- New South Wales State Budget 2017-18
NSW Treasurer Dominic Perrottet has unveiled a budget “that builds for the next generation” in his budget speech on 20 June 2017.
This year’s budget is said to prioritise investment in the “trifecta” of infrastructure, healthcare and hospitals, as well as education, however, a review of the budgeted spending shows that infrastructure is the key focus of this budget.
Further, as with the 2016-17 budget, the treasurer used his speech to criticise the current model of GST distribution by the Commonwealth government, highlighting that NSW would receive an additional $15 billion over the next four years if it were given a GST share equal to its share of the Australian population.
Headline budget items include:
- a surplus of $4.5 billion for 2016-17;
- a forecast surplus of $2.7 billion for 2017-18, with average surpluses of $2 billion per year over the next four years;
- Gross State Product growth of 2 ¾ percent, with expected growth of 3 percent in 2017-18;
- negative net debt and no change to the State’s triple-A credit rating; and
- the lowest unemployment rate in the country for nearly two years.
Overall, the budget is likely to be well received by business and the economic activity generated by the substantial government spending should have a positive impact on mid-size business.
The 2017-18 budget delivers continued investment in infrastructure, with $72.7 billion committed over the next four years. Infrastructure investments announced include:
- $7.2 billion investment in the third stage of WestConnex, the M4-M5 link
- $4.9 billion continued funding for Sydney Metro City and South West and $4 billion for Sydney Metro Northwest
- $4.6 billion for capital works in schools and TAFE
- $1.8 billion for road, maritime and freight asset maintenance
- $1.6 billion contribution to targeted infrastructure to increase housing supply
- Continued investment in public transport and local roads, including $1 billion for road upgrades in Western Sydney and $1.5 billion for upgrades to the Pacific Highway
- $1.5 billion for bus services and bus replacement
- $1.3 billion for local infrastructure and community investment in regional NSW, with another $1 billion for water security, public health, and environmental outcomes
- $1 billion for the Restart for the Regional Growth: Economic Activation fund
- $658 million for improved rail services
- $648 million for road upgrades to support Western Sydney Airport
- $300 million for regional environment and tourism infrastructure as part of the $20 billion Rebuilding NSW plan
- $264 million to reduce Sydney road congestion and implementation of Smart Motorways
- $208 million for major road upgrades such as the Guanna Hill realignment
- $200 million to support community and public facilities as part of the Stronger Country Communities Fund
- $244 million to expand the NSW Art Gallery
- $190 million for the Sydney Opera House Renewal Program
- $187 million for the Walsh Bay Arts Precinct rejuvenation
- $169 million to build the Western Sydney Stadium
Major investments in healthcare and hospitals announced in the 2017-18 budget include an additional $1 billion investment in health services in 2017-18 and an additional $2.8 billion in capital investment over four years to 2020-21 including:
- $720 million to upgrade the Prince of Wales Randwick Hospital
- New and refurbished hospitals and health facilities for Randwick Campus, Campbelltown, Tweed, Nepean, Maitland, Concord, Shellharbour, Hornsby, Wyong, Wagga Wagga, Coffs Harbour, Goulburn, Mudgee, Sydney Children’s Hospital Network Westmead, Inverell and Cooma, as well as planning for future works in other hospitals
- An additional 1,000 nurses, midwives, doctors, allied health professionals and hospital support staff, going beyond the 2015 election commitment of 3,500 additional front line staff
- Implementation of the Helicopter Retrieval Network Service to provide improved ambulance services, with doctors on every flight and 24/7 operation
- $100 million for a new palliative care package
Major investments in education and jobs include:
- A 9.5% increase to education spending from the last budget, up to $14.9 billion over the next four years
- A 60% increase to investment in education infrastructure from the last budget, up to $4.2 billion over the next four years
- An additional $747 million for school backlog maintenance
- $2.2 billion for skills development for employment through TAFE NSW and other training providers
- $217 million for universal access to early childhood education
Other investments and announcements include:
- $257 million for the Family Energy Rebate, the Low Income Household Rebate and other rebates
- An estimated $207 million for the “Active Kids Rebate” which will provide up to $100 per school child per year to cover eligible sporting activities
- $193 million for integrated tourism and events programs
- $178 million for accelerated enhancement of frontline agency communications services
- $148 million to support high needs children in Out-of-Home Care
- $100 million to support cultural and artistic activities in regional and rural communities as part of the Regional Cultural Fund
State taxes announcements, which were predominantly announced in the lead-up to the budget, include:
- As part of the NSW housing affordability package, first home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty from 1 July 2017 (up from the existing $550,000 and now including existing homes), with transfer duty discounts for properties valued at up to $800,000.
- The retention of the $10,000 First Home Owner Grant for buyers of new homes valued at up to $600,000, and the introduction of a $10,000 grant for those building their first home valued at up to $750,000.
- Shared equity arrangements for first home buyers with Community Housing Providers.
- Doubling of the foreign investor transfer duty surcharge from 4% to 8% with effect from 1 July 2017.
- Increasing the foreign owner land tax surcharge from 0.75% to 2% with effect from 1 July 2017.
- The introduction of foreign developer surcharge rebates to Australian-based foreign developers if they sell the developed properties within five years. This change is to be backdated to apply from when the transfer duty and land tax surcharges first applied.
- The targeting of the off-the-plan deferral of transfer duty for residential off-the-plan purchases to owner occupiers only with effect from 1 July 2017. Currently, local purchasers are able to defer transfer duty until completion of the sale or 12 months after the contract, whichever occurs first.
- The abolition of insurance duty on lenders mortgage insurance with effect from 1 July 2017.
- Exempting small businesses with a turnover of less than $2 million from duties on insurance (which currently applies at the rate of 5% - 9% of the premium) for commercial vehicles, professional indemnity, as well as product and public liability (but not medical indemnity insurance) with effect from 1 January 2018.
- Abolishing insurance duty on crop and livestock insurance from 1 January 2018 to reduce costs for farmers.