- Revenue: $69.1 billion
- Expenditure: $67 billion
- Budget result: $2.1 billion surplus
- Economic forecasts: Gross State Product 2.5% in 2014-15, forecast 3% in 2015-16
- Major recurrent spending initiatives: Health up 5.4% in 2015-16, Education up 6%, Social Housing up 6.5%
- Major capital investments: $38 billion in roads and transport over the next four years
What a difference a housing boom makes. On the day New South Wales’ first female treasurer Gladys Berejiklian got to her feet to deliver the first budget, news came that house prices in Sydney climbed another 3.1% in the three months to March. That takes the 12 month increase in one of the world’s most pricey cities to 13.1%, well up on the 6.9% average rise posted across the eight capital cities. It also largely explains the billion-dollar-plus bonanza in stamp duty collected by the government. While the leasing of the State’s electricity transmission and distribution networks will underpin the record planned investment in infrastructure, it is the stamp duty bonanza that has put the Baird Government in a budget sweet spot.
The government is hoping there is a lot more substance in the State’s resurgence, claiming NSW will benefit as the national economy swings from the resource sector towards services. “The State is absolutely buzzing”, the Treasurer proudly proclaimed. However not even a resurgent NSW is wholly in control of its own destiny, with the Treasurer admitting the State’s renaissance faced challenging headwinds in the national and international economies.
Budget highlights by portfolio:
Treasury and Finance
• Revenue growth will be subdued over the next four years, averaging 2.8% per annum. This reflects lower GST receipts, loss of dividends from electricity network businesses and falling Federal Government payments
• Tax revenue is forecast to grow by an average of 4.7% per year between 2015-16 and 2018-19, in line with growth in the state economy
• Expenses growth will average 2.8% per annum from 2015-16 to 2018-19
• Whole of government savings initiatives of $849.3m will be made in the three years from 2015-16 to 2017-18
• A 1.5% efficiency dividend will be imposed across most departments for a saving of more than $536.7m by 2018-19
• 2.5% public service wage rise cap and a labour expense cap in force.
Infrastructure, roads and planning: Rebuilding NSW
• $38b over the next four years to roads and transport, with 2015-16 programs to include:
o $1.7b towards building WestConnex
o $1.4b to ensure the Pacific Highway is duplicated between Hexham and the Queensland border
o $977m to deliver the Sydney Metro Northwest
o $120m to progress the CBD and South East Lightrail
o $51m for NorthConnex
• $1b investment in the Regional Water Security and Supply Fund to address water challenges faced by regional communities including Cobar and Broken Hill. It will go towards improving drinking water quality, drought security, dam safety and poor wastewater treatment
• $400m investment in a new program, Fixing Country Rail, via which the government will allocate funds through merit-based assessments of rail infrastructure needs.
• Government school enrolments are forecast to increase by 6,800 students this year. The Department of Education’s capital budget has increased by 27% on last year to $456m to build schools in places such as Parramatta, Bella Vista and Narellan
• The Budget provides funding for more than 500 additional teachers this year
• Spending in schools and early childhood overall has increased by $635m over the last year to $12.8 billion
• $20m announced for a new Before and After School Care Fund to help establish up to 45,000 new places in communities that do not currently have a service. It is part of the $348m package this year for early childhood education and care sector support
• $2.3b in the vocational education and training system, including:
o $48m over four years for fee-free scholarships for 200,000 15 to 30 year olds to undertake government subsidised vocational education and training courses
o $8m over four years to provide viable pathways into education, training and employment for young people in regional areas.
Health and Community Services
• Record health expense budget ($19.6b), including:
o $2.6b for emergency care
o $8.7b for inpatient hospital services
o $2.7b for outpatients
o $1.7b for mental health services
o $1.6b for rehabilitation and extended care
o $913m for primary and community based services.
• Boost to frontline staff – an additional 3,500 full-time equivalent positions by 2019 including at least 2,100 more nurses and midwives, 700 doctors, 300 allied health professionals and 400 hospital support staff
• $159m to advance medical research
• $60m to continue support for Local Health Districts
• $32m for community-based palliative care services
• $1.4b into state-wide hospital rebuilding program, including:
o $30m for the next stage of the redevelopment of Blacktown and Mt Druitt hospitals
o $72m for the Westmead Hospital redevelopment
• Early roll-out of the NDIS in Nepean Blue Mountains in 2015-16 – $7.3m to support children and young people under 18 years to access the NDIS
• $20m over three years for a new Social Housing Community Improvement Fund
• $35m in 2015-16 to continue implementing Living Well mental health reform.
• Whilst all the 2014-15 windfall tax revenue will go into building new infrastructure across the State to help ease housing affordability, there are no changes to the First Home Owners Grant despite the surge in Sydney property prices
• An additional $400m will go into the Housing Acceleration Fund, the largest ever single contribution to go directly towards infrastructure required in growth areas to bring housing to market as quickly as possible
• Almost 8,000 First Home Owner Grants worth $15,000 for new homes in 2014, representing a 25% increase on last year
• Dwelling investment has increased over the last two years growing by 7.8% over the year to the March quarter.