World-class services and infrastructure - chapter 4

World-class services and infrastructure

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World-class services and infrastructure

[Speaker]

Over the next 40 years we project government recurrent expenses on services per person to increase by 80%. Health, education and transport will continue to be the 3 biggest expense items, with health expenses contributing to 40% of this growth and it's expected that expenses will shift from education towards health as the population ages. 

So, keeping people healthy and out of hospitals can alleviate pressures on health spending. Following unprecedented investment in recent years over the next 40 years the government's infrastructure investment is projected to return to lower levels of growth.

[Music]

NSW Government delivers and commissions services and infrastructure to make NSW a great place to live, work and invest.

Over the next 40 years, we project government recurrent spending on services per person to increase by 80% in today’s dollars – from around $10,000 in 2018-19 to a projected $18,000 in 2060-61. Health contributes 40% of this growth.

Infrastructure spend is expected to return to lower levels following a record spend of over $100 billion on infrastructure in the last decade. Infrastructure investments are expected to be 1.8% of Gross State Product by 2060-61. This compares to 2.6% of Gross State Product in 2018-19.

It is anticipated that external events - such as natural disasters or global crises - will continue to present challenges in the future. As these pressures grow, it will be increasingly important to prioritise government spending towards the most effective and efficient ways of delivering services.

In the next 40 years

Insights and opportunities

• With growing expense pressures, there is an opportunity for government to rethink and redesign service delivery and infrastructure needs.
• This will require us to invest in a way that makes the most of technological advances, take a more joined-up approach to services that supports individuals across different systems, and plan and design for resilience to environmental and other risks. 
• These interventions can help better utilise existing physical infrastructure. A reduction of reliance on physical infrastructure by 10% across health, education, transport, and justice can reduce further capital spend to 2060-61 by nearly $4 billion in today’s dollars. 
• Addressing rising health expenses through prevention and early intervention of chronic illness can reduce pressures on expenses and improve health outcomes.
• If people live more of their older years in good health, the projected long-term growth in annual health spending will be lower by 0.13 percentage points.