South Australia budget 2026: $50 milllion R&D fund boosts startups, little SME relief

South Australia’s 2026-27 budget includes targeted support for startups, exporters and high-growth businesses, but stops short of delivering broad tax relief or major grant programs for small businesses.

While the budget papers include some measures such as a new $50 million R&D fund, a number of temporary grant programs introduced last year are winding down.

Treasurer Tom Koutsantonis says the state is “living within its means”, with operating surpluses totalling $1.4 billion forecast across the forward estimates and debt levels tracking lower than previously expected.

The government says debt-to-revenue ratios are lower than previously forecast, while economic growth is expected to strengthen as major defence, energy and infrastructure projects progress.

For small businesses, however, the headline budget measures are largely concentrated around innovation, exports, and capability building rather than direct financial relief.

$50 million R&D fund for startups in South Australian budget

The star line item for South Australian startups and innovation-focused SMEs is a new $50 million Research and Development Productivity Fund.

The government says this will help attract additional investment from universities, the Commonwealth, and private investors while lifting South Australia’s business R&D expenditure, which currently sits at 0.7% of gross state product.

The measure builds on the state’s existing early-stage venture capital fund announced in last year’s budget and forms part of a broader push to grow South Australia’s innovation economy.

Existing startup support programs also continue, with the Department of State Development targeting support for around 500 startups and early-stage businesses and aiming to attract at least $200 million in private co-investment.

Growth accelerator funding doubled

The budget includes $1.8 million over four years to double funding for the South Australian Business Chamber’s Growth Accelerator Program.

The initiative supports high-growth SMEs through mentoring, capability development and export-readiness programs. There is also a focus on improving management capability and international competitiveness.

South Australia budget winds down small business grants

While South Australia continues to fund its Small and Family Business program, several temporary support measures are ending.

The program’s net cost falls from an estimated $44.5 million in 2025-26 to $6.5 million in 2026-27 as one-off initiatives such as Powering Business grants come to an end.

On the plus side, ongoing funding remains for advisory services, regional outreach, Women in Business initiatives, and Small Business Week activities.

The budget maintains support for trade and export programs aimed at growth-oriented businesses.

For 2026-27, the government is targeting assistance for more than 500 businesses through export services and aims to facilitate at least $175 million in export outcomes through trade missions and market development initiatives.

How the South Australian budget compares with other states

Compared with other 2026-27 state budgets handed down so far, South Australia sits somewhere between Victoria’s more visible business-support package and the leaner offerings from Tasmania, Western Australia and the Northern Territory.

Victoria announced a $19 million small business package featuring grants, procurement support and AI adoption initiatives, alongside a $14 million AI investment package and the merger of LaunchVic and Breakthrough Victoria.

Western Australia included a second $1.4 million round of Small Business Growth Grants and more than $150 million in manufacturing loans, but no payroll tax relief and no major startup funding announcements.

The Northern Territory allocated just $4.4 million for business grants alongside major law-and-order and infrastructure spending, while Tasmania delivered no new small business grants, tax relief or startup funding.

New South Wales, Queensland and the ACT are yet to hand down their 2026-27 budgets.

What was in the federal budget for small businesses

The South Australian budget lands a few weeks after the 2026-27 federal budget.

At the national level, there was a bit more for small businesses and startups than what we’ve seen in recent years.

The Albanese government confirmed the permanent extension of the $20,000 instant asset write-off, the return of loss carry-backs, and changes to the R&D tax incentive. The federal budget also included new measures around payroll tax, Fair Work support, and business compliance systems

There is also a Working Australians Tax Offset that will reach around 1.5 million sole traders, free access to mandatory standards, extra support for small businesses navigating Fair Work processes, and funding to upgrade business registers and Director ID systems

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