Our experts give their verdicts on the NSW budget

NSW Treasurer Daniel Mookhey has delivered his second budget. Six of our experts – Alexandra Smith, Matt Wade, Matt O’Sullivan, Michael Koziol, Lucy Carroll and Angus Thomson – break down the economic and political implications.

State political editor

Daniel Mookhey promised a no-frills budget, and that is what he delivered. NSW is still in deficit, and there were very few new measures to crow about.

However, the significant funding for social housing showed that the government does understand the gravity of two pressing social problems – housing, and increasing family and domestic violence. Addressing the chronic shortage of social housing is a good start, but the government has a long way to go and faces significant challenges with workforce shortages and rising building costs.

Senior economics writer

The Minns government has used its second budget to address perhaps the state’s most pressing challenge: access to housing. To see a budget with big investments in social housing at its heart is a rare and welcome change.

Less welcome is the government’s forecast for another three years in the red for NSW. The economic shocks of the COVID pandemic justified a run of state deficits. But the government is now forecasting NSW economic growth to pick up in the year ahead.

As the economy improves, deficit budgets will become increasingly difficult for Labor to justify.

Transport and infrastructure editor

The NSW government has given its strongest signal in the budget that it will press ahead with a shake-up of Sydney’s patchwork of toll roads.

Budget papers reveal the government will spend almost $17 million to “support tolling reform initiatives”, which notably includes money for the creation of a state-owned tolling entity and legislation to drive the shake-up. In a clear sign of the government’s intentions, the new funding comes before a final report by former competition regulator Allan Fels is released as early as July, and despite reservations from Transurban and business groups.

Transurban, which controls 11 of Sydney’s 13 toll roads, has warned that Fels’ proposal for network-wide charges and a state-owned tolling entity – which was disclosed in his interim report - will add a level of bureaucracy without benefiting motorists.

As an interim measure to ease pressure on household budgets, the government has already introduced a $60 weekly cap on tolls for motorists. It began in January and runs for two years. The weekly cap for private motorists is budgeted to cost taxpayers $561 million over two years, including $257 million in the new financial year.

With the weekly cap in place, the cost to taxpayers of previous toll relief measures is dropping from $215 million this financial year to $39 million in 2024–25 as they are wound down. The budget papers show a toll rebate for trucks using the M5 and M8 motorway tunnels will cost taxpayers $24 million this year.

Sydney editor

The government knew it had to make a significant investment in public housing in this budget, and it has done so. It would have been untenable in the midst of a housing crisis to ignore the state’s pressing need for more social housing while also demanding councils, the private sector and everybody else do more to boost supply. The $5.1 billion it has found for 8400 homes – most of it new money and budgeted over four years – is a decent commitment.

It’s more than the bare minimum Mookhey could have got away with. Although it’s just shy of the $5.3 billion Victoria’s government dedicated in 2020 amid the pandemic slump, which was forecast to build 12,000 homes. There’s also a chunk of money for more Department of Planning staff to assess projects. While it’s worthwhile to get housing built faster, it’s an admission of what most people in the sector know – the system is too complicated, too slow, and needs to be fixed.

Education editor

A $1 billion blitz for minor works to fix toilet blocks, repair windows and maintain classrooms is part of an unflashy education budget that focuses on upgrades to schools in Sydney’s highest-growth areas. After allocating $1.9 billion for historic teacher pay rises in last year’s budget, the government has turned its attention to a backlog of urgent maintenance and “minor works” at hundreds of public schools.

Most of the $3.6 billion for school infrastructure upgrades across western Sydney was announced last year. The big winners are families in the north-west growth suburb of Box Hill, where funds have been put towards a new primary and high school. There are also signs that bursting-at-the-seams public schools, Riverbank Public and The Ponds High, may be earmarked for an overhaul in coming years with funds allocated for planning and design. Randwick High, a merger of the boys and girls schools, has just $3 million allocated for upgrades this year ahead of its opening as a co-ed campus in 2025. In February, the government said $42 million would be invested.

The funds for basic works and new schools in high-growth areas come against a backdrop of tense negotiations between the states and Commonwealth over how much extra cash will be pumped into schools as part of a new 10-year agreement. The state says it will increase its share of the School Resourcing Standard from to 75 per cent but is pushing the federal government to lift its offer from 22.5 to 25 per cent. The big question is whether NSW Labor is prepared to top up the shortfall to reach 100 per cent if an agreement with the federal government cannot be reached, as they promised in the lead-up to the election.

Health reporter

By forgiving over $100 million in debt owed by GP clinics, the government has cleverly passed off what is essentially a treaty deal with doctors as a measure to address the bulk-billing decline and take pressure off emergency departments.

It’s a rare intervention in primary healthcare policy by a state government, but it will ease upward pressure on the cost of visiting a doctor. The rebate will also provide an incentive for clinics to bulk-bill the majority of their patients.

Other smart measures, while not huge in dollar figures, will help people move more efficiently through the health system.

The “single front door” policy, for example, is about making sure that, rather than going straight to an ED, a parent concerned about their child’s cough calls the Healthdirect hotline, where a triage nurse can choose where they should go next.

Some 50,000 nurses in NSW will be disappointed but not surprised there is only a 10.5 per cent pay rise and a one-off $1000 bonus on offer for public sector workers, well short of the 15 per cent single-year raise they are demanding.

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