NSW budget to return to surplus one year earlier than expected
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Version 0 of 1. Entry-level home owners were winners in this year's NSW budget, as the state government announced it would return its budget to surplus a year earlier than expected. The treasurer, Andrew Constance, announced the threshold for the $15,000 first home owners grant (new homes) would be increased to $750,000, up from $650,000. The change means entry level home buyers can spend up to $750,000 on a property and still be eligible for the grant. "We want to make it as easy as we can for first-time buyers to get the keys to their new home," Constance said. Constance and the premier, Mike Baird, said the 2014-15 budget represented a significant turnaround in the state's public finances, with a surplus now expected in 2015-16. "The return to surplus one year earlier than forecast in the half-yearly review shows that both the budget and the state economy are in a strong position as a result of the fiscal policies implemented by the NSW Liberals and Nationals government since 2011," Baird said. The NSW economic outlook has strengthened, underpinned by household consumption, a strong housing market and state infrastructure investment. In the longer term, the state government expects improved business confidence and a recovering non-mining sector. While a deficit of $283m has been forecast for 2014-15, the result has been affected by the federal government bringing forward grants for the Pacific highway by a year to 2013-14. This improves the 2013-14 result by $801m to deliver a surplus of $988m, but worsens the 2014-15 result by $703m. Similarly, other commonwealth funding has been moved from 2015-16 to 2016-17, which worsens the 2015-16 result by $142m. "We've taken a $2.2bn hit to our revenue expectations, courtesy of Canberra, and that does impact on our bottom line over the coming five years," Constance said. However, the government still expects to deliver a $660m surplus in 2015-16 with bigger surpluses in the following two years. The budget would also enable the state to maintain its AAA credit rating after recently being placed under watch by credit agencies. The state government pledged to fill some federal funding shortfalls, with Constance promising to spend $220m to retain patient services cut under the May federal budget. A further $107m will be spent to continue pensioner concessions that were also cut. Constance urged the Abbott government to freeze its funding cuts to his state until it delivers its federation white paper. "We are able to absorb this challenge in the short term,” he said, “but beyond the forward estimates – in particular as it relates to health – we have an enormous challenge ahead." The federal government's decision to walk away from national health reform agreement would hit the NSW budget beyond the 2018 forward estimates, he said. The state government is spending $230m across all school sectors as part of the Gonski agreement. It also announced an $83m fund to accelerate opening up land in Sydney's southwest. |