NSW Budget 2018-19

19 June 2018

OVERVIEW

Battling a head cold, NSW Treasurer Dominic Perrottet has handed down his second budget this afternoon, with an emphasis on social justice and planning for the State’s future. While in previous budgets the NSW Coalition has emphasised its investment in transport and roads infrastructure, the Treasurer took a different approach today, focusing on initiatives designed to “put people first”, including improved social services and community infrastructure. Under the theme ‘Building for Tomorrow, Delivering for Today’, the 2018-19 Budget also features a range of measures to address the cost of living.

With just over nine months until the next election, the Treasurer sought to highlight the Coalition’s record of financial management, with a projected budget surplus in 2018-19 of $3.9 billion and continuing surpluses expected over the forward estimates. Treasurer Perrottet attributed this success to an unprecedented boom in the State’s economy, with NSW named the fastest growing economy for the past five years, with the lowest unemployment rate for the past three years.

The Treasurer said the result was more positive than the Government had expected, pointing to several factors that contributed to the success, including the Government’s program of privatisation, which he described as “the golden key that unlocked the door for opportunity for NSW”. The State has become the first in Australia to achieve a net worth of $250 billion. Greater-than-expected receipts from revenue streams – including mining royalties – helping to offset the cooling housing market.

Emphasising the Government’s focus on reducing the cost of living, the Treasurer announced 3,800 additional pre-school places in high-growth areas and a $100 ‘Creative Kids’ rebate to help fund the cost of creative and cultural activities, while also pledging that every three-year-old child in NSW will have access to pre-school learning. Drawing on his experience as a father, the Treasurer announced each new parent in NSW will receive a $150 ‘Baby Bundle’, comprising practical items for parents. Service NSW will be tasked with assisting consumers to access the various new refunds and payments.

The Government will establish a NSW Generations Fund with a starting balance of $3 billion as a “debt retirement fund for tomorrow”. Interest generated by the fund will be provided in the form of community grants of up to $200,000, proposed by and voted on by NSW residents under a new ‘My Community Dividend’ initiative.

As foreshadowed in media reports, the Budget had plenty for the business sector with the Treasurer announcing the payroll tax threshold will be lifted to $1 million by 2021-22 and a commitment to fund 100,000 fee-free apprenticeships, a key demand from business groups.

While the focus on transport and infrastructure was more muted than in previous years, the Treasurer highlighted infrastructure expenditure to date has reached $87.2 billion under the Coalition. The Budget includes $3 billion for a metro line between the CBD and Parramatta as well as funding for 2,000 additional bus services. Meanwhile, $439 million has been allocated to build the new Western Sydney Airport.

The Budget also focused on health and education infrastructure, with $8 billion pledged in capital works for 40 hospitals across NSW and $6 billion over four years for 170 new and upgraded schools, plus $500 million to air condition schools. The Treasurer said the Budget delivers essential public services, with funding for 880 new teachers, 950 extra nurses and 300 additional doctors.

The Budget includes $10 million over four years for economic development opportunities for ATSI people, and more funding for child protection, with a pledge to double the rate of adoption.

KEY PARAMETERS

$3.9 billion surplus for 2018-19, with average surpluses of $1.6 billion over the forward estimates.
Ongoing $87.2 billion four-year infrastructure program.
$81.1 billion in revenue, an increase in $326.4 million on the Half-Yearly Review.
Negative net debt of $9.8 billion in June 2018.
500,000 new jobs created since April 2011.
NSW net worth to reach $250 billion in June 2018.

FURTHER READING