I’m pleased to present the 2023-24 Budget: the first budget since Labor’s election in March.
We have taken office during challenging economic times.
The people of New South Wales have found their way to a new normal after COVID-19. However, we still face many of the challenges brought on by rapid technology change, climate change, and changes in global political stability.
These challenges and the lessons learned from COVID-19 are causing many societies to rethink the fiscal and economic strategies we employ to deliver a high standard of living and peaceful, stable government.
The challenges we face in New South Wales reflect these global issues. Like many people, we are transforming our sources of energy, looking for ways to house our people affordably, and working out how to improve equality and social connection.
Our greatest challenge, as always, is to live in harmony with each other, and with every living thing on the one planet we all share.
The approach of Labor in New South Wales is based on responsibility and reward, inclusion and opportunity.
Economic stability creates social stability.
Opportunity and reward rely on and enable diversity and cooperation.
Well-managed state finances are the first duty of a government which has a long-term plan to improve the wellbeing of its citizens.
Meeting these challenges
New South Wales is a well-educated, stable, and peaceful democracy with abundant natural resources, thriving diverse cities, and a lifestyle that people envy the world over.
Even in the wealthiest state of a wealthy and lucky country, we cannot rest on our good fortune.
Every person in New South Wales should have an affordable place to call home: a secure base from which to start a family, to bring up children, and to set our next generation on a path to success.
All citizens should have access to health, education, and other essential services. We should respect and reward the people who provide those services.
Despite our wealth, many people within our State are struggling to pay for essentials, like transport, energy, and housing.
New South Wales confronts these challenges at a time when the former Liberal Government had continued pandemic-level spending well after it was needed.
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.
The Hon. Daniel Mookhey MLC
NSW Treasurer
In the 15 months before March 2023, $27.7 billion (over four years) of new policy measures were added to the Budget.
In this Budget, we have taken action to stabilise our fiscal position and lower our debt so we can sustainably deliver services and cost-of-living support for the people of New South Wales.
Chart 1: Gross debt has risen by $94 billion from June 2019 to June 2023
At the change of government in March, the NSW Government was facing gross debt of $188.2 billion by June 2026 (22.3 per cent of gross state product). This would have been the largest debt in the State’s history, equivalent to $22,019 per person, and projected to cost New South Wales $7 billion in interest payments in 2025-26 alone as at the 2023 Pre-election Budget Update.
Upon taking office, the new government was also warned that $7 billion of difficult-to-avoid pressures and important programs were without funding. These included programs to protect children who needed Out-of-Home Care, cyber security projects, and 1,112 nurses not funded after 2023-24.
The fiscal position had also been masked by returns from the NSW Generations Fund and the accounting treatment of rail spending through the Transport Asset Holding Entity.
In recent years, growth in the State’s expenses has far outpaced revenues, with expense growth peaking in 2021-22 at 25.0 per cent. However, in the 15 months to March 2023, $27.7 billion of new policy measures were added to the Budget over four years, worsening the State’s financial position.
This high level of spending left the State with limited buffers in the event of an economic or financial future shock. Combined with the lack of funding for some ongoing programs, many essential services were at risk and under pressure.
Major infrastructure projects have been beset by substantial cost escalation and require fairer distribution of investment across the State.
By 2026-27, interest as a share of revenue will be the highest it has been since 1996, meaning more money to bondholders and less to essential services.
Without targeted and disciplined intervention, these fiscal pressures would have reduced the quality and quantity of services the State is able to deliver for the people of New South Wales.
Economic activity in New South Wales has broadly rebounded following COVID-19. However, the benefits of increased economic activity are not being enjoyed equally and the outlook is challenging.
Income per person is not expected to grow any faster than inflation in the short-term. Family budgets are under pressure and the average household’s spending is falling.
Households with lower incomes and people living in vulnerable situations are feeling this pressure the most.
While inflation has eased to 6.6 per cent in the June quarter, it remains high. Moreover, the prices of essential goods and services are growing quickly, like food and non-alcoholic beverages at 7.8 per cent and household energy costs by 24.3 per cent.
Housing costs remain a key concern for many people. Dwelling construction is below the levels needed to reach the Housing Accord target and to ease housing constraints. In particular:
The cap on public service salaries has contributed to low wages growth, public sector vacancies, and essential service shortages. Since COVID-19, wage increases have not kept up with rising prices.
These are the challenges confronting the people of New South Wales which the Government is addressing through the long-term plans that are outlined in this Budget.
This Budget begins the task of repairing the State’s budget position.
The Government’s Comprehensive Expenditure Review has redirected around $13 billion in budget measures, which will be reinvested into unfunded programs and essential services. This has allowed the Government to keep expenses in line with revenue.
This Budget projects a modest $844 million surplus in 2024–25.
