24 June | 2025-26 NSW Budget Summary

NSW Treasurer Daniel Mookhey was admitted into an energetic Legislative Assembly this afternoon to hand down his third budget. The 2025-26 NSW Budget reflects the continued fiscal discipline of the Minns Labor Government and builds on the foundations laid in previous budgets. Housing and fiscal responsibility remain the Government’s overriding priorities. While this may not result in a headline-grabbing budget, it is a measured and necessary response to the challenges facing New South Wales.

The Treasurer has faced criticism for a lack of ambition, highlighted by the fact that there is a lack of long-term tax reform, however, this budget does set a credible pathway back to surplus while reinforcing the state’s commitment to strengthening public services, tackling the structural housing crisis, and supporting long-term economic resilience.

The 2025-26 NSW Budget mirrors the fiscal prudence and restraint exercised in the Minns Labor Government’s preceding budgets. It is designed to simultaneously stabilise the state’s debt and restore the budget to a cash surplus, and bolster critical public services, accelerate productivity and enlarge the state’s housing supply.

Mookhey claims that "this budget improves our state's fiscal position without privatisation or an unfair wages cap."

The budget records a deficit of $3.4 billion in 2025-26, revised from a mid-year economic review that projected deficit of $2.2 billion. The forward estimates however predict that an imminent surplus, ushering an end to NSW’s entrenched deficits. It is forecasted that the NSW budget will record consecutive $1.1 billion surpluses in 2027-28 and 2028-29 respectively, representing the first surpluses since the COVID-19 pandemic. This is underpinned by a stabilisation in the state debt, with the 188.2 billion of gross debt projected in the 2023 pre-election budget update now projected to be reduced to $178.8 billion by June 2026.

The budget is ‘unapologetically pro-growth’ and had a distinct productivity undercurrent. Mookhey introduced key measures engineered to unlock housing supply, accelerate the flow of private capital into the state and stimulate economic growth through innovation. Two key reforms contained in the Budget, the Investment Delivery Authority and Pre-sale Finance Guarantee, aim to accelerate NSW’s economic growth by eliminating regulatory obstacles which are prohibitive to construction in the State.

HOUSING

  • The 2025-26 Budget remained relatively housing-centric, announcing market interventions and measures designed to reverse the structural housing crisis that has plagued the Minns Labor Government since it assumed power. These include:

    • The Pre-sale Finance Guarantee to expedite housing construction statewide. The NSW leverage its strong fiscal position to guarantee residential pre-sales for up to $1 billion of housing projects through a revolving fund, accelerating the construction of low and medium density housing throughout the state.

    • A permanent extension of the land tax concession of a 50 percent reduction in assessed land value for build-to-rent properties.

    • The enactment of a Works-in-kind Agreement Regime to expedite the delivery of critical infrastructure, an essential precondition to unlocking housing supply.

PLANNING + INFRASTRUCTURE

  • The 2025-26 NSW Budget positions planning reform as a lever for innovation and productivity enhancement. Accordingly, Mookhey announced a $17.7 million capital allocation for the establishment of an Investment Delivery Authority (IDA), underpinned by an Investment Authority.

    • The IDA will accelerate approval processes for major developments exceeding $1 billion by removing bureaucratic obstacles or regulatory impediments that deter capital investment and undercut economic productivity in the state. The IDA will power the State’s sovereign digital capability, enlarge the flow of private capital into the State and enhance NSW’s economic dynamism.

  • Further complementary measures include:

    • $145.1 million capital injection into the Building Commission NSW to enable the regulator to conduct rigorous compliance inspections, advance key building reforms and digitalise penalty infringement notices.

    • $80 million allocation for the implementation of the NSW Innovation Blueprint

TRANSPORT

The 2025-26 Budget contains measures to enhance connectivity and resilience across NSW’s public transport network, namely:

  • $425 million capital allocation to accommodate rising demand and address chronic capacity shortages on NSW bus networks. This funding will facilitate the creation, reinstatement and expansion of bus routes to improve network integration and service frequencies, and the acquisition of 50 new articulated buses to enhance vehicle capacities.

ENERGY + ENVIRONMENT

Energy measures accounted for by the 2025-26 Budget align with the Minns Labor Government’s decarbonisation and emissions reduction objectives. These include:

  • $2.1 billion capital injection into the Transmission Acceleration Facility to fast track five renewable energy zones, thereby enhancing the state’s renewable energy generation and transmission capabilities.

  • $111.5 million allocation for the establishment of the Newcastle Logistics Precinct, which will enhance NSW’s capacity to accommodate and store renewable energy components.

  • $27.3 million investment in the Future Jobs and Investment Authority to reverse coal-producing regions’ economic reliance on coal.

HEALTH

Strengthening the State’s public health system formed a key component of the 2025-25 NSW Budget. Accordingly, the Budget accounts for a 12.4 billion capital injection into health infrastructure, including:

  • $492 million for the construction of a statewide pathology hub and upgraded high security PC4 biocontainment laboratory at Westmead.

  • A further $910 million for the construction of Rouse Hill Hospital.

  • A supplementary $700 million allocation for the proposed Bankstown Hospital, eleveating the Minns Government’s cumulative investment in the project to $2 billion.

LAW ENFORCEMENT

The 2025-26 Budget allocated $125.8 million for the modernization and overhaul of the NSW Police Force’s IT systems to improve operational efficiencies and fortify the NSW Police Force’s cyber defences.

  • $24.6 million will be channeled into a Cyber Security Enhancement Program to enhance the NSW Police Force’s cyber threat detection and response capabilities.

  • $50 million will be allocated to a Critical Network Program to modernise and upgrade outdated network devices, enhance enterprise capabilities and bolster network security.

WORKERS COMPENSATION REFORMS

Mookhey leveraged his 2025-26 NSW Budget speech to condemn opposition to the Minns Labor Government’s proposed reforms to the state’s Workers Compensation regime designed to counteract operational inefficiencies and cost blowouts. The non-implementation of these reforms has imposed a $2.6 billion financial burden on the budget in the form of workers compensation liabilities, undermining the Minns Labor Government’s efforts to restore the NSW budget to surplus.

PremierState