The 2026–27 NSW State Budget is being delivered against the backdrop of weaker-than-expected economic conditions and an increasingly volatile political environment ahead of the 2027 NSW State Election. The NSW economy has been downgraded significantly. Gross State Product growth has been revised down from 2.5 per cent to just 1 per cent, due to elevated interest rates, a weaker housing market and national and global economic uncertainty. Forecasts suggest that NSW’s economy will remain sluggish for several years, placing continued pressure on government revenue, particularly from property-related taxes, while population growth is increasing pressure on essential services.

The political context surrounding the Budget is also significant. Polling released this morning demonstrates support for the major parties is under pressure in NSW. There is a rise in support for One Nation, particularly in Western and South-West Sydney and regional communities. 

Against this backdrop, Treasurer Daniel Mookhey sought to present a budget centred on “relief, reform, and discipline”, balancing fiscal restraint with long-term investments to improve service delivery across NSW. In his address to Parliament, the Treasurer noted weaker revenue growth and ongoing cost pressures across health, housing and infrastructure. However, he also pointed to signs of resilience. This saw the Budget adopt a cautious but pragmatic tone, prioritising essential services while attempting to stabilise long-term expenditure growth and strengthen the Government’s economic credentials ahead of next year’s election campaign. 

For industry and business, the Government has allocated $37 million to stand up a small business advisory program, $20.8 million for the Industrial Relations Commission to speed up resolution of workplace disputes, and $2.9 million for targeted Investment Delivery Authority rounds and regulatory support. Other key announcements in the 2026–27 NSW Budget include: