2018-19 NSW Budget

THE "PEOPLE'S BUDGET"

Earlier today, Treasurer Dominic Perrottet handed down the 2018-19 NSW Budget, the Government's last ahead of next year’s state election.

Since 2015, the Government's Budgets have centred on infrastructure spending. Today, the Treasurer added a second "horizon" to the mix: cost of living. Billing it as a Budget with "a strong heart", the Treasurer said the Government is focusing on "people" as well as "projects". Headline measures designed to ease the cost of living included:

• Payroll tax threshold raised: The payroll tax threshold will be raised from $750,000 to $1 million, benefiting small and medium businesses.

• Childcare subsidy: In an Australian first, the Government has committed more than $200 million to subsidise the cost of sending three-year-olds to childcare.

• Free hampers newborns: New mothers will receive a $150 hamper filled with essential items such as nappies, books and blankets.

• Creative kids rebate: Families will receive a $100 rebate for each child who participates in cultural and learning activities outside of school.

• Energy switch subsidies: The Government launched a new One-Click Energy Switch website to make it easier to compare and change providers, potentially saving households thousands of dollars.

• Parking ticket costs reduced: The cost of parking fines will be reduced by 25 per cent and a new "grace period" for drivers who return to their car within ten minutes of receiving a ticket will be investigated.

• Caravan registration costs reduced: The cost of registering a caravan or camper trailer will be reduced by 40 per cent.

• Government services consolidated: The Government currently provides 40 cost of living services across 12 agencies (e.g. energy rebates, Green Slip refunds etc.). Service NSW will become a ‘one stop shop’ for accessing these services.

Of course, the Government remains committed to its infrastructure agenda, with record funding for education and health projects, including $6 billion to build 20 new schools and $8 billion for capital works across 40 hospitals. In total, the infrastructure spend is $87.2 billion over the next four years.

For those that are interested, the Budget Speech also revealed the Government’s new mantra: “building for tomorrow, delivering for today”.

A link to the 2018-19 NSW Budget can be found here.

THE BOTTOM LINE

For the third year running, NSW has zero net debt. The Treasurer also announced a $3.9 billion surplus in 2018-19, with the average $1.6 billion surpluses expected over forward estimates reflective of slowing stamp duty revenues. The better than expected surplus in 2018-19 is a result of solid mining royalty growth and the State’s investment returns. Since its election in 2011, more than 500,000 new jobs have been created in NSW, with the unemployment rate having sat below five per cent for over a year.

PORTFOLIO MEASURES

The Government has earmarked $33.1 million for a new Aboriginal Social Housing Strategy. It will also spend $10 million over four years for social impact bonds to improve Aboriginal employment and well-being, and an additional $2.8 million for the first Aboriginal Languages Trust.

The Budget provides for a $50 million refurbishment of the Australian Museum. Other measures include $10 million per year over the next four years to attract foreign film and television projects, and $82 million to secure arts and cultural events.

Early childhood education is a centrepiece of this Budget, with the NSW Government leading the nation with its $200 million subsidy package for three-year-old children. Total funding in the Budget is $474.3 million, an increase of $29.8 million. An additional 4,800 new community preschool places in growth areas will be funded at a cost of $42 million.

The Government will provide a record $6 billion over the next four years to deliver 20 new schools and upgrade hundreds more, separate to the portfolio's $15.7 billion recurrent spend. The Budget also contains a $285 million package to fund 100,000 free apprenticeships. Other measures include $500 million to air condition 1,000 schools, and $3.75 million for the Clontarf Foundation to improve education and skills for Aboriginal students.

The 2018-19 Budget provides $1.9 billion to protect and improve NSW’s environment and heritage, including $630 million for the State’s National Parks. Other measures include $196 million to improve waste management and repair contaminated lands, and the launch of the One-Click Energy Switch website to make it easier to compare and change energy providers.

