In an interview with theHerald ahead of delivering his first state budget on Tuesday,Kean said the state’s finances were still in recovery mode after the COVID-19 pandemic.
He also warned of a likely decline in house prices as the Reserve Bank lifts interest rates to keep inflation in check.
“So much of the community’s wealth is tied up in the values of Sydney’s property market,and NSW’s property market,so that will obviously flow through to consumer confidence and business confidence and have an impact on the broader economy,” Kean said. “So this is a great concern for me.”
The NSW economy has made a strong recovery since the 2021 lockdown,but inflationary pressures stoked by pandemic disruptions and the war in Ukraine have clouded the outlook,he said.
“I’m incredibly concerned about the potential for the US going into recession and the impact that may have on the rest of the economy,which is one of the reasons now’s not the time for austerity,” he said.
Kean said the NSW economy was in a good position,but he is “monitoring closely” international headwinds,especially the effects of and a slowdown in China.
“When the US and China catch a cold,the rest of the world gets the flu,” he said.
“And I think that’s what we’re seeing with China and the US,particularly China – it’s causing massive capacity constraints in the market driving up supply chain costs,and that’s really flowing through to our infrastructure pipeline.”
However,Kean insisted that,despite ongoing financial pressures facing NSW,he would deliver a “reform budget” with a focus on women and the cost of living,particularly housing affordability.
“There is definitely pressure on the budget in the short term,” Kean said. “But over the longer term we want to make sure that our financial position remains strong and sustainable,and you’ll see that in the budget.”
Since the onset of the pandemic in early 2020,Kean said the NSW government had spent an extra $47 billion “to keep us safe and get us through”. The crisis has pushed the budget deep into the red and reshaped the government’s financial strategy.
“The tail of COVID is still washing through the economy,” he said.
Kean has emphasised that his focus in this budget was increasing women’s workforce participation,which includes a in NSW.
“Over the longer term we want to make sure that our financial position remains strong and sustainable,and you’ll see that in the budget”
NSW Treasurer Matt Kean
NSW will for the first time intervene in childcare,which has always been the domain of the federal government. As part of the budget,Kean will also release the recommendations from the.
One of the recommendations from the panel,which was chaired by Chief Executive Women president Sam Mostyn,is protecting women from sexual harassment in the workplace.
On the back of,which found 33 per cent of people working in Commonwealth parliamentary offices had experienced sexual harassment at work,the government will fund a $4.8 million Respect at Work Taskforce to guide businesses on how to keep women safe at work.
“Sexual harassment has no place in our society. It is unacceptable,and it also holds women back from realising their career hopes and aspirations,” Kean said.
The budget will also include Premier Dominic Perrottet’s long-touted,which will see the option of opting into a broad-based land tax,most likely limited to first-home buyers.
Kean said now was not the time for austerity and NSW Labor estimates show the spending announcements in the lead-up to the budget will be close to $30 billion.
The big-ticket items include, to 3 per cent and for all four-year-olds.
Kean said there would be no improvement in the state’s debt position which has deteriorated sharply since the pandemic.
The last budget update in December forecast NSW net debt to reach $103 billion or 13.4 per cent of gross state product (GSP) by June 2025.
That is up from just $37 billion in June last year (5.8 per cent of GSP). Kean said the debt forecasts in Tuesday’s budget would be “around” the level predicted six months ago.
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