Budget relief: record $500m cost of living spend

A little over two months after the government was returned to office with a historic majority, Premier Peter Malinauskas said the treasury department had been working around the clock on "the greatest balancing act of all time".

"The treasurer has been given a really difficult task," he said.

Expenditure had been restrained, there were no new taxes and the government would honour its modest election commitments, he said.

Net debt will rise to $40.26 billion, fuelled by two major infrastructure projects, but the debt to revenue ratio is predicted to fall, which the treasurer said was a sign of a strong economy and debt that is manageable.

The budget frames more than $500 million of spending as cost of living relief, including fulfilling a $174 million commitment to deliver free public schooling from 2027, which the government says will save families more than $8000 per child across their education.

Mr Koutsantonis claimed it was the largest cost of living package in the state's history.

"We want South Australian businesses to know that we're on their side, we want families to know that we're there to help," he said.

He rejected opposition claims that debt was unaffordable.

"We are living within our means, and this is a budget of no surprises, and we're doing all of this without increasing taxes," he said.

"It's a responsible budget … that prioritises costs for families while delivering business stability."

Much of the increased debt is attributable to the $15.4 billion Torrens to Darlington tunnel project, to complete the city's north-south corridor link, and the new Women's and Children's Hospital, which is costing an estimated $3.2 billion.

Housing was the budget's big ticket item, with a $2.5 billion package that aims to deliver 2000 rent to own homes, secure land to fast track development, facilitate new CBD apartment developments, and deliver 400 homes for first home buyers.

Budget documents reveal a $189 million surplus for 2025/26, which was up more than $100 million on the figure predicted in December.

A surplus of $223 million is predicted for next year, with surpluses across the four-year forward estimates totalling $1.4 billion.

A $50 million Research and Development Productivity Fund - which the premier said would attract "zero votes" - will support the growth of future industries.

The government would pass legislation to ensure the fund's long-term future because you don't invest in R&D today and get a return tomorrow, the treasurer said.

There is $45.5 million over four years to establish new out of school hours care services at 68 government primary schools, creating around 2300 new places.

The government had already announced a partial freeze on recruiting of non-frontline public sector for the next 12 months, which is forecast to cut 1000 positions and save $120 million.

Shadow treasurer Ben Hood said the state needed 'a targeted, attrition-based approach to curb that backroom growth in the public sector'.

''Labor simply has no plan for debt management,'' he said.

''The budget is cooked ... and it is time for the premier and the treasurer to step up to the plate."

The $11 billion health budget includes an extra $1.7 billion to cover rising demand and increased costs.

The Thriving Kids program will receive $230.3 million to implement foundational supports, with the treasurer noting that cuts to the NDIS were "one of the biggest threats" to state government budgets.

There is $100 million over three years for the delivery of a new state gymnastics centre, and $49.3 million by 2029/30 for an arts and media hub that will house the ABC, State Theatre Company and State Opera.

An extra $90 million over five years will fund safety upgrades on the South Eastern Freeway, in a joint state-federal project now costing $440 million.

The education budget provides $210 million over six years to upgrade government school facilities, and $150 million over four years to establish three technical colleges.