NSW Budget 2023: Treasurer Daniel Mookhey delivers Labor’s first state budget in 13 years

The NSW Government’s wages bill for public sector workers including nurses and teachers will grow to almost $50 billion by 2027, as part of a slash and burn budget which uses higher stamp duty and payroll tax receipts to balance the books.

The NSW Government’s wages bill for public sector workers including nurses and teachers will grow to almost $50 billion by 2027, as part of a slash and burn budget which uses higher stamp duty and payroll tax receipts to balance the books.

In handing down his first budget, Treasurer Daniel Mookhey will get $14 billion extra in revenue than forecast in March, fuelled by a surging property market and higher wages.

The Minns government has used this revenue increase to improve the budget bottom line, rather than dole out sugar hit cost of living relief measures.

Mr Mookhey said the budget signals a “new age of public investment that benefits the many” rather than handing “profits to the few”.

The budget is forecast to be back in the black next financial year with a slim $844 million surplus, with the bottom line to be improved by $4 billion over the next four years.

NSW Treasurer Daniel Mookhey addresses the media after handing down the budget. Picture: NCA Newswire/ Gaye Gerard

The improvement is being driven by $13 billion worth of spending cuts identified by the government’s razor gang.

The NSW Government also claims to have found hundreds of millions of dollars in savings which was sitting in unused government bank accounts, and has redirected the funds to building infrastructure to service new homes.

Mr Mookhey on Tuesday announced a new $400 million “Housing Infrastructure Fund” will be spent on building “sewers, footpaths, lights, parks and schools”.

He also announced a $300 million injection to Landcom to go towards building 4,697 new homes - including 1,409 “affordable homes”.

Labor’s first NSW budget in more than 10 years will pay down almost $15 billion in gross debt. Despite the improvements, gross debt is still forecast to climb to $173.4 bn in June 2026 and then $186.7 bn by June 2027.

Net debt has also been written down by more than $10 billion in 2026-27.

Paying down the state’s debt bill will save $2.3 billion in interest payments over four years.

NSW Premier Chris Minns. Picture: NCA NewsWire / Jeremy Piper

The Treasurer flagged he will continue to pay down debt in subsequent years.

“We’re not done yet,” Mr Mookhey said.

The budget’s bottom line is being bolstered by increased revenue, which has been revised up by $14 billion over four years.

That is largely being driven by “improvements in the property market” which have driven higher stamp duty receipts.

Finance Minister Courtney Houssos also announced a number of “modest” measures to increase revenue.

Almost $1bn will be raised from raising taxes on corporate restructures, and tightening certain rules for land tax exemptions impacting people who own multiple properties.

Mr Mookhey and NSW Finance Minster Courtney Houssos after the treasurer handed down his first state budget. Picture: NCA NewsWire / Gaye Gerard

A number of state government fees and charges will also be increased by the rate of inflation. That means the cost of renewing car registration will increase by as much as $37, and the cost of renewing a 10-year drivers licence will go up by more than $20.

Coal taxes have also been hiked by $2.7 billion.

Tuesday’s budget unveiled funding for a range of cost-of-living relief measures announced before the election.

First homebuyers will save almost $1bn in stamp duty concessions, and capping tolls at $60 per week will cost the budget $615 million.

A $3.6 bn fund has been set aside to pay public sector workers more, in addition to the $1.9 bn that will be spent giving teachers a better pay deal.

The budget documents reveal the state’s yearly wages bill will grow 4.1 per cent each year over four years, climbing to $49.5 billion in 2026-27.

UnionsNSW boss Mark Morey welcomed a $3.6 billion injection into frontline worker wages, but said the labour movement may still want more cash for their members.

He also welcomed a “massive” injection into housing, and money to invest in infrastructure like hospitals and schools.

However he said his members would “always want more”.

“We welcome (the wage boost),” he said.

The budget books show that Labor is expecting to spend $3.5 billion more than the Coalition had forecast until 2025-26.

Unions NSW secretary Mark Morey outside the NSW Parliament House in Sydney. Picture: NCA NewsWire / Christian Gilles

But Mr Morey said the government may be able to find more money to pay frontline workers when a review of the workplace bargaining system is finalised.

“We think that they will be able to find more (money) through the new industrial relations system, and that will benefit not just workers but everyone who is using government services,” he said.

Mr Mookhey said the government will put aside the extra revenue “for a rainy day,” rather than spending every dollar received.

That budget restraint has killed off a range of popular initiatives introduced under the previous government.

As previously announced, Active Kids vouchers have been slashed and means-tested, and the Regional Seniors Travel Card has been axed.

Mr Mookhey said the “toughest” decisions he made in the budget were cutting measures that helped families with the cost of living.

As revealed by The Daily Telegraph on Tuesday, Destination NSW bean counters have also scrapped the Open for Lunch and Noel Sydney festivals - championed by former Premier Dominic Perrottet.

Despite forecasting a surplus next financial year, Mr Mookhey said that the budget’s bottom line is not set in stone.

“I’m certainly not going to suggest that this surplus is locked and loaded,” he said.

The budget assumes that the Commonwealth government’s “no worse off” guarantee will continue after 2027-28, when it is due to expire.

That rule guarantees states and territories receive at least 75 per cent share of GST revenue.

That sets NSW up for a potential fight with the Albanese government.