South Australian Treasurer Rob Lucas has declared his first budget in 17 years will deliver on the Liberal government's election promises — but has flagged new cuts to public agencies and threatened potential privatisations to help pay for it.

New savings measures in the budget include: Increased rents for Housing Trust tenants in bedsit and one bedroom cottage flats

Increased rents for Housing Trust tenants in bedsit and one bedroom cottage flats Saving up to $15 million a year by rationalising public transport services — low patronage bus services discontinued

Saving up to $15 million a year by rationalising public transport services — low patronage bus services discontinued Closure of seven TAFE campuses — Tea Tree Gully, Parafield, Port Adelaide, Urrbrae, Wudinna, Roxby Downs and Coober Pedy

Closure of seven TAFE campuses — Tea Tree Gully, Parafield, Port Adelaide, Urrbrae, Wudinna, Roxby Downs and Coober Pedy Closing Mitcham, Modbury and Prospect Service SA Centres

Closing Mitcham, Modbury and Prospect Service SA Centres Saving $70 million by abandoning Labor's plan to provide laptops to every Year 10 student

Saving $70 million by abandoning Labor's plan to provide laptops to every Year 10 student Cutting 200 FTE non-teaching employees from the Education Department

Cutting 200 FTE non-teaching employees from the Education Department Cutting 115 FTE employees from Department of Environment and Water

Cutting 115 FTE employees from Department of Environment and Water Cuts to mining sector grants and removal of a planned royalty reduction

Cuts to mining sector grants and removal of a planned royalty reduction Cuts to crime prevention grants including those to pay for new CCTV

Cuts to crime prevention grants including those to pay for new CCTV Raise $8.6 million by selling surplus crown land

Raise $8.6 million by selling surplus crown land Scrapping plans to build new residential care facilities — seeking to increase foster carers instead

Scrapping plans to build new residential care facilities — seeking to increase foster carers instead Save $11.9 million a year through cuts to neighbourhood road safety programs, Aboriginal road safety programs, grants for councils to spend on cycle paths and the Tall Ships program

Single Housing Trust tenants will face rent increases, suburban TAFE campuses and Service SA centres will close, while the environment and education departments will face significant back office cuts.

Mr Lucas blamed the previous Labor government for the budget's $397 million deficit for the 2017-18 financial year, pointing to blowouts in expenditure in health, child protection and TAFE.

The deficit includes spending decisions made by the incoming Marshall Government, including $146 million to be put towards South Australia's participation in the National Redress Scheme for victims of abuse.

A significant uplift in GST revenues from the Commonwealth will help the Government deliver on key election promises, with more than $600 million in tax cuts including the Emergency Services Levy (ESL), payroll and land taxes.

"We've inherited a financial mess, but we're not going to use that as an excuse to break our promises," Mr Lucas said.

Mr Lucas is forecasting surpluses across the next four years, with overall state debt set to increase beyond Labor's forecasts to almost $17 billion in 2021-22.

The Government has also foreshadowed potential privatisations as it seeks to deliver on its election promises, including placing the Adelaide Remand Centre in the hands of a private operator.

Mr Lucas also warned he would seek to outsource the work of SA Pathology and state-funded medical imaging services if the Government was not able to rein in costs.

A host of the former Labor government's programs will be abolished including the Economic Development Board, Independent Gambling Authority and Commissioner for Kangaroo Island.

The Government is promising $613 million worth of tax cuts including reductions to payroll and land tax, in line with election promises.

"This budget will reduce the cost of living … by cutting waste and taxes and charges rather than relying on trying to introduce a new tax every budget such as a bank tax," Mr Lucas said.

But Opposition Leader Peter Malinauskas said the Liberals' first budget has "no vision".

"There is no central uplifting theme," he said.

"Only cruel cuts, closures and privatisations that were not contemplated before the election."

Financial position like 'an episode of Breaking Bad'

Treasurer Rob Lucas likens the budget to someone in a "business suit and sensible shoes". ( ABC Radio Adelaide: Malcolm Sutton )

Mr Lucas said the incoming government brief provided to him by Treasury after taking office in March made it clear there were significant problems with the budget.

"Reading this briefing folder was like the financial equivalent of reading a script for an episode of Breaking Bad — mayhem, deception and one atrocity after another," he said.

The Government will back away from some of the former Labor government's pre-planned savings measures in health, arguing they are not realistic.

Extra money will also be provided for TAFE and the child protection system.

SA Treasurer Rob Lucas talks through the state budget with the ABC's Leah MacLennan. ( ABC Radio Adelaide: Malcolm Sutton )

"Whilst we're bailing out TAFE to the tune of $109 million over five years, there still is a savings task that TAFE has to achieve in terms of meeting budget," Mr Lucas said.

"One of the mechanisms for the minister to meet that is to actually [close] sites that are low utilisation sites."

The Treasurer said those sites might eventually be leased out or sold.

Last year, Mr Lucas's predecessor Tom Koutsantonis described his final budget as "very sexy … it's got a red dress on and walking down the street".

Mr Lucas today likened his latest budget to someone in a "business suit and sensible shoes".

The Government will set aside $170 million this financial year for targeted redundancies as part of a plan to reduce the number of full-time equivalent public service positions by 2,286 over the next four years.

"Some of those people will retire," Mr Lucas said.

"The taxpayers of South Australia can only pay so much … difficult decisions sometimes have to be taken."

Average ESL bill to drop by $145

The budget pours $800 million into health and hospitals, as well as $169 million for 270 new high-security prison beds at Yatala and 40 new beds at the Adelaide Women's Prison.

While the cost of public transport fares will be reduced, so will the number of services, with the Government targeting underutilised public bus routes.

It has also committed $11.9 million over four years on measures designed to combat domestic violence.

ABC journalists study the first State Liberal Government budget in 17 years. ( ABC Radio Adelaide: Malcolm Sutton )

The budget is forecast to return to a $48 million surplus this financial year, at the same time as delivering lower ESL bills to 650,000 homeowners.

According to Treasury estimates, an ESL bill for the average home will fall by $145 per year.

Payroll and land tax will be reduced, and council rate capping introduced, in line with pre-election promises.

More than 20,000 new traineeships and apprenticeships will be created over four years through $203 million of skills funding but funding for HIV and STI prevention will be cut.

The Government will also investigate privatising patient transfer services currently carried out by SA Ambulance between the Modbury and Lyell McEwin hospitals.



As flagged before the election, major spending will occur in regional SA, with $150 million over 10 years in regional development and primary industries to be delivered through the Regional Growth Fund.

New R-12 super schools will be built in Munno Para and Aldinga at a combined cost of $261 million, with $100 million for a new Whyalla school.