NSW budget: Four-year bet on a building-led recovery

Responding to the triple-hit of drought, bushfires and COVID-19, the NSW government is embarking on an ambitious construction-led recovery.

The NSW government has already begun the sale process for its 49 per cent stake in WestConnex.

Responding to the triple-hit of drought, bushfires and COVID-19, the NSW government is embarking on an ambitious construction-led recovery, with record amounts spent on a four-year infrastructure program totalling $107bn.

Road, rail and other transport initiatives account for 67 per cent — or $72.2bn — of the investment, with expectations the projects will generate 145,000 jobs directly or indirectly each year.

Measures announced in the budget on Tuesday reveal major investment in regional NSW to support jobs and provide new infrastructure to improve resilience to natural disasters, particularly bushfires and drought.

The Treasury notes that “some projects continue to be impacted by domestic border closures, whilst others have been impacted because overseas experts have been unable to be on-site for essential testing and commissioning”.

The government’s “asset recycling program” has boosted its spending power by $25bn at a time when tax revenues have been drastically hit and COVID-19 response expenditures have soared.

The government has already begun the sale process for its 49 per cent stake in WestConnex and is looking at selling its lotteries duty revenue.

Proceeds from the next phase of the asset recycling program will be invested in the NSW Generations Fund to facilitate further projects.

Some $10.5bn of the total $107bn infrastructure spending announced on Tuesday is a contribution from the commonwealth government.

One key objective driving the infrastructure program is the need to boost the construction industry, which employed more than 370,000 people prior to the pandemic.

These projects include $10.4bn over four years for Sydney Metro West, to double rail capacity between the Sydney and Parra­matta CBDs with a travel time of 20 minutes, and $9.2bn for the metro rail link to the new Western Sydney International Airport.

Road projects include $2.2bn over four years for the Sydney Gateway project, which will provide a connection from Sydney Airport to the new West Connex St Peters Interchange.

Health infrastructure gets $10.7bn over four years including completion of the $673m Tweed Hospital Redevelopment.

More than $1.4bn has been allocated for new and upgraded schools and $100m for the TAFE NSW Asset Renewal Program.