NSW Budget: $800 Million Surplus But 2,000 Jobs Expected To Be Cut
It’s not the size that matters, it’s what you do with it apparently.
That’s the message from today’s New South Wales Budget, as Treasurer Dominic Perrottet unveiled an $802 million surplus that’s nearly half of the $1.4 billion he projected this time last year.
Proclaiming this a "state building budget from a state building Government" the Treasurer describes the 2019-20 Budget as “what success looks like”.
“This budget repays the faith that the people of NSW put in us at the March election,” Perrottet told 10 News First.
It features a record capital investment in health ($10.1 billion) and education ($7.3 billion) as well as a total support package of $1.8 billion for struggling drought-hit communities.
“To each and every farmer across our state, I say all of News South Wales stands with you,” Perrottet told Parliament.
But it’s not only the state’s rich soil drying up. So too are the revenue streams.
The NSW bottom line has, according to the Treasurer, faced “the largest revenue write downs in our history”.
Sydney’s slowing housing market is largely to blame for depriving the coffers of billions in stamp duty receipts. The latest numbers have wiped $10.6 billion off forecast revenue since 2017. The only good news is Treasury number-crunchers expect the decline to bottom out in the next 12 months.
The other big factor hurting the budget is the NSW share of the national GST pie. To put it mildly, Treasurer Perrottet thinks the state is being ripped off.
“Under the current system, states that perform well are penalised," he said.
“Reforming states end up subsiding those that that don’t."
The Federal Budget in April cut $2.3 billion from the state’s share, according to the Treasurer.
But Labor’s Shadow Treasurer Ryan Park has little sympathy, pointing to the fact both are Coalition Governments and complaints about GST from the Government have become near annual.
Regardless, the Treasurer has asked a new panel to investigate improving relations with the Federal Government. It’s expected to report back by the end of the year.
The state’s net debt is again in positive territory at $8.8 billion and the lowest of all states and territories. But there are storm clouds looming.
Net debt is forecast to dip into the negative territory next financial year ($12.4B) before dramatically ballooning out to $38.6 billion in 2022-23. It’s a result of the Government’s ambitious infrastructure program which was a key pillar of its re-election strategy.
“Our infrastructure investment is now approaching $100 billion,” Perrottet said.
“A new golden century for New South Wales.”
The future debt numbers again raise the question of more public asset sales. The State Government has said it has no current plans but Labor believes it’s inevitable.
“When it comes to privatisation, it’s in their DNA,” Shadow Treasurer Ryan Park said.
While the Budget papers were covered in smiling faces, it’s not all good news for the public service.
The Government has announced it will seek more than $3.1 billion in savings from the public sector. The largest chunk will come trimming the number of so-called ‘back-office’ employees and cutting executive pay bonuses. While an official number hasn’t been put on job losses, it’s estimated to be more than 2,000.
Unions NSW believe it’s a decision that will slow economic growth, particularly in regional areas.
“This government’s no longer cutting fat, it’s actually cutting into the bone of the public sector,” Secretary of Unions NSW Mark Morey said.
Labor will deliver its budget reply in Parliament on Thursday. As the results of the ballot to decide the party’s new leader won’t be known until the end of the month, Shadow Treasurer Ryan Park will deliver the address.
Some of the real impacts of the budget will be felt in just two weeks time.
From July 1 a number of measures will be put into place to ease the cost of living.
Anyone who spends between $780 to $1299 a year on tolls – or more than $15 a week – will have their car registration cut in half. This is in addition to those who already have free registration if they pay more than $25 a week.
There’ll also be savings for public transport users. The Opal travel cap has been reduced by around 20 percent, meaning the maximum amount an adult can pay is $50 a week, while concession card holders are capped at $25. It's a potential saving of $686.
Pushing down power bills is also a focus, with 130,000 self-funded retirees now eligible for a $200 energy rebate.
Other benefits for seniors include an extension for the Senior Savers card. Anyone over 60 who works less than 20 hours a week is now eligible, giving them access to around 7400 discounts.
It’s not just the adults who will benefit. The popular Active Kids Rebate will double, giving parents $200 worth of vouchers to use towards sport registration.
But not everyone thinks the measures go far enough.
Joanna Quilty, CEO of peak social body NCOSS, said: “When the premier was re-elected, she committed her government to tackling social issues and tackling disadvantage.
“I’d have to say we are somewhat disappointed, it does feel like this was a missed opportunity to help those who are really struggling.”