The Federal Budget has delivered South Australian coffers a surprise sting, in the form of a $517 million cut to forecast GST revenue next financial year.

Key points: Revenue write-down was worse than expected

Revenue write-down was worse than expected The new amount has to be absorbed in the June state budget

The new amount has to be absorbed in the June state budget The State Opposition is worried about more "punishing cuts"

The State Government had been bracing for a $329 million write-down in 2019-20 after estimates were published last month, but the final figure is more than 50 per cent worse than that.

Treasurer Rob Lucas will now have to factor that hit into the state budget, which is due to be handed down on June 18.

"It will be a real challenge and we'll sit down and discuss that as a Cabinet over the next couple of months," Mr Lucas said.

"We're not going to take any decisions which drive the South Australian economy into the ground."

SA Treasurer Rob Lucas said he did not expect a further write-down in GST revenue. ( ABC Radio Adelaide: Malcolm Sutton )

South Australia has been hurt by both a drop in the total revenue generated by the GST nationally, as well as a reduction in its share of the GST.

The current budget has not been spared either, with GST revenue cut by around $170 million in 2018-19, but Mr Lucas said that would not prevent the state from turning a surplus this year.

"It was a surprise … we certainly didn't expect a further write-down in GST revenue," Mr Lucas said.

"The reality is the national GST pie isn't growing as quickly as was expected."

GST allocations to states are not determined by the Federal Government of the day, but by an independent grants commission.

Opposition Leader Peter Malinauskas said the hit to state coffers should not be used as a justification to cut services.

"Rob Lucas got a GST windfall in his first state budget, yet he delivered massive cuts," Mr Malinauskas said.

"Now he's got a GST write-down in his second budget and we're concerned that's going to lead to an even more painful round of punishing cuts that hurt South Australians."

State scores more road projects

In total, the Federal Budget included funding pledges for infrastructure and roads worth about $2.6 billion.

More than half of that — $1.5 billion — is allocated to the north-south corridor project, but no money is in the four-year forward estimates, meaning it will not actually be spent until at least the 2023-24 financial year, more than two federal elections away.

Deputy Prime Minister Michael McCormack making an infrastructure funding announcement during a visit to Adelaide. ( ABC News )

"The Liberal Party keep talking about big dollars going towards the north-south corridor, but they never materialise in a budget," Mr Malinauskas said.

"If it's not in a budget line, if it's not in the forward estimates, then the money isn't real."

However, the State Government insisted the Federal Government's pledge was satisfactory, because it could not spend the money any faster.

"The former Labor government were incompetent, they didn't undertake the business cases for South Road," Mr Lucas said.

"We're doing that at the moment … we still haven't made a final decision on whether we're going to have to build tunnels, or overpasses or underpasses or some combination of those."

New projects announced for the first time yesterday included a $73.6 million widening of Victor Harbor Road between Main South Road and McLaren Vale, ensuring two lanes in each direction and increased safety measures.

Two level crossings have been earmarked for upgrades, on Torrens Road at Ovingham and Brighton Road at Hove, at a cost of more than $200 million.

The Horrocks Highway, north of Adelaide, has been allocated $44 million worth of upgrades.

Civil contractors say most urgent road has been ignored

South Australia's Civil Contractors Federation said while the infrastructure funding was welcome, the most urgent project missed out.

Chief executive Phil Sutherland said the road between Port Wakefield and Port Augusta was poorly maintained and needed double lanes.

"The road is substandard," he said.

"It needs to be upgraded. Two lanes in each direction."

He also said he feared freight routes would remain a low funding priority while the attention remained on Adelaide's north-south corridor.

"We're very pleased to see the Government clean up the congestion mess at Port Wakefield and rebuild the bridge at Port Augusta but the 200 kilometre section in-between is a disgrace," he said.

"It's killing people regularly and it's a handbrake on the state's economy."