Soaring house prices and New South Wales’ decision to keep the state open as much as possible during the Covid-19 pandemic will offer a faster return to blackout for the state, prompting the treasurer, Dominic Perrottet, to declare NSW “dressed for success”.
Much higher than expected stamp duty returns thanks to the booming real estate market and higher tax revenues will allow NSW to reach a surplus of $ 466 million in 2024-25, much faster than expected.
Perrottet revealed the much faster turnaround in state fortunes in his budget, handed in at noon Tuesday.
âNSW is back,â he said. âFrom the deepest recession of our life, we are back to growing and on track. “
The recovery was “no accident,” he said.
The coalition government had built the “best public health system in the country”, “pioneering digital delivery” and “taken control of the budget”.
âOur response to the pandemic and the decade that allowed it are the fruit of our values. We believe in the people of this state – letting them prosper and eliminating the government. “
Interim deficits are also lower. This year’s 2020-21 deficit fell from a projected $ 16 billion to $ 7.9 billion. The deficit will grow again in the next fiscal year 2021-2022 to reach $ 8.6 billion, in part due to a decision to increase civil service salaries and abandon an earlier policy to limit increases in salary at 1.5%.
Meanwhile, the budget reveals that NSW has spent more than $ 4 billion since March 2020 on its response to Covid-19.
Perrottet has emerged as one of the biggest spenders, with spending rising 8.2% in 2020-21 and 7.2% in 2021-22.
Perrottet did not apologize. “It’s a budget with heart,” he said, adding that the Berejiklian government made a conscious decision to continue investing in the state.
But the budget also reveals that stimulus measures will be rolled back in the coming years, and cuts are coming – perhaps as the next national elections approach.
The government is counting on opening New South Wales to the rest of the world by the middle of next year, with Perrottet revealing that the closed border is costing the state $ 300 million a month.
The state economy (gross state product) is now on track to exceed its pre-Covid size in 2022.
Unemployment has returned to 5% and is expected to fall to 4.5% by 2024, which the Treasury considers full employment.
The additional spending in the budget was relatively modest after the spending spree in the early months of the pandemic. A lot of things had been announced in advance.
For families, the government will continue to fund two days of free preschool until the end of 2022. It will also provide $ 100 vouchers to pay for swimming lessons for children aged three to six.
In what the treasurer said is a major move, the NSW government will grant five days of bereavement leave to women who experience a miscarriage and additional leave when a baby is born prematurely.
Faced with Labor and its new leader, Chris Minns, trying to reposition his attack on the cost of living, Perrottet tried to point the finger at the subsidies already available from the Berezhiklian government.
In the days leading up to the budget, he announced a second voucher program, thank goodness it’s Friday, to try and boost spending in Sydney’s CBD, which has remained calm in the aftermath of Covid.
An additional $ 1 billion will be spent this fiscal year on the health response to Covid, including $ 261.3 million for vaccine distribution, $ 340 million for PPE, $ 200 million for pop-up clinics and 145, $ 4 million for the quarantine of returning travelers.
Perrottet noted that NSW had quarantined nearly half of the travelers returning to Australia.
An important element, at $ 2.7 billion, was the decision to lift the policy of capping utility wages to 1.5%. The measure, introduced during the pandemic, was causing political grief to the government, especially with regard to nurses, police and paramedics who have been on the front lines of the pandemic response. He had also been stranded in the upper room. Instead, salary increases for civil servants will revert to the old (legislative) ceiling of 2.5%.
There was also $ 214 million over four years for ambulance service at a new state operations center, jets, and retraining of paramedics for intensive care.
An additional $ 70 million will be spent on making hospitals safer after a number of incidents at public hospitals. The government has yet to announce its response to the ice inquiry, which will likely see further action.
An additional $ 719 million will be spent on upgrading communication networks for first responders and $ 268 million for responding to the bushfire investigation.
There was also an additional $ 500 million for the digital restart fund, which fueled NSW’s adoption of digital service delivery and contact tracing, allowing the state to decide against hard locks.
In terms of responding to climate change, the NSW government has already announced a $ 490 million package to encourage the adoption of electric cars.
The stamp duty will be eliminated on vehicles under $ 78,000 (effective September 1). Rebates of $ 3,000 will also be offered on the first 25,000 vehicles purchased valued at less than $ 68,750. There are also funds for new charging stations and for converting the state’s car fleet.
Unlike Victoria, NSW does not intend to introduce a road user charge until there is 30% use of electric cars.
Perrottet admitted that soaring house prices were not good for young people trying to enter the real estate market.
He said the budget included a new payment for infrastructure from developers to help pay for more infrastructure, but acknowledged it was the âchallenge of our generationâ for state and federal governments.