Barton Deakin Brief: 2022-23 NSW Budget

Date: Jun 2022

Barton Deakin Brief: 2022-23 NSW Budget

2022-23 NSW Budget 

On 21 June 2022, New South Wales Treasurer The Hon. Matt Kean MP delivered the 2022-23 NSW state budget. This is the first state budget Treasurer Kean delivered and the last before the upcoming state election in March 2023.

The Treasurer focused on immediate cost-of-living relief and generational reform, headlined by the commitment to universal pre-kindergarten and significant tax reform, the option to pay an annual land tax as opposed to stamp duty.

Budget Outlook

The budget deficit sits at $11.3 billion in 2022-23; however, the NSW remains on track for a return to surplus by 2024-25. This is despite the fall in economic activity due to previous delta and omicron outbreaks and significant flooding in Northern NSW. Net debt has increased to 10.4% of Gross State Product (GSP) in 2022-23 and is predicted to peak at 14% of GSP in 2026.

GSP growth is currently at 2.5% in 2021-22 and is predicted to remain constant over the next five years to 2026, aided by a strong labour market and resilient NSW state balance sheet. The budget also predicts increased participation rates due to the NSW government’s policies, increasing revenues and moving the State to full employment. This follows recent Australian Bureau of Statistics (ABS) figures indicating NSW unemployment sat at 4.0% in May 2022, following NSW’s historical record low of 3.5% the prior month.

Demand for final goods is high, despite strained global supply chains increasing inflation. The Sydney consumer price inflation rate is predicted to accelerate from 4% in 2021-22 to its peak at 5.5% in the next four months before easing back to 3% in 2024-25. Wage growth is predicted to remain behind the inflation rate, peaking at 3.5% in 2023-24.

NSW 2022-23 Budget Commitments

Cost-of-living relief

The NSW Government has committed $7.2 billion in 2022-23 to assist families in combatting rising inflation as a result of the Russia-Ukraine conflict, struggling global supply chains and a tight labour market:

  • $1.3 billion for the Brighter Beginnings Affordable Preschool initiative to provide fee relief to low and middle-income families
  • $520 million over two years to deliver a broad-based Toll Rebate Scheme, saving NSW drivers up to $750 per year
  • $193 million for the Back to School Subsidy, a $150 rebate for every schoolchild toward school supplies
  • $128 million for the Energy Bill Buster program to help households upgrade to energy-efficient home appliances and solar panels

Women

The Treasurer’s and NSW Government’s primary objective in the 2022-23 budget is to make New South Wales the best place in Australia for women to live, work and raise a family. $5.6 billion has been provided to support opportunities for women including:

  • $5.0 billion over 10 years will be invested to establish the Affordable and Accessible Childcare and Economic Participation Fund
  • $80.0 million to support families with the high cost of fertility treatments
  • $43.6 million for expansion and enhancement of Safer Pathway to support victim-survivors of domestic and family violence
  • $40.3 million to establish 16 new menopause services, including four hubs across the State for women experiencing severe symptoms of menopause and address associated health risks
  • $32.0 million in grants and tailored wraparound training support to assist women to return to work after lengthy stints out of paid employment as full-time parents, carers or for other reasons
  • $30.0 million to increase safety and levels of comfort for women and girls in public spaces and when using public transport
  • $25.0 million to increase the number of fit-for purpose, safe, accessible and inclusive female sports facilities in New South Wales
  • $20.2 million towards the objective of women making up 15 per cent of trades and nontraditional roles in the construction industry by 2030
  • Additional two weeks’ bonus Paid Parental Leave for NSW public sector workers where parental leave is shared more equally between both parents

Public sector

The NSW Government is providing significant support to public sector workers, including:

  • Increasing remuneration for public sector employees by 3% in each of the next two years
  • $3,000 one-off payment to NSW Health employees
  • Five days of paid fertility treatment leave for all public sector employees

Flood response

In February and March 2022, 61 Local Government Areas were declared disaster areas due to damaged and destroyed infrastructure from flooding, particularly in the Northern Rivers region. The NSW and Commonwealth governments are offering $3.5 billion of support, including:

  • $350 million for clean-up assistance and waste disposal
  • $350 million for the procurement and management of temporary and medium-term housing for those who cannot access secure accommodation
  • $312.5 million to upgrade, repair and improve infrastructure and assets in the disaster LGA’s
  • $285.2 million for rental assistance support, temporary housing and a housing flood recovery service
  • $168 million for social and police housing service
  • $112.5 million for Back Home grants to restore housing to a habitable condition

Housing

The NSW Government has committed $2.8 billion to improve the supply of affordable housing, including the landmark scheme offering first homebuyers to opt into a land tax scheme.