The Government has taken steps to reduce gross debt by $14.8 billion by June 2026 relative to the 2023 Pre-election Budget Update. This is the largest set of gross debt reduction measures in the State’s history, without privatising public assets.
Following the Government’s Strategic Infrastructure Review, the State’s infrastructure program will focus on delivering more schools, hospitals, and public transport. The program is projected to be $116.5. billion across the four years to 2026–27. These improvements to NSW communities will be funded without new privatisation.
This Budget outlines the measures that the NSW Government will take to support households who have seen energy bills, tolls, rents, and mortgage payments rise rapidly.
It sets out our plan to invest in the essential services that are key to building a stronger economy.
The NSW Government is rebuilding our essential services by addressing critical staff vacancies with a new approach to engaging our public sector workforce.
In June 2023, the NSW Government took the first steps towards recognising the valuable work of our essential workers with the largest pay rise in more than a decade. The 4.5 per cent pay increase for more than 400,000 public sector employees was just the beginning of a long-term plan to support genuine wage rises and rebuild essential services in New South Wales.
The Industrial Relations Taskforce, led by former Deputy President of the Fair Work Commission, Anna Booth, and former President of the Industrial Relations Commission, Roger Boland, has been established to fulfill the NSW Government’s commitment to a new interest-based bargaining framework.
By collaborating with the State’s workforce, we can modernise public services and address critical staff shortages by delivering long-term wage growth.
The NSW Government will establish a new $3.6 billion Essential Services Fund to enable the Government to improve services by negotiating workplace changes.
After 12 years, the NSW public sector has critical vacancies across its workforce:
Rebuilding our State’s essential services requires a combination of service delivery improvements and wages growth to address these critical shortages.
The Essential Services Fund reinforces our commitment to a new bargaining framework by setting aside the funds to support public service improvements and deliver higher wages for thousands of our essential workers.
Everyone deserves world class healthcare. To deliver better healthcare in New South Wales, we need to respect and reward nurses, paramedics, and healthcare workers in our hospitals and health facilities.
The NSW Government is investing more than $2.5 billion to recruit and retain healthcare workers, including:
The Essential Infrastructure Plan includes a significant investment of $13.8 billion in health facilities, including 600 new hospital beds across Western Sydney. The total package includes:
In regional communities, $3.8 billion will support new and upgraded health facilities, including:
This Government is increasing women’s access to healthcare with more than $100.0 million to support new essential services, including:
The NSW Government is increasing investment in our schools, TAFE, and public preschools with $9.8 billion over the next four years to provide the public education system that our growing communities need. This includes:
The NSW Government is addressing declining education outcomes exacerbated by teacher shortages and neglected schools.
This Budget begins the long-term rebuilding of our education system, with an Education Future Fund to deliver new programs, including:
We are addressing the teacher shortage crisis in our public schools by recruiting and retaining high quality teachers through a historic pay rise and moving more executives back into the classroom.
The four-year agreement is a nation-leading investment in our 95,000 teachers. It will ensure our children are taught by teachers who know that their contribution is valued.
The offer that we have made to teachers will make them the nation’s best-paid teachers.
Chart 2: Entry-level teacher pay
The Government is rebuilding our essential services, better connecting our communities, and supporting much needed housing supply to address the housing affordability crisis affecting our State. Responsible infrastructure investment means that we are rebuilding essential services while delivering the largest set of gross debt reduction measures in the State’s history that didn’t rely on privatisation.
The Government is investing $72.3 billion to deliver new and improved transport infrastructure, including:
The NSW Government is making a significant investment in roads infrastructure across the State, with major roads commitments in both regional and metropolitan areas, including:
Since 2019, natural disasters have impacted people all across our State from the Northern Rivers to the Central West and the South Coast.
The NSW Government is investing $4.0 billion in natural disaster support and response programs, including:
The NSW Reconstruction Authority will receive $121.0 million to ensure communities are better prepared for natural disasters and can recover faster.
It allows the agency to support clean-ups and damage assessments, organise safe temporary housing, and rebuild essential services and infrastructure.
The Government’s flood support and response programs include:
The Government is providing additional resources where our communities’ needs are growing.
We are beginning the rebuild with an immediate program including:
Rural Fire Service and Fire and Rescue NSW (FRNSW)
Housing affordability and availability is the biggest single pressure facing household budgets, with mortgage payments or rent the largest expense for most households.
People buying their first home will save up to $30,735 through an expanded First Home Buyers Assistance Scheme.
The NSW Government is providing immediate support with the rental reform package.
Addressing the chronic shortage of housing requires a long-term plan. The Faster Planning Program, Essential Housing package, and $2.2 billion investment in new housing and infrastructure will begin to address the historic neglect of new housing supply.
The Government is supporting long-term housing for domestic and family violence victim-survivors with a $13.0 million expansion to the Shared Equity Home Buyer Helper.
