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Budget pain for SA households -

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MARK COLVIN: South Australians will face a rise in living costs to help fill the gap left by the Commonwealth's cuts to health and education.

The State Government is blaming tax increases on households and motorists in today's state budget on the Federal Government.

From Adelaide, Caroline Winter reports.

CAROLINE WINTER: In handing down his first budget on behalf of the newly minted minority Labor Government, the South Australian Treasurer Tom Koutsantonis didn't mince his words.

TOM KOUTSANTONIS: Someone needs to stand up and say, "This is enough. In fact not only is it enough, you can't go this far." And that's what this budget does. It lays it out for all South Australians to see exactly what the size, scale and depth of what the Commonwealth Government has done to health and education in this country.

CAROLINE WINTER: It wasn't the budget Tom Koutsantonis wanted to hand down, but says he had no choice.

South Australia faces almost $900 million in Commonwealth cuts over the next four years. The bulk of that, $655 million, has been stripped from health.

So to offset around half of that, households will be slugged a much higher Emergency Services Levy from July, with half of what is raised to go into health.

Tom Koutsantonis again.

TOM KOUTSANTONIS: It'll mean an increase to the average household of about $150 per annum. If your house is worth more, you pay more; if it's worth less, you pay less. It's a progressive tax. It's difficult. It's not what I wanted to do, but it's what we have to do.

CAROLINE WINTER: The same levy on vehicles will rise by $8 annually.

Upgrades to four hospitals have been suspended, but another $332 million in savings over the forward estimates will need to be found.

In an unusual move, the Treasurer warned that unless the Commonwealth reverses the cuts, he'll put it to the South Australian people to decide what goes.

TOM KOUTSANTONIS: Do we close a hospital? Do we close elective surgeries? Do we downscale our EDs (emergency departments)? Do we completely exempt health and move onto other departments? Do we abolish the Environment Department? Do we abolish other departments and functions of government?

CAROLINE WINTER: In a bid to boost the budget by half a billion dollars, the State Government will privatise its third party compulsory motor injury insurance scheme, despite a pledge not to sell public assets.

There'll also be a new levy on public events like the AFL at Adelaide Oval to fund public transport.

The State Opposition Leader Steven Marshall has labelled it a miserable budget, which not only increases the cost of living, but does nothing to address unemployment.

STEVEN MARSHALL: We've lost 19,000 jobs in South Australia since the budget was brought down this time last year. Our state's unemployment is going through the roof and there is no relief, no relief whatsoever for the business sector in this budget whatsoever.

CAROLINE WINTER: There'll be a $1.2 billion deficit this financial year, higher than previously forecast, with a return to surplus being promised by 2016.

MARK COLVIN: Caroline Winter.