Election promises weigh on surpluses

NSW surpluses to average less than $1bn over three years as Coalition struggles with commitments.

NSW Premier Gladys Berejiklian speaks to the media during a press conference in the new M4 WestConnex tunnels in Homebush, yesterday. Picture: AAP

NSW government surpluses will average less than $1 billion over the next three years as the ­Coalition struggles with the weight of election commitments, even after cutting 2500 public service­ jobs.

The surpluses to be announced in the budget tomorrow will be in sharp contrast to those of ­previous years, particularly the $4.23bn set in 2017-18.

This is despite a series of savings measures, including a 5 per cent cut in employee-related ­expenses in back-office roles.

What surpluses are achieved will come partly as a ­result of a move adding $60-$100 to household annual insurance bills.

The fire and emergency service­s levy on insurance policies will be increased by $600 million over four years to cover firefighter ­insurance requirements, even though states such as Queensland have spent just $20m a year to do the same. The additional tax was announced by Treasurer Dominic Perrottet in the mid-year review in December and it takes emergency services levy contributions from $780m in 2018-19 to $1.13bn in 2020-21.

Mr Perrottet has announced that the amount collected from the levy next financial year will be $897m, with the increase aimed at helping firefighters diagnosed with cancer.

In the lead-up to the March election, Premier Gladys Berejiklian made bigger spending promises than Labor, with a total commitment of more than $21bn in capital spending and more than $7bn in recurrent spending.

This included cost-of-living giveaways such as a doubling in the value of Active Kids sport vouchers for children to $200, at a cost of $291m over the forward estimates, and $250 transport cards for regional seniors.

Ms Berejiklian also promised to employ 4600 more teachers, 5000 more nurses and midwives, 3300 more doctors and other health professionals, and 1500 more police.

The promises came amid Labor criticism that the ­Coalition was focused on stadiums­ rather than schools and hospitals.

The government revealed last week that it would spend a record $93bn over four years on infrastructure.

The spending comes as the government faces a $2.3bn writedown in GST receipts­ and an $8bn writedown of stamp duty receipts.

The Australian revealed last week that, with net government debt due to blow out to $22bn by 2022, senior ministers believed more asset sales were required, including the sale of the remainder of power company Ausgrid.

Mr Perrottet will tomorrow reveal that NSW’s net worth — the value of its public assets — reached a quarter of a trillion dollars last year, a first for an Australian state and a year ear­lier than forecast.

Net worth is now expected to reach $262bn this month and is forecast to grow to $311bn by June 2023. NSW’s net worth is about $100bn larger than that of Queensland.

Mr Perrottet will argue the net worth is a result of the recycling of assets, such as selling half of NSW’s “poles and wires” businesses and ploughing it into roads, rail, schools and hospitals.

The value of property, plant and equipment is expected to grow from $224.8bn this month to $274.8bn in June 2023.

“It’s no surprise that as our plan to rebuild and transform NSW continues — with thousands of projects, including world-class schools, hospitals, roads and rail — our net worth continues to scale new heights,” the Treasurer said.

“This is the collective wealth in which every citizen of our state is a shareholder.

“What critics of our asset-recyclin­g strategy fail to understand is that when you swap old, lazy assets for new, more productive­ ones, you don’t diminis­h the state’s value — you grow it to unprecedented levels.”

Mr Perrottet said the government’s infrastructure program had “boosted growth in NSW by half a percentage point in recent years, and it will continue to do so over the coming years”.

● The South Australian govern­me­nt will commit $8m to build a new train station at Tonsley in Adelaide’s south in tomor­row’s budget.

The existing station will be demolished and rebuilt in a new location to accommodate a $125m line extension to Flinders University and a surrounding biomedical precinct.

Additional reporting: AAP