NSW budget 2019 delivers record $93b infrastructure spend, $1b surplus

| 18.06,19. 03:59 PM |




NSW budget 2019 delivers record $93b infrastructure spend, $1b surplus



Photo: Mr Perrottet shows off the 2019 budget papers. (AAP: Dean Lewins )


NSW Treasurer Dominic Perrottet has delivered record infrastructure spending and a modest budget surplus in the face of rising debt and the largest revenue write down in the state's history.


It is the Treasurer's first budget since the Berejiklian Government was re-elected and he is spending big, earmarking $93 billion on infrastructure over the next four years.


"We are strongly in the black," Treasurer Dominic Perrottet said.


"This is a budget that is a testament to our strong financial management here in NSW."


But the slump in the housing market and lower than expected economic growth have impacted the budget's bottom line.


The surplus for 2018-19 has almost halved, from $1.4 billion 12 months ago to just $802 million by the end of this financial year.


The massive drop is primarily due to a $10.6 billion plunge in stamp duty revenue since 2017, including a further $232 million write down over the forward estimates.


That has been compounded by an expected $2.3 billion reduction in GST revenue to NSW over the next four years.


Is this as bad as it gets?

The NSW Treasurer has delivered a surplus of around half that expected this time last year, but is forecasting blue skies. That could be a bad idea, writes ABC business editor Ian Verrender.


NSW retains its Triple A credit rating and net debt is currently at zero, with $8.8 billion in the bank.


But debt levels are forecast to rise to $12.3 billion in 2019-20, and up to $38.6 billion in 2022-23.


Mr Perrottet said NSW was still performing well under the circumstances.


"We sit here today off the back of funding every one of our election commitments, strongly in surplus," Mr Perrottet said.


"I am very, very confident with the current debt position here in NSW, it is manageable, it is affordable, it is sustainable."


Most of the spending measures outlined in the 2019-20 Budget have already been announced and there is very little in the way of new money or funding commitments.


This is a sign the Government is trying to hold steady in the face of gathering economic storm clouds.


The Government is predicting the rate of property sales to pick up in the next year, but it is not expecting house prices to increase dramatically.


Some savings will be made at the expense of public sector job cuts, with around 2,500 jobs to be cut from "back office" roles.


Mr Perrottet said the cuts account for around 1 per cent of the state's 330,000 public servants.


"If the Government can't find 1 per cent of efficiencies then we're in the wrong game," he said.


"This is about making sure our Government is fit for purpose."


Despite the challenges, the Government says the state's finances are strong.


The projected surplus is tipped to rise to just over $1 billion in 2019-20, $1.2 billion in 2020-21 and $2 billion in 2021-22.


abc


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