NSW Treasurer Eric Roozendaal today announced the State Budget has been returned to surplus – two years earlier than forecast
June 8, 2010
NSW Treasurer Eric Roozendaal today announced the State Budget has been returned to surplus – two years earlier than forecast.
He says the Keneally Government will deliver Budget surpluses worth a combined $3.15 billion over the next four years – or an average surplus of around $800 million a year.
“The NSW Budget is already back in the black, with a $1.1 billion turnaround in 2009-10,” he says.
“The NSW economy has also recorded a massive $11.5 billion turnaround in the past year, with Gross State Product forecasts improving by 3 percent compared to last year’s Budget.
“The 2010-11 Budget consolidates the NSW economy’s recovery and invests in what’s important to NSW families – essential frontline services, building new infrastructure and jobs.
“This is an economically responsible Budget which puts NSW on a path to future prosperity and which delivers better services and infrastructure while further securing the State’s solid-gold AAA credit rating.”
The NSW Budget delivers record investment in essential frontline services of $56.9 billion, an increase of $2.9 billion or 5.5 percent on the 2009-10 Budget.
The revised forecast result for 2009-10 is a surplus of $101 million, representing a turnaround of $1.1 billion on the forecast 2009-10 deficit of $990 million.
The NSW Budget result for 2010-11 is a forecast surplus of $773 million.
Surpluses are forecast throughout the forward estimates period:
- 2011-12: $885 million surplus
- 2012-13: $863 million surplus
- 2013-14: $628 million surplus.
Roozendaal says the NSW Budget delivers the Keneally Government’s continued investment in the biggest infrastructure building program in the history NSW.
Key initiatives in the NSW Budget which will further drive the State’s strong economic growth include:
- Australian-first zero stamp duty for off-the-plan purchases of new homes – saving up to $22,490 for families and investors who buy a house or apartment worth up to $600,000 in the pre-construction stage
- 25 percent stamp duty cut on newly-constructed homes, saving up to $5,623
- First home buyers receive up to $29,490 in benefits if they buy off-the-plan in the pre-construction stage
- Australian-first zero stamp duty for over-65 ‘empty-nesters’ who sell their family home and down-size to newly-constructed home worth up to $600,000
- Double cut to payroll tax, contributing to saving NSW businesses $4 billion on payroll tax over the six years to 2013-14
- Payroll tax cut due in January next year to be brought forward to July 1, 2010
- Payroll tax will be cut again on January 1, 2011 to 5.45 percent
- $180 million in new tax cuts in 2010-11. This includes cuts to payroll tax and cuts to stamp duties
- Abolition of the insurance protection tax from 1 July 2011.
- $654 million in new tax cuts in the four years to 2013-14.
- $22.3 billion over the next four years for the Metropolitan Transport Plan, including the start of work on the $4.5 billion Western Express, 400 growth buses, and the Dulwich Hill light rail
- A defence industry investment package worth $75 million supporting up to 1,500 new jobs and hi-tech industries.
- $152.1 million upgrade of the Sydney Opera House – the biggest upgrade in the icon’s history, improving public safety and security at Australia’s No 1 tourist destination.
- A further $35 million investment into the 2010-11 NSW Community Building Partnership to support local jobs, stimulate growth and improve community facilities; $300,000 will be invested in each of the 93 NSW electoral districts, and an additional $100,000 will be invested in districts with higher unemployment.
Roozendaal says the Keneally Government will continue investing in the biggest infrastructure building program in the history of NSW, investing $16.6 billion in infrastructure in 2010-11 and $62.2 billion over the next four years – supporting up to 155,000 jobs a year.
He adds that the NSW economy led Australia out of the financial downturn, a testament to the State’s strong Budget position.
The State leads the Australian economy’s recovery out of the global downturn with 4.4 percent growth in State Final Demand this financial year.
“Growth in the NSW economy is significantly stronger than any other major state,” Roozendaal says.
“The latest State Final Demand figures show NSW contributed around 46 percent of economic growth across all states and territories so far this financial year.
“NSW’s growth through the first nine months of this financial year is about twice Western Australia’s and about 40 times greater than Queensland’s.”
The NSW unemployment rate for 2010-11 is forecast to be 5.5 percent – significantly lower than the forecast of 8.5 percent for 2010-11 outlined in last year’s Budget.
“This 3 percent variation between budgets is the equivalent of 110,000 jobs – a stark reminder at the effectiveness of the massive economic stimulus investment of both the Commonwealth and the NSW Government over the past year,” Roozendaal says.
NSW economic output (Gross State Product) for 2009-10 is now expected to record a 3 percent turnaround – now forecast at 2.5 percent, compared to -0.5 percent contraction forecast in last year’s Budget.
“This 3 percent turnaround represents an $11.5 billion turnaround in the NSW economy over the past year,” Roozendaal says.
“The NSW economy is forecast to grow at above-trend rates for the next two years.”
GSP for 2010-11 is forecast to increase by 3 percent; and by 3.5 percent in 2011-12.
General government sector net debt is expected to peak at 2.7 percent of GSP in 2010-11 before declining in the forward years.
“General government sector net debt levels as a share of the economy will stay significantly lower than 1995 when it was 7.5 percent of GSP,” Roozendaal says.
“The NSW Budget supports jobs, invest in new infrastructure and delivers essential frontline services for the families of NSW.
“This is a fiscally responsible Budget which consolidates the State’s economic recovery and takes NSW forward into a new era of economic growth.”