SA budget plunges state into more debt

The South Australian budget has delivered on its promise of a surplus but plunged further into debt to fund hefty infrastructure spending.

Handing down the 2019/20 budget today, Treasurer Rob Lucas said the state was in a "challenging financial position" because of decreased GST and stamp duty revenues.

Despite the assessment, the budget forecasts a surplus of $94 million for 2019/20, steadily increasing until it hits $251 million in 2022/23.

But its debt will grow too - by more than $3 billion to $9.5 billion in 2019/20, and up to $13.2 billion by 2022/23 as it borrows heavily.

Mr Lucas said the debt blowout and extra lending was necessary to fund an $11.9 billion infrastructure pipeline over the next four years and beyond.

"A number of national economic commentators have indicated that now is not the time for governments, in particular state governments, to turn the tap off on major infrastructure programs," he said.

"They believe that it is important, in a softening national economy, for governments state and federal to maintain strong economic infrastructure programs."

After Mr Lucas said last year's budget was wearing "a business suit with sensible shoes", he likened this year's budget to wearing overalls and a high-vis vest.

Among the infrastructure spend was an $834 million, four-year road safety package, which includes level crossing removals and intersection upgrades.

A further $1.1 billion was designated for regional road projects and transport infrastructure improvements over the next eight years.

The state's economy will grow by just over two per cent each year between now and 2022/23, and employment growth will be flat at one per cent.

However, the government will swing the axe on more than 1500 public sector jobs - mostly back office staff - in the next year.

The budget includes a $104.5 million housing stimulus package, including a program offering low-interest first home buyers an interest-free deposit gap loan of up to $10,000.

It also allocates $550 million to start construction on the new Women's and Children's Hospital, and $150 million for a city Aboriginal art and cultures gallery.

Mr Lucas moved to close a tax loophole which means property investors could now be required to pay more land tax.

Under the current system, some owners are setting up complex ownership structures designed to minimise the tax they must pay.

"We don't think that's fair and we will be introducing a model that works well interstate," he said.