Billions for housing in a budget of ‘must-haves’

The NSW Labor government will spend $5.1 billion on building 8400 social homes – with half of those specifically for women and children fleeing domestic violence — in the biggest investment in public housing in the state’s history.

Treasurer Daniel Mookhey’s second budget will also see the government make its first policy intervention into supporting bulk-billing by providing a full rebate on payroll tax to doctors who bulk-bill 80 per cent of patients in metropolitan Sydney.

NSW Treasurer Daniel Mookhey in the budget lockup on Tuesday.Credit: Dominic Lorrimer

The move, which will cost the budget $189 million, is designed to ease the pressure on the state’s strained emergency departments, which have been taking the load as bulk-billing rates declined.

NSW Health says for every one per cent reduction in bulk-billing, there are 3000 extra presentations each year at emergency departments.

The spend will also include $104 million to waive historical payroll tax liabilities for clinics with contractor GPs.

Mookhey said the budget was “careful in difficult economic times”.

“This budget gets the balance right between making sure that the must-haves that NSW can’t go without get the investment that they need,” Mookhey said.

Despite optimism that NSW would return to the black, the state’s deficit will be $3.6 billion in 2024–25.

The run of red will continue, with a $2.5 billion deficit expected in 2025–26, $2.4 billion in 2026–27 and $1.5 billion in 2027–28.

Mookhey said NSW would have returned to surplus in 2025/26 had it not been for a Commonwealth Grants Commission decision, which will leave the budget $11.9 billion worse off over four years because of the method used to distribute the GST between the states.

However, despite the GST hit, the budget papers also reveal the state government will have almost $11 billion more to spend over the next four years than was forecast in December. This is due to an increase in revenue forecast from stamp duty and land tax.

NSW Labor has identified housing as its No.1 priority amid a chronic lack of supply, including in social homes, with the total number in NSW declining by 365 over the past 10 years.

At the same time, the waiting list for social housing for women and children has blown out to 34,000 and there has been a 25.5 per cent increase in the number of people sleeping on the streets.

The government has already announced a $245 million domestic violence package in the aftermath of the tragic murder of Molly Ticehurst in April, allegedly at the hands of her former partner.

Some 18,255 people seeking specialist homelessness services in 2022-23 reported that they were leaving domestic violence situations. Most were turned away.

There will be 6200 new homes as part of the social housing package, as well as 2200 homes in a state of disrepair that will be knocked down and rebuilt. There is also a $1 billion maintenance blitz to upgrade 33,500 social homes.

NSW needs to build 75,000 homes a year for five years to meet its ambitious targets under the national housing accord.

Mookhey said the government needed to shift its focus from building infrastructure to building homes if it had any hope of solving the chronic housing crisis.

Mookhey said the budget was one of “must-haves” for “difficult economic times”.Credit: Dominic Lorrimer

The government’s budget also includes the previously announced $520 million for infrastructure as part of its signature housing plan, including its transport-oriented development program, which will create density around train stations.

Other new measures in this budget include a new three-year wage offer for public sector workers ($4.5 billion over four years to 2027-28). That provides for a 10.5 cent increase to remuneration.

There is $224 million in 2024/25 for out-of-home care, which is under increased pressure, and $189 million in permanent funding for 286 existing firefighter positions, which had previously been left unfunded. There is also $253 million to assess development applications more swiftly in a bid to fast-track housing across the state.

Domestic Violence NSW, the peak body, said the budget offered “a great medium-term response to the housing crisis” but more funding was required to address immediate need.

Acting chief executive Elise Phillips said there would be a reduction in the number of victim-survivors of domestic and family violence who are turned away from homelessness services.

“However, this investment does not match the scale of the homelessness crisis with women and children living in cars and tents,” Ms Phillips said.

“Domestic Violence NSW and the 180 frontline services we represent will continue to work together with the NSW Government to provide housing and safety for victim-survivors.”

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