The New South Wales (NSW) State Government handed down its Budget on 17 June 2014.

The headline items from the State Budget are:

  • 2014-15 Budget provides for a strengthening in the State’s fiscal position with a minor deficit of $283 million estimated for 2014-15
  • State economic growth is the highest in Australia at 4.7%
  • An expected above-trend growth of around 3% in each of the three years to 2015-16
  • Growth will be led by household consumption and dwelling investment initially, and be underpinned by a strong improvement in non-mining business investment later
  • Stronger budget surpluses are expected from 2015-16 and across the forward estimates, backed by strong revenues and an improved outlook for the NSW economy. An expected $2.2 billion surplus is expected for 2016-17

Major announcements
Major announcements from the State Budget included:

  • Investment of $15 billion in infrastructure in 2014-15, which will bring the State’s total infrastructure spend to $61.5 billion over the four years to 2017-18
  • Major capital works and spending over the next four years include:

    upgrades to the Pacific Highway ($5.8 billion), Princes Highway ($681 million), Western Sydney Growth Roads ($557 million) and Great Western Highway and Bells Line of Road ($359 million)
    the WestConnex Motorway project ($3.8 billion)

    rail projects, including the North West Rail Link ($5.2 billion) and the Northern Sydney Freight Corridor ($576 million)

    CBD and South East Light Rail ($401 million)

  • New South Wales signed up to the Asset Recycling Initiative in April 2014. As part of this, the Commonwealth will provide incentive payments of up to 15% of the assessed value of the asset for States that divest assets and recycle funds into new infrastructure investment

State taxes
Announcements in relation to State taxes included:

  • Tax revenue is expected to grow by an average of 5.3% p.a. over the four years to 2017-18
  • For 2014-15, GST revenue is estimated at $16.8 billion. GST payments are estimated to grow from $16.8 billion in 2014-15 to $18.9 billion in 2017-18, or 4.5% per annum on average
  • Given the recent strengthening in employment growth, subdued payroll tax collections in 2013-14 are expected to recover in future years, underpinned by additional investment in Office of State Revenue collection and audit activities
  • The NSW Office of State Revenue has released a publication stating an average premium rate reduction of 5% for WorkCover
  • From 1 July 2014, the threshold for the First Home Owners Grant on new homes will be increased to $750,000 (from $650,000)
  • Abolishment of all remaining Intergovernmental Agreement taxes from 1 July 2016. This includes the abolition of transfer duty on non-real business assets such as patents and intellectual property, mortgage duty on business transactions and duty on unlisted marketable securities