Alvarez & Marsal Analyzes South Australian 2025/2026 Budget
Alvarez & Marsal has released an analysis of the South Australian 2025/2026 budget, which forecasts consecutive years of surplus and focuses on funding for law and order, housing, health, and education. No new taxes were announced in the budget.
Management consulting firm Alvarez & Marsal has released an analysis of the South Australian Budget 2025-26, delivered on June 5, 2025. The analysis highlights the budget's approach of balancing strategic investment with fiscal discipline. The 2024-25 budget is forecast to record an $18 million surplus, while the 2025-26 budget projects a surplus of $179 million.
The budget prioritizes significant funding for law and order, including police, courts, and corrections, along with investments in housing, health, and education. Notably, no new taxes or revenue measures were introduced. However, the analysis provides observations on payroll tax collection and related measures.
Payroll tax revenue is estimated to increase to $2.048 billion in 2025-26, a rise of approximately 5% attributed to employment growth. The tax-free threshold expense, a significant measure benefiting small to medium businesses, remains unchanged and accounts for $1.3 billion, representing 68.7% of net payroll tax revenue collections. No changes were announced regarding payroll tax rates or thresholds.
South Australian Treasury is implementing system enhancements and providing ongoing education to support eligible medical practices in complying with payroll tax obligations. Furthermore, revenue from compliance and debt collection activities is expected to rise substantially to $153.3 million in 2024-25, up from the previously budgeted $92.7 million, partly due to enhanced payroll tax debt recovery efforts.