Treasurer Matt Kean says his big-spending budget will grow the economy

Treasurer Matt Kean says his big-spending budget is “focused on reform”, not winning women’s votes, revealing where the state will be saving some cash. Here’s what we know so far on budget day.

NSW is forecast to be back in the black in three years despite Treasurer Matt Kean’s big spending pre-election budget targeted squarely at women and young families.

Almost $40 billion in spending initiatives have already been announced ahead of Mr Kean’s first budget, which he labelled yesterday as “responsible” spending that will “grow a bigger economy”.

The Treasurer maintained that the Coalition government is committed to charting “a path back to surplus”.

Some savings are set to be made by ending various Covid support measures that have supported the state through the last two years.

The Daily Telegraph can reveal that payroll tax is set to increase back to 5.45 per cent, with a two-year Covid tax cut for businesses coming to an end.

Treasurer Matt Kean spoke exclusively to The Daily Telegraph ahead of his first budget. Picture: Justin Lloyd

“That was a pandemic measure that won’t continue,” Mr Kean said.

Unlike in last year’s budget, there will be no extension to the Dine and Discover vouchers. That could return almost $334 million worth of unused food and fun vouchers back into government coffers.

Despite Mr Kean preparing to unveil an eye-watering debt bill, the Treasurer insisted that big spending measures outlined so-far will grow the overall size of the economy.

He said a $5 billion childcare policy alone will result in up to $17.1 billion more economic activity in NSW.

In preparing the budget, the government first looked at whether spending measures set to come to an end needed to be renewed. Temporary payroll tax cuts were among the Covid-19 measures that will come to an end.

Mr Kean, in consultation with Premier Perrottet, then looked at the government’s “strategic priorities.

On Tuesday, Mr Kean will deliver the 2022-23 NSW Budget. Picture: AAP Image/Bianca De Marchi

Ministers brought more than 1,500 new policy proposals to cabinet, worth more than $80 billion, Mr Kean said.

“We categorised things as a ‘critical priority,’ ‘strategic priority,’ and then we had the rest of the proposals,” Mr Kean told The Telegraph.

Making good on Premier Dominic Perrottet’s promise to be the first “Premier for families,” much of the spending to be outlined in Tuesday’s budget – including the childcare plan – will benefit young mothers looking to get back into the workforce.

The budget comes less than 10 months before the next election, but Mr Kean denied that his first budget has been designed to win the votes of women who may otherwise turn away from the Coalition.

“Not at all. This is a budget that’s focused on reform,” he said.

“You help one part of the family, you help the whole family.”

“Dom (Perrottet) is the families Premier and this is going to be him putting his stamp on the family’s budget,” Mr Kean said.

Mr Kean flagged that more privatisation is on the cards to pay for big-spending government reforms.

“The government is strongly committed to asset recycling,” Mr Kean told The Daily Telegraph yesterday.

One way the government could raise cash is by selling, rezoning, or developing land along Sydney’s railway network.

Mr Kean would not deny reports the government’s Transport Asset Holding Entity (TAHE) was looking at developing land near train stations in a bid to raise up to $40 billion.

“We are going to continue to make sure TAHE is looking at opportunities to get a better deal for taxpayers and NSW,” Mr Kean told The Telegraph.

The Treasurer foreshadowed more privatisation and asset recycling to put the state back in black. Picture: Justin Lloyd

He pointed to stamp duty changes as an example of tax reform to be included in his first budget, with the government to set aside $730 million over four years to give first home buyers the choice of paying ongoing property tax instead of a big upfront fee.

The government needs to pass legislation to establish its property tax scheme. A bill will be introduced to parliament in the second half of 2022.

However Labor has so-far indicated it opposes Mr Perrottet’s property tax plan, meaning the issue could become a key policy battleground at the March election if legislation is not dealt with this year.

December’s half year budget review forecasted a $449 million surplus in 2024-25. Mr Kean will today announce that NSW is set to meet that target, despite the explosion of Covid cases in the Omicron wave and catastrophic flooding.

Mr Kean would not be drawn on whether the deficit he hands down for this financial year is larger or smaller than the $19.5 billion forecast in December.

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Originally published as Treasurer Matt Kean says his big-spending budget will grow the economy