NSW Budget 2019-20
18 June 2019
NSW Treasurer Dominic Perrottet handed down the 2019-20 NSW Budget this afternoon, unveiling record infrastructure funding, support for drought-affected communities, a boost to frontline workers and measures to ease cost of living pressures. A surplus of $802 million is projected for this financial year – almost 45 per cent lower than what was forecast a year ago – as the Government faces the largest revenue write-downs in NSW history. Surpluses averaging $1.7 billion a year are projected over the forward estimates, with the state’s net worth set to reach $311 billion by 2023.
Mr Perrottet announced a “golden century” for NSW in his speech to the Parliament, highlighting the Government’s record of delivering large-scale infrastructure projects and confirming the state’s total infrastructure spend will reach $93 billion over the next four years. While the Treasurer acknowledged growth forecasts were slower, he said the state economy was “strong for this point in the economic cycle”.
The downturn in the housing market has cost the budget $10.6 billion, while GST receipts are down $2.3 billion. The Treasurer noted “economic headwinds”, including the drought and the weak housing market, while also outlining a number of trends in the state’s favour, including labour market conditions, fiscal stimulus in the form of infrastructure investment, and the strength of the export sector.
The 2019-20 Budget contains no tax increases, with a focus instead on payroll tax relief which will see the threshold for the tax increased to $900,000, benefiting small businesses. As foreshadowed in media reports, the Government will impose cuts on non-frontline government workers in a bid to create a “leaner, more agile back-office”, with up to 3,000 public service jobs set to go. The Treasurer also announced his intention to lead the charge for “a better federation” by initiating a review of federal financial relations.
This year’s Budget also features a boost to frontline staff, including funding for 4,600 additional teachers, 5,000 extra nurses and midwives and 1,500 more police. The Government has also committed to spend $6.7 billion to build or upgrade 190 schools and provide air-conditioning to 900 schools. Notably, the state’s education department will be required to have a clear focus on outcomes in order to justify its funding as part of a push to ensure value for money for taxpayers.
The Budget includes $10 billion in health infrastructure investment and funding for 8,000 paediatric operations and 10,000 cataract surgeries. The Government has also committed to build three new police stations in regional communities and 10 new Service NSW centres.
Cost of living has remained a key part of the Government’s agenda, with a new $50 cap on weekly public transport fees from 1 July and extra relief for people who spend $15 a week on tolls. The Government also announced $185 million in additional support for drought-affected communities and $1.4 billion for water security projects.
The new financial year will herald substantial changes in the NSW Public Service, with the new cluster arrangements announced earlier this year coming into effect from 1 July 2019. Under the new arrangements there will be eight clusters, each of which contain multiple sub-departments. The eight clusters are: Premier and Cabinet; Treasury; Customer Service; Planning, Industry and Environment; Transport; Health; Education; and Stronger Communities.
- A projected $1.02 billion surplus for 2019-20.
- $84.3 billion in revenue, $83.3 billion in expenses.
- Negative $8.8 billion in debt as at June 2019.
- Projections for increasing debt over the forward estimates to $38.6 billion in 2022-23.
- $93 billion infrastructure investment over four years.
- State net worth will reach $311 billion by 2023.
- NSW Generations Fund reaches $10.8 billion.