On Thursday,Mookhey will disclose the deterioration in the state’s bottom line in the half-yearly review of the state’s finances.
NSW Treasurer Daniel Mookhey says the Albanese government’s cuts to infrastructure spending “haven’t helped” the state’s budget.Dion Georgopoulos
The change means that the already modest $800 million surplus predicted for 2024-25 will become wafer-thin,as the government warns that rocky economic headwinds will make balancing the books challenging.
Along with high inflation,rising interest costs and a reduction in GST revenue,the treasurer says a decision by the Albanese government to overhaul its infrastructure pipeline by cutting funding for 17 projects in NSW was a major factor in the shortfall.
“I’ve been upfront about how challenging it is to return the state’s budget to surplus. Recent decisions by the Federal Government haven’t helped,” Mookhey said.
“The review is just another reminder about why it’s so important for the government to carefully manage its finances,just like every NSW family is having to do. By continuing to repair the state’s finances we will be in a better position to help families through this once-in-a-generation cost-of-living crisis.”
In November,federal Infrastructure Minister Catherine King released the findings of an independent review of the Commonwealth’s 10-year,$120 billion pipeline of major works. It found that without changes,the pipeline could not be delivered.
King announced 50 projects across the country that would be cut,including 17 in NSW,or one-third of all the projects axed. They included the critical western Sydney interchange linking the M7 with the new toll-free M12 motorway to the city’s second airport.
While NSW Treasury initially predicted the cuts would result in a $1.4 billion dollar budget hit over the forward estimates,.
Finance Minister Courtney Houssos also pointed to the “withdrawal of significant Commonwealth government funding” as a reason for the downward projection,along with other “economic headwinds”.
They included a rise in interest costs by $500 million this financial year,while high inflation and rising interest rates have seen GST receipts forecast to fall by $1.9 billion dollars over four years to 2026-27.
In Mookhey’s first budget in September the government predicted a $7.8 billion dollar deficit this financial year before a return to surplus in 2024-25. While the government remains hopeful it will still retain a surplus,it is likely to be more slim.
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