NSW Treasurer Dominic Perrottet released the state budget on 22 June 2021 to recover the NSW economy from the pandemic-induced recession. NSW regained all jobs lost in the pandemic and created an additional 36,000 jobs in 2020-21.
The state budget was in deficit with $7.9 billion in 2020-21 which will climb back to $8.6 billion in 2021-22. It will return to surplus with $466 million in 2024-25. The NSW government has borrowed over $33 billion since the beginning of 2020 to offset the effects of COVID-19 and paid an average rate of interest of just 1.5%.
In 2020-21, the NSW government received $21 billion in GST revenue, $2.9 billion in gambling taxes and $2.2 billion from poker machines.
The closure of international borders is hitting the NSW economy hardest. It is costing state coffers $300 million a month.
The salient features of the Budget 2021-22 are provided below.
Families with children aged three to six will receive $100 vouchers to learn swimming at a cost of $44 million to the budget over two years.
The budget allocated $10 billion for health infrastructure over the next four years. An amount of $36.4 million will be spent on mental health to support rural and regional communities which will fund over 57 Response and Recovery Specialists to work in the sector. The funding for palliative care will be boosted by $82.8 million over the next four years to create 120 full-time equivalent positions. The NSW Ambulance will receive $1.4 million to enhance its services.
The state will embark on its largest building program in the history with $2.1 billion over four years for 44 new and upgraded schools around growing areas of Sydney. The budget also allocated $196 million to develop a new online syllabus with capabilities for students, teachers and parents to find educational resources at fingertips. Free preschool for NSW families will be extended to 2021-22, saving them up to $4,000 a year.
The budget has allocated $60 million over two years for domestic violence frontline services. Another $32.5 million for the Staying Home Leaving Violence initiative to assist fleeing partners from abusive relationships.
Higher property prices and transfer transactions are swelling the state coffers. In 2020-21, NSW collected almost $7 billion in stamp duty on property transfers which will leap to a staggering $9.4 billion in 2021-22. In 2022-23, the budget estimates to reap a windfall of $11.4 billion from real estate sales. Stamp duty is now the state’s largest source of revenue, overtaking payroll tax.
Public Service Employees
A significant allocation of $2.7 billion over four years will be made available for the state’s more than 400,000 public servants including nurses, police, paramedics and teachers to provide a pay rise of 2.5%. Public sector employees and their spouses will also be entitled to five days of paid leave after a miscarriage or stillbirth to ameliorate their grieving.
Promoting electric cars is a priority for the NSW government. It aims to increase the number of these cars sold by 50% by 2030 towards zero emissions by 2050. From 1 September 2021, stamp duty will be waived for electric cars under $78,000 and $3,000 in rebates will be offered for the first 25,000 people to purchase battery and hydrogen fuel cell cars under $68,750. This will cost the budget an estimated $500 million.
An amount of $200 million will be spent on arts and tourism in NSW over four years. To revive struggling Sydney CBD due to COVID-19, the budget provides $100 vouchers for city workers to spend on lunches/dinners on Fridays as well as $100 accommodation vouchers to encourage NSW residents to spend a night in a city hotel in the winter. This will cost the budget $50 million.