The New South Wales Labor government delivered its first budget today, with treasurer Daniel Mookhey saying it was the beginning of a long-term plan to address a “decade of damage”.
“This Budget is only possible because of the careful and responsible approach to budget repair which will ensure the Government can fulfill its commitments without privatising public assets or imposing an unfair wage cap on the workers who deliver our essential services,” Mookhey said.
The budget forecasts a “modest surplus” of $844 million, with a disclaimer on the difficulty of the task.
“Before this Budget, New South Wales debt was projected to reach $188.2 billion by 2026, and higher interest rates are making many New South Wales debt repayments more expensive, limiting our ability to pay for important programs.
“In this Budget, we reckon with these challenges and begin the rebuild.
“We have made better choices. Sometimes difficult ones. But we have made the right choices, and because of them, we can deliver the programs and services that our people need,” he said.
While inflation eased in the June quarter, it is still high, with the prices of essential goods and services growing quickly. Food and non-alcoholic beverages have increased 7.8 per cent and household energy costs by 24.3 per cent.
Employer association Ai Group said the budget charts a “solid path to fiscal repair”. But Ai Group NSW head Helen Waldron said it is keen for more details on the halving of budget expenditure for the Department of Enterprise, Investment, and Trade.
“The Department's programs provide vital assistance in the development of the State's economy and the choice of program cuts cannot be taken lightly,” Waldron said.
Clean energy investment
The budget provides $3.9 billion for investment in clean energy. Of that, $480 million has been allocated to boost local manufacturing capacity and capability for renewable energy products and materials, with help for companies manufacturing low carbon products at scale.
“This has the potential to decarbonise NSW industries and support the growing domestic circular economy,” it said.
RSM Australia's National Manufacturing Lead Jessica Olivier welcomed the announcement of $480 million to support.
“State support, along with massive federal support from the National Reconstruction Fund, will reveal a lot about whether Australia can take up the challenge to be a world player in advanced manufacturing,” Olivier said.
“More government investment into manufacturing must be made at both the Federal and State level if we are to truly embrace local manufacturing capability and boost the number of Australian-made goods.
“We are seeing our manufacturing clients focusing on ESG capabilities, and this observation is backed up by recent research showing that while current economic conditions are challenging, Australian manufacturers remain positive and are committed to investing in sustainable manufacturing in the next 12 to 18 months, through ESG, green technologies and renewables.
“Just as the USA is focusing on climate, clean energy, and green technologies as part of growing their manufacturing capability, Australia needs (and wants) to do same. This budget announcement will help them to achieve that.”
In partnership with the federal government, $1.3 billion will provide energy rebates and targeted energy bill relief to up to 1.6 million eligible households and around 300,000 eligible small businesses.
More than 300,000 eligible businesses using less than 100 MWh of electricity per year will receive a one-off $650 bill relief payment towards their electricity bill in 2023-24.
The Electricity Infrastructure Roadmap is a $1.8 billion investment in critical transmission and energy storage solutions, while the $1.0 billion Energy Security Corporation will drive investment in stable and affordable renewable energy.
EV infrastructure
A further $263.5 million will support the roll out of electric vehicles (EVs), accelerating one of the main barriers to the take up of EVs, infrastructure.
The government aid it would save $527 million by ending EV subsidies and directing new funds to programs that work better.
Regional jobs commitment
Delivering on an election commitment, $5.2 million will be spent on establishing Future Jobs and Investment Authorities.
It said regional authorities will help coal-producing regions to develop new industries and economic opportunities as the state focuses on building its renewable energy capability.
The government said that in August, consultations began with workers, industry, and community leaders in the Hunter to set up the authorities.
“Once established they will support workers, industries, and communities to harness the opportunities of a clean energy future,” it said.
Tax changes
Under current legislation, corporations are exempt from transfer duty, once known as stamp duty, when transferring assets between their entities during a restructure.
Amendments to the Duties Act 1997 will now reduce the concession received by corporations, from 100 per cent to 90 per cent of the transfer duty otherwise payable when moving assets as part of a restructure.
The Budget also includes a $111.1 million investment over four years to boost Revenue NSW’s tax compliance activities.
