The New South Wales state budget delivered today by Treasurer Dominic Perrottet announces a forecast surplus of $3.9 billion for 2018-19. Major investments ahead include transport, health and air-conditioning in schools.
According to the Budget papers handed down on 19 June 2018, the New South Wales (NSW) government’s financial position is expected to improve over the next four years with a projected budget surplus of $3.9 billion for 2017-18. Surpluses are expected in later years with forecast surpluses of A$1.4 billion in 2018-19 and A$1.5 billion in 2019-2020.
However, a slowing property market is leading to an expected A$565 million decline in transfer duty collections in 2017-18. This is leading to a reduction in projected future revenue growth, but this is being partially offset by upward revisions to GST revenue forecasts and mining royalties.
The NSW economy is forecast to grow 2.75 per cent in 2018-19 and in 2019-20 before slowing slightly to 2.5 per cent in 2020-21. The Budget papers state that public investment is an important pillar to NSW’s economic growth, with it expected to contribute half a percentage point to economic growth in 2017-18 and 2018-19. However, a softening housing market and modest wage growth are expected to weigh on the economy over the next two years.
NSW’s unemployment rate is expected to remain at 4.75 per cent in 2018-19 through to 2021-22.
Wages growth is expected to pick up, with the Wage Price Index expected to increase from 2.75 per cent in 2018-19 to 3.25 per cent in 2021-22.
NSW’s population growth is expected to be 1.6 per cent in 2018-19 before declining to 1.4 per cent by 2021-22.
The government’s expected strong fiscal position and the sale of Snowy Hydro to the Commonwealth Government is allowing it to pay down debt. NSW’s net debt is projected to be negative A$9.8 billion as at 30 June 2018. Net debt however is expected to grow across the forward estimates to A$28.7 billion in 2021-22.
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The government announced that it will invest part of its surplus in the establishment of a sovereign wealth fund, to be called the NSW Generations Fund (NGF). It will make an initial contribution of A$3 billion to the NGF. The Government intends to distribute up to 50 per cent of investment returns the NGF generates towards investment in local communities.
Major announcements in the Budget include:
A$3 billion for the Sydney Metro West, the proposed underground metro railway between the Sydney CBD and Greater Parramatta (subject to the final business case)
A$2.4 billion on Sydney Metro Northwest
A$1.9 billion on Sydney Metro City and Southwest
A$1.8 billion in 2018-19 to continue the development and delivery of WestConnex
A$1.2 billion in 2018-19 to continue the Pacific Highway upgrade program
A$439 million in 2018-19 for road upgrades to support the new Western Sydney Airport at Badgerys Creek
A$258 million in 2018-19 towards Parramatta Light Rail Stage
A$155 million for the new Shoalhaven River Bridge at Nowra
A$132 million for road upgrades to support population and economic growth in Western Sydney, including construction of the first stage of the Campbelltown Road upgrade at Edmondson Park.
Business and tax measures
- From 1 July 2018, the tax-free threshold for payroll tax in NSW will increase from A$750,000 to A$850,000. It will continue to increase by A$50,000 every year to A$1 million in 2021-22. In 2018-19, this increase in threshold is expected to reduce the number of businesses paying payroll tax by around 2000
- A$250 million in loans for the Farm Innovation Fund (FIF). The FIF provides loans of up to A$250,000 for investments in farm infrastructure to boost drought preparedness. The FIF will now be accessible until 2022.
- A$50 million to upgrade agriculture research stations
- providing free vehicle registration to owners of privately registered light vehicles that spend A$25 or more per week on tolls, on average, over a year
- A$37 million to accelerate and extend the roll out of the Easy to do Business Program.
Education and training
- The Government intends to build or upgrade 170 school at an estimated cost of $6.0 billion over the next four years
- A$198 million over four years to extend the Start Strong program, extending it to three-year olds. This is designed to provide universal access to two years of early childhood education for all three-year-old children from 2019 onwards
- A$500 million over five years to provide cooling for schools through the installation of reverse cycle air conditioning
- A$160 million in 2018-19 for maintenance across NSW schools
- An additional 900 full time teachers will be placed in schools across NSW. The government will be looking for additional teachers in disciplines such as science, physics, mathematics and technical and applied science
- The Government will offer 100,000 free apprenticeships. The free apprenticeships will be on offer in any course at TAFE and non-TAFE providers approved to deliver apprenticeship programs. It will cover all 121 courses currently funded under the Smart and Skilled program
- Catholic and independent schools will receive an additional A$32 million to assist them build more classrooms
- The government will provide a A$100 voucher for each school aged child for extra-curricular activity.
- Recurrent spending on health by the NSW Government will increase by A$1.1 billion to A$23 billion in 2018-19. The increased spending will cover an extra 950 nurses and midwives, 300 doctors and 120 allied health workers for hospitals and health services
- The government announced it will invest A$8 billion in health infrastructure over the coming four years. This funding will include:
- commencing new capital works at Liverpool Hospital, Griffith Base Hospital, Dubbo Cancer Centre and the Bankstown-Lidcombe Hospital emergency
- investing in the A$700 million in mental health infrastructure, including new specialist mental health units for mothers and their babies, children and adolescents, and older people.
- upgrades at Tenterfield, Dungog, Scone and Gloucester hospitals
- A$115 million for medical and scientific innovations
- A$100 million per year for specialist community mental health support
- A$157 million to improve the wellbeing of new parents and their babies.
Other major announcements
- A$250 million to support the NSW Government’s participation in the Commonwealth Redress Scheme for survivors of institutional child sexual abuse in NSW government institutions
- A$62 million over four years to implement the NSW Homelessness Strategy 2018-2023
- A$44 million over three years for continued support to reduce the incidence of domestic violence re-offence and re-victimisation
- A$10 million fund will be dedicated to expanding trials of driverless vehicles in NSW
- Reducing ten of the top parking fines issued by state government agencies by 25 per cent
- A$288 million over four years to further support the re-engineering of the NSW Police Force and provide the Police Commissioner with the flexibility to deploy resources according to need and effectively address and respond to crime
- reducing the cost of Compulsory Third Party (CTP) Green Slips for vehicle owners, including a refund for some vehicle owners
- A$245 million in 2018-19 to assist build the new Powerhouse museum in Parramatta
- A$729 million over four years for the construction of a new stadium at Moore Park to replace the Sydney Football Stadium
- A$184 million in 2018-19 for the construction of the Western Sydney Stadium at Parramatta
- A$102 million to help communities and businesses adapt to a changing climate
- $60 million to move the National Herbarium from the Royal Botanic Garden Sydney to Mount Annan.
For more information visit www.budget.nsw.gov.au
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