2020-21 NSW Budget Update

A record $107 billion for ‘shovel and screwdriver-ready’ infrastructure projects, cuts to payroll tax rates and the prospect of nation-leading reform to stamp duty on housing, lay at the heart of the NSW Government’s Budget released today by NSW Treasurer,  Dominic Perrottet.

Described by the Treasurer as ‘building a prosperous post-pandemic NSW’, the Budget’s focus to turbo-charge jobs seeks to return 270,000 people to the workforce by June 2024. The Treasurer revealed the pandemic has put NSW in deficit to the tune of $16 billion, he committed to returning the budget to surplus by 2024-25.

The silver lining to the pandemic is that it has cleared the way for overdue policy in the form of bold tax reform. To jump-start the post-COVID job creation, the Government will implement a two-year payroll tax rate cut from 5.45 per cent to 4.85 per cent and a permanent increase in the payroll tax threshold from $1 million to $1.2 million. The Government believes these tax cuts, worth $2.8 billion, will provide an average saving of around $34,000 a year providing the incentive for businesses to recruit.

Door open to stamp duty reform

Taking it one step further, the Government has also announced a public consultation process to consider removing one of the biggest barriers for entering the property market, the much-maligned stamp duty system. This would allow buyers entering the property market to pay a smaller annual property tax rather than upfront stamp duty.

Hospitality and entertainment vouchers

To immediately support and bolster those businesses doing it tough, every adult resident will receive $100 worth of ‘Out & About’ vouchers to encourage them to stimulate local businesses as we move towards Summer. This will be welcomed by restaurants, cafes and the entertainment sector which has been hard hit by the virus.

Free preschool extended

To help working families, the Government has also extended the 15 hours of free preschool per week package to the end of 2021.

Global investment push

The Government wants to attract world-class multinational businesses and connect NSW companies with global markets and international investors, investing $180 million on its Global NSW Strategy. The aim is creating thousands of new jobs across the advanced manufacturing, defence, medtech and space industries. 

Infrastructure spend

Some key highlights include:

• $50 million worth of grants to fast track the development of pumped hydro projects across the State
• $33 billion transport budget to deliver safer roads, more efficient freight networks, better connections for regional communities and a major boost in local jobs
• More than $200 million to help the State’s 128 councils to deliver infrastructure, facilities and services
• $812 million for new and upgraded social and affordable housing across the State and $80 million to support new housing sector pre-apprenticeships, apprenticeships and cadetships
• $150 million in upgrades and maintenance to courts and other justice infrastructure
• $1.6 billion for the Digital Restart Fund over three years, which supports digital infrastructure initiatives across agencies

 

Planning

There is $240 million this financial year and more than $570 million over the next four years to continue speeding up the planning system. Funding will go toward reforming the Planning System to significantly reduce timeframes for application determinations, streamlining e-Planning to allow councils and state agencies to use one platform and establishing a dedicated Planning Delivery Unit to work with Government agencies to fast-track planning projects.

 

Health

Health spending has accounted for almost one-third of the NSW Budget, with a record $29.3 billion package. The health budget includes:

• Almost $3 billion in health capital works to deliver new or upgrade existing hospitals
• $1.6 billion to respond to the COVID-19 pandemic
• A record $2.4 billion into mental health services this year
• $3.5 billion in the National Disability Insurance Scheme
• More than $112 million over four years to fund disability advocacy programs and inclusion services

 

Regional NSW

Regional and rural NSW will receive funding across health, transport, roads and infrastructure projects, including:

• $900 million to go toward new and upgraded regional hospitals and health facilities
• $8.7 billion for regional transport and roads improvements
• $1.8 billion toward 90 new and accelerated infrastructure projects

 

Education and skills

• $2.9 billion investment in vocational education and training
• Almost $319 million over two years for the Skilling for Recovery initiative to help job seekers retrain or upskill, and support school leavers to find meaningful work
• $120 million to provide 12 months of free community preschool, extending the government’s program until 2021
• $337 million to provide tutors to every public school and selected non-government schools for 2021

 

Agriculture and Water

• More than $700 million to support sustainable, secure and healthy water resources across the State, including about $290 million over four years for vital water infrastructure projects in regional NSW
• Almost $1 billion will be spent to protect and support the agricultural sector as it begins its long road to recovery from drought, floods and bushfires
• $237 million to boost the State’s preparedness and response to bushfires