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What we know about the NSW state budget

AUSTRALIA - NewsWire Photos - General view editorial generic stock photo of Australian cash money currency. Picture: NCA NewsWire / Nicholas Eagar
With Australia’s biggest state set to hand down its budget, residents have been warned to temper their expectations. Picture: NCA NewsWire/ Nicholas Eagar

NSW Treasurer Daniel Mookhey will hand down his second budget on Tuesday, flagging fiscal responsibility, and deflating any hopes of any cash splashes.

While Australians living in Queensland were treated to billions in cost-of-living relief – like a $1000 electricity rebate and 50 cent flat public transport fare – NSW will not be so lucky.

Government spending has been reduced, with the state’s bottom line dudded by a GST redistribution which will cost the budget $11.9bn over the next four years, however housing has been flagged as a priority, with the state attempting to build 377,000 homes over the next five years.

PREMIER TREASURER BUDGET
NSW Treasurer Daniel Mookhey and Premier Chris Minns are preparing to release the state budget 2024-25 budget on Tuesday. Picture: NewsWire / Gaye Gerard

Ahead of the release of NSW’s budget at 12pm Tuesday, here are the key announcements we know so far.

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NSW to remain in the red

Mr Mookhey and Premier Chris Minns have repeatedly stressed the state’s finances are under pressure, with the budget set to record a sixth straight deficit for the state.

Mr Mookhey says the redistribution of GST funds is a key factor, and will create a $11.9bn budget hit over four years.

Unlike last week’s Queensland state budget, NSW residents have been told not expect any cash splashes or sweeteners.

NSW Rental Taskforce

A total of $8.4m will be used to establish the NSW Rental Taskforce, which promises to be one of the biggest teams within NSW Fair Trading.

The group will be overseen by NSW Rental Commissioner Trina Jones, and staffed with investigators, inspectors and support teams to target real estate owners and owners leasing poor quality rentals, and breaching rental laws.

PREMIER RENTAL CRISIS
NSW Rental Commissioner Trina Jones will head a new taskforce. Picture: NCA NewsWire/ Nikki Short

Essential worker housing

In a bid to address a lack of affordable inner-city housing for essential works – such as paramedics, nurses, teachers, police officers and fire fighters – the government has put aside $450m to build more than 400 build-to-rent homes in the next three years.

The homes will be built across four sites by public developers Landcom. While the locations have yet to be determined, once built, they will be offered to essential workers at a discounted rate, at about 20 per cent off market rate.

$200.1m will also be used to purchase about 120 homes in regional areas, including motels and units, which will be used as temporary housing for health workers moving to the bush. Lismore and Tweed Heads have been flagged as some of the first area which could access the housing.

Taxes on foreign owned homes

Fees placed on foreign investors and international home buyers will be increased from 2025. From January 1, the foreign purchaser duty surcharge will go from 8 to 9 per cent, and the foreign owner land tax surcharge will also increase by 1 per cent to 5 per cent.

About 20,000 homes in NSW, about 0.6 per cent of the state’s housing stock, are foreign owned.

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The NSW budget won’t be providing many sweeteners but will try to improve housing stock in the state. Picture: Newswire / Gaye Gerard

Support for housing approvals

New funding of $253.7m will be used to hire more planners and invest in technology to speed to assessing development applications to ensure the state can build its planned 375,000 homes by 2029.

The government has also flagged a financing guarantee pilot to support the construction industry build homes amid challenging market conditions including high labour and material costs. This could include acting as a guarantor for some development loans and pre-purchasing homes in high-density builds.

Land tax

NSW has also scrapped annual indexation on land tax rates, instead freezing the tax-free threshold for land tax at the 2024 level of $1.075m.

The change is forecast to add $1.68bn to the state’s bottom line over the next four years, with the funds slated to go towards building new homes.

The tax applies to holiday homes, investment and commercial properties, but not primary residential homes and farms.

AUSTRALIA - NewsWire Photos - General view editorial generic stock photo of Australian cash money currency. Picture: NCA NewsWire / Nicholas Eagar
Housing and measures to boost the state’s housing supply has been flagged as a big priority. Picture: NCA NewsWire / Nicholas Eagar

Bus overhaul

$91m in funding has been allocated to overhaul NSW’s bus network, including equipping vehicles with on-board screens and audio announcements, and new technology to better monitor bus services.

Another $24.7m has been committed across four years to increase services, create new routes and fund Zero Emission Buses (ZEBs) in Western Sydney.

$23.8m will also be spent on a two-year ‘Medium Term Bus Plan to improve services over the next 10 years in planning services and addressing needs in key communities.

Parramatta Light Rail

$2bn has been committed to begin construction of the second stage of Parramatta Light Rail before the next state election in March 2027. The 10km track will feature 14 stops between Camellia to the Parramatta CBD, via Sydney Olympic Park, and link up with the Sydney Metro West, as well as Parramatta and Sydney Olympic Park train stations.

Eraring power station bail out

The operation of Australia’s biggest coal-fired power station has been extended for two years to August 2027, after fears its previously slated closure in 2025 would risk the state’s energy reliability.

Negotiations with Origin Energy have resulted in a deal that NSW could underwrite the energy giant’s losses to a maximum of $450m over two years. Conversely, NSW could gain up to $40m a year, if Origin profits from the continued operation of Eraring, with the company able to opt in to the arrangement before each financial year.

Supplied Editorial Origin Energy's Eraring power station. (please load for topic 21) Thanks
Origin Energy's Eraring power station will remain operational for another two years, until August 2027

Hospitals

$3.4bn has been given to upgrade hospitals and health facilities across the state, which includes a $1bn commitment to rural and regional capital works projects.

A further $15.1m has also been committed across four years to upgrade ambulances and emergency rooms with technology to help paramedics find the closest and most clinically appropriate Emergency Department for the patient.

Domestic violence support

Vowing to do better, NSW Premier Chris Minns announced a major $230m emergency domestic and family violence package, as a “first step” to tackle the states rising crisis following the alleged murder of 28-year-old Forbes woman, Molly Ticehurst.

Biosecurity managements

$945.7m will be spent on preventing and combating biosecurity threats.

The funding includes a $13.1m boost to the Feral Pig Program, $55.3m for the eradication of fire ants, and $35.2m to help manage Varroa mite infestations.

Spend on consultants

Following a NSW Auditor-General report, which found more than 10,000 consultant contracts were issued in the last five years of the former government, Labor said they would but spend on contractors by $35m a year.