State budget 2016: Schools and commuters the big winners as Berejiklian announces a $3.7 billion surplus
A BILLION dollars extra will go to school infrastructure and another $1 billion will be spent on new suburban trains as Treasurer Gladys Berejiklian announced a record $3.7 billion surplus for in today’s state budget.
NSW
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A billion dollars extra will go to school infrastructure and another $1 billion will be spent on new suburban trains as Treasurer Gladys Berejiklian announced a record $3.7 billion surplus for 2016-17 in today’s state budget.
The massive surplus follows a $3.4 billion surplus in 2015-16 but because NSW is doing so well it will have its GST revenue cut by billions over the next four years — as the Commonwealth Grants Commission hands more money to the struggling States.
“NSW is forecast to receive just 81 per cent of our per capita GST share by the end of the forward estimates, a historic low and down from the 95 per cent we receive in 2015-16,” Ms Berejiklian warned in her budget speech.
Andrew Clennell looks at the NSW State Budget
“Next year, NSW will endure the biggest single-year loss due to a change of relativity for any state since the GST began.
“Had NSW kept its share of the GST pool at 2014-15 levels, which was just under what our per capita would be — we would have received more than $10 billion extra GST revenue over the next four years than what is forecast in the budget.”
Another big hit on the budget is after the partial sale of the electricity companies, dividends are set to decline from $2.4 billion in 2014-15 to $889 million in 2017-18.
As previously revealed, the budget contains a massive amount of funding for roads and rail, including $12 billion for the metro projects and record investment in roads including $2.9 billion for the West Connex.
But Ms Berejiklian promised the $1 billion extra for schools, including doubling money for the school maintenance backlog to $330 million over two years.
Ms Berejiklian said the extra infrastructure was necessary to “support a spike in NSW student enrolments which are expected to grow by an unprecedented 40,000 students over the next four years.”
“I am pleased to also announce today a major boost to school infrastructure that will see more schools and classrooms built across the state,” Ms Berejiklian said in her budget speech.
“Nearly $1 billion has been allocated over the next four years, bringing the total schools capital spend to $2.6 billion ... (To) deliver around 1100 state of the art classrooms across the state.”
Much of that money will go to the north shore, where there has been a school overcrowding problem.
New primary schools will be built at Smalls Road, Ryde and North Kellyville, with a new senior campus for Cammerygal High School to be established at Crows Nest.
Planning for additional classrooms will begin at two schools in Ms Berejiklian’s electorate — Willoughby Public School and Willoughby Girls — and also at Fort Street Public School, Oran Park Public School, Rosehill Public School and Curl Curl North Public School.
More schools will be announced in coming months.
The maintenance allocation will also be announced in coming months.
At her press conference, Ms Berejiklian defended the spending in her electorate.
“The schools that receive the funding are the schools most in need,” Ms Berejiklian said.
She also defended a lack of new initiatives for struggling first home buyers in the budget, saying the government was increasing supply at large levels to improve housing affordability.”
“The NSW budget also sets aside more than $1 billion for new suburban trains,” Ms Berejiklian said in her budget speech.
“The new trains will support increased patronage across the rail network and additional services.”
This is expected to be an attempt to relieve some pressure on the Western line.
Thanks to the electricity sale, the Restart NSW fund — used to fund new infrastructure projects like the metros — has a staggering $16.5 billion in it.
“If NSW was a stand-alone country, it would be in the top 20 per cent by size of economy,” Ms Berejiklian boasted.
“NSW net interstate departures are at their lowest levels since the late 1970s and population growth of one and a half per cent is expected each year over the next two years — the clearest indication that NSW really is the place to be.”
As foreshadowed, the Budget contains a 4 per cent stamp duty levy for foreigners and a 0.75
Annual land tax charge for foreign homebuyers.
This is anticipated to earn $1 billion over four years — which will partly pay for $1.8 billion in business tax cuts including the scrapping of mortgage duty.
The Budget predicts a $3.4 billion surplus in 2015-16, a $3.7 billion surplus in 2016-17, a $1.3 billion surplus in 2017-18 and $1.38 billion in 2018-19.
But those surpluses will lift as the government gets proceeds from the partial sales of Ausgrid and Endeavour, which are still to come.
The budget also predicts a slowdown in the housing market.
After extraordinary growth in stamp duty revenue, the budget is predicting it stays steady in 2016-17 at $8.9 billion before rising to $9.8 billion in 2019-20.
“Excluding the foreign investor transfer duty charge, residential transfer duty revenue in 2016-17 is expected to grow by 5.5 per cent compared to 13.6 per cent in the previous year,” the budget papers say.
“The softer growth in residential transfer duty is expected to continue over the period of the forward estimates with annual growth averaging 4.4 per cent.”
The Budget also includes the payroll tax rebate for employers who take on another employee from $5000 to $6000 and, as foreshadowed, $100 million over two years to deal with youth unemployment.
There is also $145 million for the refugees Premier Mike Baird lobbied to resettle from Syria.
And, as foreshadowed, there is $3.8 billion for 7000 extra prison beds.
There is also a record $21 billion on health, including $1.6 billion in capital spending to upgrade hospitals around the state.
But at her press conference the Treasurer was challenged on not funding some hospitals like Nepean where doctors are crying out for help, as well as not allocating any funding for the proposed new hospital at Rouse Hill despite having large surpluses.
Ms Berejiklian said health was a major priority but “for many Sydneysiders, congestion is their number one challenge.”
The Treasurer also warned that the election of Labor at next week’s federal poll may endanger the NSW budget position because of Bill Shorten’s promise to end negative gearing.
THE MAIN POINTS
Surplus:
— The government has announced a record $3.7 billion surplus for 2016-17.
Education:
— Education and schools are a big winner, with $1 billion extra funding for schools, including $330 million over two years to fix ongoing maintenance issues.
— New primary schools will be built at Smalls Road, Ryde and North Kellyville, with a new senior campus for Cammeraygal High School to be established at Crows Nest.
— Extra classrooms at Willoughby Public School and Willoughby Girls, along with Fort Street Public School, Oran Park Public School, Rosehill Public School and Curl Curl North Public School.
— More schools in the coming months.
Transport:
— A monster $12 billion for metro projects and roads.
— That includes $2.9 billion of state funding for the West Connex.
— $1 billion for new suburban trains in Sydney, mostly in the West.
Employment:
— Payroll tax rebate increases for employers who take on another staff member.
— Extra funding for Corrective Services, including $3.8 billion for another 7000 prison beds.
Health:
— A record spent on health to the tune of $21 billion.
— that includes $1.6 billion in capital upgrades for hospitals.
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