NSW Budget highlights for roads and small business

Huge spending percentage in infrastructure as some tax charges fall

NSW Budget highlights for roads and small business
Dominic Perrottet with his first Budget


The New South Wales government is rolling in cash and can afford an enormous road infrastructure spend along with small business tax cuts.

Private and public transport spending will make up 60.7 per cent of the Budget capital spend for the state and amounts to $8.8 billion.

The 2017-18 Budget’s recurrent expenses in the transport sector are expected to be $11.4 billion, which is 14.7 per cent of total recurrent expenses.

"We are surging ahead with another near-record infrastructure investment of $72.7 billion over four years, building the infrastructure backbone that will serve our State for decades to come, and investing in the local and social infrastructure that allows communities to flourish," treasurer Dominic Perrottet says of his first Budget.

Total revenue in 2016-17 is estimated at $78 billion.

"This is $830.6 million more than anticipated in the 2016-17 Budget, largely due to transfer duty received as part of the State’s asset recycling program," the Budget papers state.

Tax items

Small businesses will gain tax exemptions, including on work vehicles.

"From 1 January 2018, small businesses with aggregate turnover less than $2 million will be exempt from insurance duty on their premiums for commercial vehicle insurance, professional indemnity insurance, and product and public liability insurance.

"Combined, these measures are forecast to reduce revenue by $318.0 million over the four years to 2020-21.

"These tax cuts will encourage small businesses to take up more appropriate levels of insurance by removing the disincentive caused by higher insurance premiums.

"They will complement other Government measures designed to support the small business sector, which plays a key role in the growth of the New South Wales economy, and job creation."

The abolition of duty on commercial vehicle insurance for small businesses, which includes aviation insurance, aims to save small businesses $80 million over four years to 2020-21.

The government is concerned that current duty payable on this insurance, at is 5 per cent of the premium, encourages under-insurance for commercial vehicles.

"The abolition of insurance duty on professional indemnity insurance for small businesses (not including medical indemnity insurance) will save small businesses $83.0 million over four years to 2020-21." the Budget papers say.

"Professional indemnity insurance helps protect individuals and companies from bearing the full cost of any negligence claims made by clients.

"The current duty payable on this insurance is 5 per cent of the premium. The abolition of insurance duty on product and public liability insurance for small businesses will save small businesses $155 million over four years to 2020-21.

"Product and public liability insurance protects businesses from claims relating to injury from products or from activities affecting third parties.

"The current duty payable on this insurance is 9 per cent of the premium."

Exempt from motor vehicle stamp duty will be applications to register a heavy vehicle trailer, not previously registered under the Commonwealth or another Australian jurisdiction along with applications to register a heavy vehicle trailer, previously registered in the name of the applicant under the Commonwealth or another Australian jurisdiction.

However, payroll tax is forecast to grow at an annual average rate of 4.8 per cent over the four years to 2020-21.

And, motor vehicle weight tax, registration and transfer fees and other taxes will rise 5.5, 4.3 and 4 per cent, to $2.54 billion, $492 million and $48 million respectively, over the forward estimates to 2020-21, while stamp duty will rise 3.2 per cent to $928 million.

Other initiatives totalling $30.5 million are aimed at supporting business advisory services, helping reduce red tape and driving innovation, including funding for more than 60 advisers through the Business Connect program.

Department news

Roads and Maritime Services (RMS) will collect $67 million more, to $546 million, "due to the introduction of the new regulatory component of the heavy vehicle registration fees, which are collected by RMS for the National Heavy Vehicle Regulator".

The department will gain $118 million in additional maintenance expenditure to repair roads damaged by "natural disaster wet weather events" – along with an extra $48 million in grants to local government recovered from the Natural Disaster Fund for the same purpose – and legacy costs relating to motor registries.

The ‘reprofiling’ of the Pacific Highway, WestConnex and other capital projects will see a reduction for RMS of $536 million to $4.37 billion.

"Tackling congestion is a focus of this Budget, with current estimates showing that traffic congestion costs us $6.1 billion a year," roads, maritime and freight minister Melinda Pavey says.

"As Sydney’s population continues to grow, so will demands on our roads. The congestion busting and road building investment in this budget means people will spend more time with their families and less time in traffic jams."

Otherwise, Budget highlights for roads include:

  • $1.5 billion to continue the NSW and Australian Government funded Pacific Highway upgrade program including completing all projects between Port Macquarie and Glenugie near Grafton, continued construction between Glenugie and Ballina and planning for the future bypass of Coffs Harbour
  • $648 million for NSW and Australian Government funded road upgrades to support the new Western Sydney Airport at Badgerys Creek, including completion of the first stage of both The Northern Road and Bringelly Road upgrades
  • $282 million to improve road safety in NSW, including $19.2 million in federal funding, through safety-targeted road improvements, education and high visibility police enforcement
  • $264 million to reduce congestion on Sydney roads by addressing critical pinch points, and commencing the implementation of the Smart Motorways program on the M4 Motorway
  • $208 million for major road upgrades in the regions
  • $188 million for Central Coast roads, including widening works on the M1 Pacific Motorway and completion of intersection upgrades on Wyong Road
  • $154 million for increasing road freight safety and productivity, including continuing construction of the replacement Clarence River bridge at Tabulam
  • $153 million for road upgrades to support population and economic growth in Western Sydney, including completing the second stage of the Schofields Road upgrade in north west Sydney
  • $137 million for upgrades on the Princes Highway, including completing the Berry bypass and starting to build the Berry to Bomaderry upgrade
  • $137 million to continue upgrading the roads surrounding the new Northern Beaches Hospital at Frenchs Forest
  • $132 million to continue planning and corridor preservation for future links on the Sydney Motorway Network including the Western Harbour Tunnel and Beaches Link
  • $117 million for major road upgrades in the Sydney Airport precinct
  • $79 million for upgrades on the New England Highway, including commencing construction of the Scone bypass
  • $58 million for upgrades of the Newell Highway, including completion of realignments at Grong Grong and Trewilga
  • $50 million for planning and delivery of freight rail infrastructure upgrades at key sites
  • $49 million for upgrades to Hunter roads
  • $19 million for the country rail investments including preservation of the Lower Hunter Freight Corridor and the Fixing Country Rail pilot program.

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