The NSW budget surplus forecast for this financial year has leapt to $3.3 billion despite a spike in first home buyers taking advantage of tax breaks delivering a hit to stamp duty revenue.
The half-yearly budget review to be unveiled by NSW Treasurer Dominic Perrottet on Thursday will show the expected surplus for 2017-18 has risen by $600 million since June.
The increase from $2.7 billion to $3.3 billion is understood to be largely due to a shift in the timing of agency expenditure, leading to a reduction in expenses this financial year.
It follows the surplus for the last financial year coming in $1.2 billion higher than estimated at $5.7 billion, mainly due to lower than expected expenses.
Treasurer Dominic Perrottet will release the half-yearly budget reviewCredit: Geoff Jones
The half-yearly review will show that as at November, 13,672 people have received stamp duty concessions since the June budget.
The budget featured a housing affordability package that delivered stamp duty exemptions for first home buyers purchasing new and existing homes worth up to $650,000 and concessions for homes priced between $650,000 and $800,000.
New figures show 3148 first home buyers received exemptions or concessions in November, up from 2918 the previous month.
This played a major part in stamp duty revenue in the three years to 2020-21 being revised down by $657 million.
The review will also record that at June net debt was negative $9.3 billion.
Mr Perrottet celebrated the increase in first home buyers receiving stamp duty relief, noting that during the same five-month period last year, 3970 people received concessions.
"We are using our strong economic position to get first home buyers back in the game," he said.
"This is revenue we are happy to forgo because it means people are getting the keys to their first home and this is exactly what our government stands for."
Mr Perrottet said the drop in stamp duty revenue highlighted the need for the Commonwealth to reform how GST is distributed to the states.
The June budget forecast that NSW's share of GST is set to fall to 25.5 per cent – or by $13.1 billion – by 2020-21.
It said that under a per capita system of GST distribution advocated by NSW, the state would be $14.7 billion better off in the four years to 2020-21.
"We need to know we can rely on the levels of GST coming into our budget from year to year and this drop in revenue coming in from our own state makes the case even stronger for the Commonwealth to fix a broken system," Mr Perrottet said.
"I look forward to working with the Commonwealth to determine how GST revenues can be more fairly distributed among the states and how reward for reform can move the Australian economy forward."