Record infrastructure spend promised in NSW budget
CRANES will line the horizon across New South Wales with the State Government promising a record $10.3 billion annual spend on infrastructure projects over the next four years.
But the state's future beyond that is volatile, with a falling GST share and major cuts to Commonwealth grants expected to put pressure on the government's finances.
Handing down the State Budget on Tuesday, Treasurer Gladys Berejiklian unveiled four years of consecutive surpluses and promised to deliver 150,000 new jobs.
She also announced $7.2 billion in stamp duty revenue in 2015-16 would help fund a $590 million reserve to bring forward major projects, as long as the expected $20 billion lease of electricity assets goes through.
Stamp duty revenue is projected to exceed $30 billion to 2018-19, but Ms Berejiklian said NSW was not in a position to eliminate the controversial tax.
"There is no doubt there are huge challenges ahead," she said.
"That's why we have to make sure we don't spend more than we get."
Instead, she said the government would drive housing supply with a $400 million boost to its housing acceleration fund.
About 40% of the state's budget comes directly from the Commonwealth.
Ms Berejiklian warned cuts announced by Federal Treasurer Joe Hockey were "unsustainable".
"We will continue to push the Commonwealth Government to engage productively with the states this year on the issue of health and education funding, and broader tax reform," she said.
The underlying budget surplus is forecast to reach $713 million this financial year, but a change in the reporting of rail assets from July 1 has pushed the figure to $2.5 billion.
Ms Berejiklian said the surplus would reach $3.2 billion in 2016-17, $2.6 billion in 2017-18 and $2.2 billion in 2018-19.
"But uniquely, alongside this strong operating result, we are investing in record infrastructure, the scale of which has not been seen for many decades," she said.
Expenses growth and revenue growth are expected to be equal at an average of 2.8% for the next four years - an improvement on 2011 when growth was 6.4% and revenue was 5.2%.
"We are now by far the best performing State in the nation, and we are in that position because of hard work," Ms Berejiklian said.
"Our budget story is two-fold - it is a story of strong and careful fiscal discipline over the last four years, coupled with Government strengthening the economy."
Most government departments have been asked to make 1.5% "efficiency" cuts for the coming three years, expected to add $800 million to the coffers.
Ms Berejiklian would not say whether it meant job losses.