NSW Treasurer Daniel Mookhey prepares to deliver first budget

The state’s bottom line is set to be $3.6 billion better off than predicted before the election, with Treasurer Daniel Mookhey’s first budget defying expectations.

The state’s bottom line is set to be $3.6 billion better off than predicted before the election, with Treasurer Daniel Mookhey’s first budget defying expectations to forecast an $800 million surplus in 2024-25.

That will leave the budget’s bottom line $500m better off over four years than forecast by former Treasurer Matt Kean in the pre-election budget update.

The modest improvement in the state’s finances comes after Labor’s budget razor gang found $13bn worth of cuts.

Despite foreshadowing a bare-bones budget, Mr Mookhey will today outline billions of dollars in previously-announced cost-of-living relief measures, including stamp duty cuts and toll relief.

The Daily Telegraph can today reveal the biggest single cost-of-living relief measure will be stamp duty changes for first homebuyers.

Treasurer of NSW Daniel Mookhey will deliver his first budget today. Picture: Tim Hunter.

First home buyers are expected to save almost $1bn worth of stamp duty under changes Labor promised before the election.

NSW is forecast to post a $7.8bn deficit this financial year – $700m worse than forecast before the election.

Today’s budget will forecast a $7bn turnaround from 2023-24 to 2025-26, when the state is expected to post an $800m surplus.

That surplus is predicted to grow to $1.6bn in 2025-26.

Mr Mookhey’s forecast surplus has been achieved through a slew of cuts across all of government spending.

The Treasurer will announce today that the government’s “comprehensive expenditure review,” launched after the election, has “redirected” $13bn of spending.

As The Daily Telegraph revealed last week, that includes cutting Destination NSW’s marketing budget by 30 per cent.

Subsidies and tax breaks on electric vehicles, which the Telegraph last month revealed were only working to push up prices, will also be cut, to save $527m.

The infrastructure cuts include at least $5bn which will be saved by not going ahead with building Dungowan Dam or raising the walls of Wyangala or Warragamba dams.

The forecast surplus has been achieved through a slew of cuts across all of government spending. Picture: Tim Hunter.

Mr Mookhey will hand down a budget which has made “significant inroads” into paying down the state’s debt, the Treasurer told The Daily Telegraph last week.

The budget is expected to shave billions of dollars off the state’s debt by overhauling the corporation which owns the state’s rail assets and pausing contributions to the state’s future fund.

According to the most recent budget update, net debt is projected to climb to $118bn by June 2026. Gross debt was forecast to exceed $187bn by 2025-26 – a figure Mr Mookhey has pledged not to exceed.

Despite a raft of cuts, Labor’s pledge to deliver pay increases to public sector unions will put significant pressure on the state’s finances.

Mr Mookhey on Sunday announced he would establish a $3.6bn fighting fund to pay for public sector wage increases.

The government’s total wage bill is expected to be billions of dollars higher than forecast by the Coalition after Labor scrapped the previous government’s 2.5 per cent wage cap.

The first Labor budget delivered in more than a decade – will also outline $8.2bn in 130 cost-of-living relief measures.

This will include $615m in toll relief, and $998m in stamp duty savings for first homebuyers.

The government will also put aside billions of dollars in funding to deliver infrastructure projects it committed to before the election.