What does the 2021-22 New South Wales State Budget mean for you and your business?
The economic recovery from COVID-19 is very much the focus, with the NSW Treasurer, the Hon. Dominic Perottet, handing down the NSW Budget on 22 June 2021, titled Transforming NSW.
Some of the key Budget metrics delivered include:
- Unemployment falling from 7.1% in July 2020 to 5.0% in May 2021
- GST revenues up $6.4bn and transfer duty revenue up $1.4bn, and despite concessions, payroll tax revenue is up $1.2bn on forecasts
- The 2020-21 deficit was $7.9bn, from a forecast $16bn deficit. Forward forecast deficit of $8.6bn for 2021/22.
Government spending was the order of the day, with the key focus primarily on economic recovery and ongoing prosperity. The Treasurer outlines three core objectives of this Budget, including:
- Keep NSW safe and accelerate our recovery;
- We will invest in families and our future; and
- Transform our State for a brighter future.
The Government is intent on reducing the tax burden on NSW residents, and most eyes in the lead-up to the Budget were firmly on Stamp Duty reform. Whilst this budget did not provide any reform on these measures, the Budget has set the groundwork for tax reform designed to make house ownership more affordable.
Some of the tax savings announced in the current Budget include a continuation of rebates for eligible small businesses for government fees and charges until June 2022.
Key Spending Measures
Keeping NSW Safe:
- $260m in support of the vaccine rollout and a further $796m in committed funding in COVID-related health measures
- The creation of child and adolescent mental health crisis teams, as well as mental health response specialists in regional and rural communities
- $500m for the expansion of digital health services
Accelerating our Recovery:
Construction is very much the heart of NSW economic stimulus measures.
- $3.3bn for 44 new and upgraded schools
- $1.15bn for the new Bradfield City Centre in support of the new second airport
- $2.7bn for the M6 Extension Stage 1
- $2bn for the Great Western Highway upgrade
- $1.3bn for the Bankstown-Lidcombe Hospital and Community Health Services redevelopment
Invest in our People:
- Up to 2.5% wage increase for NSW Public Servants
- Measures to reduce the cost of living, including two days of free childcare for 2022, energy rebates, and funding for every pre-school child to learn to swim
- Increased funding and expansion of current programs to support social housing and crisis support
- Expansion and increased support for Aboriginal Communities programs
- Increased funding for palliative care of elderly and terminally ill citizens
Transform our State:
Productivity is very much the key focus of this year's Budget, supported by investment in electricity infrastructure, improvements in patient care via Digital Patient Records and ongoing education spending for curriculum reform and attracting and retaining top teaching talent.
Supporting the take-up of electric vehicles, with exemptions for transfer duty, investments in ultra-fast charging infrastructure, a limited number of $3,000 rebates for new purchases. However, this does come with a promise of a road-user charge for electric vehicles from 1 July 2027.
Increased expenditure in community investments to secure major sporting events, increase tourism and other art and cultural experiences, and a signature temporary transformation of the Cahill Expressway over the holiday period for hosting of events, including the New Years Eve fireworks.
For more information
Please contact your local RSM adviser to discuss the implications of this budget for you.