NSW Treasurer Dominic Perrottet before handing down the budget on Tuesday. PICTURE: The Hunter has missed out on any major new spending commitments in Tuesday’s state budget, despite the government boasting of record infrastructure spending and surpluses as far as the eye can see.
Treasurer Dominic Perrottet used his first budget speech on Tuesday to trumpet NSW as Australia’s economic powerhouse, handing down a massive $4.5 billion surplus in 2016-17 on the back of the sale of electricity network providers such as the $6.6 billion sale of Transgrid.
And despite falling revenue from Commonwealth grants and GST receipts, the government says the good times are set to continue.
The budget papers predict a $2.7 billion surplus in 2017-18, net negative debt and an average of $2 billion in surpluses across the forward estimates.
Funded largely by proceeds the sale of the state’s poles and wires and Commonwealth asset recycling payments, the government says it’s using that income to fund some $72 billion in infrastructure across the state in the next four years.
“We don’t run surpluses for the sake of it,” Mr Perrottet said in his budget speech.
“We run surpluses to make NSW the best place to live, work and to raise a family.”
But with growth at above-trend across the forward estimates, Mr Perrottet said it was the regions outside of Sydney that were the “unsung success” of the strong budget position.
And according to the budget papers the Hunter has been at the heart of that growth.
Employment in regional NSW has grown 4.9 per cent since April 2015, and the greater Hunter – including Newcastle and Lake Macquarie – has led the way, growing by 11.2 per cent or 32,000 people employed in the same period.
But despite the rosy economic picture, the Hunter has largely missed out on the government’s infrastructure gravy train.
The largest individual spend in the region was again the 2.7 kilometre Newcastle light rail project, which received another $206 million bringing the total spend on the project – and the associated revitalising Newcastle work – to $482,961.
In health, the drip-feed to the new Lower Hunter hospital in Maitland continued, with $5 million contributed to the $450 million project before an expected completion date of 2024, and another $13 million going toward the redevelopment of the Muswellbrook Hospital.
$49.8 million will be spent on Hunter road projects, including $3.7 million on planning for the Rankin Park to Jesmond section of the Newcastle inner-city bypass and $23.4 million to further progress on the joint state and federally funded Tourle Street Bridge upgrades.
In a slight boost for Lake Macquarie, the government’s committed $1.7 million to complete a strategic business case for “all stages”of the Glendale Transport Interchange, howeverthe redevelopment of the Newcastle Art Gallery missed out on any funds.
Since coming to power in 2011 the government has used privatisation – like the $1.5 billion lease of the Newcastle Port – as a base on which to fund its ambitious, and mostly Sydney-based infrastructure budget.
Mr Perrottet called “asset recycling” – the government’s term for asset sales – the “secret sauce” of its strong budgetary position.
It currently has $29.8 billion in its Restart NSW fund – made up of income from asset sales like the sale of the so-called “poles and wires” – including $12.1 billion in reserve for projects including the inner-city bypass.
But there’s a catch.
The budget papers indicate a “challenging” revenue outlook, thanks to declining receipts from the Commonwealth.
The government has again revised down its GST intake, expecting $448.7 million less in receipts than it did at last year’s budget, and that reduction will begin to bite over the next four years with some $14.7 billion falling out of the government’s revenue across the forward estimates as a result.
$1.6 billion in tax cuts including the government’s housing affordability measures will cost the budget another $330 million.
And while net debt is expected to be negative for the second consecutive year, increased infrastructure spending will see it increase to 2.7 per cent of Gross State Product by the end of the forward estimates.
But the government says it’s keeping expenditure growth below its long-term revenue, including a 2.5 per cent wage cap on public service salaries, and points to its GSP of 3.5 per cent in 2015-16, predicted to remain above trend to 2020-21, as evidence that the economy is still humming.
MORE INFORMATIONWhat’s in it for the Hunter?Stamp duty revenue, privatisations push to $12b surplusGovernment pledges $5 million for Maitland HospitalBerejiklian Government to fund Lake Macquarie Transport Interchange business case