The New South Wales government is forecasting four more years of deficits in Tuesday’s budget, after a change to how money from the GST is distributed shattered hopes of a return to surplus.
Treasurer Daniel Mookhey is also warning there’ll be little additional cost-of-living relief for families because he’s concerned handouts could stoke inflation.
Instead of the $475 million surplus forecast in the half-yearly review, the treasurer will announce a $3.6 billion deficit for the next financial year.
While the government is blaming an $11.9 billion shortfall in expected GST revenue, Treasury’s own calculations show the state was still heading for a $1.9 billion deficit in 2024-25 even under the previous assumptions.
Mr Mookhey said the Commonwealth Grants Commission’s decisions would make the path back to surplus much harder.
“New South Wales has been once again dudded by an absurd system,” he said.
When handing down its determination, the grants commission said NSW could provide services at a lower cost, and had the ability to raise more revenue than other states and territories.
Despite the shortfall, the treasurer said that, with spending restraint, the state could gradually reduce the deficits to $1.5 billion by 2027-28.
Tackling the housing crisis
Mr Mookhey said plans to boost housing supply would be a centrepiece of the budget.
“People will see us take the next step forward in acting on this housing crisis — decisive actions to deal with the housing crisis that is affecting all of New South Wales,” he told the ABC.
The state government is setting aside more than $900 million for housing initiatives in the 2024-2025 budget.
This includes $450 million to build about 400 apartments for essential workers to rent at a discount in inner Sydney, $200 million to secure 120 homes for healthcare workers in regional and rural areas, and $254 million to speed up the processing of development applications.
The treasurer acknowledged the need to build more social housing, which has a waitlist of nearly 60,000 individuals and families.
He hinted the budget would reveal more investment in accommodation for the state’s most vulnerable people.
“We have been listening,” he said.
“Here in New South Wales, it’s harder particularly for the victim-survivors of family violence to have a safe place to go because New South Wales hasn’t made investments in this space for a decade.”
Don’t expect a handout
Mr Mookhey said he knew families were struggling with the cost of living and that some further relief could be expected.
“We will have a bit more to say about that [on Tuesday],” he said.
However, he suggested that cash handouts would only make inflation worse.
“We want the RBA to be in a position where they can lower interest rates as early as possible,” he said.
“That’s part of the reasons why we are directing our resources towards toll relief.”
The $60 dollar-per-week toll cap was funded in the previous budget, but only took effect this year.
Posted , updated
#NSW #Treasurer #Daniel #Mookhey #set #hand #budget #forecasting #years #deficits