  • $780.4 million to trial a shared equity scheme for single parents and older singles who are teachers, nurses or police to buy their first home
  • $728.6 million to introduce the annual property tax for first home buyers instead of upfront stamp duty
  • $300 million for the Accelerated Infrastructure Fund to co-fund housing-enabling infrastructure
  • $174 million for 271 new homes for key worked in regional NSW
  • $149.8 million for 460 new and upgraded homes for First Nations people, including energy-saving upgrades to improve quality of life for tenants
  • $89 million to reduce planning assessment timeframes
  • $73.5 million to undertake strategic planning and rezoning in State-led development precincts to increase dwelling supply
  • $27 million towards the Community Housing Sector, including 120 new social housing dwellings

Regional NSW

Significant investment into the regions in the 2022-23 NSW budget includes:

  • $2.4 billion over the next decade to provide flexible recruitment and retention incentives to build and sustain the rural health workforce
  • $1.3 billion expansion of the Regional Growth Fund, including:
    • $250 million for the Stronger Communities Fund
    • $230 million to support tourism infrastructure
    • $220 million to expand the Resources for Regions program
    • $175 million for key regional industries
    • $100 million for the Regional Job Creation Fund
    • $391.3 million for the Snowy Mountains Special Activation Precinct
    • $369.6 million for the Safe and Secure Water Program
    • $173.8 million for an additional 200 firefighters and 50 permanent bushfire conservation staff to boost frontline defences against bushfires in national parks, particularly through increased hazard reduction
    • $163.9 million to bolster biosecurity incursions
    • $130 million to create jobs and drive investment in mining and processing critical minerals
    • $59 million for regional youth and children support services

Health

The NSW Government has continued to support the NSW Health sector, and this budget sees record investment in securing health worker compensation, infrastructure and accessibility into the future. The initiatives include:

  • $4.5 billion for the NSW Health workforce to ease pressure on existing health workers and support the delivery of quality health care by recruiting 10,148 full-time equivalent staff to hospitals and health services across the State
  • $1.8 billion to enable NSW Ambulance to recruit 2,128 staff and open 30 new ambulance stations
  • $961.4 million for the ongoing health costs of the continued management of COVID-19 including fever clinics, long COVID-19 clinics, and infection prevention and control
  • $776.7 million for Health Service resilience programs
  • $743.4 million over five years to enhance end of-life and palliative care services. The increased investment will support the employment of an extra 600 nurses, allied health professionals, doctors and support staff
  • $460.0 million for the Integrated Mental Health Complex at Westmead
  • $94.5 million to provide in-house Secondary Triage and Alternative Referral Services within a new Ambulance Virtual Clinical Coordination Centre
  • $13.5 million to expand the Statewide Community and Court Liaison Service to an additional 36 local courts

Infrastructure

There is $112.7 billion in the infrastructure pipeline over the next four years, a record over $178 billion since the Liberal-National Coalition was elected in 2011.

  • Sydney Metro: $12.4 billion for the Sydney Metro West between Sydney and Parramatta CBD, $8.4 billion for the Western Sydney Airport Metro line and $5.1 billion for the Southwest to Bankstown
  • $4.1 billion for the Western Harbour Tunnel
  • $3.2 billion for the Great Western Highway Upgrade
  • $2.3 billion for the first stage of the M6 Extension
  • $1.9 billion for the Princes Highway between Jervis Bay and the Victorian Border
  • $1.7 billion for upgrades to the Warringah Freeway
  • $274.5 million for the planning process of the Fast Rail program
  • $216.4 million to plan the significant redesign of Circular Quay
  • $45.9 million to repair Crown Lands infrastructure

Western Sydney

As a key region for the upcoming State election, the NSW Government is making significant investments into Western Sydney, including funding for:

  • $1.5 billion on the Western Sydney Growth Roads Program
  • $1.2 billion for the M12 Motorway, providing direct access to Western Sydney Airport
  • $680.5 million for the second stage of the Parramatta Light Rail
  • $261.9 million towards an Advanced Manufacturing Research Facility in Bradfield
  • $241.6 million for the Powerhouse Museum in Parramatta
  • $185.4 million for Stage 2 of the redevelopment of The Children’s Hospital in Westmead
  • $126.8 million for the Liverpool Health and Academic Precinct
  • $60 million for a final business case for the extension of the Metro between Bradfield and Glenfield
  • Continuation of the $5 billion WestInvest program, including $478.2 million in capital investment towards renewing school assets

Education

The 2022-23 budget continues to invest in children’s education, including the nation-leading reform to introduce universal pre-kindergarten.

