‘Cover of darkness’ state budget update sees $1.3bn slump amid union battle

Protracted union battles in NSW have left storm clouds over the state’s budget, with a $1.3bn slump in 2024-25 in a mid-year update released under the ‘cover of darkness’.

NSW Treasurer Daniel Mookhey, left, and Premier Chris Minns. Picture: NewsWire / Nikki Short

The NSW government has reported a sharp budget downturn but forecasts that the state’s ­finances will steady, despite ongoing battles with unions that the Treasury has been accused of economically downplaying.

The state opposition has accused the government of releasing its budget half-year review “under the cover of darkness” by releasing it near-concurrently with the federal government’s mid-year economic and fiscal outlook.

Announcing the figures on Wednesday, Treasurer Daniel Mookhey and Finance Minister Courtney Houssos estimated 2024-25 budget revenue was down by $1.35bn, with projected upturns of $271m, $628m and $211m in the following three ­financial years.

Despite union stare-downs with firefighters, rail workers and nurses threatening further state costs, Mr Mookhey said offsets and productivity gains had left the budget without extra baggage.

However, with 35 per cent of public sector workers still negotiating raises, it could leave up to $6bn in future taxes carved out by union demands.

Pointing to insurance valu­ations and foreign influence as the main sources of economic turbulence, the government called its budget position and debt management a “mildly encouraging” forecast.

“We have some really intense negotiations under way with our rail workers, and our nurses remain a major area of dispute, but we have made real progress when it comes to reaching fair outcomes,” Mr Mookhey said.

Among the factors tanking budget projections were sluggish home sales pulling $392m from stamp duty revenue, government support to energy bills, and a $440m accounting error on the part of Sydney Water, a failure that lashed by the opposition.

The budget update projected $1.3bn in debt by 2027-28, down from $1.5bn at the 2024-25 budget.

Damien Tudehope and Mark Speakman. Picture: Jeremy Piper

Opposition Leader Mark Speakman accused the government of “taking out the trash” by releasing their state projections as focus remained on the federal MYEFO, while raising alarm over the “debt and deficit as far as the eye can see”.

Where the NSW government pointed to stability and productivity gains in its bounce back from union carve-outs, the opposition said wage gains had been afforded through cuts to services.

“Wage increases have not been covered by productivity gains,” Mr Speakman said. “They have been covered by offsets ... ripping money out of health and education and infrastructure. We’re still looking at a 34 per cent cut in transport infrastructure, 36 per cent cut in health infrastructure and a 41 per cent cut in education infrastructure over the forward estimates.”

The opposition’s Treasury spokesperson, Damien Tude­hope, accused Mr Mookhey of misleading residents.

“This is a document that was released today under cover of darkness, in circumstances where the Treasurer has gone from dodgy to incompetent, and he’s asking us to swallow it,” he said.

“The Treasurer should not be allowed to get away with issuing a document like this (in late December) in circumstances with little scrutiny by virtue of the fact that it’s issued on the same day as the commonwealth MYEFO.”