New South Wales Budget 2016: Strong surpluses and record investment in infrastructure

Planes, trains and automobiles: it's all about infrastructure in the New South Wales budget

The New South Wales (NSW) State Budget, delivered by Treasurer Gladys Berejiklian, announced an underlying Budget surplus of $3.7 billion for 2016-17, which will be used to fund major new investments in infrastructure and to provide a boost to health, education and community services.

According to the Budget papers, the positive financial result for NSW has been driven by a boost in transfer duty, land and payroll taxes that have flowed from stronger economic and employment growth and a strong property market.

The NSW budget is forecast to remain in good health with projected budget surpluses averaging $2.0 billion over the next four years.

The New South Wales economy is expected to grow 3.0 per cent in 2016-17 and 2.75 per cent in 2017-18. Treasurer Berejiklian commented in her speech that "economic activity in NSW has grown faster than the rest of Australia over the last year and is forecast to do so again next year.”

Employment growth in New South Wales is expected to be robust at 1.75 per cent in 2016-17 and 1.5 per cent in 2017-18.  Unemployment is forecast to be 5.25 per cent in 2016-17 and 5 per cent in 2017-18.

On jobs,Treasurer Berejiklian stated that “in the last year, 141,800 jobs were created across the State, almost two-thirds of the jobs created nationally.”

CPA Australia notes the much needed investments the NSW government is making in the State’s infrastructure and the commitment it has shown to prudent management of the State’s finances over the past five years.

Record infrastructure spend

One of the key areas of interest in this year’s Budget is its investment in infrastructure. Over the next four years, the government intends to spend $73.3 billion for infrastructure.
The major investments include:
  • $10.5 billion for public transport, including:

– $2.7 billion to further fund the Sydney Metro public transport project

– $1.3 billion to renew and maintain Sydney Trains and NSW TrainLink networks

– $1 billion for new suburban trains

  • $9.7 billion for roads, maritime and freight, including:
– $2.9 billion to continue widening and upgrading the M4 and building a new M5 (as part of the WestConnex project)
– $2.1 billion to continue upgrading major regional highways
– $338 million to continue building and upgrading roads to support the proposed second airport for Sydney at Badgerys Creek
  • $4.5 billion for health projects including $133 million for upgrading the Gosford hospital and $99 million for the Westmead Hospital redevelopment
  • $2.9 billion for education and training projects including $542 million for new schools, upgrades of existing schools and improved facilities and $25 million to establish the Sydney School of Entrepreneurship.

Initiatives to boost jobs

The New South Wales Budget has allocated funding and incentives over the next four years to help local businesses take on new employees and attract investment, including:
  • $190 million for the Jobs for NSW program
  • Boosting the payroll tax rebate under the Jobs Action Plan from $5000 to $6000
  • The Small Business Employment Incentive Scheme will provide a grant of up to $2,000 to non-payroll tax paying small businesses when they hire new employees
  • $10 million to help promote the export of goods and services from NSW
  • $100 million over the next two years to create new work pathways for youth that are unemployed including traineeships and apprenticeships

Supporting housing

The Government announced a number of measures to support housing, including:
  • Continuing the Housing Affordability Fund, with projects around a number of areas including Camden Valley Way and Richmond Road that are designed to support new housing in those areas
  • $41 million to the Greater Sydney Commission to support planned growth in housing supply
  • Modernising the State’s planning system to make the planning assessment process simpler and faster
  • Imposing a new transfer duty of 4 per cent on the purchase of residential property by foreign investors
  • Imposing a land tax surcharge of 0.75 per cent from the 2017 land tax year, including on the principal place of residence held by a foreign investor

Health care

The Budget increases the government’s spending on health by $972 million to $20.6 billion, including $375 million for 79,000 more emergency department attendances and 4500 more elective surgery patients and $197 million for drug and alcohol services. The Budget also adds around 900 additional doctors, nurses and midwives.


The Budget increases the government’s spending on education by $959 million to $13.7 billion.

Key education initiatives include:

  • $330 million over the next two years to clear the maintenance backlog in schools
  • $50 million to provide additional school counsellors and other student support.
  • $38 million for the ‘Quality Teaching, Successful Students’ program to enable 1000 of the best teachers to mentor other teachers

Other key initiatives

  • $300 million over the next four years in specialist domestic violence initiatives
  • $370 million to meet increased demand for out-of-home care services
  • $190 million in new funding to reform child protection systems
  • $218 million capital expenditure for police including $57 million on new or upgraded police stations including Mount Druitt, Queanbeyan and Gunnedah

Read next: 10 most unusual items from this year's budget

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