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Sydney's recovering property market boosts NSW Government, half-year review reports

By state political reporter Ashleigh Raper, Thursday December 12, 2019 - 12:50 EDT
ABC licensed image
The NSW Government has benefitted from the recovering property market. - ABC licensed

Sydney's slowly recovering property market has helped ensure that the Berejiklian Government ends this year with a forecast surplus of $700 million, despite the mounting cost of the drought.

The mid-year review revealed the state's budget was still in the black but the forecast surplus of $1.016 billion shrunk to just $702 million.

But Treasurer Dominic Perrottet said he was willing to take the state into debt in order to meet his Government's ambitious infrastructure agenda.

He said NSW had half the debt of the other states but was building twice the amount of infrastructure.

"That puts us in a very good position to capitalise on the low interest rates that we're seeing today," the Treasurer said.

"Our population is due to continue growing and we need to have the infrastructure investment off the back of that, that means the debt position will also grow.

"But there is no better time to be in that position — to borrow — than today."

The smaller-than-expected surplus is being blamed on increased spending on the drought and a $352 million reduction in GST revenue to the state.

But the Treasurer said he was willing to dig further into the surplus to fund more spending on the drought and bushfires, if it was needed.

"We will do whatever it takes to support regional and remote communities," he said.

"My expectation is that over the next six months there will be further support provided for drought affected communities and for those affected by bushfires."

So far this financial year, the Government has added $208 million dollars to its spending on drought relief, taking the spend over the past 18 months to $2 billion.

It also spent an additional $75 million on bushfire recovery.

In the June budget, the Government planned to spend $93 billion on infrastructure over four years but that figure has now been increased to $97.3 billion to fulfil promises for funding the Metro West, Western Harbour Tunnel, Warringah Freeway and the Sydney Fish Market.

More money will have to be committed in the future as this represents only initial funding.

However the Treasurer insists that the increased spending has been partially offset by higher-than-forecast stamp duty revenue, up from a predicted $6.9 billion to $7.5 billion.

The latest property data from the Australian Bureau of Statistics showed the residential property price index rose by 3.6 per cent in the September quarter.

In this budget, the Government had done a further write-down of revenue received from stamp duty of $232 million over the four years to 2021-22, after it had already been written down by more than $10 billion in the previous year's budget.


© ABC 2019

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