Five out of every six first home buyers will pay no stamp duty, or a concessional rate after the Government expanded stamp duty exemptions and concessions from 1 July 2023.
The expanded First Home Buyers Assistance Scheme supports first home buyers with a stamp duty exemption for purchases up to $800,000, and a concession for purchases between $800,000 and $1 million.
Preliminary figures reveal that more than 1,000 first home buyers purchasing in the $650,000 to $800,000 range enjoyed a full exemption from stamp duty in July under the First Home Buyers Assistance Scheme.
By focusing the eligibility for the scheme on around 84 per cent of first home buyers who pay less than $1 million for their first home, the Government has been able to re-direct $691.0 million to those who need it most.
Homes NSW will be established to deliver better outcomes for public and social housing tenants, deliver more affordable and social housing, and reduce the number of homeless people in New South Wales.
The $224.0 million Essential Housing Package includes:
In addition, the Government will permanently expand the number of social housing dwellings by around 1,500 through the $610.1 million Commonwealth Social Housing Accelerator program.
The NSW Government is ensuring a secure supply of clean, affordable electricity for New South Wales with a long-term energy investment plan and immediate energy bill relief for families.
Under the National Energy Bill Relief payment, introduced in July 2023 in partnership with the Australian Government, the NSW Government is providing support to:
This Budget includes new funding to expand energy relief beyond 2023-24 to provide families with crucial cost-of-living relief.
Energy bill relief will be extended from 1 July 2024 for families, seniors, and households struggling with the cost of living, with a major expansion of energy rebate schemes to help support households while long term investments begins. This includes:
The NSW Government will get the Electricity Infrastructure Roadmap back on track with the largest investment in renewable energy in the history of New South Wales. The $1.8 billion investment will roll out critical transmission and energy storage solutions, including:
A further $263.5 million will support an efficient and equitable roll out of electric vehicles (EVs). This investment will accelerate the rollout of EV infrastructure, addressing the most significant barrier for the take up of EVs.
Toll relief for commuters and businesses Over the past decade, Sydney has become one of the most tolled cities in the world. The NSW Government is delivering on its commitment to introduce a $60 weekly toll cap and truck toll multiplier relief as a first step towards comprehensive toll reform.
The two-year program will provide immediate relief through:
The $615.0 million toll-relief program will support motorists as the NSW Government embarks on long-term toll reform to create a fair and equitable road network.
The Government has commissioned an Independent Review of Sydney’s motorway network led by Professor Allan Fels AO and Dr David Cousins AM. The review is underway and will investigate reform options to reduce costs for motorists and simplify the toll road system.
Household budgets will continue to face pressure from increasing tolls unless the road network is enhanced without handing over assets to the private sector. The current toll road network disproportionately burdens those who live furthest away from the city or have limited public transport options.
Quality early childhood education and care (ECEC) has lifelong benefits for our kids and enables parent workforce participation.
The Budget maintains the $5.0 billion investment over 10 years in the Childcare and Economic Opportunity Fund and also maintains $5.7 billion in funding over 10 years for universal preschool access.
This Budget takes the first steps to deliver universal preschool access and ensure all families can benefit from early childhood education services, including:
An additional $200.0 million for children who need Out-of-Home Care will provide permanency services and post-care support. The majority of this will go towards NGO service providers and the provision of emergency arrangements for children and young people who cannot live safely at home. Longer term, the Government is committed to implementing whole-of-system reform that ensures a financially sustainable system while improving outcomes for children.
This Budget also includes $17.1 million to support Kids Helpline. This funding will be used to recruit more counsellors to provide additional counselling services, and increase the capacity of the Kids Helpline to ensure children and young people across the state have access to 24/7 services.
The Government is committed to genuine reconciliation with the Aboriginal and Torres Strait Islander peoples of New South Wales and supporting self-determination and empowerment by establishing a treaty process. This Budget includes:
In addition to major commitments for female-dominated sectors like health and education, and early childhood education and care programs that support gender equality outcomes, this Budget commits:
Our economic and social prosperity is underpinned by the diversity of the communities of New South Wales. This Budget includes a range of measures to support, protect, and celebrate these communities, including:
In 2023-24, the NSW Government will provide more than $8.2 billion to households through more than 130 measures to assist with growing cost-of-living pressures. These include:
Providing energy bill relief available for families, seniors and households through 2023-24 and increasing the value of the following rebates from 1 July 2024:
Image credits: Austockphoto, Department of Communities and Justice, Destination NSW, NSW Department of Education, TAFE NSW, NSW Health, Renee Nowytarger, Department of Planning and Environment/Tim Johnson, Transport for NSW
NSW Treasury pays respect to the Traditional Custodians and First Peoples of NSW and acknowledges their continued connection to country and culture.