- New South Wales State Budget 2019-20
Treasurer Dominic Perrottet delivered New South Wales’ 2019-20 State Budget on Tuesday 18th June 2019. This Budget maintains the Government’s commitments, with a record $93b afforded to infrastructure, $18.5b for education and $26.7b for health. This is complemented by a decline in revenue from stamp duty – a reduction of $10.6b – in response to a slowing housing market, and another $2.3b gone from GST as consumers spend less.
The State of the NSW economy
- Across the four years to 2022-23, the 2019-20 Budget is projecting an average budget surplus of $1.7b.
- New South Wales continues to have the lowest net debt in Australia, projected to be negative $8.8b at June 2019 and retains its AAA credit rating.
- New South Wales has had the lowest unemployment rate of all the states over the last 12 months and employment growth remains above average.
- Growth in real Gross State Product is expected to fall slightly below trend, at 2.25% per cent per annum for FY18-19 and FY19-20.
- A slowing housing market and low income growth have dictated much of the moderation in economic growth. Severe drought conditions have also weighed on the rural sector.
- The household sector is projected to improve from around mid-2020, as stimulus measures (including personal income tax cuts and lower interest rates), stronger wages growth and improved housing market conditions prompt a consumer-led recovery.
- The 2019-20 Budget is projected to spend $93b in infrastructure programs over the next four years. This includes:
- Significant investment to deliver high-frequency services to new metro stations and deliver connections to the existing rail network. Including Sydney Metro West which will double the rail capacity through an underground metro railway line and providing a faster, easier and more reliable journey between Sydney CBD and Greater Parramatta (through Olympic Park and the Bays Precinct) with a journey time of around 20 minutes. It will begin construction in 2020 with services scheduled to start in the second half of the 2020s.
- Stage 1 of the North South Metro Rail Link will connect passengers and employees from St Marys to the Western Sydney Aerotropolis via Western Sydney International (Nancy-Bird Walton) Airport. This will provide a fast, continuous service with fully-automated driverless trains like the rest of the Sydney Metro system. This is expected to be operational in 2026 when the Western Sydney Airport is scheduled to open.
- Total investment in school infrastructure is $6.7b over the next four years. This includes $917.4m to build eight new schools and significantly upgrade a further 32 schools. In addition, the Government is providing $500m over four years to support non-government schools to build, extend or upgrade their facilities.
- $695m will be committed to technology upgrades to reduce congestion, as well as a $450m commitment to address a further 12 pinch points at intersections along major arterial roads and regional links around Sydney.
- $500m will be invested for Fixing Country Bridges and $500m for the Fixing Local Roads Program.
- $50 weekly Opal fare cap and no-interest loans for solar panels and batteries for up to 300,000 homes.
- 4,600 new teachers, and funding for 40 new and upgraded schools.
- 5,000 extra nurses and midwives and 1,500 more police.
- Increased total investment in drought support to over $1.8b. This includes:
- An additional $350m added to the Farm Innovation Fund, bringing the Fund to $1b, which provides concessional interest rate loans to primary producers to support farming communities affected by the drought.
- An additional $185m to continue existing drought assistance programs, including transport rebates for fodder, stock and water ($70m), one-year relief from Local Land Services annual rates ($50m) and Farm Innovation Fund loan interest relief ($10m).
- From 1 July 2019 transfer duty and landholder duty thresholds will be indexed to the Sydney Consumer Price Index. This will gradually increase thresholds and over time, reducing the amount of transfer duty and landholder duty that would otherwise be payable.
Foreign Surcharge Amendments
- The principal place of residence exemption from surcharge purchaser duty and surcharge land tax is proposed to be extended to the holder of a Subclass 405 (Investor Retirement) visa or a Subclass 410 (Retirement) visa under the Migration Act 1958 of the Commonwealth, or any equivalent visa of a class or subclass determined by the Chief Commissioner of State Revenue
Payroll Tax Changes
- The payroll tax threshold has been lifted to $900,000 (2019-20) from $850,000 (2018-19). The payroll tax threshold will be progressively raised to $1m by 2021-22.
- From 1 July 2019:
- Monthly payroll tax returns will be replaced with single annual returns for businesses with payroll tax liabilities up to $20,000 per annum.
- Pre-set monthly payments will also be available for businesses with liabilities between $20,000 and $150,000 per annum.
- All businesses will have an extra week to submit their annual payroll tax reconciliation.