Will NSW Labor’s restrained spending last? The treasurer answered that by saying nothing

NSW Treasurer Daniel Mookhey’s third budget was classic Labor. At least on a policy front.

Central to the NSW treasurer’s budget was the biggest spend in the state’s history helping the most vulnerable children, with money to unwind the outsourcing of care to private operators, which has proven to be a disaster for the notoriously difficult sector.

NSW Treasurer Daniel Mookhey was a guest in the lower house, where he deliverd his budget speech.Credit: AAP

The $1.2 billion investment will have a significant impact on the troubled system, not least because it will end the untenable situation of placing children who could not safely stay in their homes into motel rooms, often with minimal supervision or watched by unaccredited carers.

When Labor won the 2023 state poll, 100 children were sleeping in hotels or motels each night. By April this year, that practice had ended.

It is a very difficult area to reform, which also requires pay rises for caseworkers to keep them in the troubled system, as well as a long-overdue increase to the foster carers’ allowance, the first rise in real terms in two decades. Labor’s focus on the crucial area shows that it still has its social heart.

Labor will be criticised for doing very little on the cost of living in this budget. However, the reality is that there are very few levers a state government can pull to make major inroads on rising living costs. Mookhey insists delivering a real increase in wages will go some way to helping households.

The other, he says, is housing availability and affordability. A housing announcement in the budget was non-negotiable, as the government tries to meet its lofty housing targets in coming years.

Mookhey boasts his “canny use of the state’s balance sheet” means the government can act as guarantor for mid-tier developers to help them get started on building when finance from lenders may otherwise hold them up. The plan, however, will only deliver 15,000 homes at best.

It is still difficult to be convinced that the government will get close to meeting its ambitious targets of delivering 377,000 homes by 2029.

But while Mookhey may have delivered some obvious Labor policies in this budget, he can argue that he has managed to avoid criticism of being a high-spending ALP treasurer. It was a safe and considered budget amid a volatile global outlook.

The government has made headway in improving the state’s finances, with a (small) surplus finally on the horizon and expense growth down to 2.4 per cent a year, from 6.2 per cent in the five years before COVID.

But will Mookhey’s sensible and measured budget continue? The treasurer has one more chance to hand down a set of finances before the next state election in 2027.

When pressed on whether his restrained spending would be replicated in next year’s budget, which is typically a cash splash before an election, Mookhey refused to say. He had only been focused on this year, was his response. Without saying anything, he answered the question for us.

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