Article:

2017 SA State Budget

23 June 2017

David Fechner , Partner, Corporate Finance, Tax & Advisory |

The 2017 South Australian State Budget builds economic embers but lacks a torch.

In BDO’s view, South Australia's State Budget hasn’t delivered enough to turbocharge an idling economy facing the imminent loss of a major employer.

Speaking after the release of the 2017-18 Budget, BDO Business Services Partner David Fechner gave the Budget a score of six out of ten, saying it lacked long-term structural reform for an economy in transition.

Mr Fechner said the Budget only provided tweaks to the business landscape with cuts to payroll tax and the addition of a new apprentice/trainee category to the Jobs Accelerator Grant which will inject approximately $53 million into the business sector over four years.

A $200 million Future Fund to attract investment into South Australia, while on the surface has merit, could be better directed at broad initiatives to fuel the growth of South Australia's existing 145,000 small businesses.
The State Budget also failed to address stability in power pricing to unlock cheaper power for business. While the State Energy Plan provides a significant step forward in energy reliability, the state needs to tackle the national power generation pricing model to deliver pricing reductions to business.

BDO believes this is a major issue hamstringing SMEs and the wider business community, and requires real strength to influence the national agenda.

Business owners also need certainty of incentives and a regulatory framework that enables them to confidently pursue growth plans. As an example, the Jobs Accelerator Grant will only run until 30 June 2018.

While these grants of between $5,000 and $10,000 for new hires, announced in last year’s Budget, had created more than 9,000 jobs through 3,800 businesses, the uncertainty around their future is testament to a lack of long term vision.

BDO called on the State Government to double the grants to provide greater incentive and support to businesses on the cusp of expansion and to also ensure much of the $2 billion infrastructure spend is directed to local businesses. This would ensure more of that spending stays within South Australia instead of flowing across our borders to entities interstate.

If you have any questions on how this year’s South Australian Budget will impact your business, please contact David Fechner.