National

SA budget to be ‘tough but fair’: premier

By AAP Newswire

The South Australian budget will be "tough but fair" as the state government grapples with a GST shortfall but strives to main key infrastructure projects.

Tuesday's financial blueprint, the second for the Liberal administration after last year's election win, will feature big spending for key road upgrades as the government looks to maintain jobs and economic growth.

"It is going to be a tough budget, but it's going to be a fair budget," Premier Steven Marshall told reporters on Monday.

"It's going to be focused on keeping our economy going, keeping our jobs growth going and making our state a more productive place."

The budget will include more than $200 million to remove two railway crossings in Adelaide as part of a "congestion busting" strategy, the allocation equal to money already promised by the federal government.

Treasurer Rob Lucas will also allocate $252 million over the forwards to cover planning and early works for the final part of the state's north-south road corridor.

The 10.5 kilometre section will cost more than $5 billion, with the bill also to be shared by state and the Commonwealth.

For the SA regions, the budget offers $440 million over the next four years for a number of projects designed to make roads safer and cut the state's rising road toll.

The government wants to spend $1.1 billion on country roads but will allocate the rest of the cash in future years.

The infrastructure spend comes despite mounting pressure on SA's books including a $500 million shortfall in the GST returns in the coming year.

Some forecast savings are also unlikely to be delivered, particularly in health.

In response, the government has looked to borrow to fund key initiatives with Mr Marshall saying the strategy was prudent at a time of record low interest rates.

"We are in an environment where the cost of money is the lowest its been for an extended period of time, certainly in my lifetime," he said.

"Most recently we've been out to the market and we've borrowed around $500 million at 1.66 per cent.

"So it makes perfect sense for us to be building productive infrastructure at the moment when the cost of that capital is just so low."

But the need for cash hasn't prompted the government to look to further privatisations, with the premier ruling out anything new on that front.

At December's mid-year budget review, Mr Lucas said the government was on track to deliver a $95 million surplus in 2019/20, after last year's September budget put that figure at $105 million.

The budget review also forecast a $40.1 million surplus in 2018/19, down from the $48 million.