NSW Budget – big on infrastructure but path to tax reform still needed

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NSW Budget  – big on infrastructure, but path to tax reform still needed

The NSW Budget delivered today lays out an ambitious infrastructure agenda – underpinned by a strong economy, booming property markets and surging stamp duty.

The Property Council has welcomed the $68 billion infrastructure spend, which will be enhanced once the proceeds and projects following the poles and wires sale kicks in.

Our advocacy has delivered several wins including $400 million for the Housing Acceleration Fund and $19 million to seed the Greater Sydney Commission.

Also, the commitment to a new rail station at Barangaroo is a game-changer for the western corridor, and other major projects are being accelerated.

But the budget papers also make clear our calls for reform of state taxes is more compelling than ever.

Stamp duty revenue has doubled in the past four years to over $7 billion and now represents over one quarter of all state tax revenue.

NSW Transfer Duties

Here is a summary of the key budget highlights.

 

F2013-14 (outcome)

F2014-15 (estimate)

F2015-16
(forecast)

F2016-17
(forecast)

Economic growth (%)

2.7

3 ¼

3 ½

3 ½

Inflation (%)

2.8

1¾

2 ½

2 ¾

Unemployment (%)

5.7

6

5 ¾

5 ¾

 

F2014-15 (revised)

F2015-16 (estimate)

F2016-17
(forecast)

F2017 -18
(forecast)

Surplus/deficit ($m)

2,058

2,520

3,194

2,590

Infrastructure investment ($m)

–

16,484

17,618

16,731

Stamp Duty collected ($m)

7,290

7,841

7,930

8,275

Land Tax collected ($m)

2,497

2,660

2,854

3,004

Infrastructure

  • Total budget spend of $68.6 billion on infrastructure in the four years to 2018-19.
  • $590 million is to be injected to fast track the delivery of big ticket transport, road, hospital, schools and cultural projects.
  • $977 million will be invested towards delivering the $8.3 billion Sydney Metro Northwest which will significantly boost passenger capacity across the entire rail network.
  • $84 million to continue planning and development for the second harbour rail crossing as part of Sydney Metro including a new underground railway station at Barangaroo.
  • More than $120 million is allocated to keep progressing work on CBD Light Rail – and $19 million for planning the Parramatta Light Rail project.
  • $1.7 billion will be directed towards building WestConnex.
  • $275 million (including $51 million for enabling road works and land acquisitions) in state and federal funding towards construction of the NorthConnex Motorway.
  • $103 million to progress construction on light rail in Newcastle to completely revitalise the CBD and reconnect it with its waterfront.
  • $4 million for the continued planning for the Newcastle Inner City Bypass.

Tax

Tax revenues and expenses:

  • Transfer duty revenue was up from budget forecasts in 2014-15 of $6.1 billion to $7.3 billion.
  • Total transfer duties are forecast to rise to $7.8 billion in 2015-16 and top $8 billion in 2017-18.
  • Residential property transfer duty revenues are expected to increase over the next four years at an average rate of 4.2% per annum.
  • Land tax revenue equalled budget forecasts in 2014-15.
  • Land tax revenue is forecast to grow at a rate of 5.7% per annum over the next four years.
  • Re-commitment to the abolition of nuisance taxes which formed part of the Intergovernmental Agreement of 1999, including stamp duty on business mortgages, unlisted market securities and transfer duty on non-real business transfers, from 1 July 2016.

Planning & Housing

  • $400 million for the Housing Acceleration Fund to speed up the delivery of more housing.
  • $46 million towards new parks, streetscapes and roads to support communities in Priority Precincts.
  • $19 million to establish the Greater Sydney Commission and deliver the Plan for Growing Sydney.
  • $19.9 million to construct the on-line Planning Portal to make the planning system simpler and easier to use.

Other

  • The local government budget includes $11.8 million for the Fit for the Future reforms package.
  • $17 million from Restart NSW to address mine subsidence.

Contact

Glenn Byres, NSW Executive Director, 02 9033 1904