‘Bread and butter’ relief features in restrained budget
Tolls, trains, schools and hospitals are all slated for upgrades in a cautious state budget to provide services in tough economic times.
NSW Finance Minister Daniel Mookhey will unveil his fourth and likely final budget on Tuesday ahead of the March 2027 election.
“We are committed to using Tuesday’s budget to build a state that is affordable for working families,” he told reporters on Monday.
“We understand that people are under a lot of pressure… they expect us to help for today but build for tomorrow.”
Rising interest rates, a stagnant property market and the effects of war in the Middle East have further slowed the already stagnant Australian economy.
The treasurer wants to keep the purse strings tight, citing the “relief and reform” mantra, but the opposition says this is too timid and vision is needed.
Rather than throwing cash at big projects, Mr Mookhey said the budget focused on the “bread and butter” concerns of overlooked areas and city centres.
Planned spending includes $10.3 billion in ongoing funding for a range of health services, a record $9.2 billion in infrastructure, $2.1 billion to maintain Sydney’s major train network and a $557 million energy efficiency program for low- and middle-income families.
Nearly a million motorists will receive more help to offset expensive tolls, an issue the Labor government is campaigning heavily on in 2023.
The treasurer said reducing the toll cap from $60 to $50 for a year and eliminating administrative fees would provide “a practical relief that people will notice in their weekly budgets”.
Mr Mookhey also confirmed on Monday that a bailout was on the books to save jobs at Rio Tinto’s troubled Tomago aluminum smelter.
While the NSW economy was expected to grow by 2.5 per cent in the next financial year, this forecast has been reduced to one per cent.
The e61 Institute says NSW is the only state still running a business deficit eight years into the pandemic, and a slowing property market is jeopardizing its already long path back to surplus.
But Michael Brennan, chief executive of the Sydney-based think tank, said the state was probably in a better position than others because of its debt, which is considered a modest share of the economy.
NSW would rival Victoria as the most heavily indebted state, but the latest budget forecast shows debt pegged at around $178.4 billion.
“With continued spending discipline despite declines in revenues and structural spending pressures, Tuesday’s budget could still reliably chart a course towards relative fiscal health over the next two years,” Mr Brennan said.
The state derives 10 percent of its revenue from stamp duty revenues. These revenues are expected to drop by $5 billion over the next four years. Land taxes are also expected to decrease by approximately $3 billion.
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