Increases in GST receipts,stamp duty and payroll tax have contributed to the budget’s stronger-than-expected turn-around,with stamp duty now the government’s most lucrative source of revenue.
NSW Treasurer Dominic Perrottet with the NSW budget papers ahead of the budget on Tuesday.Kate Geraghty
In the November budget,NSW’s deficit was projected to be $16 billion,although that was revised in the half-yearly review to $13.3 billion. It is now projected to be $7.9 billion.
NSW Treasurer Dominic Perrottet will deliver his fifth budget on Tuesday,which will reveal stamp duty raised more than $9 billion for the state. Mr Perrottet wants to see the tax abolished.
Stamp duty was projected to hit $8.3 billion in the half-yearly review delivered four months ago but on the back of a strong property market,it has been revised to its highest level since 2016.
Mr Perrottet is pushing to overhaul property tax in NSW,with his ultimate goal to replace stamp duty with an annual land tax.
One of the major investments in the budget will be the government’s public sector wages policy,which will see pay rises of 2.5 per cent for four years,including for nurses,paramedics and police.
The government will spend $2.7 billion over four years on the pay rises for public servants,after introducing a policy at the height of the pandemic which capped rises at 1.5 per cent.
Mr Perrottet said the government’s regulation allows pay rises “up to 2.5 per cent” but he committed to giving the maximum to all the state’s 400,000 public servants.
He will also reveal a $500 million budget surplus is projected to return in 2024-25.
Mr Perrottet said the budget will show the state’s expenditure is forecast to temporarily increase in the next year as the government continues to support job creation.
Spending will “moderate” as the economy recovers and stimulus measures are wound back.
“Our challenge is to continue to deliver targeted stimulus and at the same time continue to repair the budget after what has been a challenge nobody saw coming,” Mr Perrottet said.
“As the latest COVID outbreak shows we are not out of the woods yet,but my hope is that in 12 months,if we continue to focus on what can be done,the trajectory we will outline in today’s budget will be considered conservative.”
Mr Perrottet said the state was “well on the way” to recovery with unemployment back to 5 per cent and confidence in the economy strong.
Mr Perrottet said the budget would be focused on families and the future.
“We’re still in an uncertain economic environment,so it’s important to keep supporting families to fuel confidence,and this budget offers record hip-pocket help,” he said.
“This is a recovery budget,but it is also a productivity budget,packed with reform from education and skills to housing affordability,to lift living standards,lift wages,and create better opportunities for current and future generations.”
The Treasurer said “recovery is only the beginning”.
“This budget throws down the gauntlet to other states and the Commonwealth to tackle tough reform,because that is the only way to steel ourselves against the next shock and set up a better future for our children,” Mr Perrottet said.
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