BUDGET UPDATE: IT’S NOT ALL ROSES

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The Baird Government budget update reveals worrying underlying trends that threaten to undermine the NSW economy, the State Opposition has warned

Thursday’s budget update reveals an overreliance on stamp duty powered by high Sydney house prices, and a financial sugar hit from the one-off sale of state electricity assets.

The $3.4 billion surplus was buoyed by the $438 million collected in stamp duty from the Transgrid sale, and a higher than expected $425 million in stamp duty receipts. 

But the Opposition says that the Baird Government doesn’t have a plan to deal with the slowdown in the Sydney property market, nor can it rely on enduring dividends from state assets once they have been sold.

Furthermore, from 1 July 2017 the Government will also have to deal with $25 billion in cuts to health and education budgets handed down by the Coalition Federal Government.

While the Treasurer admits that both present “challenges” neither she nor the Premier have a plan to deal with any of the following:

  • Youth unemployment: the Government isn’t creating jobs fast enough with youth unemployment now standing at 12.7 per cent - more than twice the national average of 5.9 per cent;
  • Housing affordability: Cutting $5000 from the first home buyers grant will make it even harder for new buyers;
  • Commonwealth budget cuts: $25 billion in cuts to education and health which have yet to be addressed with a concrete plan.

Quotes attributable to Shadow Treasurer Michael Daley

 “The state’s budget is being propped up by stamp duty driven by ridiculously high property prices. It’s a stamp duty tax that’s providing life support for Mike Baird’s budget.”

“The only thing standing between Mike Baird and a balance sheet covered in red ink are people paying increasingly more stamp duty.”

“To say the State is debt free is nothing more than a gimmick. The state still has to pay back $32 billion in borrowings; all it has done is get rid of the debt it was carrying by selling off an asset. Debt is forecast to rise in the next five years.”

“You can make your budget look better by selling income-producing assets but it’s a trick you can only pull off once – it’s the greatest economic sugar hit of all time.

"Mike Baird has no plan to address the long term financial pressures in NSW.  No plan to address looming federal cuts in health and education. Whilst Mike Baird wants everyone to think the picture is rosy, the numbers show some huge underlying problems for NSW.”