Premier Chris Minns rules out cash handouts in ‘challenging’ budget

Those hoping for cost of living relief from the NSW budget have had hopes dashed: Chris Minns says copping unprecedented cuts to our GST share have put paid to that.

Families battling the cost of living crisis will not be getting any cash handouts from this month’s state budget, with NSW Premier Chris Minns declaring he does not want to do anything that could fuel inflation.

In the first major preview of Labor’s second budget, Mr Minns told The Daily Telegraph that he has a “responsibility to ensure that we don’t stimulate the economy or put more pressure on interest rates”.

Promising a budget “focused on the long term,” Mr Minns said he won’t pursue “an easy stimulus or an easy headline”.

Notwithstanding the challenge of inflation, the government has little room to offer any major cost of living relief, due to unprecedented cuts to the revenue the state was expecting to receive from Canberra.

Cuts to NSW’s GST take blew hopes of a budget surplus out of the water in March.

Premier Chris Minns at a budget announcement on Tuesday. Picture: Rohan Kelly

Treasurer Daniel Mookhey will hand down another budget deficit when he unveils his second budget on June 18, following almost $2 billion worth of cuts to GST revenue next financial year.

Over four years, NSW Treasury expects to be short-changed by almost $12bn in GST funding following a change to the way the tax revenue was divvied up among the states.

Treasurer Daniel Mookhey will hand down a “challenging” second budget on June 18. Picture: Rohan Kelly

Mr Minns said the GST carve up was a “big hit” to NSW’s finances.

“We were relying on that money, we want to make plans for the future of NSW essential services (and) paying down debt,” Mr Minns told the Telegraph.

“It’s a very challenging environment, particularly when you consider that we’ve got that GST that’s been taken out from NSW, as well as the challenges of inflation,” he said.

Mr Mookhey’s predicted budget restraint comes in contrast to his federal counterpart, who delivered $3.5 billion in subsidies to reduce the price of power bills. Government spending outlined in the May budget was more than $24bn higher over four years than forecast in December last year.

The budget will be grim reading for those hoping for cash handouts from the state government. Picture: Rohan Kelly

Despite the “challenging” budget environment, Mr Minns said that his Treasurer will not be making deep cuts to services.

“We don’t believe we will be in a position to do that,” he told the Telegraph.

While government agencies have been told to tighten their belts, the government is not taking a “slash and burn” approach, sources said.

Instead, NSW is set to run bigger than expected operating deficits over the next few years.

Government agencies have been told to tighten their belts, with the budget razor gang working to find ways to save money.

One way Mr Minns has committed to cut spending is to slash the number of public sector fat cats in the bureaucracy.

A decision last week to absorb the Public Service Commission (PSC) into the Premier’s Department was one example Mr Minns gave of how bureaucrats are being used more effectively.

Mr Minns said the PSC’s “big staff” were deployed in his department to do “more tangible grunt work”.

“Rather than having a whole bunch of agencies that have long acronyms, we’re going to get back to basics and ensure that the Department of Planning the Premier’s department can actually do their function,” he said.