The NSW budget deficit is set to blow out to $16 billion in 2021, Treasurer Dominic Perrottet has confirmed, as the government works to rescue the economy from the coronavirus recession.
Mr Perrottet announced the massive figure while delivering his fourth budget on Tuesday – the deficit was $6.9 billion in 2019-20.
“This budget is completely appropriate for our time,” Mr Perrottet said.
He said it was predicted to be back in surplus by 2024, but the budget papers flag several risks to that, including potential delays in finding a COVID-19 vaccine, and further virus outbreaks.
The deficit blowout is the result of cash being splashed on stimulus measures on the back of a forecast $25 billion drop in revenue over five years.
The budget also flags a possible major reform, which could see home buyers given a choice on whether to opt-out of paying stamp duty, and instead pay an annual property tax.
The government will start public consultation on the move, which would reduce the upfront cost of a home, and would not affect current owners not buying or selling.
Once a home was subject to property tax, subsequent owners would have to continue paying it.
The reform would see existing stamp duty concessions for first home buyers replaced with a grant of up to $25,000.
“Tax reform is challenging, it’s tough,” Mr Perrottet said.
“Stamp duty impedes young people from getting into their first home.
“I guess sometimes there’s no good time for reform, but that’s why we need to take it on,” he said.
The budget papers confirm the government will sell its 49 per cent share in the roads system, WestConnex, and plans to investigate whether it should further privatise the state’s lottery business.
A new Bankstown-Lidcombe Hospital will be built on a undeveloped site in Western Sydney, at a cost of $1.3 billion.
Also, $750 million has been pledged for the redevelopment of Royal Price Alfred Hospital in Sydney.
Much-needed social and Indigenous housing stocks will also receive a boost, with more than $800 million to be splashed on new homes or upgrades.
The government says it will create 1300 new social houses across the state, just over half of which will be built in the Sydney metro area.
When asked if that number was a drop in the ocean compared to what is needed, the Mr Perrottet said it was a significant amount.
“It is the biggest investment in social housing in the last 20 years in this state,” he said.
“It was the number thing on the list.
“I will monitor the situation in relation to the economy and the construction industry, and if we need to do more, we will.”
There is good news for some businesses, with the payroll tax rate being cut from 5.45 per cent to 4.86 per cent, and the tax threshold being increased from $1 million to $1.2 million.
Businesses below the new threshold will be able to apply for vouchers worth $1500 to help cover government fees and charges.
It is on top of the state government’s budget centrepiece – $100 in digital vouchers for adults that can be spent in some hospitality and recreation venues.
As previously promised, the underground train project, Metro West, has been allocated $10.4 billion over the next four years.
Another metro line to the new Western Sydney Airport has been given $9.2 billion over the same period.
Three new schools will also be built, one in Western Sydney, and two more in regional NSW.
A further $175 million will be given to the Made in NSW arts program to invest in new film and TV projects.