett Cove, alongside a $2.2 million initiative to expand pharmacists’ scope of practice for treating common conditions.
The expenditure in health services follows almost 2,800 additional health workers being recruited since 2022 to support hospital capacity and improve emergency response times. The Opposition has been eager to remind South Australians that despite this recruitment, the Government is still struggling to meet its 2022 commitment to reduce ambulance ramping times.
Tourism and Events
- Strengthening SA’s COP31 bid: The State Government is investing $8.3 million to prepare Adelaide to host the COP31 climate conference in 2026 if its bid is successful, potentially generating over $500 million in economic benefit.
- Hosting world-class business events: The State Budget provides over $10.9 million to Business Events Adelaide, which is forecast to generate $117 million in economic benefit this winter through 39 business events.
Emergency Services, Police and Corrections
- Improving emergency resilience: The 2025–26 State Budget allocates an additional $21 million to emergency services, including $5.9 million for firefighter training, drone upgrades, bushfire risk mapping, and new rescue equipment. The funding will be generated through a 4.2% increase in the Emergency Services Levy.
- Improving technology and security at SA’s prisons: The State Budget includes $6.8 million to install high-tech scanners, AI-enabled cameras, and perimeter barriers at prisons to reduce contraband and improve safety. $72.4 million will be spent over the next five years to increase prison capacity.
- More officers on patrol: A $17.8 million investment will double SA Police’s motorcycle unit by adding 33 officers to improve emergency response and road safety across metro and regional areas.
- Red light, green light: $46.8 million will be spent on new mobile phone detection, red light and point-to-point cameras at high-risk locations.
- A force to be reckoned with: $170 million over six years will fund an increase of 243 FTE sworn officers by 2028-29, with a further 83 being recruited by 2030-31 and an additional $29.6 million to fund 98 police security officers by 2028-29. $9.7 million will be allocated to recruit civilian staff to assist with administrative duties.
- Rule of law: Additional funding for courts ($20 million), court security ($4.8 million) and the Office of the Director of Public Prosecutions will speed up the administration of justice and help to address court backlogs.
Business and the Economy
- SA, the venture capital: A $50 million Venture Capital Fund will be established to help entrepreneurs scale up and reach global markets.
- Enabling SA exporters: The State Budget provides $5 million to help South Australian exporters diversify into new markets through business missions, importer visits, and market intelligence support.
- Tougher enforcement and stronger protection for consumers: Nearly $10 million in additional funding will be provided to strengthen South Australia’s consumer watchdog, enabling more enforcement officers to crack down on illicit tobacco and vapes, expand compliance operations, and better protect consumers from threats like rogue tradies.
- Powering small business: A $20 million ‘Powering Business Grant’ will offer small- and medium-sized businesses and non-profits the opportunity to invest in energy efficient equipment.
Environment and Conservation
- Let it flow: $71.1 million for River Murray conservation measures, including the removal of barriers to the delivery of water to floodplains and wetlands.
- Increased conservation funding: The 2025–26 Budget includes $7.6 million to support wildlife rescue groups and conservation efforts, including $1.4 million in funding to save the Adelaide Koala & Wildlife Centre from closure.
- Surfs up: $14 million has been allocated to sand replenishment across South Australian beaches.
- Deep investigations: $44.4 million will fund the replacement of a coastal research vessel.
- Pest control: $45 million of new funding will bolster the fight against fruit flies.
- World Heritage bid: $4 million has been allocated to expand Nilpena Ediacara National Park by 26,000 hectares.
Primary Industries
- Supporting farmers: The budget allocates $55.4 million in additional drought assistance for farmers and regional communities, on top of the $18 million already committed to in late 2024.
- Industry resilience: A $3 million assistance fund has been established to support dairy farmers affected by the collapse of Beston Global Food Group.
Defence and Space
- Increasing participation and access for SA defence businesses: A $3.3 million Defence Supplier Uplift Program will help South Australian businesses enter global supply chains for nuclear-powered submarines and defence programs under the AUKUS agreement, in addition to another $13.5 million being invested in the Defence Innovation Partnership.
Sports, Recreation and the Arts
- Supporting SA athletes: South Australia will contribute $1 million over four years to support local athletes preparing for the 2028 Los Angeles Olympic and Paralympic Games.
- Enhanced support for arts: An additional $13 million will be allocated over four years to the Government’s 10-year $80 million cultural policy, which will deliver programs through the Art Gallery of South Australia ($15 million), profile building for South Australian artists ($3 million), support for programs at the Adelaide Youth Orchestras, Carclew and State Library ($2.5 million), philanthropic donation matching for cultural organisations ($1 million), grant programs ($1 million), support for First Nations arts and culture in SA ($2.3 million) and regional arts programs ($500,000).
Contact us
Reach out to our South Australian team if you would like to discuss the new South Australian Budget and what it means for you.
Sandy Biar, Associate Partner, SEC Newgate Communications – [email protected]
