Soaring tax receipts have helped South Australia achieve its first budget surplus since pre-COVID, despite growing operating expenses threatening the state's bottom line.
The government recorded a net operating balance of $41 million for 2022/23, Premier Peter Malinauskas announced on Monday.
It is the first time the state has been in the black since 2018/19, during the previous Liberal government, before COVID-19 stimulus spending blew a hole in budgets across the country.
While an improvement on the $249 million deficit in 2022/23, the figure was still lower than the $250 million surplus predicted in June.
Mr Malinauskas said the budget surplus had been delivered as a result of strict fiscal discipline and the strength of South Australia's economy.
"On a whole suite of different metrics ... we have consistently seen South Australia outperform the rest of the nation," he told reporters.
Recent Australian Bureau of Statistics figures show the state is the nation's fastest growing economy at 3.8 per cent per year.
However, the state's unemployment rate, which had been consistently below the national average, last month surged back into the middle of the pack at 3.9 per cent.
South Australia's net debt to revenue came in at 96.1 per cent, four percentage points better than forecast and 24 percentage points better off than when Labor took office.
Treasurer Stephen Mullighan said the state's improved fiscal position gave it the capacity to invest in its bold infrastructure agenda, including the new Women's and Children's hospital, the hydrogen jobs plan and the north-south corridor highway project.
But shadow treasurer Matt Cowdrey said a $460 million uptick in budget expenses was a worrying sign for the state's economy.
"What we've seen, really, is a government that has been bailed out by significant increases in both state and federal taxation revenue," he said.
The government had little to show for the increased spending, with ambulance ramping at all-time highs, Mr Cowdrey said.
The state pulled in $255 million more tax since the June budget, thanks to a $100 million upward revision in payroll tax and stamp duty coming in $71 million higher than forecast.
University of Adelaide economist Jim Hancock said strong jobs and population growth, as well as robust mining and agricultural outputs, had helped South Australia's economy outpace the rest of the country for the last three years.
But as the cost of living crunch stifles spending and leads to rising unemployment, GST and payroll tax revenues are likely to fall.
"We know that households are really stretched under a lot of cost of living pressure," Mr Hancock told AAP.
"So we think the economic environment going into next year is likely to be more difficult than it is this year."
The Malinauskas government will release its mid-year budget review in full on Thursday.
