BUDGET UPDATE SHOWS ECONOMIC CHALLENGES AHEAD BUT GOVERNMENT ON TRACK TO RETURN TO SURPLUS
Despite significant economic challenges ahead including GST cuts to NSW, changes in royalty forecasts and a jump in interest rates, today’s economic update from NSW Treasury confirms NSW will still return to surplus in 2024-25.
NSW Treasurer Matt Kean said it’s further proof of the Liberal and Nationals Government’s success in protecting the budget while investing in economy-boosting infrastructure, jobs and productivity measures as well as record spends on essential services.
“This update shows despite the economic challenges, the NSW economy is in good shape to withstand the headwinds,” Mr Kean said.
“Even though NSW is dealing with GST cuts, rate rises and changes to royalty forecasts, the Budget is on track to return to surplus in 2024-25.
“Labor would deliver rolling deficits to pay their public sector union mates if they manage to trick their way into government later this month.”
The Half-Yearly Review was based on economic and financial data as at 24 January.
Since then, economic forecasts have changed and there is significant uncertainty:
-
- ABS National Accounts data in March showed economic growth across Australia was moderating at the end of last year
- The RBA increased the cash rate by 25 basis points at both its February and March board meetings
- Household balance sheets and spending are under increasing cost-of-living pressures
“Despite these pressures, NSW’s economy is forecast to remain resilient over the next four years,” Mr Kean said.
The forecast for real gross state product remains unchanged from the Half-Yearly Review at 3.75 per cent for 2022-23. The forecast NSW unemployment rate also remains unchanged at 3.5 per cent. Inflation is forecast to peak in 2022-23, consistent with the Half-Yearly Review.