  • $5.8 billion over the next decade towards the establishment of universal pre-kindergarten by 2030
  • $1.6 billion for the Brighter Beginnings Affordable Preschool initiative to provide fee relief to low and middle-income families
  • $1.2 billion to maintain and enhance education facilities in NSW public schools
  • $281.6 million to ensure quality, retention and supply of early childhood educators

Skills and Training

The NSW Government has committed a further $234.5 million in training younger people, including initiatives such as:

  • $108.5 million to continue the rollout of Institute of Applied Technology pilots
  • $82.7 million for Fee Free Vocational and Training to increase apprenticeship and traineeship access
  • $25.1 million to expand the Career NSW pilot, providing comprehensive careers and education advice to NSW schools

Indigenous Affairs

2022 saw the 25th anniversary of the NSW Parliament’s apology to the Stolen Generations. The 2022-23 budget includes record investments of $715 million in First Nations policies and programs. Additions to the existing $1.19 billion of planned expenditure includes:

  • $317.3 million for appropriate housing, land rights and interests, and essential community infrastructure
  • $98.7 million to expand existing Aboriginal Child and Family Centres and build nine new centres to provide a mix of culturally safe services and support for First Nations families with children aged up to 8 years
  • $91.1 million to support First Nations languages, culture and survivors of the Stolen Generations and to accelerate the repatriation of First Nations remains
  • $43.9 million for the Aboriginal Languages Trust to deliver its Strategic Plan 2022-2027 and support Aboriginal Communities to grow their languages
  • $43.5 million for the Clontarf Foundation and other First Nations education providers to support First Nations students and undertake external quality assurance
  • $30.0 million to provide grants of up to $250,000 to community-controlled organisations to respond to the needs of local communities
  • $25.0 million capital expenditure in 2022-23 to construct a third flagpole atop the Sydney Harbour Bridge for the permanent flying of the Aboriginal flag
  • $22.1 million to research and establish service partnerships between First Nations community-controlled organisations and NSW Government clusters and agencies
  • $18.8 million to establish a data concierge service to support data sharing and oversee the development of data and insight-sharing tools across NSW Government agencies
  • $10.1 million to implement and sustain effective cultural models of mental health and wellbeing care for First Nations people in partnership with the community-controlled sector
  • $10.0 million to establish an Aboriginal Bail Advocacy and Support Service aimed at reducing the number of First Nations women and young people remanded in custody

Energy and Climate Change

The Treasurer’s energy portfolio equips the NSW 2022-23 budget well to handle NSW’s transition towards renewable energy. The plan for NSW’s clean energy future includes initiatives such as:

  • $3.1 billion over the next 10 years to accelerate the delivery of the new transmission projects required for Renewable Energy Zones across regional New South Wales
  • $2.5 billion investment from the Climate Change Fund over 10 years in programs to reduce emissions and make New South Wales more resilient to a changing climate from 2022 to 2030
  • $300.0 million over 10 years to provide grants for new business activities to competitively produce low emissions materials, green chemicals, hydrogen, power fuels, clean fuels and agricultural materials
  • $250.0 million over five years for grants to businesses to competitively manufacture components for renewable energy infrastructure, electrolysers, electrification of plant, and electric vehicles
  • $206.2 million over 10 years to enhance the State’s natural capital, rewarding farmers to reduce their carbon emissions and improve and protect biodiversity outcomes on their land, while increasing the productivity of our primary industries
  • $106.7 million over three years for the Biodiversity Credits Supply Fund to simplify the delivery of environmentally sustainable development and infrastructure projects, allowing development to continue while protecting the environment
  • $74.0 million for zero-emission buses to develop a final business case and commence enabling works to transition to a low-emission bus fleet to allow quiet and environmentally friendly travel services for Sydney commuters
  • $93.7 million over eight years for a whole-of government response through the Climate Change Adaptation Strategy
  • $84.0 million over 10 years to accelerate the Electricity Infrastructure Roadmap to replace retiring power stations with new sources of clean, cheap and reliable generation

To access the NSW 2022-23 Budget Papers, click here.

For more information, contact Andrew Humpherson on +61 419 241 587, Anthony Benscher +61 438 439 431, Nicholas Dower on +61 419 602 002 or Matthew Harte on +61 431 326 411.