Treasurer Daniel Mookhey to reveal NSW will ‘almost certainly’ lose prized AAA credit rating after GST carve up

The state budget will lose a whopping $11.9 billion over four years and “almost certainly” face a credit rating downgrade due to a last month’s unprecedented cut to NSW’s share of GST revenue.

The state budget will lose a whopping $11.9 billion over four years and “almost certainly” face a credit rating downgrade due to a last month’s unprecedented cut to NSW’s share of GST revenue.

Treasurer Daniel Mookhey will on Monday reveal the Commonwealth Grants Commission’s decision to cut NSW’s share of GST revenue will be a greater hit to state revenue than the Covid-19 pandemic.

“The Commission’s decision will cost NSW more in lost revenue than COVID-19 did,” Mr Mookhey will tell the McKell institute, according to an advanced copy of his speech.

The Telegraph previously revealed NSW could be anywhere between $6 billion and $10 billion worse off due to the GST decision over four years. Now NSW Treasury has crunched the numbers, the impact is almost $2b worse than first feared.

“Losing $11.9 billion is the equivalent of losing 19,000 healthcare workers,” Mr Mookhey will say.

NSW Treasurer Daniel Mookhey. Picture: NCA NewsWire / Nikki Short

“$11.9 billion is enough to hire 19,000 teachers, or 16,000 police officers for the next four years.

“$11.9 billion is how much we spend on mental health, TAFE and the NSW Police Force combined every year.”

The cuts will “almost certainly” lead to NSW losing its prized AAA credit rating, Mr Mookhey will say.

Mr Mookhey will use his speech to argue for an overhaul in how GST revenue is split among the states and territories.

The Commonwealth Grants Commission’s decision last month means that NSW will only get 87 cents back for every dollar of GST paid in the state.

“For every dollar that Victoria will give to the smaller states next year, NSW will give upwards of four,” Mr Mookhey is expected to say.

Federal Infrastructure Minister Catherine King. Picture: NCA NewsWire / Martin Ollman

The NSW Government is pushing for GST revenue to be divided “according to population share,” with the Commonwealth “topping up the smaller states to make sure they are no worse off,” Mr Mookhey will tell the McKell Institute.

However, the NSW government has acknowledged that any reform to the GST carve up is a distant proposition.

Mr Mookhey is now working to plug the $11.9 billion hole in the state’s budget by getting more money from the Commonwealth to fund hospitals, schools, and roads.

It comes as the Telegraph today launches a campaign calling for the Albanese government to reverse cuts to road spending in western Sydney.

Infrastructure Minister Catherine King last year cut $1.4 billion in spending on road and rail projects. Over 10 years, those cuts will amount to some $3.5 billion, according to state government projections.

ACCOR ROOF ON ICE

Meanwhile, A roof over Accor stadium would be “nice to have” but will “have to wait,” as the state budget stares down the barrel of an almost $12 billion hit to revenue caused by unprecedented cuts to our GST share.

In his first major preview of the June state budget, Treasurer Daniel Mookhey said that he will continue fighting with Canberra to get a better deal when it comes to funding for schools and hospitals.

Despite facing an $11.9 billion hit to revenue following last month’s GST carve up, Mr Mookhey said he will not seek to dramatically reduce spending.

“You should expect us to make modest investments in the ‘must have’ policies that cannot wait,” he said.

Those “must have” policies include spending to “counter the housing crisis,” “fix our schools and hospitals,” “prevent crime,” and “rescue the energy transition,” Mr Mookhey told the McKell Institute.

“These ‘must haves’ are our budget priority. But that means the ‘nice to have’ initiatives - such as putting a roof on Accor stadium - will have to wait,” he said.

It comes after The Daily Telegraph revealed earlier this month that the state government had commissioned a “feasibility study” into a potential $300 million permanent roof over Accor.

The study was launched to determine how many concerts could be booked at the stadium if it had a roof.

The Telegraph previously revealed that Sports Minister Steve Kamper had been inspired to investigate options for an enclosed stadium after watching the NRL’s opening round under Allegient stadium’s translucent roof in Las Vegas.

Premier Chris Minns was quick to downplay suggestions that hundreds of millions of dollars could be spent putting a roof on Accor, insisting his government had more pressing priorities.

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