The Budget allocated $2 billion to this portfolio, to be spent on measures such as enhancing coverage of the Government Radio Network for emergency services ($320 million over forward estimates), rolling out Digital Driver Licenses ($9.3 million), digitising business services ($10 million), and funding a new whole-of-government cyber security service ($20 million).

The Government has provided an additional $1 billion in new health expenditure in this Budget, bringing the total health budget to more than $25 billion in 2018-19. An additional 950 nurses and midwives, 300 doctors and 120 allied health workers will be employed by NSW hospitals, and $740 million will be spent to refurbish Liverpool Hospital. Other measures include $272 million for ambulance station upgrades, $23.7 million to employ an additional 200 paramedics, and $150 million for heart disease research.

The Government earmarked $118 million for six new police stations across NSW and allocated $40 million to build new Police Citizens Youth Clubs. A Youth Koori Court will also be built at the Surry Hills Children's Court. Other measures include $22 million to fund Community Legal Centres, $5.5 million for the NSW Counter Terrorism Plan, and $134 million to purchase 500 new vehicles for the SES.

This Budget allocates a record $2 billion for mental health initiatives, including $700 million for specialist infrastructure, $100 million per annum over forward estimates to strengthen early intervention efforts, and $42 million for community services.

More than $1.4 billion will be spent over forward estimates on local infrastructure projects that support new housing (e.g. roads, parks, cycleways etc.), including $235 million this financial year. Sydney’s tree canopy will also double by 2030, with a target set to plant 380,000 new trees each year for the next 12 years, and $157.5 million will be spent on upgrading and building new playgrounds.

The Government will provide $284 million for drought assistance measures such as loans this year, and has set aside $23 for a regional water management and compliance regime. Almost $40 million will be directed towards initiatives that help farmers export their products.

The Government’s roads bonanza continues, with headline measures including $2.6 billion to build the first stage of the F6 extension from Arncliffe to Kogarah. A further $130 million will be spent sealing and weatherproofing every NSW highway, and $600 million will be spent on road safety improvements and enhanced police surveillance. As far as cost of living goes, from 1 July the Government will provide free vehicle registrations to motorists spending more than $25 per week on tolls.

The 2018-19 Budget ramps up funding for homelessness in NSW, with $1 billion being provided over forward estimates on tailored support services. Approximately 100 new support staff and caseworkers will be employed via a $59 million funding pool.

The Government will spend $729 million to rebuild Allianz Stadium and $1.2 billion to upgrade ANZ Stadium and finish works on the new Parramatta Stadium. A further $200 million will be spent on upgrading community sporting facilities, and $130 million will be spent on youth recreation programs. As far as tourism is concerned, the Government will spent $290 million in total, including $82 million to secure major events and $54 million on marketing.

NSW transport infrastructure spending has increased to record levels under this Budget, with the total figure now set at $51 billion over forward estimates. The Government has set aside $3 billion to commence works on the Metro West rail project between the CBD and Parramatta, and $2.1 billion for the Parramatta Light Rail. The Sydney Metro and South West project received $2.1 billion over four years. The Government will also spend $880 million to add new train services and upgrade signal systems, $133 million to improve station accessibility, and $15.6 million to provide 2,000 extra bus services. A driverless car trial will be undertaken at a cost of $10 million, and $560 million will be spent over the next four years to plan for a Western Harbour and Beaches Link Tunnel between Rozelle and Seaforth.

The Government will lift the payroll tax threshold from $750,000 to $850,000 from 1 July this year, and raise it to $1 million by 2021-22, at an estimated cost of $881 million. A new 10 per cent Point of Consumption tax has also been introduced for online gambling, and $3 billion has been seeded for investment in a 'NSW Generations Fund' to safeguard against economic downturns. This is the first sovereign wealth fund of its kind in the world, and its establishment coincides with the launch a new ‘My Community Dividend’ initiative. Under this initiative, NSW residents will be able to nominate and vote on community projects valued between $20,000 and $200,000, which will then be financed by dividends from the Fund.