NSW Budget 2016-17
21 June 2016
NSW Treasurer Gladys Berejiklian today delivered her second budget – the sixth of the Coalition Government – confirming infrastructure as the priority commitment by announcing record expenditure of $73.3 billion over the next four years. The Treasurer’s ‘congestion-busting’ budget allocates $9.5 billion this financial year for Restart NSW to commence construction of road, maritime and freight projects across the State.
Today’s Budget reveals a surplus of $3.4 billion for 2015-16, and predicts a surplus of $3.7 billion for 2016-17, averaging $2 billion over the forward estimates. The Treasurer declared NSW was now ‘effectively’ net-debt free and confirmed the State as having the strongest budget position of any Australian government.
Economic growth in NSW will continue to outpace the national average, and is forecast to be 3 per cent in 2016-17, before falling to 2.75 per cent in 2017-18. Treasurer Berejiklian highlighted strong jobs growth, with unemployment now the lowest of any state at 5.2 per cent, and said the Government had already delivered on its 2015 election commitment to create 150,000 new jobs in this parliamentary term.
The Government has introduced a 4 per cent surcharge on stamp duty and an additional 0.75 per cent land tax for foreign investors in residential real estate. The new measures will apply from 1 January 2017, and are expected to raise around $1 billion over the forward estimates. These two revenue measures will partially offset the abolition of duties on business mortgages, unlisted securities and the transfer of non-real business assets, which will cost the budget $1.8 billion over four years.
The Treasurer said the greatest fiscal challenge for the State going forward will be to contain expenditure growth to offset revenue losses, driven primarily by NSW’s falling share of the GST. Labelling NSW as a ‘victim of its own success’, the Treasurer announced the State’s share of GST will fall to 81 per cent by 2020-21, down from 95 per cent in 2015-16, and representing a loss to the Budget of $10 billion over the next four years.
- A budget surplus of $3.7 billion in 2016-17 (averaging $2 billion over the forward estimates)
- Net debt projected to be $663.1 million at 30 June 2016
- Economic growth of 3 per cent in 2016-17, falling slightly to 2.75 per cent in the forward years
- Unemployment currently stands at 5.2 per cent
- Expenditure growth of 3 per cent to outpace moderating revenue growth of 2.3 per cent over the forward estimates
- A record spend on infrastructure of $73.3 billion over four years
- Population growth predicted at 1.5 per cent