In initial briefings, NSW Treasury advised the Government it had inherited around $7 billion in “difficult to avoid pressures" on the Budget.
These unfunded, budget black holes include programs that are core business for state governments:
- More than 1000 nursing positions in NSW hospitals.
- Out of home care for vulnerable children.
- Cyber Security NSW.
The Minns Labor Government also inherited the largest debt in NSW history, which is placing increased pressure on the budget amid a higher interest rate environment.
The Budget faces significant pressures and risks.
These difficult-to-avoid pressures will be considered through the Budget process alongside other Government priorities.
A Comprehensive Expenditure Review, led by Minister for Finance Courtney Houssos, is underway to assist the Government in delivering its priorities and managing budget pressures.
A Strategic Infrastructure Review of significant capital works, led by Ken Kanofski and supported by Infrastructure NSW and NSW Treasury, is also being carried out to inform the Budget.
The Treasurer will provide an update ahead of the Budget in an Economic Statement to Parliament in June.
NSW Treasurer Daniel Mookhey said:
“Unfortunately, we have inherited significant economic challenges and difficult-to-avoid pressures from the former government that will require some tough decisions in this Budget.
“It’s important that we are transparent and provide a full and honest picture of our state’s current position.
“The former government has handed over to us the largest debt in NSW history. We have uncovered multiple unfunded government programs during our reviews of our State’s position.
“High inflation and higher interest rates, as well as the state’s historic debt position, will also put added pressure on the choices made for this Budget.
“Fixing these challenges will take time and some hard decisions but we have the right team equipped to deliver.
“We’ll be handing down a budget to help rebuild our essential services, invest in the people who look after us and put NSW in the best possible position for a brighter future.”
Minister for Finance Courtney Houssos said:
“The former government failed to disclose the full scale of the budget’s challenges.
“The Comprehensive Expenditure Review will ensure that Government spending is focused on the priorities we were elected to deliver. September’s budget is an opportunity for us to be open and honest with the community as we navigate these challenges.
“Despite the mess left by the former government, we are committed to delivering what we promised.”
