The two areas where Daniel Mookhey has made his mark

With housing and health at its core, NSW Treasurer Daniel Mookhey has delivered a very Labor budget.

He had little choice. The most pressing issue facing the nation is the housing crisis, and nowhere is feeling that pressure more acutely than NSW and Sydney.

The government has already embarked on sweeping changes to the planning system that will deliver the largest reforms in a generation to where we build homes. Instead of stretching out to the city’s fringes, the government has implored voters to accept that we must go up, particularly around train stations, if we have any chance of providing the housing needed.

NSW Treasurer Daniel Mookhey, an upper house MP, was invited to the lower house to deliver his budget on Tuesday.Credit: AAP

However, the government, particularly a Labor one, needs to also dramatically increase the supply of public housing and this budget goes someway to achieving that. The waiting list for public housing runs to more than 80,000 and more than one-third of those on it are women and children.

Couple that with the scourge of domestic violence that is sweeping the country at horrifying rates, and a Labor government could not talk about housing without including public homes in that conversation.

Its $5.1 billion investment to build 8400 homes, of which half will be set aside for families fleeing domestic violence, shows the government has grasped the enormity of both problems.

Health, and access to affordable healthcare, is also a key Labor area. Emergency departments are stretched to the limit and are often the go-to in areas with chronically low bulk-billing rates. GPs, and the system by which they are paid, are the responsibility of the federal government.

However, rather than sledging from the sidelines about the need for more funding (which is a valid argument from the states), NSW has made an intervention and will use its lucrative payroll tax system to encourage GPs to bulk-bill. If a GP bulk-bills 80 per cent of their patients, they will be exempt from the tax. It is a smart move from the government.

The housing and health announcements are the major components of an otherwise no-frills budget. There are few other sweeteners despite the cost-of-living pressures households are facing, although the government insists its bulk-billing intervention will make life easier for families.

It is also a budget that makes clear that despite previous promises, any hopes of returning to the black are dashed as a sea of red faces the state for years to come. NSW has been in deficit for five years already and has another four to go. That will mark the longest time in the red in living memory.

Mookhey says a surplus would have been a reality if the little-known Commonwealth Grants Commission had not king-hit NSW with the GST carve-out. Thanks in part to the revenue NSW can bring in, the commission’s decision on GST distribution means the state’s budget will be $11.9 billion worse off over the next four years.

The treasurer has labelled it the great GST rip-off, but he is less forthcoming about the fact that NSW is also reaping the rewards of the ongoing property market boom. NSW will have almost $11 billion more to spend over the next four years than was forecast just six months, thanks to stamp duty and land tax.

Mookhey has been able to craft the budget narrative around the Big Bad Grants Commission but blaming a federal agency will quickly run its course. He has delivered a careful budget, but voters will demand more next time and will not settle for finger-pointing.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.